Pipeline News North

Northern British Columbia and Alberta's Oil and Gas Industry Vol. 3 Issue 6 • dist: 16,000

JUNE/JULY • 2013

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in this issue:

• Answering the call - documentary spotlights immigrants in the patch • modest men - petroleum association rewards TWO OF its best • rise of the robots - unmanned vehicles

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PEACE REGION PETROLEUM SHOW IN GRANDE PRAIRIE - JAMES WATERMAN PHOTO

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• PIPELINE NEWS NORTH

JUNE 14, 2013

No amount of rain and cold weather could drown the spirits of Kevin McNee and the rest of the field at the Fort St. John Petroleum Association 51st Annual Oilmen’s Golf Tournament.

McNee won the match play Championship Flight (low-handicap division) on Saturday morning with a 4-3 score over Dillon Maier at the Lakepoint Golf & Country Club in Charlie Lake.

“It was a really tough day to play,” chuckled McNee afterwards. “The conditions were terrible. It was wet and cold and the ball wasn’t flying very far so it was definitely tough.”

After 36 total holes on Thursday and Friday to decide the match play finalists, Maier and McNee were the only two left unbeaten. They battled it out early on Saturday, teeing off at 5:30 a.m. in the pouring rain to decide the winner.

A couple of miscues by Maier on the back nine opened the door for McNee. “It was almost like we tried to hand each other some holes and it was almost like no one wanted to win a hole and we kept trying to hand it off to each other,” explained McNee. “Fortunately I

hung in there long enough to win a couple holes on the back nine and was just good enough.”

Knowing the course probably helped, too.

McNee is a former Lake Point employee who now works as a General Manager for M & Resources in Fort Nelson. After having watched the tournament for years from the pro shop and being a four-time semifinalist himself, McNee says he has been waiting a long time to get his name on the coveted Oilmen’s title trophy.

“It’s kind of a neat turnaround for me,” he explains. “Working at the golf course and getting to watch these guys enjoy themselves and play golf and just the camaraderie between everybody was so much fun I always wanted to play in it, and to be able to win it is pretty nice.

“It’s 51-years-old and pretty prestigious when you can get your name on the championship trophy,” added McNee. “It’s something that I’ve always wanted, and to be able to do that, it’s kind of an honour.”

Win or lose, McNee knows he’s found a new playing partner in

i Maier, someone he had just met that weekend. “[Maier] was an awesome guy to play with and a lot of fun. If I had lost I wouldn’t of minded losing to a guy like him, that’s for sure,” he said.

And that comradeship is what the Oilmen’s event is all about and why it has lasted all these years to become one of the biggest tournaments in the region, boasting a field of 304 total players and 18 flights (divisions).

“The biggest reason everyone keeps coming back is the social part of it,” says Tournament Chairman Lee Hartman.

“Guys they met last year and played a match with them, now they are friends and that’s important, the camaraderie that goes with it.

“It brings guys from Calgary to Fort Nelson and all over B.C. and Alberta,” he adds, noting its long tradition. “A lot of the guys have been playing in this tournament for 30 to 35 years. I’d like to find out if there is any other tournament that matches our sponsorship and participation.”

As popular as the tournament is, Hartman said it was a struggle at

times to fill all this year’s tournament slots.

“We were just full. Got the 304 golfers right on the button,” notes Hartman, saying he would like to see some more listed spares to fill in for cancellations, seeing as it is a match play event and everyone deserves to get in their full amount of rounds.

But a promising sign for the contest’s future is seeing the next generation of players signing up.

“This year we probably have 100 new players so a lot of the young guys from Fort St. John they’ll tell their friends and we’ll be back to a full waitlist next year.”

One player sure to return is McNee, not just to defend his win. “[To play] this tournament is a no-brainer,” he said. “Once June comes around that’s just what you do and everyone that plays in it has such a blast. The committee, the golf course, and the people that volunteer their time and their services it’s phenomenal.”

Here is a full list of how the rest of the flight finals played out: Championship Flight Consolation: Travis Eggers over Sheldon Wheeler First Flight – John Telford over

Tyler Patrick Second Flight – Chris Ford over Len Holland Third Flight – Ron Smeeth over Todd Alexander Fourth Flight – Ezequiel Miranda over Darren Peebles Fifth Flight – Lee Hartman over Rui Miranda Sixth Flight – Bill Pearson over Brad Herron Seventh Flight – Russell Parker over Gerald Pope Eighth Flight – Gregg Pearson over Blair Myers Ninth Flight – Robin Derose over Randy Morrow Tenth Flight – Chris Jorven over Kyle Gardner Eleventh Flight – Rob Petrone over Tom Dunn Twelfth Flight – Al Levers over Shane Richter Thirteenth Flight – Brett Wilson over Kelly Ollenberger Fourteenth Flight – Terry Little over Len Fallis Fifteenth Flight – Tracy Travis over Brian Zieger Sixteenth Flight – Troy Viens over Kirk Rutz Seventeenth Flight – Tom Birch over Tim Toews Eighteenth Flight – Pete Andrews over Steve Horychun

BROCK C AMPBELL

Umbrellas were out in full effect on Saturday as play of the 51st Annual Oilmen’s Golf Tournament wrapped up on Saturday at Lakepoint Golf & Country Club.

PETROLEUM ASSOCIATION - HAPPENINGS

JUNE 14, 2013

industry news FOCUS ON FRACKING Alberta introduces new fracturing regulations james waterman Pipeline News North

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Alberta’s Energy Resources Conservation Board (ERCB) is being proactive with the latest addition to their regulatory repertoire.

Directive 083: Hydraulic Fracturing – Subsurface Integrity, which was announced on May 21 and becomes effective on August 21, is designed to improve the safety and reliability of hydraulic fracturing operations in the province.

“It’s a forward-looking directive,” said ERCB spokesperson Darin Barter, adding that Alberta isn’t yet at the level of hydraulic fracturing activity anticipated by the industry regulator.

“Public safety is paramount,” he continued. “We want to make sure [incidents] either don’t happen, or the risk of them happening is almost non-existent. It’s an additional layer of protection on top of the already strict regulations.”

The new directive stems from incidents such as the Wild Stream Exploration oil well blowout that occurred in Innisfail in January, 2012, when a well being hydraulically fractured by Midway Energy communicated with the Wild Stream well.

The result of that interwellbore communication was a release of fracturing fluid, crude oil, produced water and natural gas onto the surrounding farmland from the Wild Stream well.

That was one of about 20 such incidents to take place over an 18-month period in Alberta.

A key element of Directive 083 that is specifically designed to prevent those incidents is the implementation of hydraulic fracturing protection zones, or HPZs. “Normally, companies have emergency planning zones,” said Barter.

“We’ve implemented an HPZ now,” he continued. “And what that does is, within a certain radius of a hydraulic fracturing operation, there is an absolute requirement that ...

any neighbouring companies have to be notified and consulted with prior to commencement of operations.

What that does is it … greatly reduces the risk of these interwellbore communication incidents.

“It’s a pretty big shift for the whole hydraulic fracturing process.”

The circumstances around the Wild Stream blowout suggest that it could be a positive step for the industry and other stakeholders, particularly landowners who have oil wells or other facilities on their properties.

“The root cause of this incident was the fact that the planned fracture stimulation size was too large for the separation distance between the two wells,” said an ERCB report released on Wednesday, Dec. 12, following an investigation into the Innisfail incident.

Midway was fracturing a horizontal well targeting the same formation as the already producing Wild Stream vertical well. Communication between the wells took place almost two kilometers below surface.

“At the closest point,” the ERCB report stated, “the two wellbores are 129 metres apart, but the fracture half length was modeled at 90 metres.”

Fracture half length describes the distance from the wellbore to the extreme limit of the fracture, essentially the radius of the circle in which the fracturing is occurring.

The report noted that Midway’s internal procedures dictated that the spacing between adjacent wells be at least 1.5 times the fracture half length, which would be 135 metres in this case. The well spacing was six metres shy of that distance in the Innisfail incident.

Additionally, Wild Stream had not received any notice from Midway that they would be conducting fracturing operations. If Wild Stream had known, they could have taken actions to reduce the risk of such an incident occurring, including shutting in nearby wells.

“Midway was clearly aware of

the existence and operating status of the Wild Stream well, as well as its proximity to the Midway well.

At the time of the incident, Midway maintained an internal protocol which, if followed, would have spaced the fractures at least 135 metres from the nearest well,” said the ERCB report.

“Midway did not follow its own internal protocol in this case. The ERCB finds that, had Midway used its modeling and calculations, followed its own internal protocol and notified Wild Stream of its fracturing operations, the incident may have been prevented altogether or the impact may have been reduced.”

No enforcement action was taken by the ERCB in response to the incident, however, simply because there were no regulatory requirements at the time of the blowout concerning spacing of fracturing operations, or notifying nearby operators of plans to conduct fracturing operations.

“We issued a bulletin 12 days after the incident reminding industry to make sure they knew where their neighbours were located in the ground,” Barter said when the report was released in December.

“This specific incident – it was pretty unusual,” he added. “We had 129 metres apart – these two wellbores. And the company itself, Midway, didn’t even abide by their own internal protocols.”

If Directive 083 had been in place at the time, Midway would have been required by regulation to consult with Wild Stream prior to fracturing their well because of the HPZ. That is how the new rules could keep such incidents from occurring in the future.

“I think it’s worth noting that in the incidents that we’ve seen where we’ve had hydraulic fracturing impact another well, it’s never been a water well. It’s not been a domestic water well. Freshwater hasn’t been continued pg 12

PIPELINE NEWS NORTH •

3

special feature 9

10

A journey to excellence with Devon Energy Microturbines heating up the power generation world

industry news

4 B.C.’s new road regulations

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14

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take effect Peace Region Petroleum Show celebrates 20 years Brave new world - Shell opens LNG station Environmental assessment begins for LNG pipeline

profiles 13 Acceleware innovating for

the oil patch

environment 8 Green Alberta - Emerald

Awards recognize industry 20 Energy Diet Challenge

careers 29 Jennifer Critcher versus

invasive weeds

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JUNE 14, 2013

North

industry news

ROAD RULES New industry road regulations take effect in B.C. james waterman Pipeline News North

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All oil and gas industry roads in British Columbia will soon be governed by the Oil and Gas Activities Act (OGAA).

The BC Oil and Gas Commission (OGC) announced on May 31 that Petroleum Development Roads (PDRs) and Land Act roads used by natural gas producers in the province would be transitioning to OGAA road permit roads beginning on June 3.

The OGC has already sent letters to affected companies concerning Land Act roads and similar letters regarding PRDs will be in the mail shortly. Producers must respond to those letters for their roads to shift to OGAA road permits.

“Even before OGAA came into force, there were multiple ways that roads could be authorized in the oil and gas sector,” said Trevor Swan, general counsel with the OGC, speaking shortly after the March 22 announcement that all roads used for oil and gas industry activities would fall under a new OGAA regulation known as the Oil and Gas Road Regulation (OGRR) as of June 3.

Transitioning PRDs and Land Act roads to OGAA permit roads is part of that process.

“The regulatory framework for each of them is slightly different,” said Swan, discussing the differences between PRDs, Land Act roads and OGAA road permit roads.

“They tend to be harmonized a bit through conditions that are put into permits,” he continued, “but they ultimately hang off of different authorization mechanisms. So, the idea here is to bring them all under one roof, under the Oil and Gas Road Regulation, so that the construction, maintenance, deactivation standards are all the same [and] the road use rules are all the same.”

There are a few exceptions for maintenance on older roads.

Also, the OGC is still determining how to tackle the transition of nonstatus roads used for oil and gas activities to OGAA road permits.

“A non-status road would just be a road that was approved pre-OGAA, but does not have a permit attached to it,” said OGC spokesperson Hardy Friedrich.

“Also effective June 3, the Prescribed Roads Regulation was repealed, and the Petroleum Development Road Regulation under the Petroleum and Natural Gas Act will be repealed on July 3,” he added.

“The Prescribed Road Regulation is a regulation under OGAA. A prescribed road is a road on land other than Crown land providing access to the site of an oil and gas activity.”

Although the regulatory framework is of Natural Resource Operations different, the OGC is still responsible for (NRO), which is now part of the authorizing oil and gas industry roads.

Ministry of Forests, Lands and “And the industry is responsible Natural Resource Operations for everything associated with those (FLNRO), was first created in 2010. roads. That basic concept hasn’t One goal was limiting the number changed,” said Swan. of roads built by encouraging com“However,” he continued, “the panies within the same resource mechanism by which it’s done has industry and across the resource changed, which improves the level of industries to collaborate when certainty for both parties. The OGC building roads so as to eliminate will still issue the permits to authorize unnecessary, redundant and envithe construction. Once ... authorized, ronmentally harmful infrastructure. then the construction standards are “It is not a replacement for that set out in the regulation. They’ll be process,” Swan said of the OGRR. more in the regulation than in the “There is still is an initiative of permit. The regulation itself requires government to develop a Natural the mainteResource Road Act nance and (NRRA),” he con“‘Industry has sets out the tinued. “And that mainteact, since it’s crossalready been nance government, has the standards. ability to harmonize So, again, working to determine the road developthere’ll be ments associated with ownership on some multiple industries. less in the permit. And That is still the key then at the tool that will be used of these roads.” end of the by government to life, the promote that cross– Doug McIntyre, Encana industry effective use person’s required to of the land, to harmodeactivate nize the standards by the road unless they’re relieved of which all of those roads are constructthat obligation.” ed, maintained, deactivated.”

“The Oil and Gas Road RegulaThe OGRR is an interim step. tion and supplemental materials, “Because there is some uncertainincluding a training presentation, are ty as to when the Natural Resource now available on the Commission’s Road Act will take effect,” said Swan. website,” said Friedrich.

It is presently under construction.

The industry appears to be onThe OGC also announced on board with the changes.

May 31 that the new Measurement “There are quite a few roads with no Guideline for Upstream Oil and formal ownership or tenure attached Gas Operation has been posted on to them and we believe the new OGC their website. regulations will formalize the man“An update to the previous agement of these roads,” said Doug manual,” said Friedrich.

McIntyre, spokesperson for Encana.

“This guideline is important for per“We view this transitioning of exist- mit holders of facilities as it explains ing roads to permits as a straightthe measurement expectations as forward process which will not pose described in Section 53 of the Drillany constraint on our operations or ing and Production Regulation.” business,” he added. “Industry has Section 53 stipulates that every already been working to determine well, facility and gathering system tenure or ownership on some of have measurement equipment these outstanding roads.” capable of determining production The new regulation puts an emfrom each zone in a well and each phasis on road safety and environproduct stream. mental considerations.

Measurement equipment must “We do have a better set of tools also meet the requirements for now for ensuring that the roads are quantifying waste discharge and asin fact necessary for the developsessing royalties under the Petroment,” said Swan. leum and Natural Gas Royalty and “It’s not a land use planning tool, Freehold Production Tax Regulation. but it is something that we can see Other items concerning measurewhere the other road networks are, ment and measurement equipment and that will improve the utility of the are also addressed by Section 53. choice of roads and therefore lessen “Notable additions to the guideline the footprint.” are a chapter on the determination of Reducing the road footprint was production at gas wells,” said Frieda priority indicated by the provinrich, “and the inclusion of a decision cial government when the Ministry tree analysis for well testing.”

JUNE 14, 2013

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PIPELINE NEWS NORTH •

IT WAS 20 YEARS AGO TODAY Peace Region Petroleum Show celebrates major milestone

james waterman Pipeline News North

“There’s a bit of an uptick and some real optimism in our industry. Oil prices are strong and gas is slowly creeping up a little bit,” said Petrone.

“The show wouldn’t be this success without the exhibitors showing up and committing to this,” he continued. “And, continued pg 12

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The Peace Region Petroleum Show organizers celebrated the twentieth year of their bi-annual event by adding a brand new feature to the usual array of petroleum producers, service sector outfits, heavy equipment and new technologies.

The Grande Prairie Petroleum Association and the Grande Prairie and District Chamber of Commerce, who partner to put the show together every two years, set their sights on the oil and gas industry workforce of the future by bringing a job fair into the mix and attempting raise awareness about the opportunities that exist in the energy sector.

“The shortage of skilled workers is something on everybody’s mind in Alberta. And it’s going to be a challenge we all face,” said Rob Petrone, president of the Grande Prairie Petroleum Association.

“We were trying to really attract the high school kids to come down and learn a little bit more about the oil and gas industry and the type of education you need and the opportunities in our industry.”

The organizers were also hoping to show the students the reality of the modern oil patch.

“I know there’s a perception out there that oil and gas is rough and tough and rugged, hard work,” said Petrone.

“But people come down and they see how far we’ve advanced with technology,” he continued. “And especially these young kids, when they see the amount of technology that we’re using, not only in our day-to-day operations, but even drilling wells, completing wells and all this stuff, they get a lot better appreciation that it’s not hammers and wrenches anymore. It’s computers and technology that’s really driving a lot our business.”

It is also a vast array of career paths from surveying to archaeology and biology.

“When you talk about the oil and gas industry, it’s such a diverse industry,” said Petrone, noting that the list of professions includes everything from geophysicist to landman, construction to operations, and even marketing.

“And I’m not even touching on the downstream,” he added.

Petrone is pleased with the success of the job fair portion of the show in its first year, but he also mentioned that lessons were learned, suggesting that it would improve in the future.

“Going into planning the next session here in two years, we’re just going to make it bigger and better,” he said.

Petrone, who works for Devon Canada, has resided in Grande Prairie since 1990, but his involvement in planning the Petroleum Show through the Grande Prairie Petroleum Association began in 1994.

“It’s grown,” he said of the event.

“It’s like anything else,” he continued.

“When you start hosting events like that and showcasing the industry’s equipment and technology, it’s a learning process.

And as the years progress and technology progresses, it gets more and more exciting, and bigger and bigger every year. And this year was a testament to that.

“It was the largest show ever. And it was great. We were filled right up. We had a waiting list of exhibitors that wanted to come in. We had record attendance.

And it was just great to see all these people show the interest.”

The Petroleum Show has kept going strong over its twenty years despite slow times in the industry that have adversely affected Grande Prairie and other oil and gas industry towns in the Peace Region such as Dawson Creek and Fort St. John.

“I have to give credit back to the exhibitors and all of our contractors for stepping up and investing the time and the money to be able to come out and show what they have to offer and the opportunities they have to give to people,” said Petrone.

“And share their experiences,” he added.

Petrone remarked that the size and success of the event tends to mirror industry trends such as periods of low gas prices that limit exploration and production activity or times like the present when liquids-rich resources such as the nearby Montney and Duvernay formations are driving that activity.

9932 121 Ave., Grande Prairie, AB 780-532-1094 www.edwardsfactory.ca

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JUNE 14, 2013

environment

ALBERTA GOES GREEN Emerald Awards highlight bond between industry and environmentalism james waterman Pipeline News North

Its flower is pink, its canola is yellow, but Wild Rose Country is becoming known for the black of its oil and the green of its environmentalism these days.

Particularly, it is the increasingly strong connection between the two colours and all they represent, which was on full display during the presentation of the 22nd Annual Emerald Awards in Edmonton on Thursday, June 6.

“It was an enthusiastic crowd,” said Emmy Stuebing, the executive director of an Alberta Emerald Foundation that works to recognize, celebrate and inspire strong environmental performances through its annual award program.

“We had a huge audience of about 550 people. And I just found that it was a really positive, celebratory vibe there,” she continued.

“What I often hear about the Emerald Awards, and this was the case again last night, is that it’s a very positive atmosphere. It’s where people come together to celebrate.”

That is even the case when many of the people in the room have opposing views on various issues. “One of the really cool things about it ... is the diversity of

our crowd,” said Stuebing. “We truly had people from all across the province who traveled to be there. There were people from all kinds of backgrounds.”

The guest list even included Diana McQueen, Alberta’s minister of environment and sustainable resource development, and Stephen Mandel, mayor of Edmonton, who also served as honourary chair for the awards ceremony.

“In some cases, on different sides of certain issues,” Stuebing continued. “But they all came together to celebrate. And I think that by showing that we can collaborate and celebrate together, we’re certainly on the right path toward continuing to conserve and grow and protect our environment.”

“The Emerald Awards recognize the phenomenal environmental work being done by individuals and organizations from across the province, and I am thrilled to extend congratulations to all nominees and recipients,” said Mandel. “These people are making a difference in our communities and the environment in which we live.”

“Alberta is a leader in environmental sustainability, and this year’s recipients are excellent examples,” added McQueen. “I am inspired by these recipients and congratulate them on their dedication to Alberta’s environment.”

“Something that our foundation has always believed – and I believe this is what a lot of people acknowledge – is that the oil industry, the energy industry, has a great responsibility to steward our environment, but they are working to step up to the challenge and surpass the expectations,” Stuebing said of the link between the oil and gas industry and environmental stewardship in Alberta.

“There’s really remarkable and inspiring work happening in the energy industry,” she continued. “The research.

The technology. I believe that our energy sector is really working to raise the bar in environmental stewardship.

“We need an economy and we need the environment.

And I think that the energy sector is really working to support both of us and find the right balance between the two.”

Stuebing believes the Alberta Emerald Foundation is playing a valuable role as far as encouraging environmental stewardship within the energy sector, as well as drawing attention to industry achievements in that sphere. That is partly due to the independent nature of the organization.

“Quite frankly,” she said, “if those stories were just produced by the companies themselves, it might not continued pg 23

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Life’s brighter under the sun

Dream vacations on a budget

By Helen Burnett-Nichols, BrighterLife.ca

With summer just around the corner, many students and young professionals are ready to book that dream vacation, pack their bags and explore the far corners of the globe.

But those big trips can come with a high price tag. If you’re on a tight budget, can you still get to your dream destination and experience all it has to offer?

Although ”Canada’s Adventure Couple,” Dave Bouskill and Deb Corbeil have been travelling the world for more than a decade and sharing their experiences at The Planet D, the pair still seek out the best bang for their buck wherever they go.

“We’re budget travellers, just because that’s what we can afford, so we’re always looking for the best ways to stretch our money. We find that anyone can really do adventure travel,” says Corbeil.

Experiencing the trip of a lifetime on a budget is achievable, say experts. But to do it successfully, there are a few key tips to keep in mind: 1. Explore your flight options Flights can be one of the largest expenses for backpackers and younger travellers.

Bouskill and Corbeil recommend using rewards credit cards as a great way to help pay for your plane tickets. Bouskill also says travel agents can sometimes offer a better deal than you’d get booking your flight online.

Allison Wallace, media and communications manager at Flight Centre Canada says if your trip involves a long-haul flight to Europe or Asia and many stops once you’re there, consider using a bigger airline for the overseas flight and low-cost local carriers R001424347

for the shorter flights. Students may also be eligible for cheaper airfares.

2. Opt for budget accommodation Hostels are a good choice for saving on accommodation and meeting other travellers, but Bouskill notes that short-term apartment rentals can also be a cheap option, especially if you can share them with other people. For longer-term visits, he suggests house-sitting or house-exchanges as another economical possibility.

While it can be easier to find economically priced guest houses or beach huts in cheaper travel destinations like Southeast Asia, Bouskill and Corbeil say reasonably priced accommodation is also available in traditionally more expensive locales.

“We’ve travelled Europe quite a bit recently and we’ve been able to do it on a tight budget. We camped through Europe,” says Corbeil. Many campsites are located on beaches or close to major centres and often include free shuttle rides into the city — all for a fraction of the price of a hotel.

3. Avoid the high season Some of the best times to travel to any destination are the shoulder seasons, says Bouskill — just before or after the high season, when most attractions are still open, but you can possibly get discounted accommodation and flights.

Wallace agrees, adding that if you have to travel during peak periods, even being flexible about your departure date within a couple of days can make a big difference, as can choosing to travel on certain days of the week, depending on your destination.

4. Book locally

Rather than reserving your guide, tour or transportation in advance online or by phone, Bouskill and Corbeil suggest waiting until you arrive at your destination. This lets you barter or even find like-minded travellers with whom you can split the cost.

5. Skip expensive restaurants Spending tens or hundreds of dollars a day on food will quickly blow your travel budget. Instead, Bouskill and Corbeil recommend more creative options, such as buying food at a market and picnicking, eating where the locals eat, or even bringing a camp stove and cooking your own meals if your accommodation allows.

6. Seek out free activities In many destinations, hiking, trekking in the jungle and visiting national parks are free, says Corbeil.

“When we first started travelling, we did adventure travel on a budget, big time. Doing things like climbing Adam’s Peak in Sri Lanka is completely free and that’s a really exciting climb,” says Corbeil.

In the city, be sure to do your research to find out when attractions may have free or cheap admission. In many European cities, says Corbeil, museums offer discounted evenings or free admission on a certain day of the week or month.

Ultimately, the more money you save on the day-to-day expenses of travelling, the bigger your budget can be for those once-in-a-lifetime experiences.

“If you can find ways to cut accommodation and food costs, you can then put the money you save into your adventure,” says Corbeil.

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JUNE 14, 2013

PIPELINE NEWS NORTH •

7

special feature ANSWERING THE CALL New documentary shines spotlight on immigrants in the oil patch

james waterman Pipeline News North A small group of new Canadians have gone from unknown immigrants pursuing dreams of careers in the oil and gas industry to movie stars thanks to the latest documentary by Canadian filmmaker and journalist Brandy Yanchyk.

Oil Calling – which premiered on CBC’s Documentary Channel on Friday, June 7 – follows five men from such far flung locales as Kyrgyzstan, Northern Ireland, Eritrea, Nigeria and China as they look to join the energy sector in their new home of Canada.

The spotlight doesn’t only shine on these men, however.

The other stars of the film are the Calgary Catholic Immigration Society Oil and Gas Training Program (CCIS OGTP) and individuals such as director of operations Bob Khan and instructor John Howse who try to help those five men realize their dreams.

“I was working on another documentary about new immigrants and nature,” said Yanchyk as she began telling the tale of how Oil Calling went from idea to film.

That earlier documentary was Nature’s Invitation, a film about new Canadians connecting with the natural world of their new country.

“And I was working with the Calgary Catholic Immigration Society,” she continued. “And they have this fantastic Oil and Gas Training Program. And I was asking them if they had programs that they thought would make an interesting documentary, because I do lots of stuff with immigrants, and I also work for the BBC and the CBC. “I’m always looking for stories.”

“She saw some potential,” said Monika Bhandari, senior program coordinator with CCIS, recalling the early days of production on the documentary.

“She was able to work us and we were able to work with her in putting the documentary together and allowing her to follow these guys,” she continued. “She followed them for the whole duration from when they ... were applying for the program to how their journey ended.”

That journey really began a long time before the cameras started rolling.

“Our first program started back in 2001 under the leadership of ... Bob Khan,” said Bhandari.

Khan is both an immigrant – he was born in India and also resided in Pakistan prior to moving to Canada in the seventies – and an energy sector veteran who worked for TransCanada from 1978 to 2001. After retiring from TransCanada at the end of those 23 years, he began working with CCIS on a volunteer basis to develop training programs to help the oil and gas industry find the necessary workers, as well as connect new Canadians with that sector.

“Wanting to give back to new Canadians and to the industry where he was accepted and where he was allowed to

progress,” said Bhandari The government agreed to help out for one year only, but the success of that first year quickly led to another threeyear commitment.

“Every year, he keeps saying he’s going to retire,” Bhandari said with a laugh.

“He’s still here,” she added.

The program has grown from one course for 16 students during the first year to the point where CCIS now offers four courses focusing on the drilling rig, service rig, seismic and power engineering industries.

“He’s able to relate to these people,” said Bhandari. “But he also knows, on the other side of the coin, what the industry wants.”

It isn’t simply about the technical training and the safety certificates, but also about what it means to be an immigrant in a rough and tumble industry where other workers may not recognize your accent, your language or even the name of your homeland.

That was the story that caught Yanchyk’s attention.

“It’s a different culture,” said Yanchyk, comparing the Canadian oil and gas industry to the lives the men knew before coming to Canada.

“They have to learn about the different culture,” she added.

“John Howse, he’s one of the oil and gas training people, and he talks to the new immigrants about how the culture is different.

And even talks to them about racism.”

“The oil patch is a very varied patch and you will get some old boys that haven’t changed for the last fifty years,” Howse said at one point during the film.

“And they won’t like minority people,” he continued. “They won’t like being saddled with them until you prove yourself. The only way to prove yourself in the oil patch is to work hard, work often and be reliable.”

Yanchyk believes this story is important to tell because of how the industry is changing as far as who is joining the ranks of that sector. That change is partly due to the growing availability of new Canadians who want to work in that industry, as well as the CCIS program that can ready them for those jobs, but it is also attributable to the labour shortage and the need for workers in the oil patch.

“They have all these talents and all this worldly experience and they can bring it to the oil and gas sector,” said Yanchyk.

“Also, a lot of them have had lives where they’ve had very physical jobs.”

As an example, Yanchyk points to one of the subjects of her documentary, Birhane Tsegaye-Berhe from Eritrea, who had a job that wasn’t only physical, but dangerous.

“He was actually a landmine detector,” she explained.

“And a lot of immigrants have had this exposure to working hard outdoors,” she continued. “And they can bring those assets to the oil and gas industry. But also a lot of them have degrees. There’s one guy who’s a geologist. And he’s from Nigeria. And he brings that with him.”

Brandy Yanchyk’s new documentary, Oil Calling, tells the story of new Canadians trying to start careers in the oil and gas industry and the people of the Calargy Catholic Immigration Society Oil and Gas Training Program who work to help them realize their dreams.

BRANDY Y PRODUCTIONS POSTER

That man is Olalekan Osho, a husband and father of three, who relocated his family to Canada to give them a more stable and secure life, as well as accomplish his goal of working in the energy sector.

“Another guy from Kyrgyzstan,” said Yanchyk, referring to Alaibek Salakunov, “he worked at a coalmine that was a Canadian coalmine in Kyrgyzstan as a warehouse manager and he has that background.”

Salakunov was an employee of Centerra Gold in his native country, but opted to move to Canada just a few months ago because of the unstable political landscape in Kyrgyzstan that has resulted in two revolutions and numerous riots over the past decade.

Maojiang Han, commonly known as Luke, is a farmer from China who was always eager to work in the oil and gas industry, but he didn’t have the opportunity before coming to Canada.

“People have strong backgrounds from their own country and they can bring those skills to Canada and work in an

industry that’s always looking for people,” said Yanchyk.

“There is a pool of people, being our new Canadians, immigrants and refugees, that are here, and they’re able,” added Bhandari.

That is the key message of the documentary in her mind.

“They come with a wealth of expertise,” she continued. “They come with skills from all over the world. And they’re here.

And what they end up doing is getting jobs as dishwashers or security guards and cab drivers.”

Bhandari is hopeful that the film will help spread the message throughout the industry that there are immigrants who are very capable of working in the oil patch and that CCIS is training them to succeed in those careers.

“We hope that industry is able to recognize and understand what we’re doing,” she said. “Understand the fact that the people are here and recognize that they continued pg 28

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LOOKING OUT FOR THE LITTLE GUYS Shell donates $37,500 to Family Friendly Coalition james waterman Pipeline News North

Family Friendly Coalition coordinator Cheryl Breitkreutz had to speak over the voices of restless children during the launch of the new Family Friendly website on Friday, June 7.

It was only appropriate considering the website is meant to be a tool for young families, such as those in attendance that afternoon, to help them connect with the community through an events calendar, a directory of businesses and organizations of interest to families, a calendar of training opportunities and a spotlight on events or programs for young children.

“We believe it is crucial for young families to be involved in their community,” said Breitkreutz, adding that it can be especially important in communities like Fort St. John and Fort Nelson, where there are so many stay-at-home mothers who are new to the region because their husbands have recently taken jobs in the oil and gas industry. Breitkreutz said that experience can be “isolating” for some parents.

The new familyfriendlycommunity.ca website has been made possible by a $37,500 donation from Shell Canada, a sum that is expected to keep the site running for the next two years.

“We’re really excited,” said Breitkreutz,

also remarking that Family Friendly has “grown to become a household name” in the region.

“The Family Friendly website is a great tool for showing potential employees and those new to the community the services offered by various organizations throughout the region,” said Bryant Bird, social performance advisor with Shell, discussing how the initiative benefits the company and its staff.

Bird referred to the website as a “one-stop shop” for resources for young families, adding that Shell is pleased to be investing in an organization that helps develop the “leaders of tomorrow.” It also helps Shell in being a “family friendly business.”

Breitkreutz noted that the new site is smartphone-friendly, because parents were asking for the ability to access the information on the go, not always through their home computers.

The site also features early learning research, and the events calendar is now printable. “Parents want that on their fridge,” said Breitkreutz.

“We are now able to sustain this website for the next couple years,” she said of the funding from Shell, adding that it will allow them to build on the foundation Family Friendly has already established.

“Really looking forward to the growth.”

Bryant Bird, social performance advisor with Shell Canada in Fort St. John, discusses the importance of the Family Friendly Coalition and his company’s decision to contribute $37,500 to the new familyfriendlycommunity.ca website during its launch on June 7.

JAMES WATERMAN PHOTO

Former Nexen CEO proposes superfund to indemnify pipelines Daily Oil Bulletin The creation of an insurance “superfund” that would indemnify all Canadian pipelines that provide access to world markets might help ease citizen concerns about the pipelines, a retired oil executive said in May. “So when I think about that, I not only think about pipes, I think about producers, I think about governments, all of whom benefit,” said Charlie Fischer, former president and chief executive officer of Nexen.

“Some of the opposition to pipes, particularly on the West Coast, is where people are very, very concerned about the consequences of a significant spill,” he said in a presentation at the Enbridge Centre For Corporate Sustainability’s Research in Action seminar series.

“I look at that as a very low probability of a very high consequence event,” he said. “When the experts worked through the probabilities there are very low probabilities over a 50-year horizon. Not impossible but low probabilities.”

Fischer said that when he thinks about those events in the business sense, he believes they are insurable issues. “Rather than getting into the debate about revenue sharing and all those sorts of issues, because I think that opens up Pandora’s Box, I think all the beneficiaries of world prices ought to get together and provide indemnities for all the pipes,” he said.

“If you eliminated the cost to citizens, who aren’t exposed to the risk until they agree, I think it changes the discussion a little bit.”

While the oilsands drives a lot of the concerns around the pipe, a lot of that is driven by disinformation, said Fischer.

“The view in the industry, until very recent times, was that if you could provide energy cheaper than water, that was always available, why would anybody complain and that is what the industry has done,” he said. “Suddenly the world changed and the industry took a while to figure out the world had changed -- I think we understand that today.”

However, Fischer said he doesn’t share the view of many of his colleagues that people would “come on side” if only they knew what the industry was doing. “I think when I listen to what people are concerned about they have a legitimate concern,” he said.

According to Fischer, the industry has to listen more closely to people and when there are legitimate concerns it needs to see how it could change its behaviours to accommodate that concern and minimize the risk of that concern.

“I don’t think we’re very good at that,” he said. “I think we are still very insular and we’ve got a long way to go to really learn how to listen and how to integrate that knowledge.”

The oil and gas sector, said Fischer, still has a lot to learn about how to engage with citizens and “how to really have a

dialogue where you really make progress as opposed to talking at one another but there is no true engagement.”

Pat Daniel, who retired a year ago as president and CEO ofEnbridge Inc., also spoke at the event at the University of Calgary’s Haskayne School of Business downtown campus. He confessed that the current situation in which pipeline projects face public opposition was the greatest challenge he ever had to face as a CEO. “We feel that we are responsible for the well-being of our industry and our province and we are unable to get approvals to build projects for reasons that it is very hard to put your finger on at a time when we are most needed by the industry, by our provincial community, by Canadians,” said Daniel.

“This is something I never anticipated in my career, because I think the answers against what we are opposing whether it’s Keystone [XL] in the U.S. or Gateway are totally illogical and hypocritical and I don’t know how to tackle that.”

And while Daniel said he still believes Canada needs a national energy strategy, he does not believe it will ever happen. “If we had a national energy strategy where we knew where we are and where we are going then maybe we wouldn’t go through the same argument time and again every time we put forward a new energy project in Canada,” he said. “We keep repeating the same arguments.”

The former Enbridge CEO said he believes that all Canadians, including the most ardent environmentalists, want to get to the same point. “The difference is how we get there and how quickly,” he said.

“By opening a debate I think we will find how few differences we have instead of so many.”

Both Daniel and Fischer also agreed that the oil and gas industry needs to change in response to the issue of climate change, gradually transitioning over the next 60 to 70 years to more sustainable forms of energy.

However, “I don’t think the majority by any means in the industry believe that,” said Daniel. “I don’t see a lot of companies in our industry trying to transition and that disappoints me and that concerns me,” he said.

“We are not going to advertise our way out of this. We are not going to be able to say we are doing this, we are doing that, we are improving tailings ponds, we are reducing our emissions by this amount. We are not going to be able to do it by arguing that coal is worse,” said Daniel. “We don’t have to change overnight but we’ve got to admit to it and we’ve got to get on with it.”

At the same time, “I am not suggesting for a minute we shut off hydrocarbons; there are too many people in the world that live without access to affordable energy and their lives would be dramatically worse if we cut back what we are doing,” he emphasized.

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A WALK ON THE WILD SIDE A journey to excellence with Devon Energy james waterman Pipeline News North

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A trip to the Evergreen Centre for Resource Excellence and Innovation must seem a sort of homecoming for Kevin Stark.

As surface land and construction manager for Devon Energy, Stark is constantly encouraging innovation, not to mention the use of innovative techniques that were born with the help of his company at the facility in Grande Prairie.

That is why he led a small group of Devon employees through the woods at the Centre on the hot and sunny spring morning of May 16.

“Big value,” Stark said of bringing his colleagues to the Centre. “We can talk about it all we want in the office, but I think you really need to get the guys’ boots on the ground, in the field, to give them a real sound look at what we’re doing out there. So they can fully understand it and respect what’s going on.”

The list of innovations is long. It includes using coarse woody material from removing trees during the construction of access roads and lease sites as a road surface, a practice that Devon has used with considerable success across their western Canadian operations, as proven by the fact that the company has been able to keep access roads covered in that material frozen and navigable well into the spring, when other roads have already turned to mud.

Devon also knows that wood can be left on the road after it is no longer in use, because other studies at the Centre have shown that the material actually helps encourage reforestation by creating micro-sites – small areas with different levels of moisture and sunlight than the surrounding environment – where vegetation ranging from flowers and berries to shrubs and trees prefer to grow.

There was one occasion when Devon mulched the tops of pine trees left over from forestry operations and cast the mulch over a road surface using a manure spreader. Not only did the road hold the frost late into the spring season, thereby making it useful for industry activity longer than unusual, but the crop of seed cones from those treetops soon became a crop of pine saplings as well.

Mike Head, a former Devon employee who now runs a company known as Vieworx in Grande Prairie, remarked that the difference between Devon pipeline right-of-ways and those of other companies that he has flown over during the course of his work is “night and day,” thanks to the application of coarse woody material that has been pioneered at the Centre.

Head said that Devon’s linear disturbances are often far greener than those created by other companies. That is also attributable to Devon’s efforts to disturb the earth as little as possible, thereby leaving root systems intact and promoting the regeneration of that vegetation.

“Safety was a key part of it,” Stark said as he

moves on to discuss another innovation on display at the Centre. It’s a method of constructing water crossings that utilizes a bottomless culvert and a system that uses fabric and a metal grid to create a reinforced soil bridge.

Stark noted that the bridges are good for the environment, particularly aquatic wildlife that inhabit the streams where the culverts are situated, and also good for workers, thanks to the stability of the bridges.

However, Stark reserves the bulk of his praise for the work that has been done at the Centre to improve pipeline construction methods, in order to reduce the land disturbance in that segment of the industry.

Stark explained that Marc LaBerge, the leader of facilities construction at Devon, has been working very closely with a pipeline contractor and Doug Kulba of Alberta Environment and Sustainable Resource Development (ESRD) – the recognizable face of the Evergreen Centre for Resource Excellence and Innovation – to develop a set of tools known as Innovative Pipelining Practices (IPP).

A lot of that work has been simply about questioning conventional wisdom. For example, a typical practice during pipeline construction has been to strip a section of topsoil wider than the pipeline ditch, simply because it has actually been government regulation that the spoil continued pg 26

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special feature GREAT THINGS COME IN SMALL PACKAGES

Microturbines turning up the heat

One area where microturbines are becoming popular is the oil and gas industry. This wellsite in the remote Jonah Field of Wyoming uses a Capstone C30 microturbine to generate electricity to run its pumps. The microturbine uses a small amount of clean natural gas to generate 20 kilowatts of power.

CAPSTONE TURBINE CORPORATION PHOTO

james waterman Pipeline News North It is common knowledge that we can burn natural gas to generate electricity, but it isn’t quite so commonly known that it can be done with a device known as a microturbine.

The Capstone Turbine Corporation has been working in that space since 1988, when a group of engineers left the world of turboprop engines and turbochargers at Garrett AiResearch to develop microturbines to serve as range extenders for hybrid electric cars, but the conversation around the small and efficient energy generators is only now starting to reach a volume where it can be heard by the average energy consumer.

Jim Crouse has a theory as to why that is the case.

The executive vice president of sales and marketing with Capstone has been around engines and fuel throughout his professional life, previously as a representative of Cummins Northwest in Eugene, Oregon, providing logging equipment manufacturers with diesel engines, now in his seventh year with the turbine company.

“My background has been mostly on the sales and marketing side of the business, and application engineering for engine manufacturers and engine distributors throughout the world,” Crouse said as he was about to begin telling the Capstone story.

“The original plan was to build microturbines as range extenders for hybrid electric vehicles,” he continued.

“And back in the late eighties, there was even less of a market for electric vechicles than there is today. And they quickly realized if they were going to have a chance of becoming commercially viable, they needed to find something to do with the technology other than be a range extender for electric vehicles. And about the first eight or ten years were truly used to develop the different pieces of the technology. They were probably about eight years into being a company developing the technology before they started shipping what is today our C30 product for stationary power applications.”

The C30 is natural gas microturbine capable of generating 30 kilowatts of electricity.

As the name suggests, the microturbine is small, a modular design that can be installed easily and inexpensively, but

is also very efficient and reliable, as proven by its low greenhouse gas emissions record and the fact that it can run for tens of millions of hours with little maintenance because it only has one moving part that requires neither lubricant nor coolant.

“The first ten years were spent developing the technology,” said Crouse.

“We’ve been in commercial production for around 15 years.”

The C30 was followed by the 65 kilowatt C65 model.

“And now we have a 200 kilowatt machine, which we’ve engineered into packages of 600 kilowatt, 800 kilowatt and 1000 kilowatt, and that machine’s been in production for about four years,” he added.

Prior to Crouse and his colleagues from the business world joining the company, it was largely led by the engineers developing the technology.

“They were very good technically, but they didn’t really understand the power of business,” said Crouse.

“They had started to develop the 200 kilowatt machine,” he continued, “but when we got here it was sitting on the shelf and they didn’t have a plan to bring it to commercial production.”

Capstone established a partnership with United Technologies Corporation (UTC) at that point.

“To finalize the engineering and bring the [C200] to market,” Crouse explained.

“I think part of why you’re hearing more now is because we’ve matured as a company,” he said. “Instead of being a 30 kilowatt and a 65 kilowatt generator manufacturer, we’re a 30 kilowatt to a megawatt generator manufacturer with multiple products in that size range.”

Actually, Capstone now supplies solutions ranging from 30 kilowatts to 10 megawatts.

“Our business has been growing about 39 per cent year over year for the last five years. And so I think the reason why you may be hearing more about us now is simply because all of our hard work is starting to pay off, hopefully, and we’re getting some traction,” he added.

As so often appears to be the case with technologies that utilize natural gas or other hydrocarbon fuels, the oil and gas industry has been driving the growth of the company, particularly with the development of the shale gas industry in both the United States and Canada.

Capstone’s last quarterly report indicated that 68 per cent of their business is taking place in the oil and gas sector.

“It’s used for production equipment, for pipelines, for station power, for telemetry and valve control, pumpjacks – pretty much anything you can think of,” Crouse said of oil and gas industry uses of their microturbines.

“The one thing we haven’t done yet that we’re looking to do is more drilling,” he continued, noting that there might also be a future for microturbines in the hydraulic fracturing business as that practice and the associated technologies continue to develop.

“Most of that today is mechanically driven pumps,” said Crouse. “Because, really, all the horsepower to do that is really running pumps. Pumping fluid more than anything else.”

Another aspect of the business that could enjoy a particularly interesting future is a technology known has CHP (combined heating and power), especially as individuals and companies look to reduce their carbon footprints through alternative electricity generation, as well as reduce the strain on their bank accounts.

“Microturbines are used usually running on natural gas – but we do have some customers that use propane or other fuels depending on what part of the world we’re in – to make electricity and reduce the amount of electricity that ... customer

JUNE 14, 2013

purchases from the utility,” Crouse said as he began his explanation of the CHP technology and its applications.

“The exhaust on the turbine is in the 525 degree Fahrenheit range,” he continued.

“And then so the customers use the thermal energy to make hot water for domestic hot water or for cooking or for cleaning.

Or industrial customers may use it in a process. And then it can also be used to make steam. So, you can use it in whatever the steam application may be.

“But it can also be used either directly or via hot water or steam in an absorption chiller to make chilled water.”

That is why some people use the term CCHP or combined cooling, heating and power.

“That’s really the whole cogeneration concept,” said Crouse. “And the reason we’re able to achieve the efficiencies is because of that combined use of the electrical energy and the thermal energy from one fuel input.”

Crouse suggests there are three key factors driving interest in CHP today: cost savings on energy consumption, ensuring energy security and environmental considerations.

“Our grid system is pretty reliable,” he said of the energy infrastructure in North America. “We still do have natural disasters or somebody runs into a telephone pole or whatever the case may be. And there’s power outages.

“The ability to use your cogeneration system as a back-up source of power for extended periods of outage is a huge benefit.”

The environmental considerations revolve around carbon footprint concerns, as well as concerns about emissions other than carbon monoxide (CO) and carbon dioxide (CO2), including nitrous oxides (NOx) and particulate matter.

“We’re really the cleanest combustion technology available,” said Crouse. “Our emissions are maybe one tenth the emissions of a diesel engine or a gas engine.

And we’re almost always cleaner than grid power.”

The exceptions on a pure power generation basis are hydro and nuclear.

A great deal of the economic and environmental benefits also stem from the differences between centralized power and distributed power. It isn’t all about lower levels of carbon in natural gas in comparison to diesel fuel and coal or the present low natural gas prices. Efficiency is the key.

“We’re happy with gas if we have gas in the five to six dollar range,” said Crouse. “That’s a real great price point for us. And it allows us to ... generate electricity for less than the average utility price, but it also makes the value of the thermal energy coming off the microturbine high enough that it can be impactful for a customer.

“It goes back to the whole concept of central plan power, transmission [and] distribution versus decentralized energy,” he continued. “And our niche is really in the distributed generation and decentralized energy business. Almost all of our customers generate power and use it at their facility. It’s all inside the fence. So, they’re able to utilize all the electrical

energy and all the thermal energy.”

The fuel efficiency in that case is in the 70 to 80 per cent range.

“When you’re looking at a more centralized model, you’re 35 to maybe 38 per cent when you turn on the switch at your house for efficiency,” said Crouse.

“The carbon benefit comes from the efficiency,” he added. “Because grid power is 35 per cent efficient, the carbon footprint of a kilowatt-hour for electricity from the grid is higher than a similar energy output from the microturbine in a cogeneration application.”

Hotels and hospitals are big parts of the CHP market currently.

“They’re a good fit because they tend to use a lot of hot water and electricity,” said Crouse.

“What we typically do is we size for thermal load requirements because that usually then keeps us under the electrical load requirements,” he continued. “We can run 24 hours a day, 365 days a year, making as much hot water and electricity as possible.”

Crouse cited the Four Seasons hotel in Philadelphia, Pennsylvania as an example of how microturbines can work for the hospital industry. Capstone has three 65 kilowatt machines at that hotel, producing about 30 per cent of their electricity requirements, but as much as 90 per cent of their hot water requirements.

“There’s a very good load profile,” Crouse said of facilities such as hotels and hospitals.

“Their load doesn’t vary more than maybe 10 or 15 per cent from peak to off-peak, which makes it nice to size a cogeneration system,” he explained. “And that applies to both the thermal and the

electrical side.”

Commercial office buildings are also a good fit of microturbines, particularly when those buildings contain large data centres.

“Data centres are high energy users and they’re a good fit for cogeneration in a lot of places,” said Crouse.

Capstone improved their ability to work in that space with the introduction of an energy system known as the Hybrid Uninterruptible Power Source (Hybrid UPS) that can provide constant power to facilities that require constant power.

Data centres are a prime example.

“Our first project was at Syracuse University,” said Crouse.

“There’s 12 of our C65 Hybrid UPS microturbines there that provide all of the conditioned power that they need, as well as hot water and chilled water,” he continued.

Subsequent Hybrid UPS installations include the data centre at Capstone headquarters.

“We see that as a growing market,” said Crouse. “And sort of our challenge there was we needed to prove or validate to those customers that our power reliability was as good as the incumbent.

And now that we’re able to point to that reliability in a number of different cases, we’re going to start more aggressively marketing to that small data centre market segment.”

Continuing to improve the environmental performance of energy generation is also part of the future for Capstone, particularly now that the conversation is turning toward solar power with natural gas microturbines as back-up power as an efficient and environmentally friendly alternative to centralized power plans

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ranging from coal and nuclear to hydro and wind.

It is an idea that could work on a building by building basis.

“Solar and distributed generation work well together,” said Crouse.

“Take a commercial office building that maybe has a peak load of a megawatt,” he continued, adding that the off-peak load during the night could be less than half of that amount.

“Typically, what we’re trying to do with an application like that is put in a baseloaded microturbine CHP installation, and then solar helps to cover that peak electrical demand that’s driven by the people occupying the space and the additional cooling that’s required when they do so.”

It is also possible to run the microturbines on various forms of biofuels.

“We can run on any methane fuel [including] landfill gas,” said Crouse, adding that Capstone has also done some work with biodiesel.

“As that industry matures and the quality and consistency of the fuel stock is improved, we’ll be able to operate on it more consistently.”

It all points to the possibility that natural gas may actually be that transition fuel to a renewable energy future as so many energy sector experts suggest.

“Whether that transition is 20 years or 50 years I think will be driven by how well some of these other technologies become cost effective and how well the grid operators can manage the intermittency that some of the other technologies [offer],” said Crouse.

“Natural gas is definitely a bridge fuel or a transition fuel to a more renewable electrical infrastructure.”

Marathon Oil uses a Capstone C30 microturbine at one of their gas transmission sites in Kenai, Alaska. They run the microturbine with the gas that they are pumping. Previously, they were using a diesel generator that required frequent refuelling. This microturbine runs at temperatures well below freezing and without any operator intervention.

CAPSTONE TURBINE CORPORATION PHOTO

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industry news

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Petroleum Show puts focus on technologies and careers equally important to that, to have the producers come and learn a little bit more about what’s changed over the last couple years.”

Connecting the oil and gas producers with the service sector is another important face of the show.

“If you look in Grande Prairie, northwestern Alberta, northeastern B.C., we work with these people and the technology and the equipment day-to-day,” said Petrone. “And it’s just a great opportunity to get everybody in the same place over a couple days. And meet new acquaintances and learn a little bit more about what’s changing and opportunities [that are] coming.”

Petrone thinks the level of participation in the show suggests that Grande Prairie has truly become an oil and gas industry hub in Alberta.

“If you look at the history of oil and gas production in Alberta,” he explained, “it kind of started in southern Alberta and moved up through Calgary, Red Deer, Nisku, Edmonton, and then branched off

northeast to the oil side and northwest to the gas side.

“The service companies go where the activities are,” he continued .

“Today, Grande Prairie’s a hub. And Fort St. John to a great extent as well.”

Calgary might be the head of the industry in western Canada, but its arms and legs are hard at work in places like Fort McMurray, Fort St. John and Grande Prairie.

Petrone said the exhibitors are pleased with the growing recognition of that fact because it means they can showcase their businesses and their equipment in their own backyard instead of incurring the expense of transporting that equipment to Edmonton or Calgary.

Petrone also noted that the Peace Region Petroleum Show now routinely features more of the heavy equipment used in the industry than similar events in those major centres.

“I think we have a great opportunity,” he said of the future of the show.

“I think it’s important to our community and northwestern Alberta and northeastern B.C. to continue doing this.”

The Peace Region Petroleum Show in Grande Prairie isn’t just a great place to check out the heavy equipment used in the oil and gas industry, but it is also an opportunity to learn about new technologies and career opportunities.

JAMES WATERMAN PHOTO

New regulation takes aim at interwellbore communication cont’d from pg 3

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impacted,” said Barter.

“Hydraulic fracturing is a safe process,” he continued. “The concerns [are] that, if wellbore integrity [isn’t] 100 per cent sound, than the process becomes compromised.”

The directive includes other features to address those concerns as well. Oil and gas producers will have to be able to prove that they have taken operational risks into account when designing and constructing wellbores, largely due to the industry shift from dual-barrier wellbore construction to single-barrier construction.

Companies will also have to conduct testing and monitoring to demonstrate the maintenance of that wellbore integrity.

Interwellbore communication is front and centre in a requirement that companies perform a risk assessment prior to fracturing operations, as well as devise a plan to manage the effects of interwellbore communication if it should occur during fracturing.

Additionally, the directive outlines rules for conducting hydraulic fracturing at shallow depths between 200 metres and 600 metres below surface, since producing from that zone is becoming economically viable, but those resources also intersect with zones of groundwater protection in many jurisdictions.

Those measures include performing risk assessments, obeying setbacks from water wells and the top of the bedrock, and only using chemical additives in fracturing fluids that are environmentally friendly.

“When we make significant changes to the regulations the companies are required to adhere to, we will ... go out to industry and the public ... and say, ‘What do you think of what we’ve proposed to address these concerns and these issues

around hydraulic fracturing?’’’ said Barter, explaining the consultation process that ran from Dec. 6, 2012 to Feb. 4, 2013.

“What we get, typically, is pretty low feedback, just because it’s a technical industry. But it is important for us to go out and consult with the public,” he continued.

“However, during the hydraulic fracturing directive consultation, we received well over 300 responses from industry, from the public, from interest groups, who made some very good points.” The feedback is accessible on the ERCB website.

“We’ve either addressed the feedback through integration in the new regulations, or we’ve explained why we couldn’t integrate their suggestions and thoughts into the new directive,” said Barter.

“In some cases,” he added, “we find that the public isn’t all that aware of the existing regulations. So, when they bring up an area that’s fairly hot and they think that some aspects should be done in different ways, sometimes it just takes some education.

So, we’ve done that part of it as well.”

The comments and questions included in the feedback primarily come from the general public and the oil and gas industry, as well municipal governments and Alberta Health.

“It was all very applicable,” said Barter.

“The feedback we got from the consultation was directly related to hydraulic fracturing.

It’s precisely what we were looking for.”

Conversely, the ERCB hasn’t heard very much feedback since the directive was finalized. Barter said he has been surprised by the silence from industry stakeholders.

‘They haven’t really commented beyond the initial feedback that they provided,” he continued. “I would suggest that no feedback at this point on the directive is probably good news.”

profiles

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ENERGY EFFICIENCY Acceleware building a better future for the oil patch james waterman Pipeline News North

oil and gas industry in recent years, partly because of changes in the cell phone marketplace.

“A lot of the traditional space that we were in just as Maybe it isn’t the typical tale of success in the Canapure antenna design,” Miller explained. “We kind of sold dian oil and gas industry. to almost everyone in that marketplace.”

It doesn’t begin with an oil find akin to the Turner ValA cell phone manufacturer such as Samsung – an Acley discovery that set the Alberta oil industry in motion, celeware customer – used to offer as many as 30 different but starts with a small group of professors and graduate phone models, but only have one or two models at this point. students at the University of Alberta searching for a level The need for Acceleware’s electromagnetic technoloof computing power that was both necessary to their gies has diminished. “That market is only so big,” said research and beyond their budget.

Miller. “Oil and gas, even though it’s a very different “And they stepped outside the university and founded customer, the technologies are very similar.” a company,” said Robert Miller, chief marketing and Acceleware is just starting to push that technology in a sales officer with Acceleware, the technology company bold new direction that could mean big changes in how that began with that research team and their need for a the industry produces its oil. better computer in 2004.

It is an idea known as RF heating, and it is a method The focus of the venture was “high-performance of producing heavy oil such as Alberta oil sands bitumen computing” utilizing the latest technologies, particularly that is so viscous – it typically has the consistency of mographics processing units, or GPUs. lasses – that it doesn’t flow easily without heat, which is “The real core of it was gaming,” Miller said of the usually created by burning natural gas to generate steam development of the GPU business. that is pumped into the reservoir.

“What’s inside of a GPU is essentially a very powerful “This is radio frequency heating,” said Miller. “And this is the computing board that is not a CPU (central processing idea of designing antennas, putting antennas in the ground, unit),” he continued. “It doesn’t do everything. It doesn’t to heat heavy oils, as opposed to using conventional steam do your email and that kind of stuff. But in terms of just technology.” a number-crunching-type board, it’s incredibly powerful, The idea began with a company in the United States that and it has several thousand processing cores just on a tried the technology in the 1990s without much success. board that you can stick inside your desktop computer.

“They ended up just kind of melting the equipment,” And so by using that technology, it allows you to get said Miller. a tremendous amount of number-crunching computer The problem was that they weren’t able to run a power in a very small footprint.” simulation, and the consequence was design flaws in Acceleware’s applications of GPU and electromagnettheir antenna. ic technologies quickly thrust them into the oil and gas “The challenge here is I need to put a lot of power into industry. “Oil and gas is our main market,” said Miller. the formation, but I need to disperse that power away Acceleware offers two key products to the energy sec- from the antenna, get it out as far as I can,” Miller contintor, the first being the ability to process seismic informaued. “And we’ve been able to – at least in theory at this tion using Reverse Time Migration, or RTM. point – design antennas with special features in them “It’s a migration algorithm that’s been around for a that will propagate that energy farther out and away from while, but it was so computer-intensive that for the last the antenna. And we’ve done that all through simulation, several years it’s only been used through using the computing power by the biggest of big companies “This technology will and the software we’ve created.” that had tens of thousands of When Acceleware was contacted computing cores available to by the oil producer interested in use less energy than them to process seismic data trying the technology again, their using the RTM method,” he first task was to determine why their traditional steam continued. previous attempt had failed.

RTM is an extremely accurate “And so we went back and actualtechnology.” method of producing images of ly did a post-mortem on this project, the subsurface geology, which [and] discovered really what was makes it a valuable tool for oil – Robert Miller, Acceleware wrong with the design,” said Miller. producers hoping to extract The partners began moving forward hydrocarbon resources from that with the new effort at that point. subsurface.

“We’ve been doing research now “We’ve been able to start to expand the marketplace for about two and a half years. And our first antenna – for RTM,” said Miller, adding that the use of GPUs is test antenna – is going to go into the ground later this making that possible. year. In the fall of this year,” said Miller.

“Smaller companies can use it,” he continued. “Larger RF Heating could be used in ordinary oil sands operacompanies are now migrating to the GPUs as well, betions, but there are a few specific situations where it cause it’s just such a powerful computer technology.” could be most beneficial.

Their customers in that space are the seismic service “They have some heavy oil reserves that for a variety providers that actually process the data and produce imof reasons can’t be produced with steam,” Miller said of ages of the subsurface geology. the oil company working with Acceleware on the project.

“The second market is the electromagnetic,” said Miller.

“It’s kind of shallow and it doesn’t have a real good It isn’t an area where Acceleware exclusively works cap structure,” he explained. “So, whenever they’ve tried with the oil and gas industry. “Anything that deals with to put steam into the formation in the past, it just broke antennas ... are big markets for us,” said Miller. through and actually came up to the surface. There was Chief among those markets is the cell phone business. no way of really containing the steam inside the formation.

“Every cell phone manufacturer in the world is cur“It’s a stranded reserve.” rently or has previously used Acceleware technology to That company isn’t alone in that predicament. help design their antennas,” he added.

Additionally, RF Heating could prove to be the best The company has been sharpening its focus on the way to develop resources in carbonate formations found

Pedro Vaca, a reservoir engineer with Acceleware, is researching radio frequency heating of heavy oils. The technology could drastically change how oil producers pursue resources in the oil sands and carbonate formations of northern Alberta.

ACCELEWARE PHOTO

in northern Alberta.

“These are very heterogeneous-type reservoir structures where they’re full of cracks and holes and tunnels,” said Miller. “Steam works in things like the oil sands where you have a very uniform-type formation, but if you have a formation where it’s complex – think about if you put steam in there and it finds one crack.

Well, it’s all going to go up that area. It’s not going to develop a steam chamber.

“So, the carbonate reserves are ... particularly interesting, because they don’t really have a great solution to produce in those areas right now.”

Acceleware is also anticipating huge benefits in terms of efficiency, as well as reducing the environmental footprint of the oil industry.

“Our studies have shown so far that this technology will use less energy than traditional steam technologies,” said Miller. “And it certainly is much less infrastructure. I don’t have to build a steam plant. I basically run electricity to the well site and there is an RF generator on the surface. And that generates the RF signal that you put underground.”

Acceleware expects that method will require about 30 per cent less energy than the traditional practices of using steam. There are advantages in other areas as well.

“You don’t use any external water,” Miller explained.

“You use the water that’s in place. That’s really what’s heating. As the radio waves propagate into the formation, they’re heating up the water molecules. And that’s providing the energy.

“And RF has a very great characteristic that once it heats the water molecules to a certain point, then it moves on, it keeps migrating outwards. So, you don’t have to add any water. You just use the water that’s in place.”

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industry news

BRAVE NEW WORLD

Shell brings LNG fuel stations to Canadian highways james waterman Pipeline News North

Truck drivers prepare for a unique ribbon-cutting ceremony at the Shell Flying J Travel Plaza on Tuesday, May 28. The event was the grand opening of the first liquefied natural gas trucking route in Canada, which has begun with one fueling station in Calgary and will grow with additional stations in Edmonton and Red Deer.

SHELL CANADA PHOTO

“For heavy-duty truck operators facing a challenging economic climate, LNG could be a cost competitive fuel option, particularly for those looking to invest in new fleet vehicles,” he added.

If trucking companies switch to LNG for their transportation fuel, it could also benefit a Canadian natural gas industry searching for new markets and a solution to R001492257

At a time when so much of the talk about liquefied natural gas (LNG) in western Canada has been about shipping that fuel to distant lands across the ocean, one natural gas producer has been thinking about pumping it into the gas tanks of heavy-duty trucks right in our own backyard.

That is exactly what Shell Canada is doing now that the first LNG trucking route in Canada has had its grand opening on May 28 at the Shell Flying J Travel Plaza in Calgary, Alberta.

“The Highway 2 corridor between Calgary and Edmonton is the ideal place to start, as it is one of the busiest trucking corridors in western Canada,” said Bob Taylor, manager of LNG business development with Shell Canada, adding that the Calgary station is also nearby the liquefaction facility being built at their Jumping Pound Natural Gas Complex just 33 kilometres west of the city.

The grand opening was a relatively small affair, approximately 50 guests and company representatives safe and sound behind concrete barricades near the LNG islands at one end of the plaza, eagerly waiting to watch a heavy-duty truck with an “LNG” license plate perform a rather unique ribbon-cutting ceremony.

The numbers were small and the precautions were necessary because the station was accepting diesel customers that Tuesday morning.

A second LNG fueling station will be built in Edmonton and there are plans to build a third station in Red Deer.

“We are very pleased to be working with Shell on this leading edge initiative that stands to transform the commercial freight and fuel industries in North America,’ said Trevor Fridfinnson, vice president of western operations with Bison Transport.

“Proving that this alternative fuel source can be economically and practically viable is our objective, aligning perfectly with our company values.”

Taylor noted that using LNG as a transportation fuel in the heavy-duty trucking industry can provide a carbon dioxide (CO2) emissions reduction benefit of up to 20 per cent over diesel on a wells-to-wheels basis, but he thinks the real incentive for trucking companies is the economic benefit.

“The main reason for switching to LNG in transportation is the cost benefit,” he said. “LNG is sold at a discount to diesel fuel. And even with the additional truck costs, we believe there is a strong business case to move to LNG fuel.”

“Pioneering LNG for fleet use allows us to bring a new product to market and choice to our customers,” says Jean-Marc Morin, general manager of commercial fuels with Shell.

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low commodity price woes.

“Giving Shell’s customers the ability to tap into a lower cost fuel option is a good business opportunity for both Shell and our customers,” said Taylor.

“Shell is a large natural gas producer with decades of experience in LNG and over 100 years of experience delivering fuels to Canadian customers,” he continued.

“Adding LNG to our product offering is another way to deliver value to our customers, and that is important for both their and Shell’s competitive position.”

It isn’t all about the wheels on the pavement when it comes to heavy horsepower applications, however.

“In addition to on-road trucking, LNG is well-suited to high horsepower applications such as industrial power generation and rail,” said Taylor, adding that his company was also a sponsor of the LNG for E&P conference held in Calgary on May 14.

The purpose of that conference was to discuss how using LNG in oil and gas industry operations could help producers reduce their costs and their greenhouse gas (GHG) emissions.

“The cost benefits of using LNG,” said Taylor, “can make drilling operations more profitable.”

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MODEST MEN

Fort St. John Petroleum Association recognizes a pair of outstanding citizens james waterman Pipeline News North Modesty characterizes the recipients of the Ivor Miller Award and the Oilman of the Year Award that were presented by the Fort St. John Petroleum Association during their Oilmen’s Golf Tournament barbecue on Saturday, June 7.

The Ivor Miller Award went to Bruce Craig in recognition of his years as a hardworking associate member of the club, during which he has been heavily involved in organizing golf tournaments and curling bonspiels.

“It’s a big surprise. It means a lot,” said Craig.

“It’s nice that he’s recognized for everything he does,” added his daughter, Shannon Craig. “We know. We see it every day. Now everybody else knows.”

“He’s an associate member,” said Sean Thomas, president of the Fort. St. John Petroleum Association.

“Doesn’t work directly in the oil and gas sector,” he continued. “But with all of his dedication, his fourteen years on the golf committee, putting together the couples golf tournament and also now the seniors tournament. And he’s been a member for over 26 years. In my opinion, this is a prime example of what our associate members [should be].”

The Oilman of the Year this year is a man known to many as the Mayor of

Peejay, Don Kyllo.

Thomas said Kyllo deserves a lot of credit for the pipeline infrastructure that exists in the Peejay area after his 17 years working for Canadian Natural Resources Ltd. (CNRL) in that region, which is why he has been given the mayor moniker.

“First time I was in Peejay was in November of 1963,” said Kyllo. “I spent a lot of time out there.”

“He’s done a lot of stuff in this area,” said Thomas. “He’s well known and well respected in the entire industry. I’ve had a great opportunity even working with Trans Carrier Ltd. (TCL) to be able to work with Don on a one-to-one basis and speak to him on a daily basis.”

“It’s an award I never expected,” Kyllo continued. “There’s probably a lot more guys out there more deserving than I am, but I guess when they pick your name, they pick you.

“You go above and beyond what’s expected of you just to help guys out, especially in the field,” he added. “If they got something they need a hand with, you go help. You don’t just leave them there.”

Thomas said the men who win these awards certainly deserve the recognition.

“It’s not an easy industry, as most people know,” he said. “You spend a lot of time away from your family. A lot of long hours, long days.

“Everybody recognizes the contributions of those people.”

The man known as the Mayor of Peejay, Don Kyllo, accepts the Oilman of the Year Award from Fort. St. John Petroleum Associaton president Sean Thomas on June 7. Bruce Craig was also presented with the Ivor Miller Award that night.

JAMES WATERMAN PHOTO

Montney and Deep Basin focus of Tourmaline activity Daily Oil Bulletin Tourmaline Oil Corp. is continuing to pursue new E&P plays and opportunities as it ramps up its Alberta Deep Basin, Montney liquids-rich gas and Charlie Lake oil projects, shareholders heard Wednesday, June 5.

In the Outer Foothills, the company is looking for a step-change in the emerging fracture-enhanced Wilrich play, Mike Rose, president and chief executive officer, told the company’s annual meeting. Three high-rate vertical wells have already been drilled and the company plans to drill three horizontal wells in the second half of this year. There are more than 150 locations in the inventory.

Other new plays or opportunities this year include two deep Paleozoic tests (one at Sunset/Parkland in British Columbia and one in Alberta), along with exploration wells in the Charlie Lake regional oil play at Spirit River, Alberta.

At Resthaven/Smoky at the north end of the Deep Basin, Tourmaline is looking at drilling two horizontal Montney wells at the end of this year or in early 2014.

Plans also call for Devonian strat tests in the Deep Basin where Tourmaline has identified nine prospects along with drilling two to three wells in the emerging

Outer Foothills Cardium oil play where it has an inventory of more than 500 locations.

Current total production is 75,000 boe per day with 16,500 boe per day shut in/awaiting tie in. Of that, 13,000 boe per day will come onstream this month with the start up of the new gas plant at Sunrise/Doe and the gas handling facility at Spirit River.

Tourmaline has two main core areas: the Alberta Deep Basin where it focuses on the tight sands and the Lower Cretaceous and the Peace River High complex where it targets the Triassic sediments, the Montney and the Charlie Lake. In both areas, it has a deep Paleozoic exploration area.

With a land base of more than one million acres (80 per cent operated), Tourmaline is by far the largest owner in the Deep Basin. In operating there, it also does a few things differently from other operators, Rose told the meeting. For example, it uses 3D seismic to pick nearly every location. While that requires significant expense upfront, most of that expense is now behind it. “We think that gives us a bit of an advantage,” he said. It also likes to build and control its own infrastructure.

Current gas production is 270 mmcf per day and with natural gas liquids is up in the 62,000 boe-perday range.

Tourmaline has a future drilling inventory in the Deep Basin of more than 3,100 vertical well locations with downspacing of two wells per section, although nearly all of it is approved for four wells per section. Horizontally, contemplating just three horizons it has more than 3,600 locations.

Starting up in the next two weeks, the company plans to have eight rigs running in the Deep Basin. One rig will do vertical wells down the backside of the asset base where it has seismically-defined features at the edge of the outer Foothills Belt where the Peace River sands get fault repeated. “They have been extremely lucrative wells,” said Rose.

The other seven rigs will be running horizontal wells, including six doing Wilrich horizontal wells and one doing Notikewin horizontal wells.

So far, the company has drilled 14 horizontal wells in the Notikewin and plans to do about 10 this calendar year. The formation is seismically mappable with a series of north-south channels very pronounced on the 3D seismic, he said. Tourmaline has an inventory of 530 and nearly all the north-south channels have been first calibrated with vertical wells, so “it’s extremely low risk.”

Test rates are between seven and 10 mmcf per day. continued pg 26

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industry news PRINCE RUPERT BOUND Peace Region has its say on pipeline project

james waterman Pipeline News North Peace Region residents were given their opportunity to affect the environmental assessment process for the one of the latest major pipeline projects proposed for British Columbia on Wednesday, May 22.

Spectra Energy and their partner BG Group have put forth a plan that would see the construction of a new natural gas transmission system from the northeast corner of the province to a liquefied natural gas (LNG) export hub on Ridley Island in Prince Rupert.

The company held an open house in Fort St. John to discuss the project with the public and ensure environmental concerns would be addressed by their application to the B.C. Environmental Assessment Office (EAO) “The B.C. Environmental Assessment Office requires that we go out to the communities when we’re doing our draft application information requirements,” said Evan Saugstad, manager of aboriginal affairs and permitting with Spectra in Fort St. John, adding that the open house is an opportunity for the public to “influence what … we state in the application.”

“The public comment period began at the beginning of May and goes until June 2,” said Mike Peterson, a project assessment manager with the EAO, who was representing that agency at the open house.

“What we’re looking for is just comments from the public on the draft application information requirements,” he continued. “What we’re looking for is to make sure that we’re looking at the right values and that we’re using the right methodologies.”

Prior to the open houses, EAO asks the project proponent to supply all the information they will be presenting during the sessions.

“A lot of their placards are on some of … the value components,” Peterson

said of Spectra. “And I think that’s good.

Because that’s what we’re looking for, is information on the value components. Do we have the right ones? Are we missing some? What we basically do is just ask the proponent to speak to those.

“They’ve also spoken to things like some of the routing and so on and so forth, because there’s lots of questions [that] come up on that,” he added.

“EAO works with the proponents to make sure that we do have that information there to get some good response.”

After the open houses, EAO gives the comments they receive to the project proponent.

“Once we’re satisfied with the proponent’s response to the comments, the next stage would be issuing the application information requirements,” said Peterson.

The proponent subsequently puts together their application based on those requirements.

“We would run a screening process,” added Peterson. “And then, if they met the requirements in the [application information requirements], we would initiate the application.”

The Fort St. John stop was one of two open houses – the other taking place in Prince George on Tuesday, May 21 – specific to the environmental assessment process, but Spectra also held a series of similar events in Fort St. James, Smithers, New Hazelton, Terrace, Burns Lake, Mackenzie, Chetwynd and Hudson’s Hope between February 18 and March 7.

The public can also comment on the project through the energyforbc.ca website and Spectra’s offices in Fort St. John, Prince George and Terrace.

Peterson said the route of the pipeline has been the biggest topic of conversation, particularly when it comes to issues such as stream or river crossings and areas where wildlife of concern such as caribou reside.

The proposed route follows an existing Spectra pipeline corridor south from

Spectra Energy and British Columbia Environmental Assessment Office representatives were in Fort St. John on Wednesday, May 22 to discuss the environmental aspects of a pipeline proposal that would ship natural gas from the northeast corner of the province to Prince Rupert for exporting as liquefied natural gas.

JAMES WATERMAN PHOTO

the Cypress area to Willow Flats just west of Chetwynd.

The company is considering three possibilities from that point.

The pipeline could head west to Kitsault before traveling south to Prince Rupert underwater or it could drop into the ocean south of Kitsault.

The third option is to build the pipeline on land all the way to Prince Rupert.

Saugstad noted that the discussion around the project varies from community to community along the over 850 kilometres the pipeline would traverse.

Salmon are a big concern in the northwest.

“It’s so important to their cultures and their well-being,” said Saugstad.

“And then you get more into the northeast here,” he added, “and then it’s maybe more on gas production and [land] disturbance. And through the mountains, it’s caribou.

“You have the mountain caribou in the Rockies,” he continued. “I think that’s a longstanding issue up here from Tumbler Ridge right up into the Pine Pass with the low numbers of the mountain caribou. A R001424176

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lot of interest on effects on bears, but that comes more from people that have never been around pipelines.

Generally, bears like pipelines, but then hunters know bears like pipelines.”

One interesting issue already identified by Spectra is the presence of contaminated sediments in the water at Alice Arm left by the old mining operation at Kitsault.

“They had an ocean dumping program,” said Saugstad. “They took the tailings from the mine, they put them on a barge, and they went out in the inlet and they dumped them in the ocean.

“It’s not known how much heavy metals are actually in those tailings,” he added.

Spectra is concerned about what the effect might be if they choose the undersea pipeline route and disturb those sediments during construction.

“Coming up this summer, we’ll take a remotely operated submarine – they’re huge – and they will follow our whole underwater route with a video camera,” said Saugstad, explaining how Spectra plans to assess that risk.

Additional remote submersibles will also be used to take core samples from the ocean floor to determine the composition, depth and stability of that surface so the company can decide if they will bury the pipe or rest it on the ocean floor.

“And in the terms of those sediments,” he continued, “take samples, send them to the lab, and see what is actually there.”

Saugstad indicated the public isn’t as concerned about the product – natural gas – as they are with oil pipeline projects such as Enbridge’s Northern Gateway, Impacts on wildlife such as salmon and mountain caribou are among the issues that would likely need to be addressed but they still have questions about the construction and

by Spectra and BG Group during the environmental assessment process for their proposed natural gas pipeline. That operation of the project. process begins with open house forums such as the one that took place in Fort St. John in May. Saugstad seems confident Spectra can earn their trust.

JAMES WATERMAN PHOTO “We’ve been in B.C. for 57 years,” he said. tion of the undersea portion during the commercial fishthe pipes.

“Most people out west never heard of us. We say ing season so as not to disrupt that industry.

“And a lot of confusion about who’s doing what … and that’s a good thing. Because, as you know, bad news is “That’s all going to be planned.” are they all going to happen.” always on the front page.”

Much of the early work is already well underway already.

Spectra is hoping to submit their application in The company also works hard to minimize their impact “We’re out right now consulting with the communities early 2014, assuming BC EAO will take about a year on the surrounding environment and communities during – all the First Nations, local communities, stakeholders,” to assess that application and make their decision in the construction phase. said Saugstad, adding that Spectra early 2015.

“We’re confined to narrow will also be talking to trappers and “Then it will take six months or a year for the comright-of-ways. So, there’s a “Make sure that we’re guide outfitters to understand the panies to decide whether it’s feasible,” said Saugslot of planning … to get you impact the project could have on tad. “They would come to their FID – or final investdown to the lowest footprint looking at the right their activities. ment decision – and then construction would start possible,” Saugstad exBiologists are already collecting after that. The LNG plant would probably take about plained. information, including determining four years to build.”

“Locating your camps and values and using the fish species living around potential That would put the operational date in 2020 or 2021. your workers as close to the water crossings using electrofish“Some are more aggressive,” said Saugstad, discusssites as you can so you keep right methodologies.” ing and net pens. ing how the timeline for Spectra and BG compares to them off the roads, free up “I think it’s generally supportive,” other LNG project proposals. “But it remains to be seen the roads for the local people.

Saugstad said of the public opinwhether they can get through the environmental assess– Mike Peterson, EAO Water management is a big ion of the emerging LNG industry ment process and make all those decisions.” one – controlling your water in B.C. The process of securing sales contracts could also for your stream crossings and “There is a lot of interest on how many projects there delay actual shipments of LNG, but market issues don’t rainfall events. Burning your garbage so bears don’t get may be and the cumulative total of all of those – numconcern Saugstad right now. into garbage and become nuisance bears.” ber of plants, number of pipes, number of wells to feed “The business side will sort itself out.”

Another important consideration is avoiding construc-

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special feature

RISE OF THE ROBOTS Unmanned vehicles on display in Fairview james waterman Pipeline News North The quiet Alberta town of Fairview was invaded by tiny robots on Thursday, May 30, but it wasn’t some science fiction horror brought to life.

It was a demonstration of Unmanned Vehicle Systems (UVS) presented by the Peace Region UVS Partnership (PRUVSP) in an effort to grow interest in an industry that has applications ranging from emergency services to the agriculture, mining and oil and gas industries.

“The demonstration today is to just show some of the local politicians and local businesses the different applications for the three types of unmanned vehicles,” said Ray Skrepnek, a councillor with the Municipal District of Fairview, as well as a member of the PRUVSP. The three types of vehicles are Unmanned Aircraft Systems (UAS), Unmanned Ground Systems (UGS) and Unmanned Underwater Systems (UUS).

“We really need to start moving the industry forward in this region,” added Lloyd Sherk, project officer with the Grande Prairie Regional College Centre for Research and Innovation (GPRC CRI).

That is partly because of the applications for UVS – both existing and potential – and the challenges still facing the industry.

“That’s where I think it’s really exciting,” Sherk said of the applications.

“There’s a huge push by some of the big mining companies to use ... remotely operated mine trucks, especially in uranium mines where you don’t want to put people down where there’s radiation,” he continued.

Sherk explained that mining operations are a good fit because they are very controlled environments where companies don’t have to worry about people randomly walking through areas where work is taking place.

“Then you can make specific routes for an unmanned vehicle,” he said.

“And mines, certainly, a lot of times, are dirty, dusty and dangerous, which are what unmanned vehicles are really good for.”

Sherk noted that the oil and gas industry presents similar circumstances where access to a site is tightly restricted and the work can be dangerous for a human employee, such as in gas plants or oil refineries.

That could be another application for UVS. However, one possibility in the energy sector also sheds light on the challenges the UVS industry is still experiencing.

“Potentially, it would be good for actually doing the pipeline inspections,” said Skrepnek, referring to UAS specifically.

“The biggest thing is the limitations because we can’t go out of line of sight,” he added.

“At present, there are no regulations

that allow you to fly,” said Sherk, also discussing the issues around the UAS portion of the industry.

“You can apply to get a special flight operations certificate, which allows you to fly in a specific area at a specific time,” he continued. “Depending upon your safety record and your experience, sometimes you can have one for six months in region. Or if you’re just starting out, you get it one time at one event.”

Sherk also mentioned that Transport Canada is currently working on the problem.

“It’s going to become easier,” he said, adding that it is likely a number of years until UAS vehicles are allowed to fly beyond line of sight for performing tasks such as patrolling or inspecting pipelines.

“People are just afraid of what’s going to happen if they did interfere with a manned aircraft.”

UGS and UUS are also encountering obstacles.

“It’s proving the reliability,” Sherk said of UGS. “If you put a self-drive car on a highway, you’ve got to make sure that it’s not going to be involved in an accident or it can avoid an accident,” he explained.

“That’s going to happen. And it’s probably going to happen a lot quicker than we think. I read one article that said by 2030, morally, you probably won’t be able to drive your own vehicle. You’ll have to computer-drive it because it’s going to be much safer than the average human.”

UUS vehicles are certainly not a new phenomenon, but the technology is still expected to improve considerably in the coming years as equipment shrinks in size and sensors and computers

Jeff Christopherson of Inuktun Services explains the operation of one of his company’s robotic cars during an unmanned vehicle demonstration in Fairview, Alberta on May 30.

JAMES WATERMAN PHOTOs

JUNE 14, 2013

A crowd of onlookers scan the sky for the small robotic aircraft being flown by Steve Myshak of ISIS Geomatics. The unmanned aircraft aren’t allowed to fly beyond line of sight yet, but the hope is they they can eventually be used to inspect long stretches of pipeline.

JAMES WATERMAN PHOTO

become more powerful.

Sherk said the industry could eventually see UUS vehicles that aren’t bound to surface by a tether.

“But that’s a ways off yet too.”

One of the main applications for UUS is search and rescue operations.

PRUVSP is also looking at how the UVS industry can grow its presence in the area of emergency response and play an important role in that sector.

“You can send a robotic device in,” said Skrepnek.

“You can send that into a site that’s too dangerous for people to go into to find out what’s actually going on in there,” he added.

“This is a project we started, basically, to look at how we can integrate unmanned vehicles into the first response,” said Sherk. “In a lot of cases, it’s not particularly to rescue, but it’s more situational awareness. So, you’ll have an aerial platform that’s got a camera so you can see a route in. Or, if there’s a fire, you can get a better idea of what the fire is.

“If you had a hazardous materials spill, you could actually check out to see what the material looks like or where it’s spilled.”

That could be as simple as reading the writing on the side of a railcar.

UGS could be sent into buildings that have collapsed in order to find people trapped inside and deliver items such as food, water or a means of communicating with the emergency response crew.

“The fire departments are looking at them quite seriously because they can give them a better situation picture,” said Sherk. “The search and rescue people are really interested. The police are using them right now, especially the OPP (Ontario Provincial Police) in Ontario.”

Policing applications include photographing crime scenes.

“The RCMP have got a number of

them,” Sherk added. “They’re using them to look at crime scenes or do surveillance.”

Obviously, Peace Region proponents of UVS are also interested in the forestry and agriculture applications of the technologies.

“Agriculture – that’s huge,” said Sherk, noting that John Deere is developing equipment that would allow one operator to control as many as four pieces of UGS machinery.

“Spot-spraying,” said Skrepnek, suggesting another agriculture application for UAS. “You can send it over with different filters and it can monitor a field, and then you can send it back over with a chemical to spray exact spots,” he continued.

“Doing it on the ground, you’re doing a lot of over-spray. You would probably save quite a bit of money in the long run just by not spraying stuff you don’t have to.”

The resident sheep and cattle at the

Fairview campus of GPRC were among those enjoying a glimpse of UAS vehicles flown by Steve Myshak of ISIS Geomatics and UGS vehicles driven by representatives from Inuktun Services, Mechatroniq Systems and Recce Robotics.

Don Simard of Seamor Marine was also on hand to show off his UUS vehicles.

A lot of the conversation was about acquiring information.

ISIS Geomatics’ UAS vehicle is equipped with cameras that can provide a live view of the area it is flying in real time. It can also be easily programmed to fly a specific route – such as a pipeline corridor – using GPS waypoints.

A UGS vehicle shown by Inuktun Services is small and agile enough to travel through a pipe. It is equipped with a swiveling head featuring a camera and surprisingly powerful lights

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that can be used to acquire images from dark places such as pipes, wells and mineshafts.

One member of the crowd was Kurt Menzies of Snap Security Solutions Canada, a company that looks to employ UVS technologies in a variety of capacities.

“It’s just great to get better exposure for the technologies and [develop] an understanding of what we can do with them,” Menzies said of the demonstration day.

“When people see exactly what these can do – and physically see them versus just hearing about it – it’s a huge advantage.”

Skrepnek said Fairview was a logical site for the demonstration.

“Because we’ve been involved in it for so many years,” he explained.

“And we have the facilities here,” he continued. “We have the college here.

We have dorms here. We have an airport here. And the biggest thing with Transport Canada is you can’t use them out of an airport with scheduled flights, and ours doesn’t have scheduled flights.

“But we have been keeping it updated.”

Moving the industry forward requires support and cooperation from government, but Sherk also noted the value of the private sector, including the natural resource industries.

“If we could get the support, than it would be a lot easier to fund the development,” said Sherk, adding that there have been positive signs from the agriculture sector in that respect.

“Right now, farmers are buying units with accurate GPS systems,” he explained. “And they’re realizing that, if I can keep this tractor or combine [working] so that I’m not wasting any of my land, I’m getting perfect coverage with my seeding and that sort of thing, than my net return is that much better. And I think that’s what’s going to happen, is that these companies ... are going to say, ‘Hey, first of all, I have a hard time getting people. Just physically getting workers. And, if I can use an unmanned vehicle, [than] my profit is going to be that much greater.’”

“I think we’re seeing rapid growth already,” said Menzies.

“Just in the last couple of years.”

ISIS Geomatics’ unmanned aircraft comes to rest in a field at the Fairview campus of Grande Prairie Regional College following a wellattended demonstration of its operations and capabilities.

JAMES WATERMAN PHOTO

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environment BRINGING OUT THEIR BEST Students impress in Classroom Energy Diet Challenge

james waterman Pipeline News North When Jana Masters of Shell Canada talks about the Classroom Energy Diet Challenge, a partnership between the oil and gas producer and Canadian Geographic that asks Canadian students to think about energy production and consumption, her enthusiasm comes through loud and clear with every word.

Masters has good reason to be so excited, too. After all, the program has just completed a successful second season that saw three times as many classrooms join the competition as the first year, and a familiar face resume its place atop the leaderboard.

“Duncan Cran really led the pack again this year,” Masters said of the Fort St. John, B.C. elementary school that held onto first place after finishing in the top spot in the inaugural challenge.

“That school is doing so many unique initiatives,” she continued. “And we were really excited to see everything the students came up with this year, from doing litterless lunches in the classes through to doing homemade art and having art sales.

“They were just really creative and are doing so much.”

The top individual classroom in 2013 was a split Grade 7 and Grade 8 team from far across the country in Huntsville, Ontario. “They were an extremely keen group,” Masters said of the team from St. Mary’s School, known as Foxcroft’s Eager Energy Savers.

“I think every morning, they were checking the website to see how many points they had accumulated versus other classrooms,” she added. “Every challenge they completed was at the highest difficulty level. And they really went above and beyond to complete as many assignments as they could to earn points toward their prize.”

The top classroom receives $500 for a school party, an additional $1,000 for a school trip or school supplies and a $500 donation to a charity of their choice. The top school earns a $1,000 school party, a

contribution to school trips or school supplies worth $2,500 and a $1,500 donation to a charity of their choice. Two classrooms are also rewarded with a $5,000 technology package by random draw.

Masters has seen the prizes make a meaningful difference in the schools.

“They have a number of iPads within their classroom already, and they’re going to use the funds to create a docking station for those,” said Masters, referring to the team from St. Mary’s School in Huntsville.

“So, it’s really enhancing what they already have in that case. In other classes, they have very little technology,” she continued. “So for them, that’s a huge boost to have 10 iPads that they can use not only as a class, but can share it around the school.”

The challenge also includes a video contest where classrooms can win cameras and $2,000 for technology useful to programs at the school.

“We were blown away by the creativity and professionalism of some of these videos,” said Masters. “Some of the schools that submitted videos actually have technology-type programs where students are learning fairly skilled editing and learning how to use programs like that.

“One of the top videos, for instance, was quite powerful. It showed a number of devices being plugged in set to music.

And it was a very simple message, but really left you a strong sense for how many devices we actually use in a day and how much energy they all draw.”

Masters was impressed with how the classrooms tackled many of the challenges.

“One called Community Connections encouraged youth to actually get out and encourage others in their community to conserve energy,” she explained. “And we saw some really interesting approaches there. Within Fort St. John, the students went to a local city council meeting.

In other regions, there were letters written to the editors of newspapers.

“A lot of effort made to really get beyond the walls of the schools to involve others.”

Involving as many people as possible in conservation efforts was a big reason

why Shell and Canadian Geographic chose to move away from their original Family Energy Diet Challenge to the classroom competition.

“Back in 2011, we ran this as a Family Energy Diet Challenge where we had six families from across Canada who were competing to see who could use the least amount of energy and water,” said Masters. “And they were also tracked on their ability to influence others and make others aware of the program, and about the importance of conservation.

“And then from that, we decided that we could have a lot more impact if we actually ran the program within schools. so we could reach more individual classes, more individual students.

“If you’re looking to actually change behaviours and drive change, that really has to begin with youth, who go on to then influence their parents and others in their community.”

Masters is seeing that happen with the Classroom Energy Diet Challenge.

“As part of the program, we’ve encouraged teachers to share information with other schools,” she said.

“We’re certainly seeing that students are taking this beyond their classrooms,” she continued, “and heading home to encourage Mom or Dad to drive slower to conserve fuel or to turn off the lights or recycle more because it takes more energy to break down materials sitting in landfills.”

This could represent an important shift in student awareness of energy issues.

“Oftentimes, students can be quite disconnected from energy and don’t have that understanding of where it comes from when you flick on a light switch,” said Masters. “And a program like this really helps them understand, first of all, how energy’s produced and how it’s transported. And it gives them more awareness around the need to conserve energy as well.

“I think the more they can understand about energy, the more they’ll be invested in finding solutions to reduce their use.”

Consequently, Shell and Canadian Geographic have laboured to develop a

set of challenges that are a good fit with the existing school curriculum, as well as fun and engaging ways to teach new material and inspire new ideas.

“Canadian Geographic has two fulltime educational consultants that work very closely with us to make sure that the content is relevant for the various provinces and the various school levels,” said Masters. “And so they work very hard to make sure that teachers can use the content from the Classroom Energy Diet Challenge within their classes and so that it’s enhancing learning.”

Shell and Canadian Geographic are considering one new idea for next year to ensure that the program does stay interesting and relevant.

“We really want to focus on … looking more at the connection between water, food and energy,” Masters explained.

“We think that’s a really interesting area to explore.”

The connections are fairly simple on the surface. Energy production, including the hydraulic fracturing done in northeast B.C. to extract natural gas from the ground, requires a great deal of water.

Water and energy are both essential to food production.

Masters noted that an example of how to address those issues exists right in the backyard of Peace Region students, where the reclaimed water plant in Dawson Creek treats sewage that is later used by Shell for their hydraulic fracturing operations in their Groundbirch natural gas project.

It is all about understanding the dynamics of local water demand and industry water use. “And finding creative solutions,” Masters added.

Promoting an understanding of topics such as the water issue is one area where the Classroom Energy Diet Challenge not only has value for the students and the classrooms, but also for Shell and other players in the oil and gas industry.

“We are a major energy producer here in Canada and around the world. And so we think it’s quite important for the company to be involved in solutions to

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managing energy use,” said Masters.

“Canadian Geographic had a real interest in the program because there’s a strong geographic component when you’re talking about energy, in terms of the regions where it’s produced and how it’s used across Canada,” she continued. “They were really a natural partner for us. They have strong connections to the schools already. And they’re a very credible organization that has a lot of connections with experts across Canada.”

Ultimately, the goal is improving energy literacy. “Others within the industry are also recognizing the need for so-called energy literacy – the importance of making sure we have an educated population that understands the fundamentals of energy,” said Masters.

“If you live in a resource area, it’s your bread and butter, and you really get that. Your neighbours and your family members work in the industry. But if you live in Vancouver or elsewhere, you can be quite disconnected. So, it’s helping provide that bigger context for energy, helping people understand how it’s produced, how we use it and some of the issues associated with managing our energy resources.”

Masters is hopeful that awareness grows as participation in the Classroom Energy Diet Challenge also grows.

“We’re thrilled in particular that the number of classrooms participating tripled this past year,” she said. “So, we now have 1,500 classes from across Canada who are involved with the program. And that really tells us there’s a lot of interest in learning more about energy.”

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Grade 6 students Brandyn Sharron and Samantha Smith hold up a banner while Kindergarten students Adam Pengelly and Eva Nabseth hold up a cheque during a presentation by Ellen Curtis of Canadian Geographic to honour the Duncan Elementary School for winning the Classroom Energy Diet Challenge.

GAVEN KRITES PHOTO

Tourmaline concentrating on liquids opportunities cont’d from pg 15

The Wilrich has been mapped out in a series of sub east-west shoreline so about one-half of Tourmaline’s land base is prospective for it, he said.

The company has had very strong results over the past 18 months, drilling and testing 35 Wilrich wells. Of those, 30 had initial production rates of more than 10 mmcf per day. “And we’ve had some truly spectacular results in some of the sub-areas we operate in.”

At Kakwa, a Wilrich well produced 52 mmcf per day in short-duration capability and final clean-up tests at the end of the main production test period, while at Smoky-Resthaven another well tested 37 mmcf per day.

So far, the Wilrich has seen only delineation drilling and Tourmaline has not yet taken advantage of pad drilling and batch fracturing. The average well cost is about $5. 25 million but the company believes it ultimately can get that down to about $4.5 million with batch fracturing.

Tourmaline has an inventory of more than 1,500 Wilrich horizontal wells and hopes to get between 45 and 50 wells drilled, completed and for the most part tied during 2013. At an IP rate of five

mmcf per day, 250 mmcf per day of gas would come onstream during the year.

Most of the company’s $270 million infrastructure investment in the area is now in place, shareholders heard. It consists of six gas plants with liquids recovery capability and a series of large pipeline laterals that connect the plants to the TransCanada Corporation mainline. “It’s a huge advantage having this in place already,” he said. “It allows us to be one of the lowest-cost operators; we control our on-times, our tie-in schedule, we control our liquids catcher.”

The current capacity is 300 mmcf per day and Tourmaline is running 250 mmcf per day with two 50 mmcf per day expansions planned for the second half of this year at Minehead-Banshee and at Wild River.

The Peace River High core area consists of the Sunrise/Dawson Montney complex on the Alberta-British Columbia border and Spirit River, a Charlie Lake oil and gas asset in Alberta. Current production is about 23,000 boe a day.

As far as Tourmaline is concerned, the Sunrise/Dawson, B.C. Montney/Doig development is by far the best resource play in Canada and “this part of the world is the best of all of them,” said Rose.

“This is where the Montney is the thick-

est, the richest and the most over-pressured; it’s sweet and the liquids content is very high.” It’s also Tourmaline’s most profitable property with operating costs below $3 per boe, he said.

Tourmaline also has access to three major pipelines: TransCanada Corporation,Alliance and Spectra through its different plants, which also are well connected to various markets. That would include potential access to West Coast LNG markets via a TransCanada westward extension of its Groundbirch pipeline, said Rose.

Current production is between 100 mmcf per day and 110 mmcf per day with 90 mmcf per day of gas behind pipe. Of that, 55 mmcf per day will come from the new Doe plant, which will start up in the next month, increasing production to 165 mmcf per day of gas and between 4,000 bbls and 4,500 bbls per day of natural gas liquids (two-thirds condensate).

Two-year rolling average rates are 11.7 mmcf per day of gas and 270 bbls per day of liquids.

Drilling times using one rig are down to 11 to 12 days and with improved gas prices Tourmaline will bring a second rig into B.C. to work on the Huron properties it acquired late last year and where it likely

will drill about eight new horizontal wells.

Spirit River has turned into a core area in its own right and the pool is at least twice as big as the company thought it would be a year ago, said Rose. This year, it plans to drill 25 to 30 horizontal wells in the area.

“It’s a bit of a unique application of horizontal drilling because here we are not creating the permeability; we are more connecting layers and lenses within a fairly complex mixed-lithology Charlie Lake sequence,” he said.

“It’s about 50 per cent oil and 50 per cent gas and we will get to the 10,000 boe-a-day mark in October and there’s lots of growth beyond that.”

Tourmaline is assuming a gas price of $3.66 per gigajoule for 2013 and $3.86 per gigajoule for 2014.

Responding to a question from a shareholder, Rose said Tourmaline’s corporate decline rate was 30 per cent in 2012 with a 32 per cent rate forecast for this year.

In a presentation on its website, Tourmaline has a preliminary budget of $800 million for 2014, up from $770 million this year. The company also is forecasting a 36 per cent growth in production next year to an average of 109,000 boe per day, up from 80,000 boe per day this year.

GASFRAC announces new executives as they celebrate 2000th frack Daily Oil Bulletin The board of directors of GASFRAC Energy Services announces that Jim Hill has been appointed as chief executive officer and Tim O’Rourke as chief operating officer.

Hill joined the company in 2010 as its chief financial officer and has served as

acting CEO since September 2012. He is a chartered accountant with over 30 years experience as a CFO and in executive management roles with global oilfield services businesses including Nowsco Well Services and Complete Production Services, both fracturing companies.

As acting CEO, GASFRAC said Hill has

provided the leadership resulting in stability both for operations and employees and in successful execution of the operational review outlined in September 2012. This provides a continuing platform for growth.

O’Rourke has an engineering degree with over 20 years of experience in the oilfield services industry working with

Nowsco, BJ Services and Nabors Industries in various operational, technical and sales management roles in Canada and the U.S. Since joining GASFRAC in 2010, O’Rourke has been instrumental in facilitating many operational and HSE improvements and has served most recently as vice-president of operations.

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Shipping oil by rail cuts risk Daily Oil Bulletin

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Moving crude oil by rail represents a cheap form of insurance against pipeline interruption, shareholders attending Crescent Point Energy Corp.’s annual meeting in Calgary heard May 30.

While oil spills arising from derailments and similar incidents are statistically more common than pipeline ruptures, the former tend to spill less oil, on average, while pipeline ruptures, although less common, tend to make for greater volume spills, a company executive said.

“When you look at the statistics, there are less frequent pipeline issues, but they’re potentially on a larger scale,” Trent Stangl, Crescent Point’s vice-president of marketing and investor relations, said after Wednesday’s event. “That’s the trade-off.”

Smaller spill volumes aside, shipping by rail has other advantages, including minimizing the risk when Crescent Point’s oil is loaded onto a tanker car, Stangl said, arguing that the risk for the cargo is transferred at that point.

“If there’s a derailment along the way, it’s the responsibility and liability, most likely, of the rail-line, or potentially, the buyer,” he said. An exception might arise if Crescent Point was found to have negligently sealed a tanker car, he said.

“At the end of the day, the rail-line carries most of the risk. If there’s a derailment, it’s most likely related to something they’ve done. If something happened, it’s most likely their responsibility.”

Where a refinery has bought the oil cargo from Crescent Point, it’s the refiner’s insur-

ance that would take effect to replace the value of the oil in case of a loss, he said.

For many years, when it comes to policing the environmental risk of oil spills, industry regulators have focused on pipelines, but, Stangl was asked, as more oil-shippers use rail, would regulators at some point turn their attention to the environmental risk posed by more frequent and increasingly large movements of oil cargoes across the country, including through or near large urban centers.

“No,” he said, “because ... oil is actually much less hazardous than a lot of things that [railways] carry today, and they’ve already got very stringent requirements around those things. The risk of something happening on the oil side really isn’t any different than the risk of one of their other hazardous materials, such as acid.

They’ve got controls in place to manage that and [those] will translate into the same kind of controls over on the oil side.”

Billing itself as Canada’s largest shipper of oil by rail, Crescent Point will further expand its shipping capacity by year-end.

Currently, management estimates the company has the capacity to ship about 53,000 bbls per day by railway. In the first quarter, the company actually shipped about 31,000 bbls per day by rail, but the figure is likely to rise. By year-end, the former trust expects to boost rail capacity to about 60,000 bbls per day.

Transportation methods aside, the company’s total production in the first quarter reached an average 117,663 boe per day, with about 91 per cent of production made up of light oil.

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Young scientist makes waves with groundbreaking research cont’d from pg 6

carry a lot of weight with the general public. But by having an outside source truly consider the good work and recognize those that are doing truly great things, I think that it will, hopefully, help more of the general public believe in the great work that’s happening in the energy sector.

“Rather than industry patting themselves on the back for doing something great, we as an independent organization can identify and celebrate environmental leaders and give them some recognition in a quite legitimate way.”

Stuebing also enjoys that the program celebrates the “unsung heroes” in the province. “People who do this amazing work quietly and passionately just because it’s what is the right thing to do,” she said.

“I was speaking with one of the recipients last night, and they were saying how this is just such a boost for them,” she added. “It makes them want to keep on doing what they do just by getting a little bit of recognition. So hopefully, we’re continuing to support and encourage environmental leadership by recognizing some of our heroes.”

The breakout star of the evening was a young woman, Kelcie Miller-Anderson, who began her research into oil sands tailings ponds remediation when she was just 15 years old.

Miller-Anderson has shown that the oil sands industry can address issues around hydrocarbons, napthenic acids, sodium and pH levels in tailings and tailings pond water just by growing oyster mushrooms in those locations. That research already earned the young scientist a Manning Young Canadian Innovation Award prior to winning the Emerald Award on June 6.

“Our judges were so impressed with

such a young woman doing phenomenal research ... stemming from her own passion,” said Stuebing. “She’s obviously a talented and very sharp young woman. And the fact that she’s devoting so much of her spare time to trying to fix a problem is really remarkable. And we can’t wait to see where she is five or ten years from now. And what kind of impact she’s made.”

Miller-Anderson was also the talk of the town after the award presentations.

“I had people, sponsors and friends of our foundation, and even other nominees, coming up and saying, ‘That girl was amazing.’ So many people were so impressed with Kelcie and her great work and her enthusiasm and her intelligence,” said Stuebing.

Another award recipient, the Wet Areas Mapping Initiative led by the Alberta Environment and Sustainable Resource Development (ESRD), also had strong ties to the oil and gas industry.

“That was a substantial undertaking by the government and Alberta,” said Stuebing.

“It took almost a decade of work,” she continued. “And it was something that will hopefully help guide better development and stewardship of our land on a goforward basis. And the fact that it’s being used now by industry and community groups, and it’s available to the public at large, we feel this is a real asset and a real gift for our province.”

A handful of finalists that didn’t receive awards offered additional proof of the growing bond between the energy sector and environmental stewardship.

Canada’s Oil Sands Innovation Alliance (COSIA) was nominated for their Landscape Ecological Assessment and Planning (LEAP) project that looks to improve reclamation and reforestation practices in the oil sands sector.

The breakout star of the Emerald Awards was Kelcie Miller-Anderson, who was presented her award by Russ Litun, senior vice president of ConocoPhillips Canada. The young scientist’s research concerns oil sands tailings remediation.

ALBERTA EMERALD FOUNDATION PHOTO

Coast to Coast Reforestation’s Smoky Lake Forest Nursery was also nominated for a project associated with reclamation and reforestation work, growing 80 different species of native trees, shrubs, berries, flowers and grasses for use in the oil sands region.

“We were very impressed with how they have really grown their operations,” Stuebing said of the Smoky Lake Forest Nursery.

“The scope and the magnitude of their reach and just the hundreds of types of plants they’re growing is really helping to offset the carbon emissions. And our

Diana McQueen, Alberta’s minister of environmental and sustainable resource development, enjoys a conversation with a few finalists n the youth category of the Emerald Awards that were presented on June 6.

ALBERTA EMERALD FOUNDATION PHOTO

judges were just very impressed with them for taking the initiative. They’re really filling a niche.”

“We’re always impressed when there’s partnerships,” continued Stuebing, discussing the partnership between Suncor Energy and the Alberta Conservation Association (ACA) known as the Boreal Habitat Conservation Initiative (BHCI), which aims to purchase privately-owned land for long-term conservation.

“Two groups who had different strengths,” she said of Suncor and ACA. “Suncor could contribute financial resources and the ACA could contribute their expertise at conserving land. And here they are collaborating and conserving tons of land in our province.

“As one of the members of the ACA had mentioned, conserving is different than preserving. Preserving is just that there’s no growth and it stays as it is. And here these two, by working together, are helping our habitats thrive and grow. And not just remain the same, but hopefully continue to be lush and healthy.”

Stuebing believes the list of finalists and recipients this year suggests that the ecological future of her province is a bright one. “Alberta is in good hands,” she said, adding that groups ranging from schools to businesses to municipal governments are starting to get really serious about stewardship.

“And it’s not just an extraordinary activity that just a few people are engaged in.

It’s increasingly becoming just standard operations,” she continued.

“Being an environmentalist is becoming mainstream. And it’s not an extreme view to want to look after our home. And the fact that so many people from so many backgrounds and so many parts of our province are doing such great work on their own initiative really leaves us feeling inspired.

“We’re going to be okay.”

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industry news window of opportunity Canada should pay attention to Australian LNG challenges

Daily Oil Bulletin Canadian LNG developers should look across the pond at the challenges facing Australian projects because there are similarities between the two countries, a Platts Calgary forum heard on Thursday, May 30.

Proponents in Canada should also be aware of a “window” when projects will be most successful; for facilities that come onstream post 2020, the global LNG landscape is expected to be tougher with more competitors.

During her talk, Samantha Santa Maria, Platts managing editor of natural gas, characterized LNG exports as a race with several countries muscling to get their projects onstream first in order to access premium Asian markets. The competition is global, but the United States and Australia are frequently mentioned as top competitors to Canada.

“Everybody’s looking at Asia as the big, big consumer,” she said. Prices over there are around US$14 per mmBtu, NYMEX is slightly above US$4 per mmBtu while AECO sits around C$3.50 per gigajoule. “There is continuing large spreads to Asia.

“What happens in Australia, Canada needs to look at really carefully,” Santa Maria said. “[It’s] very similar: greenfield projects, high costs – especially labour – [and there’s] the need for oil indexation at some point in your pricing formula.”

However, a move away from oil-linked pricing to more spot or hub-based pricing is expected for LNG as new supplies come onstream, but some sort of premium will still need to be paid. The head of Chevron Corporation has said oil-linked pricing will be key to making projects like Kitimat LNG work.

Santa Maria later told the DOB that Australia’s surging costs have a lot to do with dealing with environmental issues and labour shortages.

“It looks like the Canadian government has a genuine understanding that exporting gas as LNG is critical in order for price recovery and the return to financial health of its producers,” she said.

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But she added that the provincial and national governments should work with the various stakeholders like First Nations to ensure the infrastructure that is necessary for the success of these projects – like pipelines and facilities – can be constructed cost-effectively.

“The labour shortage issue is far more difficult,” Santa Maria added. “We have heard anecdotally [that] recruiters are finding skilled labour in Texas and Louisiana for the projects in B.C., but the availability of labour is a real concern.”

Asked about a possible window of opportunity for the Canadian projects, she said that any facilities coming online post2020 are not very likely to succeed.

“China is ramping up its shale development and might not need as much LNG,” she said. “Other LNG supply options, which already have investors and offtakers, will be coming online by the end of the decade [like in Mozambique].

“It is critical in our analysis that LNG projects be up and running before 2020; actually, the sooner the better. The later you get in this decade, the less feasible the project becomes.”

In conducting an analysis of LNG projects, she asked a few questions: Have they cleared federal approval? Do they have off-takers? Are they being proposed and operated by experienced players?

She is confident that three proposals will move ahead in Canada, The National Energy Board has already approved BC LNG Export Co-operative LLC’s 20-year licence to export LNG from Canada to the Pacific Rim. This would be a smaller-scale project near Kitimat.

“This is the first one that should get off the blocks,” Santa Maria said.

Golar LNG Limited said yesterday it entered into firm framework agreements to establish a partnership that will take the Douglas Channel LNG project forward through the development and execution phase. The other partners in the project include the Haisla First Nation of Kitamaat Village, LNG Partners, LLC of Houston and a “large energy company.” “[The unnamed company is] Chinese,

but wish to remain anonymous for now,” Tom Tatham, managing director of LNG Partners, told the DOB. Through the framework agreement, Golar has secured a minimum 25 per cent stake in the project and the partners have now made a firm commitment to fund activities up to and including the FID, which is anticipated to be made in the third quarter of 2013. Project FID remains subject to “obtaining the remaining required permits, execution of certain project agreements and EPC contracts for the key components of the planned infrastructure.”

The project will consist of a 0.6 to 0.7 million metric tonne per annum (mmpta) capacity liquefaction barge and associated facilities. The project’s existing NEB licence allows it to export up to 1.8 mmtpa for a period of 20 years. The total capital expenditures for the project (including development costs) are estimated to be $500 million.

Golar’s contribution of 25 per cent of the project’s current funding requirements, subject to positive FID, provide Golar with a firm option to invest a minimum of 25 per cent project capital and right to a proportional share of the LNG off-take.

The project partners have also agreed to investigate a future liquefaction train in the Douglas Channel in connection with the successful expansion of thePacific Natural Gas pipeline. The company has an option to take a minimum of 25 per cent stake in the future liquefaction train developed by the DC LNG project.

Golar will have the opportunity to provide shipping to the project and believes this will lead to other shipping opportunities in the region.

The project has an onstream date of late 2015 or early 2016.

Kitimat LNG is the one being proposed

by Chevron and Apache Corporation.

It also has NEB export approval, environmental approval but has yet to ink customer agreements.

“Chevron is very much a reputable player with lots and lots of experience in LNG markets,” Santa Maria said. “We see this one as one that’s probably going

to get off the blocks as well.”

LNG Canada Development Inc. recently submitted a project description to the Canadian Environmental Assessment Agency(CEAA) and the B.C. Environmental Assessment Office. It is a joint venture between Shell Canada Limited, Korea Gas Corp., Mitsubishi Corp. and PetroChina International. It has also received export approval.

“Look at the owners; they probably have a real vested interest in taking that [gas] to their market, so we feel fairly confident that LNG Canada should as well get off the blocks,” Santa Maria said, pointing out the proposed Coastal GasLink project, an estimated $4 billion pipeline that will transport natural gas from the Montney gas producing region near Dawson Creek to the LNG Canada export facility near Kitimat, B.C., is an important piece for the project. TransCanada Corporation was chosen last year by Shell and its partners to design, build, own and operate the proposed project.

In the U.S., the Energy Department recently conditionally authorized Freeport LNG Expansion, L.P. and FLNG Liquefaction, LLC (Freeport) to export domestically produced LNG to countries that do not have a Free Trade Agreement (FTA) with the United States from the Freeport LNG Terminal on Quintana Island, Texas.

Freeport previously received approval to export LNG from this facility to FTA countries on Feb. 10, 2011. Subject to environmental review and final regulatory approval, the facility is conditionally authorized to export at a rate of up to 1.4 bcf a day for 20 years.

The department granted the first authorization to export LNG to non-FTA countries in May 2011 for the Sabine Pass LNG terminal in Cameron Parish, Louisiana, at a rate of up to 2.2 bcf per day.

The development of U.S. natural gas resources is having a transformative impact on the U.S. energy landscape.

This increase in domestic natural gas production is expected to continue, with the Energy Information Administration forecasting a record production rate of 69.3 bcf per day in 2013.

JUNE 14, 2013

PIPELINE NEWS NORTH •

25

IN HIGH DEMAND Oil and gas jobs could grow 35 per cent over next decade

Reg Norman Trucking manager Neil Norman takes a break at a worksite on a Monday afternoon. A recent Petroleum Human Resources Council report indicates that the oil and gas industry in Canada is going to need a lot more people like Norman in the coming years.

WILLIAM STODALKA PHOTO

WILLIAM STODALKA Pipeline News North The number of workers required in the oil and gas industry are expected to increase by 35 per cent by 2022, according to an industry report.

The Petroleum Human Resources Council of Canada is indicating that British Columbia could see an additional 640 to 1,600 oil and gas jobs over the next ten years.

“Traditional migration of B.C. residents has been from North to South and this will need to be reversed to fill growing employment in the North,” the report stated.

“Northern B.C. has a very small labour force (three per cent of provincial total) and will need to attract a substantial number of workers to fulfill construction and operations requirement.”

These jobs will be part of a larger increase expected across the country, according to the council.

“For every job created in our industry, three more are created in other areas of the economy,” said Cheryl Knight, the council’s executive director. “Our report estimates that by 2022, the oil and gas industry will sustain between 900,000 and 1 million jobs across Canada.”

The report put out two scenarios for B.C. and other parts of Canada – a low growth scenario and an expansion scenario. The low growth scenario is where only domestic sources increases demands, and the second scenario is where B.C. begins to

export natural gas.

In the low-growth scenario, B.C. will add about 3,000 jobs to its current number of about 12,000 people employed in the oil and gas industry. In the expanded scenario, this number jumps up to about 4,100. This is about 25 to 35 per cent increase.

The people who are indirectly employed in things like construction, financial, and manufacturing services is expected to increase by about 54,000 in the low growth scenario, and about 75,600 in the expansion scenario.

However, not all of these jobs will be permanent. Data from the oil and gas industry shows that this will increase to about 13,500 to 14,000 in 2017, going down to about 12,700 to 13,600 in 2022.

Alberta’s numbers are expected to increase more so than B.C. The Enform report states that about 159,400 people are employed in the oil and gas industry in that province, and this number could grow between 34 and 47 per cent for direct jobs. For indirect jobs, this number goes between 262,500 and 318,100 jobs over the next ten years.

The northeast region of B.C. was specifically targeted in the report as well, which states that the labour market “is already operating at capacity.”

This will mean that companies that provide work for oil companies, like Reg Norman Trucking, will be looking for more workers.

“We’re looking at places ... 500 to 1000 people building a plant,” said the company’s manager, Neil Norman.

“It’s tough to find the skilled employees you want, even labourers in some cases.”

Norman has already begun looking south for his employees.

“Quite a few of the guys that we’ve hired are not from Dawson Creek,” he said. “I just don’t think there’s enough local boys to do it. If you’re a local guy and you’ve got anything going from you it’s not hard to find a job in this country right now.”

He estimates that 25 per cent are local hires, and the other 75 per cent comes from out of area, which has not been the case.

“A lot of the younger fellers that come here...they come here and they realize that it’s not so bad working here,” said Norman. “I mean, even when we’re cold we’re sunny.”

However, for another person in charge of hiring, like Kendall MacDonald from Macro Industries in Fort St. John, hiring local seems to be the best policy.

“A lot of people from (the southern part of B.C.) want to go out to camp or go to a project where we pay them subsistence,” said MacDonald.

In contrast, the workers that MacDonald is looking for would need to reside on a longer basis within the Peace Region.

“When you can’t go outside of the province and bring ‘em in because you don’t have a job for them to go yet, it’s kind of hard for them,” he said. “It’s easier for us to employ people that are local.”

In addition, the report from the Human Resources Council also offers what it feels are solutions to these worker shortages.

These could be allowing workers from other industries with transferable skills, and new Canadians who may not be able to find work in their home provinces. It also calls for enhanced mobility and transferability of skills and qualifications across industries and Canada.

The report also goes on to suggest temporary foreign workers (TFW) to fill temporary or short-term work assignments, and to promote energy literacy and career awareness across Canada.

Many locals also have their own ideas, too.

Norman also pointed out that that particular hire had H2S training and First Aid training. H2S training is training employees can take about what to do if a someone is hurt by a hydrogen sulphide leak – a byproduct that can come out about from some fracking operations.

Norman said that he believed these two types of training should be in high schools, even for those who may not necessarily want to pursue a career in the oil and gas field.

“It’s invaluable to people who are living beside it,” he said. “Why not have that knowledge right out of school?”

First aid would help out people who may be suffering from distress, and H2S training would help potential oil and gas field employees, and particularly help local students. These costs could be paid for by the schools, or by the parents.

“A lot of the companies, they’ll look at you and they’ll say, ‘Have you got your H2S? Have you got your first aid?” said Norman. “And if there’s three boys standing there, and one boy says ‘I have it,’ you’re going to work tomorrow, but you two can go find a way to get that.”

MacDonald also said that the oil and gas field service would remain difficult.

“It takes a guy from down south or a girl from down south, in all due respect, having the balls to try it out,” said MacDonald. “You’ve got to come up here, you’ve got to put in the time to go to each outfit and say, ‘Hey, I’m available, I’ve got my tickets, and I’m here to rock and roll.’”

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special feature Innovating in the oil and gas industry means challenging conventional wisdom cont’d from pg 9 pile from the ditch not be placed on top of topsoil.

LaBerge and Kulba questioned why that was necessary, just as they questioned the widths of ditches that were being excavated for building relatively narrow pipelines.

The results of their curiosity included the development of new backhoe buckets that can dig trenches as narrow as 11 inches wide, as well as new practices for managing soil that include placing spoil piles on top of topsoil and improving compaction techniques to limit the effect of rain and freeze-thaw cycles on pipeline right-of-ways.

It has saved Devon a great deal of headaches and money by solving problems around ground depressions and sunken pipeline ditches on farmers’ fields that occasionally caused damage to farm equipment. Many of those issues resulted from wider than necessary pipeline ditches and poor soil compaction.

Now the company is addressing the problem even further by starting to use horizontal directional drilling to dig

pipeline ditches on cropland, so that the surface doesn’t need to be disturbed at all. It’s another technique that has been tested and proven at the Centre.

Stark is more than pleased with the progress that has been made in that arena.

“I’m responsible for acquiring access to land, be it on Crown land or freehold land,” said Stark. “And with this innovation … we’ve built a social license to operate within the farming community, where we can go in, put pipelines in the ground with minimal disturbance, give the land back to the landowner to put into rotation – cropping rotations – without any lost revenue, which is fantastic.”

Stark gives a lot of credit to Kulba for turning ideas about how to improve industry practices into reality.

“One of the first and probably the only regulator that I’ve personally worked with where we can go to with questions on resolving our issues,” he said. “And Doug is very, very open to working with industry on resolving some of our issues, be it on the ground or our social license or whatever. He jumps into it with both feet.”

A walk through the Evergreen Centre for Resource Excellence and Innovation quickly reveals how experiments with road construction, pipeline construction and the use of coarse woody material are helping companies like Devon minimize their footprint on the land when building infrastructure and improve revegetation on disturbed sites.

JAMES WATERMAN PHOTOs

industry news

JUNE 14, 2013

PIPELINE NEWS NORTH •

27

Petrochemical producers looking for more ethane may have to pay higher extraction costs Daily Oil Bulletin If Alberta petrochemical producers are looking for increased supplies of ethane, they should be prepared to pay for the higher costs associated with extracting it from natural gas, an industry conference heard Monday, June 3.

“What’s being offered these days is essentially heating value so it’s just not working, hence industry is going back to focusing on the C3+ type [shallow cut] facilities,” Richard Dunn, vice-president of regulatory and government relations for Encana Corporation, told the Canadian Energy Research Institute petrochemical conference.

To make ethane recovery economic, producers need an additional $1.50 to $2.50 or more per gigajoule for ethane at a greenfield deep-cut facility – which will be the case for many projects in the Montney or the Deep Basin, said Dunn.

Liquids-rich natural gas producers increasingly are choosing to leave ethane in the gas stream rather than face the higher costs of a deep-cut processing facility to extract a product that is not recognized in the price they receive for natural gas, he said.

The all-in cost of ethane recovery is up to 25 per cent higher than for a shallow cut facility that removes only propane because of the higher horsepower required along with larger vessels and higher pressure, he said. Using a relatively new high efficiency ethane rejection process, Encana can recover 90 per cent to 95 per cent of the propane, the conference heard.

But there is more than just price involved, he said. “In today’s environment where cash flow is extremely important to producers and there is a desire to maximize cash flow and to minimize

capital outlay and also minimize the long-term commitment to further infrastructure, the focus of C3+ targets makes a lot more sense.”

The province is also losing out because royalties rise with higher prices on a percentage basis, Dunn pointed out.

“It’s really a double whammy.” If producers were to receive another $2.50 per gigajoule for their ethane, that would amount to an eight or nine per cent increase in royalties for an incremental $25 million on a 35,000 bbl per day ethane stream, he said.

In the question period that followed, Dunn said the Alberta government has been working hard to facilitate discussions and there is a bit of a window of opportunity before producers build ethane rejection facilities, for example.

The timing is good in that LNG appears to be coming along and the liquids-rich unconventional plays are in the early stages where people are looking at their facilities and how they start planning them, he said.

“I do believe the time is right to have a dialogue to look at what can be done and how you encourage the petchem industry to take advantage of the opportunities,” said Dunn. “I think philosophically there is a role for the parties to get together and there is money on the table for all.”

Gerry Goobie, a principal at Gas Processing Management Inc., warned that if gas exports fall sharply that could affect straddle plants that extract ethane sold to the petrochemical producers.

He said he’s not sure that more field extraction would offset that shortfall as producers may choose not to opt for deep-cut facilities. “Sometimes it’s just not worth producing ethane,” he said. “It’s not worth the aggravation.... It may be easier and cheaper to produce propane

and [obtain] a quicker return.”

While less ethane might be available from field plants, the straddle plants that extract ethane that is sold to the petrochemical producers can contribute to a much greater extent, said David Fanstone, director, NGL extraction for Inter Pipeline Fund.

The fund has an interest in three large straddle plants at Cochrane and Empress, processing about 40 per cent of the gas volumes that are exported from Alberta. It owns and operates 100 per cent of the Cochrane extraction plant and owns 100 per cent of Empress II and 50 per cent of Empress V, both operated byPlains Midstream as part of the Empress complex.

Increased recovery rates can be achieved in part through internal efficiencies or “internal plumbing” that involves process engineering and the use of hardware and processes to extract liquids. “It is not one of the glamorous types of activity but it does have the potential to yield fairly dramatic yields in efficiency going forward,” Fanstone said.

For example, a 2009 investment of more than $50 million by Inter Pipeline and Plains (and its predecessor BP) at the 1.1 bcf-per-day Empress V deep-cut plant in 2009 improved recovery to 82 per cent from 63 per cent, increasing recoveries to about 23,000 bbls per day from about 14,000 bbls a day. “Lots of those prizes are possible out there,” he said.

“You’ve got to work on it and it might take a little bit of courage to get the financial backing but they’re out there.”

Straddle plants in aggregate have been reworking their internal operations to try to extract more value from their operations with ethane recovery increasing to about 26 bbls per mmcf earlier this year from 16 per mmcf in 2002. While part of

the increase might be due to richer gas coming through the plants, Fanstone suggested it was due mainly to plant efficiencies.

Efficiencies involve reworking the plants’ internal plumbing in collaboration with upstream and downstream partners of the plant. One collaboration with TransCanada Corporation involved a PTS (pressure temperature service) in which the gas pressure across the plant is dropped to increase the efficiency of the extraction facility.

However, the requirement that the initial gas pressure be returned to Trans Canada at the outlet restrained the plant’s efficiency. Inter Pipeline, though, negotiated a deal with the company in which it was able to return lower pressure gas at the inlet and replace that pressure downstream of the plant where TransCanada could do it more efficiently. The deal which cost less than $100,000 yielded another 1,000 to 2,000 bbls a day, the conference heard.

Fanstone also said there’s a need to reinvent Empress. “There’s got to be a way to dispatch the higher recover plants,” he said. “Right now we’ve got a bunch of physical plants that different people own and have a variety of interests in and then we’ve got a bunch of commercial contracts that say how the gas gets processed and the two invariably collide resulting in inefficient deployment of the Empress facility.”

As some of those contracts lapse, there is more flexibility in the complex but it will still take more work, said Fanstone.

“I still think that with limited capital and operating cost investments, there’s got to be greater than a 10,000 bbl-per-day prize there and probably much greater and that’s something that’s got to be high on the radar screen.”

Painted Pony again checking out potential of Buckinghorse shale as natural gas prices improve Daily Oil Bulletin

With the rise in natural gas prices over last year, Painted Pony Petroleum Ltd. is set to restart its evaluation of the Buckinghorse shale in British Columbia.

The company said recently it was looking forward to pending completion tests targeting the Buckinghorse formation, which may host a second large gas resource overlying the company’s Montney play.

“That was a zone we talked about up until about two years ago and kind of put it to bed for awhile,” Patrick Ward, president and chief executive officer, told the company’s annual meeting on Wednesday. “With the gas [price] recovery, we think the Buckinghorse is worth spending capital on again.”

According to the company’s investor presentation, the Buckinghorse shale is a regionally extensive sweet gas resource play. The B.C. government estimated gas in-place of 60 bcf per section per 100 metres thickness. Painted Pony expects to frac two existing wells there in 2013.

The company holds 95,900 net acres and will use the same infrastructure as the Montney project.

Ward, meanwhile, noted the boost in gas prices has been higher-than-expected this year.

“Natural gas prices a year ago today was $2.45 NYMEX, today it’s $4,” he told the meeting. “We’ve had gas prices rebound considerably over the last 12 months, certainly above anyone’s forecast a year ago.”

Roughly 85 per cent of the $145 million

capital budget this year is being spent in B.C. where the company is continuing to prove up its resources, expanding processing capacity and growing production.

Fifteen per cent is set aside for southeast Saskatchewan to maintain its Bakken light oil assets.

In the Saskatchewan light oil area, the company holds 74,200 net acres and had production of 1,587 boe per day in the first quarter and an operating netback during that three-month period of $47.37 per boe. At its Flat Lake Bakken project, the company has 13,700 net acres with an average working interest of 47 per cent and a 2.5 per cent Crown royalty for the first 100,000 bbls per well.

In the B.C. North Montney, the company produces high-rate, sweet gas wells, liquids of between 17 and 60 bbls per

mmcf, with a contiguous land spread and royalty incentives.

During the first quarter, the company participated in the drilling of five (2.6 net) Montney wells, including one (one net) well at Townsend, three (0.6 net) wells at Cameron and one (one net) well at Blair.

For the balance of 2013, the company plans to drill an additional seven (six net) Montney horizontal wells.

Ward also touted the LNG opportunities shaping up on B.C.’s West Coast, which would take gas produced in the northeast part of the province to Asian markets.

“We did bid on supply in that [BC LNG Export Co-operative LLC]; we were outbid by a gas marketing firm,” Ward said.

“We’ve got no commitments for our gas right now [for LNG].”

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special feature Documentary filmmaker brings her interest in immigrant stories to the Alberta oil patch cont’d from pg 7 have the skills. And we can work together with industry, with government, with stakeholders to make this a real, viable source of people going into the industry.

“All we hear is that industry needs certified people. We have them. We just have to polish them up a bit.”

It is a matter of awareness for Bhandari.

“You don’t need to go overseas to recruit people,” she said. “There’s people sitting right here in our backyard who have got the same expertise. ... We can utilize the talent that we have here.”

That would consequently allow those immigrants to build good careers and good lives in Canada.

“That’s why they came to Canada in the first place,” said Bhandari. “They made a choice to come to Canada, that choice being that they want to contribute and they want to gain a good life for them and their families here in Canada. I think it’s quite important raising that awareness that we have people here.

“What we’re doing, I think, has been successful,” she added, noting that the industry is always eager to hire all 16 students from each training session.

That isn’t to say that it was an easy road for these men.

“They were so optimistic and so excited to have an opportunity to take this course,” Yanchyk said of the subjects of her film.

“And they had such huge hopes and dreams,” she continued. “And when they didn’t get a job right at the beginning, I was really getting nervous. And you see that in the film. It doesn’t happen right away. And they start getting really frustrated and getting upset. And you start to see their smile slowly start to disappear. You just want them to get a job.

You want them to be successful so badly because you know how much it means to them.”

CCIS does everything they can to ensure their students succeed. “[Khan] works really hard to make sure that these new immigrants are involved in a program that has a lot of strong links to the industry,” said Yanchyk. “It’s not just a program that teaches you skills, but doesn’t give you anything. They set them up with interviews.

“That is amazing. I think that’s like the dream university program.”

Frequently students are already being interviewed by industry players before their training is even completed.

“This program gives them safety certificates and on the job training and it gives them more experiences than some Canadians have when they show up on the rigs,” added Yanchyk.

The filmmaker’s interest in stories about immigrants began with her Ukrainian grandmother.

“I just remember her being different from all my friends’ grandmothers,” she explained. “And she was so suspicious and she had a lot of anger and a lot of sadness. And I didn’t really understand it. She was like a real person. She wasn’t just like my grandmother. And she struggled so much when she came here.

And I think that watching her and listening to her, it had an effect on me.

“And then when I moved to England, I became an immigrant, because I lived in England for five years. And I lived in a home with a woman who had escaped the Nazis.”

That woman was already in her eighties at that point.

“Her story of escape and what her life was like affected me,” Yanchyk continued.

“And then there was also a woman who was a refugee from Kosovo who was my roommate in London. And that experience had a profound effect on me too because she was basically going to be murdered.

Because she was Muslim there. And they escaped with fake passports.”

Yanchyk’s first documentary, which she made when she was working for the BBC, told the story of Palestinian refugees who had travelled from Iraq to settle in Iceland.

“And that experience really changed me because I just loved those women,” she said.

“I just saw how much they wanted a new life. They had had horrible lives living in refugee camps. And they just were so determined that they went to Iceland, which is very far away from where they were from, Iraq, and they were going to a cold country. And they had to learn Icelandic.

“In their forties and fifties – who wants to do that?”

Colum Quinn (top) was involved in software engineering in Northern Ireland, but relocated to Canada over a year ago to pursue a career in the oil and gas industry. Maojiang Han, also known as Luke, was a farmer in his native China, but always had dreams of working in the energy sector. These are just two of the stories told in Brandy Yanchyk’s film about new Canadians in the Alberta oil patch.

BRANDY Y PRODUCTIONS PHOTOS

Yanchyk believes the Alberta oil patch is an interesting venue for telling similar stories about immigrants and their journeys simply because there is already such a bright spotlight on the energy sector.

“Right now, everybody’s eyes are on the oil and gas industry,” she said. “If you live in Alberta, you are looking at it, wondering what’s going to happen. It is

the future and it is the driving force of our economy. And people depend on this economy. We also care about the environment. So, there’s this question about what’s too much.

“It’s also a place where lots of people are getting opportunities to work from all around Canada. And now it’s from all over the world,” she added.

“I think that Oil Calling shows how, for

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careers

PIPELINE NEWS NORTH •

29

VEGETATION ADVISOR Jennifer Critcher brings her love of plants to Encana

Jennifer Critcher, vegetation advisor for Encana in northeast British Columbia, looks over a few plant samples from her collection. Her top priority is weed management.

JAMES WATERMAN PHOTO

james waterman Pipeline News North Jennifer Critcher has plants in her blood.

Born and raised on a farm halfway between the bustling oil and gas industry towns of Dawson Creek and Fort St. John, British Columbia, Critcher eventu-

ally took her scientific curiosity and love of plants to Olds College in Alberta, finally becoming a certified crop advisor.

Now Critcher puts her knowledge of native flora to work every day as a vegetation advisor with natural gas producer Encana.

“It was just one of those things – natural career

progression,” Critcher said of her move into the energy sector. “I believe that there needs to be people that have awareness and understanding both of agriculture, and oil and gas.”

Weeds are the focal point of her career these days.

“I coordinate the weed control contractors on all our sites,” said Critcher, noting that her area extends from Fort Nelson in the north to Grande Cache in the south.

“And then I work on a bunch of different projects here and there,” she continued.

One of those projects is a study Critcher is conducting alongside the Peace River Forage Association.

“We’ve taken an actual oil and gas lease site and we’ve done replicated trials on the site with different species ... of grasses and legumes,” she explained.

Those species include alfalfa, clover and timothy.

“To see which species does better in that specific oil and gas site,” she added.

Critcher also took part in developing a new guidebook known as Best Practices for Managing Invasive Plants on Oil and Gas Operations in B.C. that was released this May. “I’m involved with the invasive plant councils for the Fort Nelson area and the Dawson Creek area and that’s how I got involved with the oil and gas handbook,” she said.

The work was a collaboration between stakeholder groups ranging from oil and gas companies –including Encana and Shell Canada – to the Oil and Gas Commission (OGC), the Ministry of Agriculture and the Peace River Regional District (PRRD), as well as the Invasive Species Council of British Columbia.

“We had a pilot training session that we did in Dawson Creek in April,” said Critcher. “And then the final draft of the book was sent out at the beginning of May.” Critcher explained that movements of people and soil are major contributors to the spread of invasive weeds, adding that the oil and gas industry is a sector that sees a great deal of movement of both people and soil.

“Invasive plants can spread by anything from walking through a patch with your shoes to [moving] through a patch of invasive plants with a heavy piece of equipment,” she said. “Anything that moves soil is continued pg 30

Pipeline right-of-ways such as this one belonging to Encana are hot zones for the spread of weeds because of the movement of both people and soil, key contributors to weed issues in the oil and gas industry.

JAMES WATERMAN PHOTO

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careers Weed management is part of being a good neighbour for Encana cont’d from pg 29 going to move invasive plants. And oil and gas moves a lot of soil. And we’ve got a lot of people moving in the industry.

“All potential vectors for invasive plant spreads.”

Critcher said the key to preventing the spread of invasive plants is awareness.

“When people know better, they do better,” she said. “So, just bringing to the forefront that, yes, that pretty daisy plant is actually a bad plant. It can have impacts on natural wildlife grazing areas.”

Invasive weeds can also outcompete native plants for valuable resources and even poison livestock that try to eat those species.

All of these are reasons why the key aspect of Encana’s approach to invasive weed management is simply prevention.

“Preventing the weeds from get-

the Courtesy Matters program is beting there in the first place,” said ing a good neighbour. And keeping Critcher. “We do lots of awareness, down weeds on our leases is part of just making sure that people aren’t parking their equipment or anything being a good neighbour.”

Forging strong relationships with in an invasive plant area. We do neighbours is important for a natural lots of monitoring. And then we gas producer in northeast B.C. when do mowing, handpicking and then there can be such a large amount herbicide treatments.

“I do of construction of and lease presen“When people know pipelines sites on land actutations ally belonging to loand better, they do better.” cal people involved training in a much different on weed identiindustry.

– Jennifer Critcher, Encana That is one area fication where Critcher and just really notices her genvalue to the industry and Encana. eral invasive plant awareness,” she added.

“There needs to be people that Managing invasive weeds is bridge that gap between the oil and gas industry and agriculture because almost a matter of good manners there is a disconnect,” she said. for Encana.

“Because you have two different “We have our Courtesy Matters goals in mind for that specific land.” program,” said Critcher. “And part of R001424278

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Excellent wages & perks!

Contact us TODAY! Apply with resume, to 9905-85 Avenue, Fort St. John, BC Call 1-250-262-4455 for an appointment or fax resume to 250-262-4457.

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