pipeline news north april 2012

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Northern British Columbia and Alberta's Oil and Gas Industry

Vol. 2 Issue 4 • dIst: 20,325 APRIl 27 • 2012 • FReeNorth

in this issue:• doIng It RIght

- ResPonsIble cAnAdIAn eneRgy

AwARds• the PAtch In

PRInt - oIl And gAs jouRnAlIsm

• All eyes on h20 - FRAckIng semInAR

In FoRt st. john

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2 • PIPELINE NEWS NORTH APRIL 2012

PETROLEUM ASSOCIATION - HAPPENINGS

Fort St. John’s Petroleum Association held its 9th annual Oilmen’s four-on-four hockey tournament April 4 - 7 at North Peace Arena where, despite some close games, Baker Hughes came out as this year’s champions.With the help of sunshine, barbeques, beer gardens and even former

Vancouver Canucks coach Marc Crawford, the event was another huge success.

“It was great,” said Lee Hartman, chairman of the Fort St. John Petroleum Association. “The teams were very competitive this weekend, and a lot of fun, which is what it’s about: having fun and a few sociables, too.”

According to Hartman, what made this year’s tourney different from others was how close the standings were, which made for more interesting finals which were held on Saturday.

Starting at 8 a.m. on Saturday, April 7th five playoff games wrapped up the tournament after a full day of round-robin hockey on April 6th.

“The guys have a great time,” Hartman said. “They play with guys in this tournament that they play all year in rec league, so guys that they have an axe to grind within the rec league, they get to go sit in the dressing room with for five days, then the next year they’re buddies instead of enemies.”

The top six teams faced off in the afternoon, with Ditmarsia Holdings Ltd. beating CE Franklin 8-3 in the Scotia Bank final for third place.

Fort Motors and Nabors Production Services went head-to-head for the Spectra Game at 1:30 p.m. but from the comradery between the two teams, it was hard to tell if there were any actual competitors on the ice. It was a close game at times, but Nabors won second place by a score of 4-2.

The final, also known as the Petroleum Club game, was between the tourney’s top two teams, Baker Hughes and Complete Pumpjack Services, and was what could only be described as a goal fest.

By the end of the first period the teams were already tied 4-4. Until the very end it was a close game, with both teams losing and gaining the lead until the final moments, when Baker Hughes got an important breakaway and won the game 10-9.

“It’s just for fun,” Hartman said about the tourney. “We started hockey because we wanted younger membership in our association. The golf tournament is so hard to get into, that the young guys who work the oil patch get discouraged.”

“Golf just seems to be an old-boys club… Hockey is just hockey.”

Bringing in celebrities also helps the association sell tickets and garner a little extra attention.

This year’s hockey star was former NHL coach and current TSN panelist Marc Crawford who was in town Thursday for the stag.

“Marc jumped at the opportunity to come and took some days off of TSN just before playoffs,” Hartman said. “He worked the whole time he was here, and he was great. The guys really enjoyed it.”

Next up for the Petroleum Association is the 50th Annual Oilmen’s Golf Tournament.

“Golf is in it’s 50th year, so we’re throwing a huge celebration this year,” Hartman said. “We’ll be canvassing the community for help to run the tournament this year. My committee members will be out asking for sponsorship and prizes.”

“There are lots of ways to get involved.”

The golf tournament runs June 6-9 at Lake Point Golf and Country Club in Charlie Lake.

APRIL 2012 PIPELINE NEWS NORTH • 3

28231

10 Energizing the North - Yukon looks to LNG

12 Coping with climate change

16 The patch in print - the

world of oil field journalism

industry news

community

environment

careers & training

special feature

4 Supply and demand - gas

storage troubles

19 Fuelling change - Shell

funding green projects

28 Local companies struggling

with transportation issues

14 Local businesses help

volleyballers go to nationals

8 All eyes on H2O - BCWWA

seminar in Fort St. John

6 Skills Canada National Competition30 CAODC revamps drilling rig career site

industry newsdoIng It RIght

Six oil and gas companies earn

Responsible Canadian Energy Awards james watermanPipeline News North

Scat-sniffing dogs. Tracking birds with radar. A new high school in Northern Alberta.

They doesn’t necessarily sound like the oil and gas industry, but they are all part of projects that were rec-ognized by the Canadian Associa-tion of Petroleum Producers (CAPP) with Responsible Canadian Energy Awards, which the organization presented to six energy companies in Calgary on March 21.

“We had a lot of submissions,” said CAPP spokesperson Travis Davies.

“They’re all good projects,” he added, discussing the 29 initiatives from which the six winners were chosen. “It’s about recognizing people that were very successful at their innovation programs and came up with some really cool projects to address social, environmental and health and safety issues. And I think those are pretty well evident by the winners.

“Taking your own business and finding ways to improve it – some-times that has a bottom line impact and sometimes it’s just because it’s the right thing to do.”

Shell Canada and Suncor Energy shared the Health and Safety Per-formance Award, while Quicksilver Resources took home the Chair’s Award for their timber recycling pro-gram in northeast British Columbia.

The Environmental Performance Award went to Statoil Canada for their unique use of scat-sniffing dogs to gather information about caribou, moose and wolf populations in the oil sands region of Alberta.

“The actual project itself started as part of our wildlife study for our environmental impact assessment for Statoil’s Kai Kos Dehseh (KKD) Project,” said Tim Shopik, Manager of Regulatory Affairs with Statoil Canada.

The study area is a tract of land that covers about one seventh of the East Side Athabasca River (ESAR) range for boreal caribou.

According to Shopik, previous caribou population estimates for

that entire range is about 90 to 150 caribou.

“Our study estimates a lot larger population,” he said. “We’re talk-ing in excess of 300 animals in our study area.”

The company found 208 unique individuals in that region.

“You just can’t say, well, we’ll multiply it by seven to get the new estimate for ESAR,” Shopik cau-tioned. “In the summertime, the caribou are dispersed and tend to be very singular. In the wintertime, they do congregate. What we can say is that the population estimate within ESAR is at least double what was… estimated previously. We also know that the estimate that we have is statistically defensible. And it’s the first statistically defensible popula-tion estimate we have.”

The project was inspired by the work of Dr. Samuel Wasser, direc-tor of the Centre for Conservation Biology and Conservation Canines program at the University of Wash-ington, who has been using scat-sniffing dogs to put a dent in the illegal ivory trade in Africa.

“He was able to genotype elephants based on their fecal de-posits,” Shopik explained. “And then able to determine the genotypes from the ivory tusks themselves, and then be able to link where that particular tusk for ivory came from.”

Wasser has also used scat-sniff-ing dogs to gather information about grizzly bears in Alberta.

“The dogs are hyperactive,” Shopik continued, describing the process and the best dogs for the job. “They are not breed specific.”

The trainers use a ball as a reward. When the dog successfully detect a caribou, moose or wolf scat during training, they get to play with the ball. Judging by the results, the method has worked extremely well, as four dogs were able to locate about 1500 scats in just ten weeks.

Shopik believes that was a very thorough job.

“The sampling grid covered the study area,” he added.

Shopik is also optimistic about how the information can help Statoil and other companies improve their

operations in the region to help protect caribou.

“First off, just finding the popula-tion estimate is really important,” he said, also noting

valuable information that was gathered about land use issues and nutritional and physiological stresses.

The company has also developed a relative selection probability func-tion model.

“It predicts the likelihood of wildlife being found on any one piece of ter-rain,” Shopik explained.

For the purpose of the model, ter-rain includes topography, vegetation and land use.

“Based on the scat locations, we’ve developed a very sophisti-cated computer model that predicts where these animals will probably be found,” he added.

A big issue concerning caribou is how oil and gas industry activities such as seismic work and building access roads and pipelines have made it easier for wolves to spot and pursue caribou. Those areas are also ideal for the growth of food sources preferred by moose and moose may be attracting wolves to those regions.

“One of the trials that Statoil did last spring is to look at a predator access control,” said Shopik. “What we did is we scattered a bunch of logs and slash along a segment of the right-of-way where we know where wolves are. We put a bunch of cameras there on that section of line, as well as other lines that are in close proximity to that treatment area to see if that slash would deter wolves from using that treated line.

“The results are still very prelimi-nary, but the results are encourag-ing,” he continued. “It means that, potentially, if we can locate where there are areas where we would like to discourage wolves from going – and I’m thinking caribou habitat – than you might put these treatments in there to deter wolves from going into those areas.”

Statoil has analyzed scats collect-ed to determine wolf diet at different times during the year. According to

continued pg 22

CORRECTION

In “Health concerns,” from the December edition, we referred to hydrogen sulphide instead of sulphur dioxide. We regret the error, and any confusion it may have caused.

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industry newssuPPly And demAndPursuit of new markets heating up as natural gas supplies continue to grow

james watermanPipeline News North

Ed Kallio certainly raised a few eyebrows during the 2012 Natural Gas Conference organized by the Canadian Energy Research Institute (CERI).

Speaking at the conference on Monday, February 27, the director of gas consulting for energy sector consulting firm Ziff Energy Group said that natural gas producers may have to pay buyers to take their gas this summer, as those fees would most likely be lower than the penal-ties they would have to pay if they were unable to move their product by the dates stipulated in their stor-age contracts.

He has been fielding questions on that subject since that day.

“It has happened,” said Kallio.The problem the industry is cur-

rently facing is that the volumes of gas in storage as of the beginning of April were more typical of late sum-mer than early spring.

“Our inventory, coming out of the winter, should be much lower than it is right now,” Kallio explained. “We’re carrying over the amount of gas that we normally have in the ground by August of each summer, not April of each spring.”

At the beginning of April, said Kallio, there was about 300 to 350 billion cubic feet (bcf) in storage in the ground, while the normal volume at the end of winter would be about 150 bcf.

“That means we have less room to put gas into the ground,” he added. “So, it will fill up much more quickly. So, it will be full by August.”

“It doesn’t go anywhere,” Kallio said of that gas. “The gas stays in the ground until you need it. And you sure don’t need it in August. You need it in December or January.”

The cause of this problem is fairly simple: the market for gas is smaller than the amount of gas being produced. A warm winter coupled with the well-documented North American gas glut resulting from the shale gas boom has contributed to creating that situation.

However, that isn’t the whole story.“What’s happened is that Cana-

dian gas is getting shut out of our traditional markets by [United States] Lower 48 gas,” said Kallio. “So, we produce more gas than we need here in Western Canada. And we export a lot of it.”

A pair of natural gas pipelines – the Bison Pipeline and Rocky Express (REX) Pipeline – transport-ing gas from production areas in the U.S. Rocky Mountains to the northeast and midwest U.S. has cut into those exports. Additionally, the Ruby Pipeline is transporting that U.S. gas to the Pacific Coast region of that country.

“Our gas isn’t flowing to those markets,” said Kallio. “So, guess what happens? It stays in our basin. It doesn’t go out.”

Kallio remarked that there is spare

capacity on the TransCanada pipe-line that feeds markets in Ontario, Quebec and the northeast U.S., but the pipeline tolls are too high for those markets to choose western Canadian gas over gas produced closer to home.

“The market’s working,” he said. “[Eastern] Canadians and folks in the northeast [U.S.] are getting the cheapest gas available. But it’s just not western Canadian gas, because western Canadian gas is higher cost, generally. And with the toll structure on TransCanada, which is $2.00 plus, [it] doesn’t make sense.

“The toll used to be $1.15.”The only options for producers

now are to either shut-in production or find a market for their gas.

It has been suggested that the promise of liquefied natural gas (LNG) exports to Asia could go a long way to solving the North Ameri-can gas glut problem, but much of those LNG exports will likely consist of yet to be produced resources from the Horn River Basin of Northeast British Columbia. If that is the case, LNG might not be any solution at all.

Kallio noted that there are other factors at play.

“Oil sands demand [for natural gas] is also growing,” he said. “That will soak up some of it. And power demand is also growing, especially in Alberta and Saskatchewan, with the federal government performance standard for coal-fired generation.

“Demand will increase, but over and above that we still need more demand to realize the potential that we have in the basin. We have much more potential – productive potential – in the basin than we have market. And so we have to look outside for market because of that competition from the U.S. Lower 48.”

The question that remains is what impact the final decisions on TransCanada’s Keystone XL pipeline and Enbridge’s Northern Gateway pipeline could have on oil sands de-mand for natural gas. It appears as though the revamped Keystone XL proposal is bound to move forward after hitting a speed bump in the fall, but a decision on Northern Gateway is still a year away, and opposition to the project is mounting.

“I think we’re at about 2.6 million barrels per day right now and we’ll increase to 4.8 million barrels per day 2020,” said Kallio, describing oil sands production. “And we start getting tight on capacity out of the basin around 2015, which is when Keystone is supposed to come on.

“But you can see that we need all the pipe,” he continued. “We don’t just need Keystone. When you got an incremental two million barrels plus coming on, you need Keystone, you need Gateway and you prob-ably need that expansion of [Kinder Morgan’s] Trans Mountain [pipeline] to accommodate all the incremental oil production that’s coming on. And so if those projects are delayed, than the gas demand will be impacted.”

The volumes of oil produced by

steam-assisted gravity drainage (SAGD) projects, which are the source of much of the natural gas demand by the oil sands, can be adjusted according to demand or pipeline capacity.

“Every year or every couple of years you can pull back on that or ramp it up,” said Kallio. “Versus the mining projects, which are pretty much done or will be done. They’re not scaleable. Those things will just go ahead.

“If we’re tight, we’ll be railing bar-rels out and being creative.”

Another concern is the potential impact of an emerging shale gas industry in China in terms of turning this storage capacity issue into an annual problem by eliminating one market for Canadian natural gas, but Kallio doesn’t expect Chinese shale gas to put much of a dent in Cana-dian LNG exports to Asia.

“We don’t see that as a big threat,” said Kallio. “Where that gas is is kind of in the interior, and there’s so much local demand there that it will soak that stuff up. And it’s doubtful they’ll pipe it to the coastal areas, which are going to take the LNG.

“They want to build gas usage to about ten per cent of their energy needs going forward and they’re go-ing to need a lot of gas,” he contin-ued. “And they’re going to need their own shale gas, which is unproven, plus the LNG. And they may need effectively more LNG than what we forecast. If you get demand wrong in China, you could double it pretty quickly, because it’s just such a huge market, and their energy usage is much lower per capita than ours. They’ve got so much more room to grow as they build out the middle class in China and also in India.”

Ultimately, the storage trouble is largely an unanticipated problem created by the industry itself.

“In 2007, we were importing three bcf a day of LNG,” said Kallio. “Everybody was forecasting that this year, in 2012, we’d need between five and ten bcf a day of LNG to bal-ance our market. And [then] we had this explosion of shale gas produc-tion because the wells are very productive.”

That productivity has increased with advances in horizontal drilling and hydraulic fracturing.

“In some of the shale plays, you get wells that produce ten million cu-bic feet (mmcf) a day,” he continued. “And the average in western Canada in 2006, for instance, was about 180 mcf (thousand cubic feet) a day. We were drilling 18,000 wells and on average producing 180 mcf a day. So, it didn’t add up to much.”

Declining wells meant that produc-tion couldn’t be increased while the demand for natural gas was grow-ing. That was why gas prices were so much higher prior to the shale gas boom that prompted natural gas heavyweights like Encana to accu-mulate as much land as possible in

continued pg 18

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wheRe theRe Is smokeWildfires could strike the oil patch this year


A dry winter and plenty of fuel left from a slow wildfire season last year has some people in Northeast British Columbia won-dering about the potential for wildfires in the heart of the province’s oil patch this summer.

At first glance, the Snow Survey and Water Supply Bulletin released by the River Forecast Centre of the provincial Ministry of Forest, Lands and Natural Re-source Operations on April 1 would sug-gest that the conditions may be right for a slow fire season in B.C. again this year.

Snow packs throughout the province are above normal thanks to cool, wet weather in March. In the Upper Fraser and Nechako regions, snow packs are more than 150 per cent of normal.

“For the Peace Region, snow packs are very elevated,” said Dave Campbell, who heads up the River Forecast Centre. “We’ve got 129 per cent of normal for our Peace Region snow basin index.”

However, that number is skewed by the South Peace, and conditions are much different in the North Peace.

“Most of the snow pack measuring we do tends to be more to the western edge of the basin and also the south,” said Campbell.

“There’s fairly limited snow pack monitor-ing on the broader, flat terrain as you work your way out to Fort St. John,” he added.

“Right now, what we’re seeing in areas

north of Pink Mountain and [in] the Fort Nelson zone are below average snow pack levels,” said Alyson Couch, provin-cial fire information officer. “And then in the Peace agricultural lands, snow cover is, for the most part, gone.”

Couch noted that the region also so drought conditions heading into winter.

“What those snow pack levels will tell us is whether we see an early or late to fire season,” she continued. “And since those levels are low in areas of the Peace, we’ve already started to see some grass fire activity. But in terms of looking out at what could happen this fire season, it’s still a bit early to know what we might see. What we will be watching is drying patterns and the June rains to see how that might effect the fire season.”

The long-range weather models pre-dicted a cool April, but the possibility of warmer, drier conditions starting in May.

“There is the potential for a busy sea-son,” said Couch. “But that being said, the conditions can change quickly, as we know, and our accurate forecasting is done really about a few days in advance.”

Couch had no specific information about the amount of fuel available for wildfires, but did acknowledge that there could be extra wood to burn after a slow 2011 season.

“Each fire season is unique, and if we don’t get the lightning storms, or it’s wet and it’s cool, then the number of fires goes down,” she said.

“There is unburned fuel because we didn’t have much fire activity last year,” she continued. “But we’re also going to need the right conditions in order to see that fuel burn. So, we’ll just be continu-ing to monitor the weather conditions… through the remainder of spring and also into summer to see how that might affect the fuel that hasn’t burned.”

Of course, wildfires are nothing new to the region or areas of oil and gas devel-opment generally.

The 23,182 hectare Liard River fire of 2009 – the second largest wildfire that season – led to the closure of the Alaska Highway and the evacuation of three small communities.

Last year, the Slave Lake area of Northwest Alberta suffered from sig-nificant wildfires that impacted energy companies operating in the region.

“We were impacted,” said Husky En-ergy spokesperson Mel Duvall. “It was a combination of events. It wasn’t just the fires. We also experienced disruptions to the Plains Midstream Rainbow pipeline at the same time. So, the combination of the two events resulted in an impact to production of about 17,000 boe (barrels of oil equivalent) a day.”

The company also did their part to help residents of Slave Lake and the surround-ing area affected by the wildfires.

“Following the fires,” said Duvall, “a trust fund was established by a Husky employee to directly accept financial

donations. Funds raised by employee donations were directed towards helping families displaced by the fire.”

Shell Canada hasn’t suffered any dis-ruptions to their activities due to wildfire at their Grounbirch operations in Northeast, B.C., said company spokesperson Patty Richards, but they have considered sus-pending work in other areas such as their Muskeg River Mine near Fort McMurray, Alberta.

“The decision to do so is made in consultation with internal folks trained in health and safety exposure and with ex-ternal agencies… and the local municipal-ities,” said Richards. “The most important thing is to keep people safe.”

Factors they consider are the safety of area roads and if the smoke could pose a threat to human health.

“The principles of safe design we use to keep the public, our employees and the environment safe are the same that keep our risk from forest fire low,” Richards continued. “The risk of fire is a consid-eration in site design, how we clear and store material like wood, how we design and then build facilities and in how we train our employees.”

Early indications are that Alberta could be heading for a busy wildfire season again this year, but that is difficult to predict because it depends on various factors, according to Duncan MacDonnell, a spokesperson for Alberta Sustainable Resource Development (SRD), the minis-try that handles wildfires in the province.

“We started our fire season early because of low moisture content in the ground,” said MacDonnell. “Normally, we start April 1. This year we started March 1.

“There was less moisture in the ground,” he continued, explaining the decision to start the fire season early. “It was just over 50 per cent of normal. Not that that by itself is any great flag, because last year we had one of the wet-test winters on record and we still had a record breaking fire season. So, there are so many things that go into what the fire conditions are going to be like. There’s no one thing. It’s a combination of the weather, the amount of fuel you have on the ground in a particular area where a fire takes off. It’s humidity. It’s wind. Fire hazard is very much a local event.

“We can’t really predict what this fire season is going to be like. Nobody can.”

Still, there are ways the people can help reduce the risk of wildfires.

“Leaving campfires unattended,” said MacDonnell, listing the top human con-tributors to wildfire outbreaks. “No spark arrestors on an ATV. Careless discarding of cigarettes. That sort of thing.”

A 2011 wildfire in the Red Earth area of Northern Alberta shortly after it was detected. Fanned by strong winds, the fire grew to over 84,000 hectares before it was contained by fire crews. Similar fires could impact oil and gas industry operations this year.

PHOTO COURTESY OF ALBERTA SUSTAINABLE RESOURCE DEVELOPMENT


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stRut youR stuFFTransCanada helping Canadians show their

ability at annual skills competitionjames watermanPipeline News North

Skills Canada announced that TransCanada Corpora-tion has been signed as the Premier Sponsor for the 2012 Skills Canada National Competition on March 28.

According to Skills Canada CEO Shaun Thorson, the involvement of TransCanada, as well as Canadian oil company Cenovus, helps validate the annual contest, which attracts over 500 secondary, postsecondary and apprenticeship students working toward careers in about forty skilled trades and technology fields.

“They see the value in trying to create some discus-sion and raise the profile of these occupations,” Thorson said of TransCanada, suggesting that their name alone can help Skills Canada raise the profile of the competi-tion and address the skilled labour shortage, particularly if they can get the message to young people outside of their traditional audience.

“I think we are well known in those parts of the educa-tion system that are working with youth that may be interested in pursuing trades and technology [careers],” Thorson explained. “But I think we can make a larger impact on the education system overall and also with the general public.

“Encourage more of a discussion in the general public about the value of skilled trades,” he added. “And that we should be presenting as many options as possible

to our sons and daughters and… young Canadians in general so that they are very informed when they go to make that decision about what they want to do for the rest of their life.”

That can include attracting young people from parts of the country – such as Ontario and Quebec – where recruiting for the oil and gas industry hasn’t gone as well as in other jurisdictions.

“When you have larger compa-nies involved, and start to involve some pan Canadian compa-nies, some national companies, international companies, I think people do take notice of what’s happening,” said Thorson.

“With it being a national event,” he continued, “I think it provides us an opportunity to communi-cate that message throughout the country, that these activities are taking place and here’s the rea-son why. And that there are short-ages – skilled trade shortages – particularly in western Canada and more specifically in Alberta. And that that may pres-ent opportunities for people across the country.”

“We’re definitely interested in workers not just in Al-berta, but all across Canada,” said Sian Weaver, Com-

munity Investment Advisor with TransCanada. “Because we are all across Canada as well, as well as the [United States] and Mexico… And we’re very rurally based. We might have a head office here in Calgary, but if you look at our assets, we’re in small communities all across the country.

“A very rural demographic is important to us in ensuring that those skills are located rurally. Northern Alberta. Aboriginal communities in par-ticular are very important to us. But also in rural communities all across the landscape in Canada.”

“From our perspective, it’s not so much that you would necessarily have an Ontario recruiting strategy or things like that,” added company spokes-person Shawn Howard. “The reason people come to join our company is the reputation of it, the stability that it can provide for them.”

“And the kind of work,” said Weaver.“It’s not about a specific region where you have a

certain recruiting strategy that would be different from another,” Howard continued. “It’s we are TransCanada,

careers

“We’re definitely

interested in workers

not just in Alberta, but

all across Canada.”

– Sian Weaver, TransCanada


http://www.canwestgroup.com



here’s what we have to offer, here’s how we’ll help you develop personally and professionally over time. Because we want you to grow in your skills and what you can offer.”

That focus on people essentially sums up TransCanada’s reason for sponsor-ing the 2012 Skills Canada National Competition, which follows their sponsor-ship of a similar event, WorldSkills Calgary 2009.

“That was a really wonderful experience for us,” said Weaver.

“I think the main reason why we get involved with Skills Canada,” she continued, “is [that] a future skilled workforce in the area of techs and trades is really critical to TransCanada as a company. The people aspect – people are the big-gest assets for this company. It’s what makes things go.

“And it’s very important to us that we make sure that we have that future work-force that are highly trained and have those skills to be able to perform and be able to meet the criteria we’re going to

need on future projects.”“It will definitely help them in their busi-

ness in that we will have some of the top skilled people from across the country at the competition, which is a great opportu-nity for that industry as a whole,” echoed Thorson.

“To really connect with those young people and sell their business, sell them on why these are valu-able careers and why they should consider these as occupations,” he added.

“We need to make sure that we’re on their ra-dar,” said Weaver.

Howard noted that TransCanada also wants to use the opportunity

to show that they aren’t just a pipeline company concerned with transporting oil and natural gas, but also an energy infra-structure company with a wider scope.

“Thirty-three per cent of the power that we deliver comes from alternative and renewable resources,” he said. “We’ve got the largest wind farm in Canada. It’s located in eastern Canada. We’ve just announced a huge solar [energy] deal.”

This year marks the eighteenth national skills competition and Thorson believes the program has had a positive impact throughout its history.

“We do surveys every year of the par-ticipants onsite, and also the visitors that come and see the competition, and… from a visitor’s standpoint it always ranks very high in terms of increasing their positive view of careers in skilled trades and technology areas,” he said.

“We definitely improve the profile and the perception of the opportunities that are available in those careers. And that young people are able to access more career information from visiting the competition site and [meeting] with some of the partners that are there [that can] provide information, guidance and direc-tion on how people can pursue those careers.

“We’ve seen continued par-ticipation and in-creased participa-tion from partners, which is obviously important.”

The participa-tion of companies like TransCanada is important to the continuing success of the competi-tion, according to Thorson.

“Just the contri-bution itself allows us to provide a better experience for everyone that’s involved,” he said. “So, making sure that we are able to access equipment and material and put together a significant contest set up that provides… the competitors a very real and significant challenge as people working in their specific industries.”

The event also includes Try-a-Trade demonstrations where visitors can try their hand at tasks such as building a brick wall or wiring a circuit board, as well as a career fair.

“We will have a booth there,” said Weaver, adding that an aboriginal group will also be there to provide an aboriginal employment perspective.

“We definitely want to encourage stu-dents to get involved – heavily involved – in the techs and trades,” she continued. “And in particular we’re also focused on the aboriginal component of that. So, we’ll have a strong presence there as far as promoting aboriginal employment in the techs and trades.

“But that is not our only component that we’re focused on. We’re focused on generally making sure that students understand the credentials that you need to get involved in the techs and trades careers, but also how to move forward in those areas as well. And what happens when they have finished. Where do they

go from there? What are the opportunities? And so we’ll be prepared to talk about appren-ticeships and all that type of thing.”

Fields repre-sented at the competition include tradi-tional trades such as carpen-ters, welders, electricians and

plumbers, manufacturing trades such as precision machining and industrial millwright, information technology trades such as web design and software ap-plications, and various trades in the hospitality industry.

Potential competitors are identified by Skills Canada through regional and pro-vincial competitions across Canada and invited to participate in the contest.

The 2012 Skills Canada National Competition will be held May 13-16 in Edmonton, Alberta.

The Skills Canada National Competition has been giving secondary, postsecondary and apprenticeship students pursuing trades and technology careers a chance to show their talents for 18 years. TransCanada his helping them continue that program this year as Premier Sponsor of the event.

PHOTOS COURTESY OF SKILLS CANADA

“A future skilled

workforce in the area

of techs and trades is

really critical.”


“We’ll have a strong

presence there as far

as promoting aboriginal

employment in the

trades.”



All eyes on h2oenvironment

BCWWA seminar on hydraulic fracturing and water management attracts global audience


Although the focus was on water management in the province of British Columbia, that didn’t stop representatives from the Yukon government and Saudi Arabian Oil Company (Saudi Aramco) from attending the BC Water and Waste Association seminar held in Fort St. John on March 23-24.

Indeed, two of the most curious attend-ees at the seminar – Hydraulic Fracturing: Focus on Water – appeared to be James Ewert (one of two petroleum engineers in the Yukon government, currently serving as an operations officer with the Oil and Gas Resources Branch) and Abdulrah-man Alghamdi (an engineering specialist in the Environmental Protection Depart-ment of Saudi Aramco).

Alghamdi said that his primary reason for attending the seminar was to get a closer look at oil and gas industry regula-tions in other jurisdictions, which made sense considering that Mayka Kennedy, deputy commissioner of engineering; Ken Paulson, COO; Patrick Smook, operations manager; and Allan Chap-man, hydrologist – all of the BC Oil and Gas Commission (OGC) – made pre-sentations on subjects ranging from the basics of hydraulic fracturing to managing surface water use for hydraulic fracturing, as well as the regulations involving those operations.

“Hydrofracture will be fairly new in Saudi Arabia,” Alghamdi explained. “We don’t have as long experience with it, especially from the environmental im-pacts. I think this gathering does include great experience from both government and private sector, which [makes] the conference very rich with information and discussion.”

Ewert noted that his office had similar interests regarding the seminar.

“We’re really engaged with what other jurisdictions are doing when it relates to hydraulic fracturing,” he said. “This has kind of become a bigger point of discus-sion up North. So, we kind of monitor what’s going on in the United States, what’s going on in other jurisdictions in Canada. And the BC Oil and Gas Com-mission’s really done a lot of work to that. I personally have gone to various conferences – the Canadian Society of Unconventional Resources conferences in Calgary. This is just an extension of that.”

Yukon has to look to other jurisdictions for knowledge and expertise because their oil and gas industry is just as small as the associated government agencies.

“I was at another conference,” said Ewert, “and Manitoba stood up and made this comment about [how] they only had something like 517 wells drilled. And so everyone from Alberta and B.C. had a good laugh.

“I thought to myself, ‘I should stand

up and tell everyone we only have 73.’ And that’s over the past 50 [or] 60 years. So, we’re really small still. We only have two producing wells in the Southeast, in the Liard Basin, which is really close to the B.C. border. We’re still pretty small beans.”

“Water is definitely one of the things that gets brought up in the community meetings,” he continued. “People are re-ally passionate about it. We have several watersheds up in the Yukon [that] people want to make sure are maintained for future generations. Water – you know, it comes up when you talk about mining or any other kind of industry as well. But if there was going to be any kind of oil and gas development that required water, I think it behooves use to look into that now versus later.”

Ewert was impressed by the presenta-tion on toxicology by Dr. Donald Davies of Intrinsik Environmental Science, during which he discussed issues related to water quality and chemical additives in fracturing fluids.

“Chemicals are everywhere,” said Da-vies, noting that all the people in the room were essentially “sacks of chemicals.”

He said that people cannot avoid expo-sure to chemicals.

“The dose makes the poison,” he added.

“I find it’s really difficult, when you’re talking to people, they tend to have a certain level of chemi-phobia, where

anything that’s a chemical must be bad,” said Ewert. “So, when he talked about the dose being just as important as the substance, that really speaks to the kind of conversations I’ve had with people time and time again.”

Obviously, the oil and gas industry in Saudi Arabia is neither young nor small, but, as Alghamdi mentioned, the use of hydraulic fracturing is new. That had him scouring the internet for opportu-nities to learn about the practice. He only found three conferences that fit his schedule: one in Pennsylvania, one in Calgary and the BCWWA seminar in Fort St. John.

“I attended both the one in Calgary and the one in Fort St. John,” he said.

Alghamdi acknowledged that Northeast B.C. differs greatly from Saudi Arabia, particularly in terms of climate and sur-face land conditions, but he also noted that the geology and the concerns around water are very similar between the two jurisdictions.

“We don’t have difference on the design of the oil and gas wells,” he said. “We don’t have much difference on …the groundwater [or] subsurface.

Alghamdi suggested that industry in both B.C. and Saudi Arabia face similar problems when it comes to sourcing water and dealing with contamination of water.

“This conference covers both,” he said. “To minimize the use of the water and protect the water.”

Those issues have become hot top-ics of discussion in western Canada as residents of the region ranging from First Nations communities to environmental groups to grassroots landowner organiza-tions have continually voiced concerns about industry use of freshwater and the possibility of groundwater contamination due to hydraulic fracturing.

Julie Robinson, a regional agrologist with the Sustainable Agriculture Man-agement Branch of the Ministry of Agri-culture in B.C., actually discussed some of those concerns during her seminar presentation.

“Agriculture is a big component of what’s going on in our land base,” she said, adding that agricultural activity in the Peace Region of B.C. is largely an extension of the beef, forage and canola operations that are prevalent in Alberta.

According to Robinson, the bulk of agricultural water use in the Peace Region is spraying fields in the spring, which accounts for 2.5 to 6 million gallons of freshwater per year, and beef cattle operations, which account for a massive 275 billion gallons of water per year.

“We’ve always had abundant land and we’ve always had abundant water,” said Robinson.

However, concerns about availability of freshwater are escalating.

“A lot of our producers are surface water users,” she added. “It isn’t very common that they have deep wells.”

Natural gas producers also use surface water for hydraulic fracturing operations, but, unlike agriculture producers who require freshwater for their operations, they can also use saline water from deep

James Ewert (right), a petroleum engineer with Yukon’s Oil and Gas Resources Branch, discusses one of the presentations with his colleague, Erin Light (left) of the Water Resources Branch, during the BCWWA water management and hydraulic fracturing seminar held in Fort St. John March 23-24.



subsurface aquifers as well as recycled flowback and produced water from their gas wells.

Surface water sources traditionally used by agriculture producers include dugouts over natural springs and small water bodies such as beaver ponds. Some of those dugouts no longer access those natural springs. Some of those beaver ponds have gone dry. Robinson wonders if hydraulic fracturing may have played a role.

That concern relates to questions about the possibility of hydraulic fractur-ing adversely affecting groundwater sources and domestic water wells. The industry and its regulators in Western Canada are confident that the large vertical distances between groundwa-ter aquifers and natural gas producing zones, as well as the construction of ce-ment casings around the upper sections of gas wells, are keeping water wells safe from contamination by hydrocar-bons and chemicals used in hydraulic fracturing.

However, one seminar attendee questioned if there was enough informa-tion being collected to be that confident about the safety of drinking water, asking if regulators have considered requiring monitor-ing wells at vari-ous stages above the zone being fractured into or-der to collect that information.

Chapman acknowledged that there is a knowl-edge gap, but that such measures are not about to be implemented just yet.

“A topic that is under some sub-stantial discussion,” he said.

The seminar did provide some reasons for optimism concerning industry use of freshwater, even though wells in the Montney formation can require 10,000 to 30,000 cubic metres of water to complete and wells in the Horn River Basin can require 30,000 to 100,000 cubic metres of water to complete.

“The trend we’ve been noticing is that water volume per well is increasing,” said Smook, citing larger horizontal drills and greater numbers of fractures as the reasons.

Steve Dunk, Manager of Regulatory Affairs and Policy with Progress Energy, noted that only 15 per cent of the water used for their operations in Northeast B.C. comes from lakes or rivers. Prog-ress also uses 40 per cent run-off cap-ture, 20 per cent flowback water and 25 per cent produced water.

“Even though we’re producing more gas,” he added, “we don’t have a whole bunch more wells.”

Ken Burris of WorleyParsons also provided some interesting insights on water use as much of his work has been done in parched environs of the Texas oil fields.

“Drought is tremendous in Texas,” he said, emphasizing that hydraulic fractur-ing activity can’t happen without water.

“Cities are running out of water in Texas,” he added.

However, the state is actually “sitting on a sea of water.”

That water just happens to be saline water.

Northeast B.C. also has a considerable amount of saline water deep below the surface, which has been demonstrated by a pair of studies led by Geoscience BC in the Montney region and the Horn River Basin.

Subsurface water data from the Mont-ney project was released online on the first day of the seminar.

“There is still a lot of gaps in this work, but a lot of progress was made,” said Lyn Anglin, President and CEO of Geosci-ence BC, during her presentation.

Anglin also noted that some of the deep subsurface aquifers could poten-tially be areas for disposing of produced fluids.

“My opinion [is] people here should not look to that deep aquifer – saline aquifer – as something that cannot be used [except] for disposal or… for hydrofracture,” said Alghamdi.

“Because you can mix it with freshwater,” he continued, adding that that

is the practice at desalinization plants producing drinking water in Saudi Arabia.

Alghamdi insists that Canada should not overlook potential solutions to future freshwater demand problems because we appear to have a lot of freshwater now.

“Look for the demand. Are you match-ing demand?” he said.

“If the demand [is] much less than what you have available,” he continued, “then you can say, okay, we have lots of water. But if you hardly match the demand for agriculture, for [the] industrial sector, then you have to think about every resource.”

As a result of the hydrological model-ing study recently undertaken by the OGC, Chapman was able to discuss the availability and use of freshwater during the conference in greater detail than was possible even just last year.

“Industry, in 2011, used only one tenth of water approved,” he said, explain-ing that companies commonly apply for amounts greater than the amounts re-

quired simply because they don’t want to run out of water while completing a well.

“From my hydrologic perspective, I think there’s lots of water,” he added. “It’s really how you manage it.”

Chapman also said that the majority of industry water use in B.C. is through short-term water permits that expire after one year. Last year, OGC only denied about ten short-term water permit ap-plications, but they commonly ask for amendments to applications rather than deny them outright.

“We state explicitly that we can sus-pend water use,” he added.

Industry can also use water under long-term licenses, which are done through the Ministry of For-ests, Lands and Natural Resource Operations, not the OGC. There are currently only 10 active water licenses in the province.

“Very few water licenses up in the Horn River Basin,” said Chapman.

That is bound to change, however, as companies move from exploration to production.

“We believe we’re going to see more companies now wanting long-term water licenses,” said Chapman.

Despite the positive news, some seminar attendees raised concerns about water use and the regulatory approach to water management.

Gwen Johansson of the Custodians of the Peace Country Society insisted that the Province has its priorities backwards, suggesting that there should be an “Air and Water Commission.”

Chapman used his hiring as the first OGC hydrologist last year as proof that the government is taking water issues seriously.

“We are looking at enhancing the water staff at the Commission,” he added, not-ing that there are hydrologists and geolo-gists focusing on water across govern-ment ministries and agencies.

The modernization of the Water Act is also expected to address many existing concerns, such as licensing of ground-water.

“I think it went great,” said Daisy Fos-ter, CEO of BCWWA, discussing the suc-cess of the seminar as far accomplishing its goals.

“The quality of presentations [was] extremely good,” she continued. “I was really pleased with the work that’s under-way to help understand… the supply of water that’s available. I feel that there’s still a need to better understand the cumulative demands on the water by all

users. “We do

understand that they did present about the quanti-ty of water that’s being used for wells and each fracture and everything like that, but until we know exactly… how many wells they need to drill

and how much fracturing needs to be done, it still doesn’t tell us a lot about the demand. So, I think there’s still a lot of in-formation that needs to be gathered on… helping us understand what the demand on the water is.”

Foster believes that BCWWA and their seminars have a role to play in gather-ing that information and finding those answers.

“The role of BCWWA is basically edu-cation and knowledge sharing,” she said. “I think that’s a key role for us.

“And it’s also providing a voice for the water and waste community,” she continued. “That is how we do that. We bring various stakeholders together when there’s issues related to water. We bring people together and have those discus-sions. On the side of having a voice for the community, we meet often with regu-lators. And so we have the opportunity to gather this information and make sure that it goes… back to the regulators and that they understand what the concerns of the community are.”

No stranger to conferences and seminars dealing with energy sector water issues, Steve Dunk, the new Manager of Regulatory Affairs and Policy with Progress Energy, dusted off a few slides from his days as BC Operations Manager with the Canadian Association of Petroleum Producers for the conference.


Julie Robinson from the British Columbia Ministry of Agriculture brought the perspective of that industry to the seminar.


“The trend we’ve been

noticing is that water

volume per well is

increasing.”

– Patrick Smook, OGC

“We believe we’re going

to see more companies

now wanting long-term

water licenses.”

– Allan Chapman, OGC


special featureeneRgIZIng the noRthYukon sets their sights on B.C. gas


Yukon Energy is paying careful attention to a new mining development underway in their territory, and the reason for that close scrutiny is actually related to an emerging industry and a hot topic of discussion in British Columbia – liquefied natural gas (LNG).

Western Copper and Gold is currently engaged in a feasibility study for their Casino mine project, a process that includes a serious look at using LNG produced in the Horn River Basin shale gas play of northeast B.C. to power the operation.

“Our schedule is to have the feasibility study complete at the end of this year,” said Paul West-Sells, president and COO at Western Copper and Gold.

“The other thing we’re doing in parallel is working towards getting our submission in to the regulatory agencies in Yukon,” he added, noting that their goal is to complete that part of the process by the first or second quarter of 2013.

Western Copper and Gold has approached natural gas suppliers and processors operating in the Horn River Basin about the LNG component of the project.

“[We have] talked to them and gauged their interest in working together to develop a source of liquefied natural gas at Fort Nelson,” said West-Sells. “Right now, there is not a facility that actually liquefies natural gas in that area.

“We’ve had some preliminary discussions with a num-ber of groups there,” he added. “And there’s certainly lots of interest in working together. And we’re sort of just hammering out some of the details around that.”

Yukon Energy is involved in the project because the territory is actively seeking solutions to their peculiar energy challenges.

“Yukon is in a rather unique situation in that we are not connected to the North American transmission grid,” explained Yukon Energy spokesperson Janet Patterson.

That is vastly different from the situation in B.C., said Patterson, where they can deal with other jurisdictions to buy and sell power, depending on whether they have a deficit or a surplus.

“We can’t do that because there’s no transmission line that goes from the Yukon down to either Alberta [or] Brit-ish Columbia, or over to Alaska,” she continued.

“What that means is that every bit of power we need, we have to come up with a way of generating it our-selves. And it also means that… if we do find ourselves in a situation where we do have excess power, we can’t sell it to anybody else. And so because we can’t sell it to

anybody else, and because we’re a very small popula-tion – we only have about 35,000 in the entire territory – we are very conscious of the fact that we can’t go ahead and overbuild, thinking “oh well, we can just sell the stuff we don’t need.”

“We can’t do that because we can’t sell it. And then with the small ratepayer numbers that we have, people just can’t afford it.

“We’re very conscious of how much these big proj-ects cost. And we find ourselves in a situation where it’s extremely difficult to do anything without partners, without help from the federal government or the Yukon government.”

Yukon Energy is also working with the private sector and First Nations governments to find joint business venture opportunities.

However, the fact that their economy is so closely tied to mining presents another challenge when it comes to energy.

“Our economy is very up and down,” said Patterson. “We rely a lot on mining. It’s one of our major [industries] in the territory. But it’s all tied to the price of metals, of course. So, right now, metals are high. Mines are open-ing or have opened. But if metal prices bottom out, well, then those mines are likely going to close before too long, and where does that leave us?”

In the nineties, the Faro Mine, which was a massive project, was Yukon Energy’s biggest customer.

“When they shut down,” Patterson continued, “all our other customers had to sort of take on the expenses. We didn’t have a major customer to help pay all the costs. So, everybody else had to pick up the slack. And it was really difficult for people.”

The utility has tried to keep that from happening again.“Whenever we do negotiate a contract with a mine,

we try to have them contribute something in terms of legacy,” said Patterson.

“I’ll use the example of the Minto Mine,” she contin-ued. “Not only did it pay the full cost of the line from its property to our main transmission line, but it also gave us $7.2 million towards the building of that main transmission line, which, whether the Minto Mine exists or not, that’s a line that is useful to the vast majority of Yukoners.”

Presently, Yukon is approaching the end of its supply of hydro power, which means Yukon Energy will need to use more diesel power to supply the territory with electricity. They would prefer to replace that hydropower with other forms of clean and renewable electricity, with natural gas possibly serving as a transition fuel.

“It’s cleaner than diesel,” said Patterson. “It’s cheaper

than diesel. But it’s not totally clean either.”Patterson noted that some Yukoners also have con-

cerns about the possible effects of hydraulic fracturing.“If it’s feasible,” she continued, “does it make sense for

us to use that instead of diesel in the short-term, while we continue to look for these renewable options?”

Those renewable options could include wind farms and additional hydro projects, the latter of which would take a minimum of ten years to build.

“And we don’t have ten years,” said Patterson. “We could continue looking and working on that project, but in the meantime we want to find something that’s a little better than diesel, and that’s why we’re looking at lique-fied natural gas.”

The first priority for Yukon Energy is energy efficiency and conservation and so they are working with the Yukon government and Yukon Electrical to devise a conservation plan for the whole territory.

“Because, obviously, the more power we save, the less we have to build,” said Patterson.

“We are trying to squeeze as much electricity out of our existing assets as we can,” she continued. “Last year we built Mayo B, which was a new powerhouse in the area of Mayo A, our initial Mayo hydro station. And it gave us ten extra megawatts of power without having to build a new dam and without needing more water.

“We added a new hydro turbine at our Aishihik Plant. That’s given us seven additional megawatts. And we’re doing upgrades to our equipment to make it as efficient as possible.”

They are also examining a project in Whitehorse that would increase the water supply for hydro projects when electricity demands are highest, which are the winter months.

“We only have two small experimental wind turbines near Whitehorse,” said Patterson. “Very small. They can only produce enough for about 150 homes. But we do have now some wind monitoring equipment at a spot in the central Yukon and we’re trying to see whether we could set up a wind farm there. Probably 20 megawatts. There’s another spot near Whitehorse [where] we’re going to be looking at the same thing, maybe 20 mega-watts of wind if that… proves viable.”

The utility is considering producing electricity from the municipal garbage and through biomass such as wood waste from sawmills and trees that have fallen prey to bark beetles. Both of those initiatives could also provide heat for homes and businesses.

Being in the Pacific Ring of Fire means that geother-mal electricity is also a possibility.

“We know that there’s very hot water deep under-ground,” said Patterson. “And we’d love to find some so that we can use it to produce electricity. But it’s really ex-pensive to find. It’s like drilling for oil. So, while it’s on our radar, we don’t, at this point, have a geothermal project.”

As Yukon Energy began considering using LNG to generate power in the territory, they saw an opportunity to examine the idea jointly with Western Copper and Gold.

“We’ve been working with Western Copper [and Gold] over a period of years to serve a smaller mine that they have, which is really close to the grid,” said David Mor-rison, CEO of Yukon Energy. “And when they started looking at LNG, we had a discussion early on to put our resources together to examine the LNG options jointly. They for their purposes and us for our purposes.

“From my perspective,” he continued, “It’s a very good approach, because we’re sharing information.”

However, Morrison doesn’t view this as a pilot project to assess the potential for the larger scale use of LNG in Yukon.

“That generally leads people to think that this is just some little thing [where] you’re going to try it out and maybe you’ll do it,” he explained. “What we’re looking at is what are our options for putting new generation into the system to meet growing load. So we’re trying to figure out [if] LNG is the most cost effective and timely way to do it. Or is it something else?”

“Natural gas energy in the form of LNG is an option that we’ve been looking at for about five years,” said Ron Sumanik, acting director of oil and gas business

Western Copper and Gold’s Casino mine project in Yukon. The company is working toward using liquefied natural gas produced in the Horn River Basin area of British Columbia to power the operation.

PHOTO COURTESY OF WESTERN COPPER AND GOLD


34550

development for the Ministry of Energy, Mines and Resources in Yukon.

Initially, power generation projects of that type would rely on imports of natural gas from Alberta or British Columbia.

“We do have natural gas resources and activity exploring for those re-sources, but currently we have nobody that’s ready to supply product for an LNG consumer or an energy consumer,” said Sumanik.

“We have a large natural gas project in the Eagle Plains area of the Yukon that a company is looking at,” added Morrison. “And if, in fact, there one day turns out to be local resources [of LNG], we would use that.”

However, plans for oil and gas produc-tion in Yukon took a bit of a hit on April 12, as Energy, Mines and Resources Minister Brad Cathers announced that the province would not be issuing oil and gas exploration rights in twelve areas of the Whitehorse Trough under consid-eration for oil and gas development by interested energy companies.

The decision followed a 60-day public review period.

“When the Yukon government received these requests for postings, I noted that it had come as a surprise,” Cathers said.

“As I said in February, government would need to decide whether to al-low bids in all of the areas, some of the areas, or none of the areas, following the technical review and public consultation. What we heard during the public review period is that many Yukoners have concerns and questions about oil and gas exploration and development in the Whitehorse Trough at this time.

“The recent public review was our first real opportunity to hear from Yukoners on the possibility of oil and gas explora-tion rights being issued in the Whitehorse Trough,” he added.

It has been suggested that natural gas

power generation in B.C. would require associated carbon capture and storage (CCS) facilities in order for the province to stay on track with its greenhouse gas (GHG) emissions targets, but Sumanik doesn’t feel that that would be such a necessity in Yukon.

“Carbon capture is something that’s not lost on us,” he said.

“The upside of our energy crisis situ-ation is we’re basically out of hydroelec-tric energy and our next alternative is diesel,” he continued, echoing the words of Patterson. “So even without carbon capture… if we were to switch over to the use of natural gas, we’re simply improv-ing upon firing up diesel generators. It’s a positive step forward in terms of GHG emissions. And a cleaner fuel.”

Of course, all these issues aren’t nec-essarily the concern of Western Copper and Gold, who simply continue to push forward with their plans.

West-Sells explained that LNG is the preferred option for Casino because the project requires a constant 120 mega-watts of power.

“Because of our location, things like hydro are not on the table,” he said. “So, really, you’re reduced down to diesel or some sort of natural gas solution. And it’s pretty much cost. Delivered lique-fied natural gas comes in quite a bit less expensive than diesel.”

“Casino is sufficiently robust and the location is such that, for us, truck-ing makes a lot of sense,” he added, discussing fuel transportation options. “It’s still an economic project trucking in the liquefied natural gas even though it’s a fairly long haul. A pipeline would deliver it much cheaper, but the length of time that it would take to permit that, plus the capital cost, makes it somewhat prohibitive.”

According to a cumulative economic effects study, the results of which were

released on February 23, noted an esti-mated $9.8 billion contribution to Can-ada’s Gross Domestic Product (GDP) while creating 55,000 full-time equivalent (FTE) positions resulting in $2.8 billion in income.

“It’s a big project,” said West-Sells. “The capital cost is $2.1 billion dollars. The cash flow on it is, depending on which prices you’re using, is sort of in the $500 million to $800 million per year range. So, it’s a big project. It generates a lot of revenue. It pays a lot of tax and contributes significantly to the GDP of Yukon.

“Casino, with the liquefied natural gas, it adds 20 per cent to the GDP of the Yukon,” he continued. “Putting in a facility that would supply the liquefied natural gas in the Horn River area in British Columbia is going to be relatively smaller impact. One of the things that we’re go-ing to be determining is what the capital costs of that project would potentially be, but it’s not going to be in the billions of dollars. This is a pretty small amount of LNG that we’re considering that we would need.

“I mean, this isn’t sort of an export facility to load up big ships. This is just to load up trucks. So, it’s going to be in the low hundreds of millions [of dollars].”

Despite the relatively small invest-ment in the LNG facility, West-Sells and Morrison are encouraged by the growing links between resource industries and provincial-territorial economies in Cana-da’s North suggested by this project.

“The territory has, over a number of years, used resources in Alaska to develop its economy and its resource industry,” said Morrison. “And what I mean by that is the port of Skagway. So, that’s how we get ore out of this territory other than by straight truck, which means that we’re using highways in the province of British Columbia or Alberta, depending

on what we’re doing.“I think the inter-jurisdictional piece

is really important,” he continued. “How we support each other and how we benefit each other – because there’s benefits as well – is a big part of how the North gets developed. And it always has been. That goes back as far as I can remember.”

“It’s an exciting time to be a mining company in northern Canada,” said West-Sells. “There’s been quite an explo-ration boom, particularly in Yukon, and also spreading into the Northwest Territo-ries and Nunavut. And there’s enormous potential. And what’s holding back the po-tential has been infrastructure. And what does that mean? That means energy and roads. And the thing that’s exciting for me about Casino is that it’s a big enough and robust enough project that we can carry some of that infrastructure – we’re carry-ing an extension of a road.

“But, really, the LNG has been the last piece of the puzzle to really bring this project together,” he added. “It’s just an excellent energy source. It’s a clean energy source. It’s an economic energy source.”

In fact, during the pre-feasibility study that was completed in April 2011, the company was using a model where natural gas was at $6.00 per thousand cubic feet (mcf), which is well above the current price.

“At current prices,” said West-Sells, “it’s very, very economic.

“And I think that using liquefied natural gas is just going to open up the develop-ment of the North,” he continued.

“As an interim fuel. I think, eventually, you’re going to see, potentially, pipelines and power transmission be developed better in the North. But, at this point in time, with the sparse population and still sparse development, having a transport-able fuel like LNG is what makes sense.”

Although it might appear to be remote location with rough terrain, the best option for transporting liquefied natural gas from British Columbia to Yukon is by truck, according to Western Copper and Gold’s president and COO Paul West-Sells.

PHOTOS COURTESY OF WESTERN COPPER AND GOLD


special featurecoPIng wIth clImAte chAngeChanging weather across the globe could alter the demand

for natural gas and impact the way the work is done

These spring scenes of deep, melting snow and running water could change along with the climate. One question facing the natural gas industry in Northeast British Columbia is how associated changes to seasonal run-off could impact their operations by reducing the volumes of water accumulating in borrow pits.



After one of the warmest Canadian winters in recent memory – during a period of the lowest North American natural gas prices in history – it may be only natural to wonder if climate change might also be changing the face of the natural gas industry in this country.

What impact might warm winters have on exploration and production operations that depend on ice roads and frozen muskeg?

Could rising temperatures shift the residential and com-mercial demand for natural gas from winter to summer?

Those are the questions that could be top of mind if Canadians continue to experience winters like the one they had this year.

“We can compare this winter with the past 65 years,” said David Phillips, senior climatologist with Environment Canada, noting that the federal government agency has a database of temperature and precipitation statistics dating back to 1948.

“And it stood out as quite exceptional,” he added.According to the database, this winter was the third

warmest Canadian winter on record, temperatures being about 3.5 degrees Celsius warmer than the historical normals. In southern Ontario and southern Quebec, this winter was the second warmest on record.

“And what’s also interesting is that in that 65 years, the three warmest winters have all occurred since 2006,” said Phillips. “So there is clearly a suggestion that our winters aren’t what they used to be. They tend to be shorter. They tend to be warmer.”

Phillips was particularly struck by the fact that every geographical region of Canada experienced warmer temperatures that usual. Additionally, there wasn’t much variation from month to month. The warming trend was consistent.

The winter was also drier than normal, except for the Pacific Coast region.

However, Phillips doesn’t suggest this is all attribut-able to climate change.

“There are factors which create it,” he said. “I’m always a little reluctant to go there to the climate change agenda because you can’t have it both ways. You can just say, well, this is climate change. And what do you say next year when it turns out to be the coldest winter in a few decades?

“We know that variability exists in weather. It’s wild swings. If anything, our weather seems to be becoming more extreme. And I think this is the thing that is really of concern to businesses.

“We do everything based on normal weather,” he added. “That has worked for us for decades.”

Canadian Association of Petroleum Producers (CAPP) spokesperson Travis Davies dis-agrees with that notion.

“I wouldn’t say this industry plans for the normal,” he said. “Just the whole process around environmental assessments and actually getting your approval for a project demands that you look far beyond the normal. You have to take into context what could happen when you’re doing these approval processes.”

Bill Gwozd, vice president of gas services with energy sector consulting firm Ziff Energy Group, insists that unpredictability of weather – the extremes mentioned by Phillips – can be managed with proper planning.

“It’s always hard to predict,” he said. “However, proper planning will solve all that.”

Gwozd knows how proper planning should work because he was previously a utility planner. The key is built-in flexibility.

“They would have some extra contracts that are flex-ible, where they can take the gas if they need it, but they don’t need it enough to take it,” he explained. “They can

also use gas inside storage, which is very flexible. And then when weather is colder than normal – 10 per cent [or] 15 per cent colder that normal – they can take a lot more gas from storage.”

Ziff Energy’s own models show that natural gas de-mand in North America varies from 70 to 75 billion cubic feet (bcf) per day.

“If the weather was 10 per cent colder, you need 2 bcf more,” said Gwozd, providing approximate figures. “If the weather was 10 per cent warmer, you need 2 bcf less.”

That approximate 4 bcf swing in demand is easy to manage with proper planning. Also, as Gwozd explained,

it is really only an issue in cities near the Canada-United States border.

“If I said that the Baja Pen-insula in California was 20 per cent colder, there’s no extra gas demand because they don’t use gas anyway,” he said. “And if I said that, you know, up in Can-ada’s North, in Inuvik, it was 50 per cent colder than normal, it doesn’t matter, because nobody uses gas up there. But if I said Boston or Chicago or New York was 15 per cent colder, it does matter.”

Gwozd also explained that the natural gas markets that are most affected by weather only account for about 30 per cent of the total market, with residential

demand at about 20 per cent and commercial demand at approximately 13 per cent. Pipeline fuel is about seven per cent. Industrial demand and power generation as-sume about 60 per cent of the market.

“If the weather’s really, really cold, it’s not impacting the power generation sector, which is really a function of sunlight hours,” said Gwozd. “Industrial [demand] is re-

“Our weather seems

to be becoming more

extreme. And I think

this is the thing that

is really of concern to

businesses.”

– David Phillips,Environment Canada


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ally a function of gas price. Residential [and] commercial are a function of temperature.”

Since residential and commercial demand are just a third of the market, approximately, a 20 per cent warmer or 20 per cent colder winter only affects 25 bcf of the total 75 bcf per day North American natural gas market. Twenty per cent of 25 bcf is only 5 bcf.

“It’s still tangible, but it’s not the end of the world,” said Gwozd. “That’s my point. So when I say 75 bcf, maybe it was only 71 [bcf].

“So, weather is a factor, [but] it is not the reason for the dismal gas prices.”

Davies agrees that temperatures aren’t always a big player in deciding gas prices.

“Obviously, a warm winter doesn’t help,” admitted. “But last winter was an extremely cold winter. So, that’s a little bit neither here nor there.

“The main reason the price is so low and so challenging is because of the supply glut, which actually begs effort in using more for electricity,” he added. “If you’re going to get into using more for electricity than warm summers are equally a boom for natural gas.”

Accessing foreign markets would also be good news in terms of gas prices and climate change if natural gas can dis-place the use of coal and bunker oil for power generation that has increased in Japan since the problems with their nuclear infrastructure began last year.

“Natural gas … is very clean and something that can have a very positive effect on climate change,” said Davies.

However, there is still an emphasis on reducing green-house gas (GHG) emissions produced by the industry, particularly when it comes to venting and flaring.

“You look at ways to curb that,” Davies continued,

“And industry in Alberta has done a very good job of it.”In Alberta, flaring has been reduced by 80 per cent

since 1996 and solution gas venting has been reduced by 53 per cent since 2000.

However, it can be difficult to build the necessary infrastructure to reduce those GHG emissions in a low gas price environment that can severely limit the amount of capital available for such investments.

“When you’re looking at gas at a very low price, it makes it a little bit more challenging to capture that gas that would be vented and make an economic return for it,” said Davies.

“But there’s an environmental upside to doing it as well,” he added.

Davies also addressed how climate change might af-fect the industry purely from an operations standpoint.

“In terms of the actual ac-cess,” he said, “you might have earlier break-up and things of that nature, but companies are getting pretty creative with their ability to have roads, whether they’re using timber or mulch or whatever, to get in there.

“So I don’t see that as a big challenge for us. The commod-ity price is still the big challenge in terms of actually getting the production and work done.”

The other challenge may be the impact of changing precipi-

tation patterns on how and when borrow pits are filled by run-off from rainstorms or snow melt.

“We’ll see what happens,” said Davies. “Obviously, if there isn’t enough in the borrow pits, than you’ll have to see companies going back to the regulator to see what other options there are.”

“I think that climate change and less solid freeze-up during the winters is going to impact the industry access into oil and gas [well] sites,” said Bruce Rutley, direc-tor of the Centre for Research and Innovation (CRI) in

Grande Prairie, Alberta.CRI has recently developed four scenarios for the fu-

ture of the Peace Region to 2050, all of which acknowl-edge that climate change will have an impact on that future, particularly in terms of resource industries.

“In the scenarios, there was a recognition that climate change and societal changes would be shifting the demand for oil and gas products and towards more alter-nate energy products,” said Rutley.

“I think we need to reframe the way we respond to [climate change],” he added.

The first thing that must be done, according to Rutley, is simply to admit once and for all that the climate is actually changing. The second thing is to identify the causes of climate change and work to reduce their ef-fects.

“The other one is to position ourselves so that it’s not the same old, same old anymore,” he said. “Because of climate change and because of the global economy, we have to rethink – I believe we have to rethink – how we plan to respond, how we plan to approach the world and the changes that are coming our way. And that I think is key. And that was the key element that was articulated in Smart People, Dynamic Times.”

Smart People, Dynamic Times was the third of the scenarios produced by CRI.

“[That] was a scenario that really touched on the fact that our economy is not as stable now as what it used to be,” said Rutley.

“However, if we’re smart – in other words, if we pro-vide ourselves with the understanding that we have to be flexible … in skills training and learning and essen-tially repositioning the way we learn and educate our-selves – we can be flexible and take advantage of the opportunities when they arise and be more equipped to respond to the changes that the uncertain economy will bring our way. And so developing new products, solving those problems.

“It’s essentially becoming even more engaged in this innovation and entrepreneurship process and becom-ing better at it so that we can really respond to those changes that arise.”

“You might have

earlier break-up, but

companies are getting

pretty creative.”

– Travis Davies, CAPP

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communitytoRonto boundVolleyball team heading to nationals

with help from local businesses


Fort St. John’s ICE U15 Girls Volleyball team has been receiving tremendous support from the local busi-ness community as they pursue their goal of competing in the national tournament in Toronto on May 17-19.

One of the biggest sponsors has been the local AltaGas office, which donated $500 to the team. Their donation has only been topped by REMAX agents Lanna Tucker and Rick Walters, who have contributed $550 and $600, respectively, and a $650 donation from

Kalmar Construction.“We like supporting the local sports teams and the

community itself,” said Randy Merk, Plant Manager at AltaGas’s Taylor operation.

“And I think a lot of the companies don’t mind giving to teams like that.”

Merk, who is eager to see the volleyball team make it to Toronto, noted that AltaGas as a company routinely donates to organizations such as the Olympic teams and the United Way.

“And they give a lot of money to those kinds of organi-zations,” he said. “And they don’t mind me giving locally.

They like to support local community stuff.”The team had to have its funding in place by April 15,

said Coach Debbie Mah, but they will continue to try to raise funds after that date so that the players’ parents can get a refund on some of the money they have contributed.

As of April 13, the club had raised $5990 from corpo-rate sponsorships and $2900 from team activities such as bottle drives, candle sales and pizza lunches at local schools.

“We got a sea can full of bottles,” said Brianne Lara-more. “We could have like $4000 in there.”

The team set their fundraising goal at $20,000, figur-ing it would cost about $10,000 just for flights to Toronto.

“We thought, okay, let’s work it into chunks,” said Mah. “So, let’s go for the $10,000 for the flights. And then if we can raise more, awesome.”

The players are appreciative of the support offered by local businesses.

“That’s very helpful,” said team captain Tori Coulter. “Because we want to play in Toronto really hard and get the experience.

“We need all the sponsors we can get.”Mah noted that the support isn’t just about making it to

nationals this year, as the U15 team is part of a five-year development program that will hopefully see some of the girls earn volleyball scholarships from universities in the United States.

As part of that program, the team is conducting clinics with topnotch players like Andre Turgeon and Fort St. John native Kelsey Kosick, who attended university on a volleyball scholarship.

The development program appears to paying off, as the team demonstrated their skill and fortitude during a suc-cessful tournament in Calgary on March 31 and April 1.

“Out of the eight of us that were there, five us were sick, and we pulled through,” said Makari Espe.

“I thought that we all played really well together,” added Coulter. “And we stayed strong.”

The Fort St. John ICE U15 Girls Volleyball practice for upcoming provincial and national tournaments at Dr. Kearney Middle School on April 10.


let’s get geometRIcAlstaff reporterPipeline News North

A handful of Northern Lights College students have taken piping almost to the level of high art.

When asked by instructor Stacy Smith to turn pipes into three-dimensional shapes that can handle 30 pounds per square inch (psi) of pressure, Industrial Instrumentation Foundation Trades students at the Fort St. John campus rose to the challenge, completing impressive replicas of butterflies, horses and even the Starship Enterprise from Star Trek.

“The students this year have produced some ex-tremely difficult and creative projects,” said Smith. “How-ever, the key part of the project is that every connection has to hold when the pressure is done.”

TOP LEFT: James Dawes and Michael Bourgoin with their replica of the Starship Enterprise from Star Trek.

BOTTOM LEFT: Cole Comeau, Travis Stevens and Calum Rounthwaite with their rendition of a butterfly.

RIGHT: Teresa McNabb and Andrea Kurjata with their almost life-sized horse.

PHOTOS COURTESY OF NORTHERN LIGHTS COLLEGE


Encana donates $500,000 for

pediatric simulation lab

Daily Oil Bulletin

Encana Corporation has do-nated $500,000 to the Alberta Children’s Hospital Founda-tion, bringing the foundation to within $1 million of its goal to help the hospital build the largest pediatric simulation lab in Canada.

The new 4,000-square-foot simulation lab will cost an estimated $2.4 million and will be built on the fourth floor of the hospital.

Like flight simulation for pilots, patient simulation is cru-cial in helping health profes-sionals and students build the skills required to excel under pressure during life-and-death medical emergencies involving children.

The hospital’s KidSIM team, which was established in 2005, uses sophisticated technol-ogy funded by the community to train 3,500 people every year at the hospital and in rural centres across southern Alberta and southeastern Brit-ish Columbia. “Our goal is to double the number of medical professionals, students and families who will benefit from crucial KidSIM experience,” says Vincent Grant, medical director of the KidSIM pediatric

simulation program.The team runs mock trauma

and resuscitation drills, using high-tech mannequins that simulate breathing, pulses, blood pressure, as well as speech and sound so they can replicate a child’s response to illness, injury and treatment.

In addition to training thou-sands of professionals, the team has now become the first in the world to use simula-tion to help families look after the medical needs of their children. As part of the hospi-tal’s family-centred approach to care, a pilot project was launched in November for fam-ilies of children with epilepsy requiring seizure management and rescue medication admin-istration.

“Encana is committed to helping build stronger commu-nities,” says Bill Oliver, Encana executive vice-president and chief corporate officer.

“By investing in KidSIM,” he continued, “we are help-ing to ensure that sick and injured children in Alberta and beyond receive the best care possible from profes-sionals who have the skills, experience and confidence to save young lives for years to come.”

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special featurethe PAtch In PRIntOil and gas journalism almost as old as

the oil and gas industry in Canadajames watermanPipeline News North

Just as the Canadian oil and gas industry has had its iconic figures such as Daryl “Doc” Seaman and Dick Haskayne, the world of those who report on the oil patch for newspapers and magazines has also seen a few pioneering legends.

There is Carl Nickle, who began the Daily Oil Bulletin in 1937, when the energy sector in this country was barely older than his fledgling newsletter. There is Leslie Rowland, who joined forces with Nickle to publish a weekly oil and gas news maga-zine, Oil in Canada, which later merged with Oilweek, one of the most read oil and gas publications in the country.

“I worked with Les briefly,” said Dale Lunan, current editor of Oilweek.

“If anybody knew the pulse of the industry at the time, it was Les,” Lunan continued, “Because, I mean, everybody knew him. And I’m not saying that lightly. I mean, everybody. Every senior executive in the industry, every mid level execu-tive, every general manager, everybody knew Les. And his specialty was covering pipelines.”

Rowland would take to the open road every spring shortly after break-up.

“You wouldn’t see him for the next six months, as he was out bashing around the country in his Volkswagen Beetle, gather-ing information on all the pipeline projects that were underway,” said Lunan. “And he basically lived out of the back of his Volk-swagen six or eight months of the year.”

Lunan has been in the business for while himself, ever since winning a con-test for writers from community news-papers in oil and gas towns run by the predecessor to the Canadian Association of Petroleum Producers (CAPP). He was writing for a weekly newspaper in Drayton Valley, Alberta at the time, which was the late seventies.

Lunan used his success in that com-petition to make contacts in the industry, including the editor of Oilweek in the early eighties, Vic Humprheys. Cutbacks cost him his job in 1982, but he found his way onto the Daily Oil Bulletin roster just eigh-teen months later. The editor was Rick Sharland., who had also been Lunan’s editor in Drayton Valley.

“It doesn’t really matter what you know,

but who you know,” said Lunan.Lunan would be at the Daily Oil Bulletin

for the next sixteen years, finally returning to Oilweek, where the editor at that time was Gordon Jaremko.

“I’d known Gordon probably for 25 years,” said Lunan. “So, again, it’s who you know, not what you know. And I joined as statistics editor and did a lot of the other things that needed to be [done]. And [Gordon] left in 2005. I just made my case – I’ll do it.

“I’ve been doing it ever since.”Another one of the legends is a man by

the name of Ian Doig.Doig passed away on Saturday, March

10 at the age of 80, after devoting most of the last thirty years of his life to reporting on the petroleum sector as the editor and publisher of Doig’s Digest, a monthly publi-cation that sprang from Doig’s dissatisfac-tion with the development of the Hibernia oil field off the coast of Newfoundland.

“And he thought it was getting over-looked by petroleum journalists in general because it was the other end of the coun-try,” said Frank Dabbs.

Dabbs, also an oil and gas reporter, first met Doig in the late seventies.

Dabbs was exploration editor for Oil-week at the time, while Doig was working as a financial analyst, which had been his avenue into the inner workings of the energy sector.

“I don’t know whether or not he was a media groupie maybe a little bit,” Dabbs added. “But he was… a very good friend of Oilweek. And particularly of Les Rowland.”

Dabbs remembers his first lunch with Doig very well because it was the day that the shares of Dome Petroleum hit $100 for the first time.

“Dome Petroleum, in its day, was the great success story of the Canadian independent companies,” said Dabbs. “It was like the Encana of the seventies – a Canadian company that was at the top of the heap.

“I just remember Ian saying about the $100 share, ‘It won’t last.’ And how insightful that was, because he already had a bit of a grasp of the problems that Dome got in to.”

That financial perspective was some-thing new that Doig brought to petroleum journalism, a field that had been domi-nated by an interest in the technical side

of exploration and production until that moment.

Dabbs and his peers had been accus-tomed to talking to geologists, geophysi-cists and engineers, not financial analysts like Doig. If not for that fresh perspective, reporting on the National Energy Program (NEP) and its effects could have been very different.

“I think that that perspective of the marketplace was able to steer us to think more about the net present worth of the companies,” Dabbs explained.

In order to understand the impact of the NEP, reporters had to understand the new Petroleum Gas Revenue Tax (PGRT) and it impact on investment in the Canadian oil patch.

“The reason why there was all of a sudden no money for [exploration and production],” Dabbs said of the wellhead tax. “Rigs were leaving the country and activity was diminishing. To understand that, you had to understand common shares in the way that Ian was able to help us understand them. And so the net present worth of companies had a direct bearing on the common share. The net present worth of the companies had to do with the valuation that was placed on their oil and gas reserves. Their oil and gas reserves lost value because of the [PGRT], because at the wellhead these companies were going to have to pay a huge amount of money.

“These companies over night lost – to the financial analyst – lost 30 per cent of their value and more, depending on the company. Simply because they would not have the same revenue stream that was built into the net present worth.

“That is one concrete example of why he was different,” he added. “He had a different worldview and was able to share that worldview.”

It was providing the link between what was happening in the field and the larger economic picture of the industry and even the country. Unfortunately, the economics side – along with the politics surrounding the oil and gas industry – has become the tail that wags the dog, according to Dabbs.

“I would say a very limited scope of economics,” said Dabbs. “Economics of the share price and of the value of the companies and of the balance sheets of the companies.”

When Dabbs began his career, the focus on economics mostly had to do with oil price, particularly after the emergence of OPEC in the seventies.

“But escalating oil prices were a lot simpler in their economic impact on the companies than the marketplace,” he admitted. “And the emphasis now on the quarterly report and the focus of the CEO on share price and quarterly performance, that’s all new. I mean, new to me.”

Jaremko is also lamenting changes in the way journalists report on the oil patch.

“You’re talking to an antique from a previ-ous generation,” said Jaremko. “I have never darkened the door of a journalism school.”

Jaremko, armed with a graduate degree in history, was studying law at Queen’s University in Kingston, Ontario in 1971 when he “ran out of gas” and returned to his hometown of Calgary. He began writing for the Calgary Herald in 1972, manning the political beat for the next ten years.

Eventually, he found his way to the oil and gas industry beat before straying to the police desk for a short stint and finally returning to the energy sector as editor of Oilweek in 1997. In 2003, he moved to the Edmonton Journal to write about the industry for their news and business sec-tions until 2008, when he became editor of a magazine called Alberta Oil.

“By the end of 2010, we’re at 38 years in the trade,” he said. “That felt adequate.”

Presently, he is working on a book about the Energy Resources Conserva-tion Board (ERCB) for the Alberta oil and gas industry regulator’s 75th anniversary.

“If you were covering politics, whether in Calgary or the press gallery in Edmon-ton, it was only a matter of time until you discovered that the driving force in the Alberta economy and often in government and politics is the energy industry and various spin-off issues from it,” said Jar-emko, explaining his move from politics to oil and gas.

“And you start to get a sense of what makes this province tick and who runs the place,” he continued. “There’s a fascination with the oil and gas industry. And that’s from a quite wide perspective. To me, covering the oil and gas industry is not about carrying a torch for particular companies or shares. It’s more about


33551

Dozens of publications have been printing stories about the Canadian oil and gas industry over the years, employing well known and respected journalists such as Gordon Jaremko and Frank Dabbs.


what do we the people get out of this, whether it’s jobs or whether it’s royalty revenues or tax revenues that pay the bills in the budget. It’s economic devel-opment. In Alberta, it’s a very wide and significant issue.”

He remembers his first day at the Cal-gary Herald.

“The staff training officer comes and says, ‘Look, number one recognition: this is not about you. If you want to be a crusader, fine, go get yourself a picket sign and we’ll come out and interview you if you’re interesting. But that’s not what we’re about here.’”

The Herald, according to Jaremko, was first and foremost a community newspaper. Their mission was to provide information to the still small, but growing metropolis, not to influence opinions.

“You were always trying to talk to participants,” said Jaremko. “You were always mindful that they were your neighbours. And from a very practical point of view within journalism, you had to recognize that you had to be able to go to the same well more than once.

“I had to be able to talk to [Canadian Hunter Exploration founder] Jim Gray more than once,” he continued. “If some-body wanted to say Canadian Hunter is a piece of shit, it was okay as long as that

was attributed to the source. And your coverage acknowledged the second rule, which was: consider the source. You’d say who that source was. And then you would speak to Canadian Hunter and [they would] say in reply to that, ‘Well, no we’re not a piece of crap [and] we did what we did on this particular occasion for such and such a reason.’”

As far as Jaremko is concerned, there are too many journalists with their own agendas when it comes to reporting on the oil and gas industry now.

“The torch-carrying that goes on nowa-days isn’t so much for a particular side,” he explained.

“The journalistic tribe is competing to see who can be the biggest tribune of the people. And there tends to be a sort of mindset that says, well, the people are not the corporations or their employees, the people are the outsiders who don’t like them. There also tends to be… more of a practice of granting one side or an-other of a dispute involving industry moral high ground.”

Jaremko also credits – or blames – the growing popularity of broadcast and online news throughout his career, as well as the associated development of corporate and government public rela-tions machinery, for changing oil patch

journalism – and journalism in general – for the worse.

A prime example is his experience with media briefings for Alberta budgets at the provincial legislature in Edmonton.

“Print media and broadcast media had separate briefings,” said Jaremko, adding that print media was always after very specific information about the numbers and their impact on society.

“You really weren’t interested in the partisan statements of how this is good for all of you and all that bullshit,” he con-tinued. “As a matter of fact, you tended to say that’s the bullshit part. And you always had to have the bullshit part to go and look for the best quote.

“Broadcast is very different. If you’re doing broadcast, suppose you’ve got a one minute spot or something like that, you can eat up that whole minute just saying two or three numbers. And so what they needed was tape. And they needed to spend time getting the provin-cial treasurer… putting ideas or putting themes of the budget onto tape. If you’re print, you had the budget speech. There it was. And it didn’t matter what he added on tape or not. As a matter of fact, we hardly ever even used tape recorders. But that all has changed.

“Broadcast media grew – multiplied.

And print allowed itself to become more like broadcast. Almost everybody who works in print nowadays uses tape recorders – relies heavily on them. Relies heavily on sound bites that go into the print version of the news. There’s a dif-ferent style that’s evolved. It’s a different approach.”

It has created an environment where talking isn’t safe anymore, said Jaremko, simply because quotes can so easily be taken out of context. It has also led to the rise of the public relations industry.

Elsie Ross, a reporter for the Daily Oil Bulletin, has noticed a difference in how companies deal with reporters in her fifteen years with the publication.

A recent trend is companies and gov-ernment department – particularly in Brit-ish Columbia – only replying to questions via email instead of actually participating in an interview.

“And I hate that,” said Ross.“Unless it’s just a fact-checking thing,”

she continued, “I dislike that intensely. Because there’s no back and forth, which is why, I’m sure, they prefer it that way.

“Your interview goes beyond that, which is the whole point of an interview.”

Although it wasn’t originally her career goal, Ross began moving toward journal-

continued pg 18


http://www.steelproducts.ab.ca


industry newslet me IntRoduce myselFMeet the North Conference aims to

show Canada to the worldjames watermanPipeline News North

The Edmonton Chamber of Commerce is discover-ing that introducing northern Canada to the world also means introducing northern Canada to itself.

“At one point, Edmonton was a gateway city,” said Dennis Gane, manager of business development with the Edmonton Chamber of Commerce. “And we don’t consider ourselves a gateway city anymore. We consider ourselves more of a destination point. And when you consider the amount of northerners that come to Edmonton, that certainly validates that kind of thinking.

“When we look at the businesses that have been set up here in Edmonton that have connections to the North – because, of course, they’re doing business up north as well – the fact is that there are a lot of services and com-mercial enterprises that are originating from Edmonton that feed into the North.”

After inaugurating the Meet the North Conference in 2001, the Edmonton Chamber of Commerce began to look toward broadening its scope by encouraging sister conferences in Whitehorse, Yukon and Yellowknife, Northwest Territories. Subsequently, Meet the North was held in Edmonton in 2006 and 2009, Prospects North was held in Yellowknife in 2007 and 2010, and Opportunities North was held in Whitehorse in 2008 and 2011.

It has been part of changing that perception of Ed-monton commonly held by those who live farther north than the Alberta capital.

“We consider ourselves the North, but I go up North and we’re the South,” said Gane. “The largest northerly city in North America. It’s kind of bizarre.”

However, Meet the North has also begun setting its sights on the rest of the world, particularly foreign mar-kets in the Pacific Rim that are so desirable to resource industries in Canada.

That is why Meet the North, which will be begin on Oc-tober 3 this year, has adopted the “Going Global” slogan.

“The world is becoming a very small place,” said

Gane.“We’re not necessarily seeing this as much as we

would like – and I think Prime Minister [Stephen] Harper is really pushing it – [but] we’ve got to start looking at other markets,” he continued.

The Edmonton Chamber of Commerce organizes and promotes the conference through its World Trade Centre Edmonton franchise, which is the international arm of the organization.

“Through the World Trade Centre Edmonton, [we’re]

looking at those other markets with a view to bringing in foreign investors,” said Gane. “That would be direct foreign investment.”

Gane noted that they are also interested in attracting Public-Private Partnership (P3) projects such as the new hospital in Fort Smith, Northwest Territories.

“The winning bidder on that P3 was a company from Spain,” he added.

Gane remarked that the P3 program is important for regions like Canada’s North.

“And part of the reason, of course, is government, whether it be the federal, provincial or municipal levels, can’t afford to just do it themselves anymore, especially in the North,” he said. “And so that might be an option. And so that’s actually going to be discussed on the last day [of the conference].”

Meet the North will also include discussion on improv-ing information technology in smaller communities, the global competition for labour and education in the North.

Networking is also an important element of the event, said Gane, particularly as they are expecting over 400 attendees from across Canada and the world.

“We’re also promoting this through the World Trade Centre Association network, which has 330 [members] in 98 countries,” he added. “And we will be specifically targeting countries like India and China – well, the Asian market – where there is a lot of money.”

Gane hesitated when asked if he thinks the three sister conferences bring a greater sense of unity to the Canadian North.

“I don’t want to say that there hasn’t been unity, be-cause, frankly, when we’ve got 19 Northern Chambers of Commerce that are partnered with the Edmonton Chamber of Commerce under the World Trade Centre Edmonton umbrella, that amounts to 9000 businesses,” he said. “That demonstrates that there is unity.

“I think that, if anything, what these conferences do is create clarity,” he continued. “And one of the big things for all of these conferences is they’re venues to discuss what those issues are and come up with some potential solutions.

“And that’s basically what we’re after as well.”

Aboriginal throat singers performing at a past Meet the North Conference in Edmonton, Alberta.

PHOTO COURTESY OF EDMONTON CHAMBER OF COMMERCE

ism when writing for the campus newspaper at the Uni-versity of Alberta.

She was going to be a librarian.“I found I enjoyed it,” said Ross. “And kind of went

from there. I got a job in Red Deer… And I spent a few years there. And then I got hired at the Calgary Herald.”

After her stint at the Herald, she began freelancing for Oilweek when Jaremko was the editor.

“My introduction to the oil patch,” said Ross, noting that the transition from the Herald – where she didn’t do any business reporting – to the pages of an oil and gas industry weekly required a lot of learning on the job.

One of her early mentors at the Daily Oil Bulletin was Rick Sharland.

“Most of us tend to be on the arts grad type side,” Ross said of the Daily Oil Bulletin reporters. “So, really, the biggest thing is just drilling the importance of num-bers into us, because we use so many numbers. And we have to be so conscious of them, whether we’re doing quarterly reports, whether we’re doing stories on gas and oil production. I mean, they’re just crucial.

“And he was very good at correcting them,” she added.

It is an interesting time for Ross as an oil and gas reporter. Her main interests are pipelines and regulatory affairs, both of which are front and centre in the Key-stone XL and Northern Gateway sagas.

“They were below the radar for so many years,” she said. “There was nothing. For Keystone, there was hardly any debate about it.”

That has all changed rather suddenly.

Considering the way journalism has changed – not to mention the changes to how industries and govern-ments deal with the media – Dabbs can’t help but wonder what sort of legacy is left behind by the likes of Ian Doig.

“Journalism is like a footprint on the sand on the beach,” said Dabbs. “As soon as the tide comes in, it’s gone. And as soon as the tide changes, Ian, I guess, like anybody else, will be gone… But that’s not to say it’s not important. Because petroleum journalism was a good deal better than it would have been otherwise because of him.”

It has been forty years since Dabbs began working at Oilweek.

“And I can count on less than one hand the number of fellow journalists who really changed things,” he said. “And Ian was one of them.”

Oil and gas journalism has had its legendscont’d from pg 17

Production increased dramatically in recent years

U.S. plays.“And they tied up millions of acres,” said Kallio. “And in the U.S., if you don’t pro-

duce form that acreage, you lose it. In the Haynesville play, for instance, we went from zero in 2008 to six bcf a day of production last year. That’s huge growth just so those companies could hold that land by production.”

“We’ll see an adjustment in production,” he continued, “especially after this winter with the big storage overhang. The storage in the U.S. in their producing zone is the same as it is here. It’s chock full. It won’t be too many months before it’s totally full. Then what happens with the gas? You got to shut it in. You got to pray for more power demand. Because folks are burning less coal and they’re replacing the coal with gas, but there’s only so much of that you can do.

“It’s going to be an ugly market this summer.”

cont’d from pg 4


28392

FuellIng chAngeConservation projects could benefit from Shell Canada program


Shell Canada’s FuellingChange program could be about to make nature lovers in Western Canada very happy.

The competition gives environmental projects and organizations the opportunity to vie for a slice of a $1 million investment from the petroleum company, which is divided up into two grants worth $100,000 each, four grants worth $50,000 each and eight $25,000 grants.

Canadians vote online for the projects or organizations that they would like to see receive the funding. Voting for the second cycle of the program concluded on April 30, but the results are not yet known.

As of the middle of the month, a wetland mapping and planning project proposed by the BC Wildlife Federa-tion held the top spot in the race for the $50,000 grants.

“We’re a wetland education program and we’ve been running for the last sixteen years,” said Neil Fletcher, wetland education program coordinator for the organization.

Fletcher is one of the driving forces behind the proposal, which is designed to protect wetlands across the province and inspire community involvement in mapping and planning initiatives at the local level.

“We are trying to [reinvigorate] our wetlands program to get communities involved in wetlands mapping and plan-ning to help municipalities and other regional planners, who are understaffed and under-budgeted, to get work done to get wetlands on maps,” he said. “A lot of wetlands are under the radar when it comes to what is seen from an air photo or a satellite image.”

Fletcher explained that air photo inter-pretation has been the primary method of mapping wetlands in British Columbia.

“And so they miss a ton of smaller

wetlands, which still have a lot of eco-logical value,” he continued. “The project that we’re putting forward, it’s integrating some of our current projects, but also developing what’s called a one day Map Our Marsh workshop.

“The map our marsh workshop will show people that don’t have very much information on wetlands how to use GPS devices. And have some simple train-ing in wetlands monitoring so they can put wetlands on to what’s called the BC Wetlands Atlas.”

Fletcher noted that wetlands occur throughout B.C., especially in the North, but his organization is especially con-cerned with those in areas where there is a great deal of development.

“Because they’re the ones where there’s the most impact, too,” he said. “The Lower Mainland, for instance, there’s only about 10 to 15 per cent of the wetlands still intact. And a lot of those are degraded wetlands. So, there’s a lot of pressure on them.”

Seventh place in the same category was occupied by the Young Naturalists’ Club of BC, which is endeavoring to get more children – and their families – exploring wild spaces and learning about wildlife in the province through their Kids in Nature program.

“It’s our belief that children – young children – should learn about nature … and environment in B.C.,” said Daphne Solecki, president of the Young Natu-ralists’ Clubs of BC, who founded the organization in 2000.

“Get to know it at a young age,” she continued. “To respect it and to feel that they can be responsible for the health of nature and the environment. And so we take them out on field trips every month so that they can go and really get out there.”

What began with just one club now has about 50 clubs across the province.

“We reckon that since the year 2000 we have brought at least 10,000 children

out into natural areas,” said Solecki. “It’s not just a nature wander that they go for. We have an expert go with them as well so that, if it’s about fungus, we have a mycologist go with them, and if it’s birds, you have an ornithologist go with them. So, they can get really, really valuable information. And you find that these children are quite amazingly aware and knowledgeable. We’ve had some of our guides quite stumped by the fact that kids already know so much.”

About 30 of the clubs are family-based groups.

“Not only are the children brought to see nature, but their parents are as well,” said Solecki.

The second place project in the $100,000 grant category as of the middle of April was an Alberta Conservation As-sociation (ACA) to use what is known as citizen science to get a better handle on the wolverine population in Alberta.

“In some areas, they might be consid-ered abundant,” said Doug Manzer of the ACA. “In other areas, it’s really not known. And Alberta is one of those areas where wolverine abundance or distribu-tion is really not well known. And they’re what we call a data-deficient species in Alberta, which means they don’t have an actual legal status.”

Determining their legal status is a pri-mary motivation for the project.

Historically, said Manzer, it was com-mon for trappers to target wolverines in Canada and parts of the United Stats such as Montana, but that isn’t really the case anymore.

“But they still are trapped in Alberta, Northwest Territories, British Columbia,” he added. “And even hunted in British Columbia.

“And so having a good understanding of their distribution and their abundance is particularly important, since they are still consumed as a species.”

ACA is presently working with the Al-berta Trappers’ Association to gather that

information and determine if they may be thriving in certain areas compared to other areas of the province.

“We’re going back into trapping records right now and looking at where wolverines have been harvested over the last 40 years,” said Manzer.

“Some of the early data on that sug-gests that wolverines have been harvest-ed, certainly, in the northeast,” he added.

Manzer suggested that the value of the FuellingChange program goes beyond simply funding conservation projects to encouraging public interest in conserva-tion and environmental concerns.

“I think something that captures the imagination of the public as a whole is a very valuable thing for conservation in general,” he said.

“To have a project like this put onto a website,” he continued, “which is being looked at by participants across Canada, would potentially raise the interest of Ca-nadians in general to a species. Oh, why is that project important? What is it about wolverines that we don’t know?

“I think most of the public would as-sume that there’s a pretty good un-derstanding of wildlife in general, and especially a charismatic species like wolverine. But, in general, it’s not at all. It’s absolutely the opposite. There’s usu-ally not very good information on even charismatic species. And wolverine is certainly one of those.”

Fletcher noted that this new trend toward asking projects and organizations to compete for votes has forced the BC Wildlife Federation – and the Wetland Education Program in particular – to expand it skill set to include effective use of social media.

“Before this, I don’t think we had a Twit-ter account,” he said, adding that their Facebook account was also seldom used prior to this competition.

“I’ve actually had to bring in volunteer supporters that can help me and strategize how to run those types of campaigns.”

Quest environmental review positive step for carbon capturejames watermanPipeline News North

Eric Beynon is encouraged by the positive environ-mental review of the Quest Carbon Capture and Storage (CCS) Project released by Natural Resources Canada and Canadian Transportation Agency this March.

As director of strategy and policy for the Integrated CO2 Network (ICO2N), a big part of his job is promot-ing the development of CCS facilities such as the one

proposed by Shell Canada on behalf of the Athabasca Oil Sands Project, a joint venture involving Chevron Canada, Marathon Oil Canada and Shell.

“A big step forward for CCS,” said Beynon. “It’s just the next step forward toward the commercial operation of these projects.

“I think Shell has done a great job of being fully trans-parent with as much information as possible,” he added.

According the Beynon, providing accurate information to the public is essential to ensuring that CCS projects

do move forward. He also feels that there are numerous reasons to be optimistic about CCS.

“I think all the projects in Canada continue to move forward,” said Beynon. “We have seen some projects pull back around the world, but I think that’s natural. These are big projects. They’re complex engineering projects. And, really, when you’re looking at such big projects, be it CCS or anything else, you always have a whole bunch that are explorers, and then some pull back and others move forward.”

http://www.trojansafety.com


34359

industry newsA dAy In the lIFe oF A RegulAtoRy ReVIew


It was pretty quiet at the Quality Hotel in Grande Prairie the morning of March 28.

It could almost have been mistaken for a sleepy summer afternoon thanks to the warm sun that was beating down on hotel staff in their short sleeves, smok-ing cigarettes by a service entrance, and shining through lobby windows where a custodian languidly vacuumed the floor and a front desk clerk calmly dealt with just a few guests and phone calls.

Upstairs, a small group of people were scattered throughout an ambitious col-lection of empty chairs, all assembled in a second floor ballroom, all focusing on a panel consisting of just two men and one woman who were listening intently to the testimony of residents of the nearby Saulteau First Nations community.

Questions were asked and honest, straightforward answers were given.

Saulteau First Nations people also sat quietly in the audience, along with a few other residents of the region waiting for their opportunity to make oral state-ments that afternoon and a collection of federal government employees in casual dress, dutifully taking notes, their functions unknown.

No protests.No grandstanding

politicians.It was almost hard to believe that it

was a public hearing of the Joint Review Panel (JRP) tasked with assessing the Enbridge Northern Gateway pipeline proposal.

After all, the Prince Rupert hearings had the audience booing when En-bridge’s laywer objected to statements made by Nathan Cullen, MP for Skeena-Bulkley Valley, because he had strayed

too far from the purpose of the hearings toward ar-gumentative com-ments against the pipeline company and the federal government.

The JRP ordered the room to come to order.

Cullen quipped that he was surprised it took the Enbridge lawyer ten minutes to say anything.

Also, just the week after the hearings in Grande Prairie, the first day of hear-ings in Bella Bella, British Columbia were

cancelled in reaction to protests against Northern Gateway and the federal review process.

“Some of it is quite different,” said Colin Kinsley, comparing the Grande Prairie hearings to others he had attended as per his role as chair of the Enbridge Northern Gateway Alliance.

“There seems to be a lot more oral, local history from First Nations’ points of view and sharing of that history here, as the original oral hearings were set up [to do],” he continued. “In some other areas, in particular in Prince Rupert, that was actually abused and politics was brought into it. And so the people who are affected, the Coastal First Nations, didn’t get to give the kind of oral testimony that I personally was hoping for.”

Three groups of Saulteau First Na-tions people, men and women, youth and elders, were given a chance to speak of

The Joint Review Panel comes to Grande Prairie

“There seems to be

a lot more oral, local

history.”

– Colin Kinsley



Pipeline inspector Myron Gauthier (left) of the Saulteau First Nation testifies to the federal Joint Review Panel assessing the Enbridge Northern Gateway proposal as other members of his community await their opportunity to speak.


their experiences hunting and fishing – and living – in the land south of Tumbler Ridge, B.C. where a section of the pipeline would be built if it receives regulatory approval.

The JRP mostly kept quiet throughout the proceed-ings, only occasionally asking for clarification or addi-tional information.

“Some of these stories like we’ve heard today,” said Kinsley, referring to the tales of hunting, fishing and trapping, and the migration of the Saulteau people from Mantioba to B.C. over a century ago “that’s some pretty interesting stuff.

“And I’d like to have heard a little bit more about that in Prince Rupert,” he continued. “But, of course, at the time,

Nathan Cullen was in the heat of a national leadership race for the NDP. And it quite frankly was disrespectful.”

Kinsley noted that other hearings, such as those in Smithers and Edmonton, also left politics at the door, al-lowing participants to share their view of local history.

“I think what the [JRP] is going to see here is the vast diversification between lifestyles between prairie natives and interior British Columbia and coastal British Colum-bia,” said Kinsley. “So, that’s a great learning experience for them as well. A lot of things – the basics of living off the land and the history of that – is the same across all the provinces, but some of the different aspects of how they lived and a lot of their traditions vary. So, I’ve found it very interesting.”

Kinsley has been attending the hearings to keep the Alliance membership informed of what occurs during those sessions.

“The process itself is very good,” he said. “It’s an op-portunity for those who don’t have either the financial or administrative resources to make written. … And it gives a flavour that can’t necessarily be put in the written form at the more formal hearings, where there’s cross exami-nation and all that kind of stuff. So, I like the process. Particularly, addressing the need to consult and accom-modate First Nations as projects affect their traditional territories. So, it’s been good. It’s just unfortunate, like I say, there’s been a couple of areas where it has been used for other purposes, with special agendas.”

ABOVE/FAR LEFT: The Joint Review Panel consisting of Kenneth Bateman, Sheila Leggett and Hans Matthews carefully considered the oral testimony of the Saulteau First Nations people during the public hearings in Grande Prairie, continuously jotting down notes and occasionally discussing remarks made by the speakers with one another.

LEFT: Naomi Owens watches as Stan Napoleon has a laugh with Matt General, who facilitated the oral testimony of the Saulteau First Nations by asking them questions about their history and culture and the land that they use for hunting, fishing, trapping and picking berries for food and medicine. Owens was representing the young generation of their community, while Napoleon was representing the elders.

JAMES WATERMAN PHOTOS

their findings, the winter diet is about 80 per cent deer, 10 per cent moose and 10 per cent caribou, while the summer diet is 40 per cent deer, 40 per cent beaver, and moose and caribou stay at 10 per cent each.

“The sense is that caribou are an incidental kill, not the main prey,” said Shopik.

“You’ll find deer populations in a differ-ent habitat than where you’ll find caribou,” he continued. “And… there’s a close association between the deer habitat and where the wolves are. So, occasionally, you’ll have a caribou that will wander through a deer area, and then becomes incidental prey. Occasionally, you’ll have a wolf who will walk through caribou [habitat].

“These are pretty naïve statements, but that’s generally what happens. So, with an incidental kill, they’re not actually out looking for caribou. They’re out looking for deer.”

Canadian Natural Resources also received the President’s Award on the merit of their environmentally friendly programs, as the company was rec-ognized for the wildlife manage-ment system at their Horizon Oil Sands operation in Alberta and the electrification of their Septimus Gas Processing Plant in Northeast B.C.

“It is a regula-tory requirement to have wildlife management on your site,” said Bill Clapperton, Vice President of Regulatory, Stakeholder and Environmental Affairs with Canadian Natural, discussing the bird deterrent program being used at Horizon.

The system, known as Merlin Detect and Deter, was originally developed to prevent collisions between birds and aircraft. It uses Long Range Acoustic De-vices (LRADs) and lasers, all guided by radar, in order to stop birds from landing at night and other times when visibility is so poor that the animals might acciden-tally land in tailings ponds.

“What made it special is that it is the newest technology,” Clapperton contin-ued. “We’re the latest oil sands mining

operation up in that region and we have the opportunity of assessing a whole bunch of different technologies. And we just determined that this would be the most effective.”

The system can track birds from as far away as approximately three kilometers.

“They can actually track the size of the birds,” he added. “They generally know what type of bird it is, and it will change the type of response that it would give [accordingly].”

Clapperton has been very impressed with the impact the system has had on wildlife management at the site.

“We have a goal of having no bird fa-talities and that’s what we had last year,” he said. “It’s working very well. I think it’s also providing a lot of good informa-tion to ourselves and to the… industry and academic community that’s trying to understand how best to manage and deter wildlife.

“At one point, we’ve had peaks of 35,000 targets per day that have flown into that range.”

Electrification of the Septimus facil-ity has had a similar impact in terms of energy consumption and a reduction in

greenhouse gas (GHG) emissions.

“Everything we have other than that is run off gas drive,” said Clap-perton.

“This being electrical, for us, is quite a signifi-cant change,” he continued. “And probably the big-gest aspect of this is the planning. The electrical process of this

takes tremendous lead-time. And so it really is a planning focus from a company perspective.”

Clapperton noted that Canadian Natu-ral reduced GHG emissions by an equiva-lent of 31,000 tonnes of carbon dioxide (CO2) and 77 tonnes of nitrogen oxides (NOX) during the first year. Associated initiatives such as switching to energy efficient yard lights have reduced energy consumption by 57 per cent.

“Basically, it’s reducing emissions, it is saving some operating cost, but the capi-tal cost is higher,” he said. “In a sense, it’s one of these planned out efficiencies that I think we’re all looking at. And if you had the time to plan it out, what would be the

best way of doing it? “And I think we’re really proud of our

team coming up with this and being able to do it early on enough to be able to actually put it into play. Two years prior to a project getting built and get-ting it engineered into a system is a real challenge.

“What this demonstrates – and I think it’s [what] us and a lot of industry is doing – is that they are and we are putting and engineering in these types of efficiency initiatives that we are technically able to do that are kind of outside of what our common practice is.”

The Social Performance Award went to Devon Canada for their role in offering teenagers in Conklin, Alberta the oppor-tunity to receive their education at home rather than move to Fort McMurray to attend secondary school.

Devon worked with the Northlands School Division and online education spe-cialists Sunchild E-Learning to launch the program that will have its first graduating class in 2015.

“They’re more likely to finish high school if they can do it closer to home,” said Donna Barrett, Superintendent of

Schools for Northland School Division 61, discussing the value of the program.

“Our goal is to have our students com-plete high school,” she continued. “And so that’s why we engage in these kinds of partnerships. Because anything we can do to support kids to stay in school, that’s what we want to do.

“This is not a program that we could be operating… without the support of Devon.”

Just as communities like Conklin are appreciative of contributions from compa-nies like Devon, the winning companies are appreciative of this recognition from CAPP.

“We were very excited,” said Shopik.“I believe it’s an acknowledgement – a

recognition by CAPP – that Statoil has taken an innovative approach to look at caribou, wolf and moose in the… area where bitumen development is taking place,” he added.

“I think it was really good for the teams,” said Clapperton.

“I think it was a good shot in the arm for the teams to actually be recognized for putting environmental factors into our project planning,” he continued, “and then


34549

cAPP RewARds comPAnIes FoR socIAl And enVIRonmentAl PeRFoRmAnce

industry news

cont’d from pg 3

The Merlin Avian Radar System, an important component of the award winning bird deterrent program at Canadian Natural Resources’ oil sands operation.

PHOTO COURTESY OF CANADIAN NATURAL RESOURCES“What made it special

is that it is the newest

technology.”

– Bill Clapperton,Canadian Natural Resources


getting recognized for it.”Davies suggested that the recognition given to a few companies can also serve as

inspiration for other companies when it comes to new and innovative ideas. He be-lieves the awards also send a strong message to the general public that the industry understand when and where it has to improve its performance.

“That we are an innovative industry,” he added. “That we are a technological indus-try. And that there are a lot of different ways to address the problems or the issues that we see in front of us.

“This is the most people we’ve ever had at this event,” he continued. “It was 600-plus people in a room in Calgary. Obviously, the entire industry is represented there. So, you’re very much on stage, in front of your peers, getting recognition for good projects.

“And there’s also government’s watching as well,” Davies concluded, noting that

Calgary Centre-North MP Michelle Rempel and Alberta Premier Alison Redford at-tended the event.

Davies suggested that the awards also bring ideas that have been tried in small areas to the industry as a whole, providing means of tackling similar issues in other regions.

“If you’re one of those companies that’s at the event,” he said, “and you go and you see that so-and-so has gone out to Conklin and built a high school or figured out a creative way to use the timber from their leases and roads or used scat dogs to get an accurate count of caribou, I think it bodes well for other companies to pick up those initiatives. And that’s why the recognition is important.

“Because, as leaders, they’ve gone out and they’ve put money and resources into figuring out a creative solution. And what that does is it lowers the cost and resource input for other groups to do the same.”

A scat-sniffing dog and his human partner search for caribou, moose and wolf scat in a section of the East Side Athabasca River caribou range, which is the area of Statoil Canada’s oil sands operation in Northern Alberta. The program won the company the Environmental Performance Award at CAPP’s Responsible Canadian Energy Awards this year.

PHOTOS COURTESY OF STATOIL CANADA

THE WINNERS:

TOP LEFT: CAPP president David Collyer with Chris Vander Pyl, Mike Preece, Don Wilson, Bill Peterson, Jeff Irons, Gerard Iannottone and Trever Goodman of President’s Award winner Canadian Natural Resources.

BOTTOM LEFT: David Collyer and Dr. Samuel Wasser, pioneer in the use of scat-sniffing dogs to obtain information about wildlife, joined by representatives from Environmental Performance Award winner Statoil Canada, including Tim Shopik, Tom Parker and Bradley Maynes.

TOP RIGHT: Sunchild E-Learning teacher Samantha Konopka; David Colllyer; Bee Schadeck of Devon; Marjorie Quintal-Adby and her grandaughter, star Conklin High School student Savannah Adby; Greg Brady; Northland School Division trustee Colin Kelly; Sunchild E-Learning CEO Martin Sacher; Sunchild E-Learning principal Mavis Sacher; and Nelson Daychief, Chairman of the Board of Sunchild E-Learning. Devon won the Social Performance Award.

NOT PICTURED: Health and Safety Performance Award winners Shell Canada and Suncor Energy; Chair’s Award winner Quicksilver Resources.

PHOTOS COURTESY OF CAPP


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industry newsERCB examining its collection and use of confidential dataDaily Oil Bulletin

The Energy Resources Conservation Board is reviewing its collection and use of confidential information, and is heading into the next phase of consultation with the oil and gas industry, along with other groups, on this issue.

In late 2011, the ERCB started the proj-ect and spoke to industry via groups like the Canadian Association of Petroleum Producers and the Small Explorers and Producers Association of Canada. The regulator also surveyed the Energy De-partment and ERCB staff. Key questions included: Should the ERCB continue to collect confidential data? Is there a need for the data to continue to be classified as confidential?

The consensus was that the ERCB should continue to collect some data as confidential and some opportunities were identified to reduce the amount of confi-dential data collected as well as reduce the term of confidentiality, an Alberta En-ergy tenure information exchange heard recently in Calgary. Opportunities were also identified to potentially modify exist-ing confidentiality regulation, including possible changes to the Lahee classifica-tion system.

“It’s really something the board decided to look at, particularly related to how the ERCB acquires and manages confiden-tial data,” said Laurie Wilson-Temple, a manager in the applications branch of the ERCB. “Oil and gas conservation regula-tion and oilsands conservation regulation,

they provide for full disclosure of some basic well information on all wells that are drilled in the province immediately after drilling and confidentiality assigned to some of the other well data that’s gathered on the wells for certain periods of time.

“The board is very interested to see if changes would be necessary in the fu-ture,” she added. “They were concerned that some of the assumptions that went into the underlying regulation and the terms and types of confidentiality, that they may be outdated or irrelevant today.

“We’ve had a first look at those in Phase 1 of this project.”

Gary Leach, executive director with SEPAC, said that the ERCB initiated an industry survey in late 2011 to assess in-dustry views on the role of the ERCB in the collection of data, particularly as it relates to confidential well data (type and timing).

“We don’t have the results of the sur-vey, we merely facilitated the dispersal of the survey request,” he said. “The ERCB has digested the survey responses from industry and will now decide whether some changes, if any, to the current system should be considered. We expect industry will be further consulted as that phase is undertaken.”

Brad Herald, manager of operations with CAPP, said that in November, the ERCB asked the industry group to survey members to provide information and opinions on this project to evaluate its collection and use of information classi-fied as confidential.

“The request was linked to the ERCB’s oil and gas conservation regulations and the oilsands conservation regulations, some of which have not been reviewed for some time,” he said. “CAPP for-warded the request to its membership for response to the board. If the ERCB goes ahead with its project, the industry will look forward to participating in the process and providing input as appropri-ate. At present, industry comments would be premature as the process is still in its scoping phase.”

In terms of next steps, the ERCB is moving to obtain scoping approval to evaluate the opportunities and present further options for stakeholder engage-ment. It will also ask for volunteers through industry associations to provide input and work with other government departments/agencies to “ensure align-ment.”

In terms of the survey, Wilson-Temple said the ERCB was looking for responses on key questions.

“Some of those questions were around whether the board should continue to collect, store and distribute confidential data, so it’s a pretty fundamental ques-tion,” she said.

Some key considerations included: Should the data that’s currently being classified as confidential continue to be classified as confidential? Is there data that’s currently not classified as confi-dential that should be? Are the current confidentiality periods considered ap-propriate?

Wilson-Temple added that there were some diverse viewpoints generated.

“We were looking for some common themes and trends to see whether we had anything that we could launch out as a further first step in this project,” she said. “There was an acknowledgement ... that the existing confidentiality rules were somewhat out of date and needed some updating.

“There was clear consensus, though, that the ERCB should continue to collect and disseminate confidential data that is useful to it and its stakeholders. I don’t want to alarm anybody that there’s a move afoot to discontinue that practice.”

Some opportunities were identified to reduce the amount of confidential data that was collected and reduce the term of some of the confidentiality, Wilson-Temple said.

“Some of the things and themes specifi-cally from the industry was that there was an ongoing need to protect data that was gathered on exploration plays, but they were very open to seeing a broader or quicker access to data from development work,” she said. “As a company person, you may have data that you’re generating yourself and you have some viewpoints about how soon that should be available to other people. There’s also the side of you being very interested in data that other operators are collecting and how soon you can access that material, too.

“We’re going to continue to seek input from industry and other agencies to en-sure solutions are aligned across all the stakeholders.”


Northern Alberta welding and manufacturing company Hell ‘N’ Back Industries Ltd. has come up with an inno-vative new adjustable pipe stand system for cold produc-tion of crude oil.“Our StandsFastTM system of fully adjustable pipe stands are built specifically for static loading from wellhead to containment, containment to flare line,” explains Hell ‘N’ Back Industries Ltd.’s Vice President Doug Thompson. “Our patent-pending stands were designed with the worker and with safety in mind, but they also have the benefits of being versatile and cost-effective.”“Metal stands are safer than wood blocking because they’re not flammable, and they are less expensive and permanent than putting in piles,” Thompson explains. “While many companies have portable welders come in and build temporary metal pipe supports, those stands can vary in price and quality. Normally, you have to have an engineer sign new drawings, and look for a portable welder to pay hourly to build the product in the field. With our system, you simply buy the product that best suits your needs without having to reinvent the wheel every time. Our stands are prefabricated at our manufacturing facilities in northern Alberta, ensuring high product qual-ity and availability, as well as a consistent price.”StandsFastTM stands are also different than most stands because they are fully adjustable to a range of heights, eliminating field modifications which can easily increase costs. The smallest StandsFastTM stands adjust from 12” to 24” in height, while medium-sized stands adjust from 24” to 44” in height and large adjust from 43” to 80” in height. Stands come in both singles and doubles, depending on the application needed. The heads also tilt to compensate for uneven ground conditions, another unique and innovative feature of the system. “In the real world, the ground is almost never completely level and straight. By adjusting the tilting heads to compensate, your pipe can remain level even when the ground isn’t. You can also adjust the heads later if freezing or thawing changes your ground levels over time, which can happen in our northern climate,” Thompson says.V-top heads are also available for single lines where the larger tilting heads are not needed. To keep the stands safely in place when adjusted and holding weight, the StandsFastTM stands also have a unique, patent pending locking lever system in addition to the usual jam nuts.“We found that all of the adjustable stands currently in use still have the potential to pinch thumbs and fingers. Whatever goes up must come down eventually, and if it happens when a finger or thumb is in the way the person

adjusting a normal stand can get hurt. We came up with the locking lever system to prevent that from happening. With our stands, not only is adjustment made quick and easy by the levers, it’s also impossible for a worker to hurt their fingers during setup and takedown. The stand stays in place when you are adjusting it thanks to the locking levers, even under load, giving workers time and free hands to tighten the jam nut.” That means fewer potential safety incidents and a much faster setup time. The locking levers also provide an additional safety feature by preventing the stands from collapsing even when overloaded. “The box around the locking lever is designed to crush, which shows a visual cue to workers that the stand has been overloaded,” Thompson says. “But is also becomes a brake by biting into the pipe, preventing the stand from collapsing. Although you have overloaded the stand, the more weight you put on it, the harder it bites onto the pipe and the less likely it actually is to have a catastrophic failure, making it safer to use.”A U-bolt clip system for attaching the stands to piping is another innovative feature unique to the StandsFastTM system. “Our U-bolt clips replace drilling. Drilling holes in pipe for U-bolts can create sparks, which means you have a higher fire hazard and may need hot work permits,” Thompson says. “Besides the greater risk of causing a fire, you also often have workers climbing on a ladder to drill those holes, which is both time consuming and more likely to cause falls or other safety incidents.”“Drilling also means you need to drill new holes to move or reposition the piping if it’s not straight. With our U-bolt clip system, you simply have to loosen a nut or two on the clip and slide things to where you want them. It means your pipe ends up straighter, faster, with no drilling.”That also makes teardown much quicker and easier, and prevents ruining the stands for future use. “Quite often when holes are drilled to affix U-bolts to pipe, they end up misaligned. That can cause the U-bolts to seize or ruin their threads,” Thompson explains.“In those cases workers usually end up just cutting off the U-bolts with a zip disc or cutting torch which again creates more fire and safety hazards and potential

for ruining stands or piping. With our U-bolt clips, you simply undo and remove the clips, and save them and the stands to reuse later. That means our stands tend to have a much longer lifespan than other stands being used in the field.”The StandsFastTM system even includes teardown stands that can be built around an existing line.“Sometimes you want to run a pipe below or above an existing line. Our teardown stands make that fast and easy by allowing you to set stands up around existing stands, giving you the ability to add a temporary second or even third tier without needing to run piling.”The many advantages of the StandsFastTM system have generated sales in the Peace oil sands area of northern Alberta as well as in Wainright and other southern por-tions of the province, with rapidly increasing interest from oilfield companies.“We know that once the word gets out about this system, it will set a new standard in the industry, because once workers use our stands, they don’t want to use anything else,” Thompson says.Ultimately, Thompson says companies who use the new StandsFastTM system will gain several advantages over their competitors.“They will speed up their set-up and takedown time con-siderably, have fewer safety incidents, and also control their costs over the long-term because of the reusable design of the stands and clips,” Thompson says. “That gives an instant edge over competitors using old-style stands.”The StandsFastTM system of adjustable pipe stands is now available from select distributors. For pricing and availability or to find a distributor near you, call Hell ‘N’ Back Industries Ltd. at 780-322-2222. You can also view a catalogue online at www.hellnbackindustries.com

Innovative New Stands Product Increases Cold Production Safety and Speed

For our full catalogue, visit the Products section of www.hellnbackindustries.com For pricing and availability, contact Doug at 780-322-2222 or [email protected] Our stands may also be available from a distributor near you.

Adjustable stands in use on a flare line.


communityindustry newsDaily Oil Bulletin

The oil and gas industry applauded the federal government’s budget pledge to streamline the regulatory review process for major economic projects.

The much delayed Mackenzie Gas Project is often held up as the poster child for unnecessary, laborious and time-consuming reviews. With several other important energy projects on the table – namely Enbridge’s Northern Gateway, which would deliver crude overseas – the federal government’s move toward a “one project, one review” approach drew widespread industry praise.

Brenda Kenny, president and chief executive officer of the Canadian Energy Pipeline Association, said that her group strongly supports the move towards a more effective, efficient and timely regu-latory process.

“An improved process would allow environmental assessments to focus on major environmental concerns that could amount to a show stopper,” she said. “If [a] project is to proceed, specific environmental considerations should be addressed by environmental regulation, at a later stage. At that point, industry and other stakeholders’ resources could be allocated more efficiently.”

CEPA supports the one project, one review approach with time certainty by the best-placed regulator in considering major pipeline projects.

“In the case of most CEPA member companies, it would likely be the National

Energy Board,” she said.“The NEB has an in-depth knowledge

of safety, environmental and social factors linked to major pipeline projects, as well as the experience to balance local and na-tional interests. In addition, we’re pleased to see that the federal budget is increas-ing resources to improve pipeline safety through better monitoring and auditing.”

CEPA believes a streamlined approach will allow project proponents, regulators and stakeholders to focus on developing and implementing practical solutions that will make a real difference.

“Our member companies typically spend between three to five per cent of their capital costs on environmental assessments and regulatory processes. This equates to approximately $30 million to $50 million, based on a $1 billion proj-ect,” Kenny said. “We support thorough reviews that focus on important environ-mental and social considerations. In do-ing so, we can deploy technical expertise and resources to address environmental and social issues, enhance best prac-tices and develop new technologies.”

The group also supports initiatives that will alleviate labour constraints in Canada.

“CEPA intends to provide input to these initiatives to ensure that pipeline-specific issues are considered and incorporated in the federal government’s plan,” she said, in reference to the government’s intention to better align the temporary foreign work-er program with labour market demand.

In a statement, Paul Stanway, manag-er of communications, Northern Gateway

Pipelines, said that Enbridge is support-ive of measures in the federal budget that advocate the concept of one project, one review completed in a clearly defined time period.

“It makes great sense and would support developments that bring jobs and prosper-ity to Canadians,” he said, adding that the company will examine forthcoming legisla-tion stemming from the budget regarding streamlining the regulatory application process for major energy projects.

“Enbridge supports the notion of hav-ing a thorough but efficient regulatory regime assess all large industrial projects -- this is in the best interests of all Ca-nadians,” Stanway said. “We believe the public interest is also best served by a timely process that provides predictabil-ity for companies proposing substantial investments in the Canadian economy, often in the billions of dollars.”

Travis Davies, a spokesperson with the Canadian Association of Petroleum Producers (CAPP), added that regulatory changes broadly outlined in the budget will improve Canada’s business climate and competitiveness without compromis-ing industry’s commitment to responsible, sustainable development.

“The government’s plan will improve the timeliness and efficiency of the decision-making process while the regulatory scrutiny that Canadians expect remains intact,” he said. “We must move to more efficient processes, time-limited decision-making and better co-ordination both within and among governments to eliminate regulatory overlap. Today’s announcement is a positive step and we look forward to the federal government continuing to advance its regulatory plan. That said, the environmental outcomes remain the same.”

As for the Temporary Foreign Worker Program, Davies noted that one of the largest challenges Canada’s oil and gas industry and other sectors of the econo-my currently face is a looming shortage of skilled labour to support growth.

“Current and growing workforce short-ages are no longer cyclical in nature and we are entering into a time of global, chronic and sustained skilled labour shortages, a situation that is expected to remain in the longterm,” he said. “Cana-da’s oil and gas industry believes in hir-ing Canadians first and supports training and measures to increase labour mobility within Canada. Given the numbers of skilled people needed, we also believe we must look beyond our borders and take steps to increase economic immi-grants and temporary foreign workers.”

The government also is phasing out the Atlantic Investment Tax Credit (AITC), and Davies noted that the measure builds on the federal government’s G-20 commitment to reduce and/or eliminate subsidies for fossil fuels.

“However, we do have concerns it is dis-criminatory towards the oil and gas industry insofar as the AITC will still be available for non-oil and gas and non-mining activities,” he said. “CAPP and our members oper-ating in Atlantic Canada will continue to address this issue with government.”

He added that CAPP made a budget recommendation for a temporary acceler-ated deductibility for natural gas drilling and completion expenditures, aimed to aid the industry through a near-term chal-lenging business environment.

“Despite extensive consultations and support from the province of Alberta, the budget did not include this measure,”

Davies said. “However, some of the enhancements in competitiveness of the regulatory system will benefit the natural gas industry, which continues to face considerable challenges in terms of com-modity price.”

Gary Leach, executive director of the Small Explorers and Producers Associa-tion of Canada, said that many of these resource projects, particularly pipeline infrastructure, are going to be essential to provide the oil and gas industry with access to new markets.

The discounts being received by Ca-nadian producers on sales of crude oil, bitumen and natural gas are denying the industry billions of dollars that could be re-invested in Canada while also depriv-ing provincial and federal governments of billions of dollars in taxes and royalties, he pointed out.

“Duplicative processes conducted by different levels of government or min-istries reviewing the same project do not guarantee a better environmental outcome but certainly increase delay, uncertainty and expense for project pro-ponents,” Leach said. “We believe such regulatory reviews can be done more efficiently without compromising the need for a thorough review that will assure Ca-nadians that the environmental impacts are being managed and minimized.

“We also know that some opponents of the oil and gas industry have clearly stated they intend to use the regula-tory review process to stop oil and gas development period, not contribute to a thorough and objective review. For these reasons we support the federal govern-ment’s plans to set specific timelines for review and we think the timelines being proposed are reasonable.”

Mark Salkeld, president and chief ex-ecutive officer of the Petroleum Services Association of Canada, said the group is encouraged by the budget.

“There’s a lot of things that we need to go through in a little bit more detail with our membership,” he said.

“First blush is that we’re pleased. It sent a clear signal that they’re listening to us.”

The Tories also intend to better align the Temporary Foreign Worker Program with labour market demands and ensure that businesses look to the domestic labour force before accessing the program.

“The whole approach to hiring Cana-dians first is first and foremost, without a doubt. We’re working on a couple of projects to identify those potential labour pools across Canada,” he said. “On the foreign workers side, it’s about identifying skill sets that match with our industry.”

On the move to streamline the regula-tory review process, Salkeld stressed the industry is not looking for shortcuts, but rather to speed up the process with all the required due diligence in place.

“When the producers can get approv-als to drill wells and develop infrastruc-ture, [build] small diameter pipelines to roads to the actual drilling and comple-tions of wells, then that’s where the PSAC membership benefits,” he said.

Environmental groups, meanwhile, panned the government’s moves toward regulatory efficiency.

“The plan to weaken one of Canada’s foremost environmental laws outlined in today’s budget is nothing more than a gift to big oil,” said Gillian McEachern, Environmental Defence deputy campaign director, in a prepared statement.

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communitythe PeAce hAs tAlentRegional team goes to provincial skills competition

A team of Peace Region students traveled to Abbotsford for the 18th Skills Canada British Columbia championship, which took place on April 18. The team of 20 middle school, secondary and postsecondary students competed in areas ranging from cosmetology and culinary arts to television and video production to trades important to the local oil and gas industry such as carpentry and welding. Members of the team were selected from contestants at the Peace Region skills competition in March. Sponsors of the team include Encana, Northern Lights College, School District 59 Parental Advisory Committee and School Districts 59 and 60.

PHOTO COURTESY OF NORTHERN LIGHTS COLLEGE

Dawson Creek schools set example in energy conservationBroCK CampBeLLPipeline News North

Pouce Coupe and McLeod Elementary have received province-wide recognition for their efforts in conserving energy.

The two schools are recipients of $1000 in prize money (shared between both) awarded to competitors of the BC Green Games. The Green Games is a BC Government supported project geared towards motivating elementary and secondary students to create envi-ronmentally focused education programs at their school.

In total $24,000 was dished out to thirty-four schools across the province, and Pouce Coupe and McLeod claimed the Energy Prize given to schools with the best energy-minded project.

Both schools partnered with one

another in an energy conservation chal-lenge that in fact pitted the two against one another in a battle of reducing energy con-sumption. The competition was voted-on by a panel of environ-ment special-ists as the top energy project by an elementary school in British Columbia.

The money was awarded to encourage schools to continue ongoing or further develop environmentally minded projects at the school.

“Of course we are all excited that we won,” said Kristy Lineham, one of the

main organizers of the challenge, and teacher with McLeod Elementary. “Doing

the energy chal-lenge made us work even harder to save energy.”

As part of the challenge, schools were awarded points as a mea-sure for the amount of energy they conserved. Both finished with over 5000 points.

Lineham said it was such a close con-test that the school’s finished within 100 points of each other.

“It was really close and both schools did a great job of saving energy.”

Over the five-week span of the contest

the schools racked up a savings of 1806 total kWh, equaling a savings of $144. They reduced total electric-ity consumption by eight per cent, far exceeding the initial goal of a five per cent reduction.

Brad Booker Vice-Principal of Out-door Education and Environment was extremely proud of the school’s participa-tion in the challenge.

“The efforts of the students has been incredible,” said Booker. “To see the initiative they have taken over the five weeks serves as an example for not only other schools in the district but also the community.”

“I think that is most important of all, the kids have learned how important saving energy is. They’re excited about it and don’t just want to do it at school but at home as well,” added Lineham.

“Of course we are all

excited that we won.”

– Kristy Lineham,McLeod Elementary Teacher


34561

doIng busIness FRom beyondPeace Region businesses struggling with

freight carrier troublesjames watermanPipeline News North

It isn’t easy doing business where freight carriers dare not go.

That is the situation facing Richard VanderZee of On-Track Supplies and Equipment, a company based in Grande Prairie, Alberta that provides parts, ma-chinery and service to customers working in forestry, mining and oil field construc-tion, particularly building roads and lease sites.

“A little bit of the agricultural side, but it’s only the guys that are clearing land,” said VanderZee.

The problem is that Grande Prairie, a community central to those resource industries and the home of associated service and supply companies, does not exist on the map of most major freight carriers.

“In the world of freight,” said Vander-Zee, “Grande Prairie is considered a beyond point. So, everything that you’re commonly used to – the real common name carriers out of the United States – use a beyond carrier out of Edmonton to get things up to Grande Prairie.”

“You’ve only got a certain number of carriers up here and most of them are ground,” he continued.

As an example of the trouble he is experiencing, VanderZee said that he could ask UPS to fly a 70 pound part from the U.S. to Grande Prairie, but that part will only make it as far as Edmonton in the air.

“They will not fly it into Grande Prairie,” he said. “It gets to Edmonton and then they stick it on a truck and they run it up here. And then what happens for those guys even is that Purolator [Courier] delivers their freight to us. Not even UPS themselves. They’ve hired somebody else.”

“And the worst part is airfreight,” VanderZee continued. “You’ve got no carriers that I know of that are doing air freight for that kind of stuff into Grande Prairie that are easy to deal with. You can get Canadian Air Cargo or something like that, but in most cases, if I’ve got to ship something out of the States, that is not going to work.”

The truly frustrating aspect of this pre-dicament is that globalization has meant that companies like On-Track no longer have to be limited to their own region. Indeed, VanderZee’s company is dealing with companies in the U.S. to both buy and sell products. They are also dealing with customers in other countries outside

of North America.“Twenty per cent of our business is

international,” said VanderZee. “Eighty per cent of it is domestic. In order for me to supply our domestic customers, I have to do business with those guys in the States.”

However, by doing business in a be-yond point like Grande Prairie, not only is his access to the global market restricted, but he also loses out on business at home.

Carriers charge companies like On-Track what is known as an extended area surcharge to ship freight beyond Edmonton to Grande Prairie. That extra distance also adds to delivery times. Conversely, Edmonton-based compa-nies receive their freight earlier and at a lower cost. VanderZee considers that an unfair advantage.

“That extra cost just for that little bit almost triples the freight cost in a lot of ways,” he said. “So, now a guy in Ed-monton can do business with a customer up in Grande Prairie and provide him a product for less money than I can. And I’m right here.”

On-Track isn’t alone.Rentco Equipment has locations in

Grande Prairie and Peace River, Alberta and Dawson Creek and Fort St. John, British Columbia, all of which fall into the zone of extended area surcharges.

According to General Manager Mike Maki, the construction equipment dealer has the same issues competing with similar operations in Edmonton.

“It’s common,” said Maki. “One com-pany that actually stepped up and tried to do something to make it a little more fair is Honda... They call it a harmonized freight rate. So, the dealer in Edmonton pays the same freight as I do. In some cases, some of the dealers are paying a little more than they should be, and others a little less. But it’s the only way to keep it fair for them.”

Maki also noted the problem of lengthier delivery times.

“It just takes forever,” he said. “I mean, in some instances, I can get parts quicker

from Europe than I can from the United States because of customs.”

Rentco deals with a Korean company called Doosan that owns a number of the equipment lines that Rentco rents and sells, including Bobcat. That company has a 48 hour parts guarantee worldwide.

“So, if you buy a piece of heavy equip-ment, and it breaks down, and it’s like a machine debilitating part, they guarantee that they’ll have the part to you within 48 hours,” said Maki. “They can do that all over the world except for here. They have that guarantee in Alaska, but they can’t do it here because they just can’t get the parts physically to us quick enough. So, now they’re looking at having to put a Ca-nadian warehouse in Edmonton that they can ship directly from Korea to Canada instead of going through the States.”

Maki has even experienced problems on a personal level.

“I bought my wife a truck in Detroit and they shipped it up to me,” he explained. “They would only take it to Edmonton. They wouldn’t bring it to Grande Prairie. I had to fly to Edmonton to pick it up and bring it here because it was more money to ship it from Edmonton to Grande Prai-rie than it was to ship it from the Ontario depot to Edmonton.”

Maki isn’t sure what the solution might be.

“It’s a tough one,” he said. “I re-ally don’t know. As far as the freight, I think, in some cases, the companies are taking advantage of us up here. Because I really don’t understand why, with Grande Prairie and Fort St. John being such a hub kind of thing, how it’s so much more money to ship here than everywhere else. So, I get the impres-sion that, because of the economy up here and that type of thing, I think we get taken advantage of.”

VanderZee believes it is a problem that governments should be tackling, suggest-ing that it should be the role of regional economic development organizations such as the Peace Region Economic Developmen Alliance (PREDA) to take the issue to government.

industry news

Global and Asian LNG prices

over $16 on summer demandDaily Oil Bulletin

Asian liquefied natural gas spot prices for May delivery rose to around $16.50 per mmBtu as summer demand continued to drive prices higher.

Japan, the world’s largest LNG import-er, was expected to continue stocking up on the fuel as it heads into summer with very little of its nuclear capacity online.

“Prices are over $16 and could be headed to $17 on the assumption that the Japanese will top up,” one market source said.

Japan’s nuclear capacity has slowly been taken offline since the Fukushima nuclear crisis last year triggered nuclear safety concerns. The last remaining online reactor, Hokkaido Electric’s Tomari No.3, is scheduled to be shut on May 5 for maintenance.

About a third of Japan’s power came from nuclear utilities before the Fukushima crisis and the country has relied heavily on LNG to fill the nuclear gap, with February imports of the fuel up 23 per cent on the year.

But with so many reactors shut, some traders said Japan’s demand for LNG was unlikely to ease anytime soon.

“Even if [some nuclear reactors] do restart, it’s not going to be sufficient - the strain on gas supplies will still be high,” another market source said.

Spot supplies are also expected to tighten with plans by Qatargas, the world’s largest LNG supplier, which has filled a large chunk of Japan’s increased LNG demand since the 2011 nuclear crisis, to shut all three LNG producing units at its Qatargas-1 plant for three weeks of work starting next week.

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Kinder Morgan to proceed with $5 billion Trans Mountain expansion

Daily Oil BulletinA proposed $5 billion expansion of the

Trans Mountain pipeline system trans-porting an additional 550,000 bbls per day of crude oil from Alberta to the West Coast could be in operation by 2017, operator Kinder Morgan Energy Partners, L.P. said Thursday.

When completed, the proposed twin-ning will increase system capacity to 850,000 bbls per day from the current 300,000 bbls per day. In an open season which closed April 10, a diverse group of existing and new shippers had submitted binding bids for 660,000 bbls per day of capacity, all for 20-year terms, it said.

“We are extremely pleased with the strong commercial support that we received through the open season, which reinforces the appeal of our project and our approach,” Ian Anderson, president of Kinder Morgan Canada, said in a news release. “This strong commercial sup-port shows the market’s enthusiasm for expanding market access for Canadian crude by expanding an existing system.”

While the company had received com-mitments of about 600,000 bbls per day from its initial open season, a number of additional shippers came forward after the open season was extended for two weeks until April 10, said Andrew Galarnyk, a company spokesman.

Kinder Morgan anticipates filing a facilities application initiating a regulatory

review with the National Energy Board in 2014, he said. If the project is approved, construction is currently forecast to begin in 2016 with the proposed project operat-ing by 2017.

In addition to construction of a second pipeline, the preliminary scope of the pro-posed project includes adding new pump stations along the route, increasing the number of storage tanks at existing facili-ties and expanding the Westridge Marine Terminal in Port Metro Vancouver.

Prior to submitting its application, Kinder Morgan will be meeting with the NEB and the federal government’s Major Projects Office to understand expecta-tions and the process from their perspec-tive, said Galarnyk.

Kinder Morgan is still in the early stages of a community engagement process with more in-depth consultation getting underway this summer.

“We share respectful, open relation-ships with many communities and organizations interested in our business,” said Anderson. “We are committed to an 18- to 24-month inclusive, extensive and thorough engagement on all aspects of the project with local communities along the proposed route and marine corridor, including First Nations and Aboriginal groups, environmental organizations and all other interested parties.”

Kinder Morgan also will consider pro-viding financial support to local communi-

ties for environmental initiatives.In addition to extensive engagement,

the company will conduct traditional land use and environmental and socio-eco-nomic studies, and undertake detailed engineering and design studies.

To the extent possible, the pipeline consisting of a combination of new 30-inch and 36-inch diameter pipe will be built in the existing right-of-way between Edmonton and Burnaby, British Colum-bia, said Galarnyk. There may be areas, though, where Kinder Morgan may need to look some rerouting because of urban and other types of development since the pipeline was built.

From Burnaby, crude could be shipped from the Westridge dock in Port Metro Vancouver to markets in Asia or California or shipped by pipeline to refineries, includ-ing some in the U.S. Pacific Northwest.

The Trans Mountain expansion will be based on Aframax ships, the largest ships currently using the port, Galarnyk said. “This is not necessarily dependent on bigger ships coming in.” However, if the port were to decide to allow larger ships to come in, “we’d work with them to see how we could make that happen,” he added.

Aframax vessels are 245 metres long with a deadweight of approximately 80,000 tonnes (average freight rate as-sessment). That’s about one-quarter the weight of the very large crude carriers

(VLCC) that would transport crude to Asia from Enbridge Inc.’s proposed Northern Gateway terminal at Kitimat.

This summer, Kinder Morgan antici-pates filing a commercial tolling applica-tion with the NEB seeking board approval on how it will charge its customers for transporting their product through the proposed expanded pipeline. “We want to make sure that the board understands how we are proposing to charge custom-ers, based on this project, said Galarnyk. “Having the board review and approve that methodology ... saves time in the end.”

Meanwhile, Joint Review Panel hearings are continuing on Enbridge’s proposed 525,000 bbl-per-day, $5.5-bil-lion Northern Gateway crude line from Bruderheim, Alberta, to Kitimat and a 180,000 bbl-per-day diluent line that would carry imported diluent back to Edmonton. The project has faced intense opposition from First Nations, environ-mentalists and those involved in the fish-ing industry who are concerned about the effect of an oil spill on their livelihoods.

At present, community hearings for oral statements have been scheduled into July 2012 with an NEB decision by the end of 2013. The federal government, though, has served notice that it wants to streamline the regulatory process for ma-jor resource projects, including Northern Gateway


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32433

careers


RigTech.ca has been given a facelift.The new version of the Canadian Association of Oil-

well Drilling Contractors’ (CAODC) drilling rig career and training information site hit the web on Monday, March 19. The redesign was done with the goal of erasing com-mon misconceptions about drilling rig work, particularly the idea that it is largely unskilled and unsafe labour.

“Our 2012 stats say something about this workforce,” said Nancy Malone, vice president of operations for CA-ODC. “These are skilled profes-sionals who are getting the job done. That’s also the message behind RigTech.ca.”

The new version of the site doesn’t stray completely from the original incarnation, which also provided information for individuals working in the in-dustry as well as those who are considering drilling rig careers.

“But what we’ve tried to highlight is basically the profes-sionalism of the career path,” Malone said in an interview, “where there’s a bit more of an explanation of what you’re learning once you get into the industry, the course outlines of all the courses that you take in terms of rig tech.”

The new site also offers details about the drilling rigs

and the crew positions.“Because a lot of people don’t have a full understand-

ing of what the equipment is and they aren’t aware of the technology advances,” Malone added.

“And we’re also growing the area where we just talk about current events and articles they might want to read.”

A brand new feature is a short quiz that helps jobseek-ers determine their suitability for careers in the field.

“It’s pretty basic stuff,” said Malone. “Do you like work-ing outdoors? Do you work well in a team environment? Things like that. And it gives immediate feedback.

“Our quiz was developed and vetted by our CAODC human resources and training commit-tee,” she added. “So this is coming directly from the recruiters.”

Ultimately, according to Malone, it was just time to revamp the site, especially after CAODC launched their new service rig career and training site in November.

“We need to keep up with the times in terms of design and ease of use for the user,” said Malone. “We just felt that it was time to just give it a refresh and a facelift.”

The redesign took about three months.

“You can see that the bones of the service rig website carry over a little bit to the rig tech website,” Malone continued, noting that there is a consistency between the two sites, but that both have

different identities.“The service rig is definitely different from drill work,”

she explained.When asked if spring break-up – a period when indus-

try activity winds down after a busy winter and the need for workers isn’t particularly high – was an odd time to re-launch the website, Malone stressed that RigTech.ca isn’t simply about helping people find jobs.

“Our focus was sort of the information piece to help people understand this part of the industry,” she ex-plained. “I think what we’ll be doing in the future, sort of through the [spring] and through the summer, is trying to drive a little more traffic to it for the fall ramp-up.

“We hope that it becomes a really useful tool for people out there who have questions about drilling rigs and drilling rig careers. That’s really the key to it, is that it is a career, and we want to demonstrate the career path and help people understand that.”

That is another one of the common misconceptions: drilling rig work is just a job, not a career.

“And we try to sort of dispel that myth.”Actually, the drilling rig and service rig sites both dem-

onstrate how workers can use their field experience to forge careers at the management level.

“Field experience is really… valued by industry, whether you’re going to be an accountant or an engineer or a sales rep or what have you,” said Malone.

“Anywhere in the wide range of careers that are avail-able in the industry, if you know what’s happening on the ground out there in the middle of nowhere, that’s really helpful. Because it makes your decision-making so much better when you understand or you’ve experi-enced it yourself.”

A bRAnd new lookCAODC revamps drilling rig careers site

“What we’ve tried to

highlight is basically

the professionalism of

the career.”

– Nancy Malone, CAODC

http://www.enformbc.ca


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