Business of Energy - April 2021

OF ENERGY

APRIL 2021

DIGITALLY

TRANSFORMING FRAC COLD BORE’S BRETT CHELL ON BEING AT THE FOREFRONT OF THE DIGITAL REVOLUTION OF WELL COMPLETIONS

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OF ENERGY VOL 3, ISSUE 1 | APRIL 2021

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Post-Pandemic, Alberta is the Place to Be

by David Yager

Let’s Celebrate our Successes, and Take Pride in our Energy Sector

by Cody Battershill

04 07 08 12

Digitally Transforming Frac FEBRUARY 2019

by Melanie Darbyshire Let’s Lean into the ESG Opportunity for Canadian Energy

by Scott Crockatt

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COVER 3 • Business of Energy • April 2021

David Yager | Post-Pandemic, Alberta is the Place to be

POSTPANDEMIC, ALBERTA IS THE PLACE TO BE

by David Yager

A

s Albertans cope with lockdowns, restricted travel and vaccination delays, their views of the future are understandably short term.

This is no surprise. We’ve been living for a year on an endless diet of bad news. Even a U.S. election that seemed positive for those really tired of Donald Trump turned sour when incoming President Joe Biden’s first order of business was to cancel Keystone XL. Again.

Prognostications about our post-COVID future have been dominated by those with an agenda and a soapbox. Build Back Better. Great Reset.

Energy Transition. Resilient Recovery. Green New Deal. If slogans were money, we’d be rich. They all claim that returning to a pre-pandemic world would be failure, not success.

There are the same folks who so capably managed the pandemic. Hardly a confidence builder.

The most important macro-economic driver deserving much more attention is the reduced ability of governments to use deficit spending and ultra-lower interest rates to stimulate the economy.

Governments have been on a borrowing binge since the last great downturn of 2008/09.

Using the fancy term “quantitative easing,” governments have been spending continuously and borrowing heavily to increase the money supply, stimulate liquidity and encourage higher corporate and personal debt through very low interest rates.

The combined effect has been to mask declining productivity and low levels of business confidence and investment. As a consequence, not enough growth has come from true wealth creation, the sale of goods and services at a value much greater than the total cost of production.

Like primary resources. Oil. Natural gas.

Agriculture. Minerals. Forestry. The things that built Canada and Alberta. The bread-and-butter industries that urban dwellers and millennials don’t understand; the essentials of life that are taken for granted because there has never been a shortage. Modern society increasingly questions resource development because it disturbs the land and contaminates the atmosphere.

Post-pandemic, Canada will be forced back to the basics. Blessed with a disproportionate share of what modern civilization cannot live without, Alberta’s economy will rise once again.

G7 countries had accumulated a ton of debt before the pandemic. Using government debt to GDP ratios, prior to the 2008/09 world economic crisis the average debt/GDP ratio for Canada, France, Germany, Italy, Japan, the UK and U.S. was about 55 per cent. When major financial institutions began collapsing in the fall of 2008, central banks responded with tremendous injections of liquidity to prevent a run on the world’s financial system.

It worked. Coined a “bazooka” by central bankers, the combination of massive injections of liquidity and ultra-low interest rates got the economy

4 • Business of Energy • April 2021

Post-Pandemic, Alberta is the Place to be | David Yager

Unemployment rates stayed low, inflation was under control, and stock markets were strong.

What a beautiful thing. What politician would dare spoil this story? Public debt no longer seemed to matter to anyone but fiscal conservatives and businessmen.

From the same voices increasingly branded as incapable of managing the modern economy the way it should be run. Just noise. After all, corporate social responsibility was much more important than profits, shareholders and customers.

Economic activity was also stimulated by rising personal debt, now at record levels.

In 2007 total Canadian household debt was about 70 per cent of GDP. Thanks to very low interest rates and a seemingly robust economy, by 2019 this rose to 100 per cent, about 50 per cent higher. This was supported by growing “current transfers received,” defined by Statistics Canada as income without labor or product sales. Canadians received $204 billion in transfers in the third quarter of 2008, about $6,182 for each of 33 million Canadians. By the end of 2019, this figure was $355 billion for 38 million Canadians, $9,342 or 50 per cent more.

Cash from the Crown. What a beautiful thing. And “progressives” want to give us all much more.

Then along came COVID. When governments locked everybody in their homes, they had to keep the economy functioning. So central banks cranked up the printing presses and really started dispensing the cash. By the end of 2020, the G7 debt/GDP ratio was 110 per cent, double that of 13 years earlier.

In Canada, instead of the balanced budget by 2019 that Prime Minister Trudeau promised in the 2015 election, in his first five fiscal years in office the total debt increased by $92 billion, or an average of $18 billion per year. Now the estimated deficit for the 12 months ended March 31, 2021 is a staggering $380 billion. Canadians have not seen a federal budget since 2019.

How much of Canada’s prosperity is supported by deficit financing? More importantly, what happens to the economy when it stops?

On January 29 economist Jack Mintz wrote in a column in the Financial Post titled, “Per Capita Economic Growth Has Stalled.” It examined Canada’s financial performance in the past five years. In 2015, the year the Liberals were elected, real per capita GDP (in 2012 dollars) was $51,158. Five years later in October of 2020 it was $50,510, a decline of 0.75 per cent.

Obviously, the pandemic hurt. But the problem was much deeper. Since 2015, the only year per capita GDP grew materially was in 2017, 1.9 per cent. The other years were flat.

Under the increasingly vilified leadership of Donald Trump, the U.S. did much better. From 2016 to pre-pandemic 2019, the U.S. grew at an average of 1.7 per cent annually using this measure. Canada averaged only 41 per cent of that figure. According to Mintz, Canada’s average real GDP per capita in 2016 was about $11,300 below that of the U.S. By 2019 this was up to $14,000. Mintz concluded this was the worst five-year performance in modern history.

5 • Business of Energy • April 2021

Post-Pandemic Alberta is the place to be

back on its feet very quickly. But it was so effective they never stopped. Choosing not to wait for a recovery driven by productivity, profits and savings, they kept borrowing money. By 2011 the debt/GDP ratio was up to 80 per cent, 45 per cent higher than before the crisis. From 2012 to 2019 this rose another 10 per cent to 90 per cent, 64 per cent more than before the meltdown.

David Yager | Post-Pandemic, Alberta is the Place to be

Blazing trail. Backwards.

These five years overlay perfectly with the collapse of oil prices in late 2014 and the election of the Justin Trudeau Liberal government. Not only has Canada chased away capital as international investors bailed out of the oil sands, but we’ve also created a significant investor chill through pipeline cancellations and delays, tanker bans, and increasingly complex and uncertain major project approval processes.

Business across Canada has complained about the country’s lack of competitiveness for years.

The Liberals are not listening. Some of the last financial news to come out of Ottawa in 2020 was the plan to raise carbon taxes from $30 per tonne today to $170 per tonne in 2030.

That will surely get global investors ringing our doorbell.

How can the foregoing summary of runaway debt, profligate public spending and proenvironment, anti-fossil fuel policies possibly be good news for Albertans?

Because it is unsustainable. Out of necessity, the economy will be forced back to the basics, and that includes agriculture and primary resources like oil and gas.

Governments must raise taxes and cut spending to get the debt under control. This will reduce disposable income. Consumers cannot afford a five-fold increase in carbon taxes over the next nine years, rebates or not. They will be forced to reprioritize spending on the basics of food, transportation, clothing, heat and shelter. Three are in Alberta’s sweet spot.

The significant rebound in Alberta’s oil industry in the past few months has been clouded by the pandemic misery dominating the headlines.

During the February cold snap, natural gas reached high prices not seen in years. By midFebruary crude oil was at pre-pandemic levels.

ARC Energy Research Institute’s February 9 report estimates 2021 revenue from oil and gas

production back at 2017 levels at $104 billion and free cash flow from production at $42 billion. The figures for 2020 were only $76 billion and $23 billion respectively.

Big bucks. Real cash flow from resource extraction, not governments handouts or stimulus programs. When people opine about “sustainable” business models, surely this is what they really mean!

The world may be experiencing another commodity “super cycle”, with prices for copper and iron ore reaching levels not seen in a decade. This means that cost-of-living essentials are going up. Tax increases to cover deficit spending or Canada’s 2030 Paris climate change commitments will further erode personal disposable income.

If interest rates rise, as they may if inflation returns, everything related to debt will cost more.

The entire energy transition concept from fossil fuels to renewables is a pre-COVID phenomenon, conceived and funded during a period of significant economic growth supported by government spending.

It will cost many trillions more to finish the job.

Paid by whom? Debt ridden governments or economically squeezed consumers? Who can really afford to pay more for energy? Who can really afford to pay more for anything?

The pre-COVID economic playbook will not survive in the post-pandemic world.

Domestically produced resources will again be recognized as an asset, not a liability. Alberta is very well positioned to be a winner in Canada’s B economic future. OE

David Yager is a Calgary oil service executive, energy policy analyst, writer and author. He is President and CEO of Winterhawk Well Abandonment Ltd., a methane emission reduction technology company. His 2019 book From Miracle to Menace- Alberta, A Carbon Story is available at www.miracletomenace.ca.

6 • Business of Energy • April 2021

Let’s Celebrate our Successes, and Take Pride in our Energy Sector | Cody Battershil

LET’S CELEBRATE OUR SUCCESSES, AND TAKE PRIDE IN OUR ENERGY SECTOR

by Cody Battershill

H

ere’s to Steve Major, a Calgary-based partner at the law firm Bennett Jones LLP.

Last month at the Annual General Meeting of the Canadian Bar Association, a member reintroduced a resolution that proposed the CBA adopt a definition of “Climate Justice” that would then help shape law reform policies in Canada.

(The resolution, defeated a year earlier, was reintroduced as a result of a technical voting glitch.)

Steve’s opposing view was that “Climate Justice” means different things to different people. For example, in Steve’s view – and mine as well – climate justice means supplying MORE Canadian energy to the globe, not less. He further argued the CBA, as a national organization representing the legal profession, should not be used for politically divisive issues like this one.

In his previous submission against the resolution in the spring of 2020, he described his opposition as follows: “To certain lawyers, ‘climate justice’ may really mean ‘leaving all fossil fuels in the ground’ and interpreting any pro-energy development as something against which to rally, legislate, rule and, if the resolution passes, then also enlisting the CBA to advocate such an agenda.”

“To others, ‘climate justice’ actually means something at the opposite end of the spectrum, that is doing everything possible to facilitate getting Canadian oil and natural gas to the rest of Canada and specifically, to tidewater to ultimately replace the (higher emission) coal-burning in China.

After all, global CO2 emissions know no border.”

More recently, Steve put it this way: “The main point remains that the proponent’s definition of ‘Climate Justice’ is nebulous, verbose, and open to a multitude of interpretations

and meanings that are largely dependent on the viewpoint of the lawyer who happens to be reading it. While this open invitation for political discourse may be appropriate for other organizations, the CBA should not be subject to the political pressures of the day.”

Steve added that he acknowledges some CBA members might advocate that Canadian hydrocarbons should be kept in the ground, despite Canada’s better performance when measured against environment, social and governance (ESG) metrics.

“Many of our competing jurisdictions have failed to make any improvements to environmental performance, social leadership, process or governance,” Steve argued, “during a period where Canadian producers have led the charge on what it means to be a progressive energy producer.”

Steve reports that with the assistance of a half dozen other opposition speakers, the “NO” vote ultimately carried the day. While it may seem like a small, obscure win, it’s the kind of critical victory that sometimes goes unnoticed.

That’s unfortunate because, when taken together, small successes often add up to something much larger.

So, thanks to you, Steve and your colleagues in the legal profession who spoke out responsibly and brought intellectual rigour to the B conversation. We celebrate your win. OE

Cody Battershill is a Calgary realtor and founder / spokesperson for CanadaAction. ca, a volunteer-initiated group that supports Canadian energy development and the environmental, social and economic benefits that come with it.

7 • 7Business • Business of Energy of Energy • December • April 2021 2020

Cover | Digitally Transforming Frac

DIGITALLY

TRANSFORMING FRAC COLD BORE’S BRETT CHELL ON BEING AT THE FOREFRONT OF THE DIGITAL REVOLUTION OF WELL COMPLETIONS

by Melanie Darbyshire

G

Brett Chell, co-founder, president & CEO of Cold Bore. Photo by Bookstrucker.

iven the state of the hydraulic fracturing (also referred to as ‘fracing’, ‘frac’ and ‘well completions’) industry over the past five years, one might assume it’s a tough business to be in today. In the last year alone, everything that could have gone wrong for the industry seemingly did: oil fell to negative $37/barrel; a surge of bankruptcies and consolidations swept North American oil and gas companies; the COVID-19 pandemic caused a seesaw in the demand for energy; and, a newly-inaugurated U.S. President Joe Biden banned fracking on U.S. federal land.

If there has ever been a difficult time to be in the well completions business, now seems to be it.

In fact the opposite is true for Calgary’s Cold Bore Technology. Founded in 2014, the company’s SmartPAD - the world’s first and only completions master control system, which allows for truly autonomous frac has transformed the fracing operations of producers across North America, making Cold Bore a singularly valuable ally to an industry working through turbulent times.

It’s been a slog to be sure, as many tech startups can relate. But, having emerged stronger than ever from a challenging 2020, with the price of oil stabilized and forecast to continue a slow and steady rise, and given the push towards greater automation in the hydraulic fracturing industry, Cold Bore is now capitalizing.

“We’re a survival story,” says Brett Chell, cofounder and president of Cold Bore, proudly.

“There’s a triple recession, oil and gas gets crushed, we pivot, we refinance - all of it. We started as two guys and now we’re 65 people.

Last year our revenue was $6 million - almost double the year before - during what was

conceivably the worst year possible. And we are on track to pass $25 million this year.”

The core of the business is SmartPAD, a completions master control system. “SmartPAD acts as a centralized nervous system,” Chell explains of the made-in-Canada product, “to connect all of the control systems from different service companies on site. It’s a network, a platform that universally brings the whole operation together. Literally brings the whole pad together - from a physical and data perspective.”

8 • Business of Energy • April 2021

Digitally Transforming Frac | Cover

Using sensors on the frac trees, the system autonomously tracks workflow for the entire pad, then provides an auditable baseline.

“It’s the first time a company thought to track the entire pad itself, rather than a single service,” Chell points out. “The result is a one-second accurate workflow that connects control systems and enables zero-human interaction, fully autonomous frac operations.”

All users working on the pad, from oil companies to service companies, have access to the dashboard, which has every service screen on location consolidated into one place.

Indeed, Cold Bore has partnered with most major service companies who connect their automated control systems to the “central hub,” so they too can be part of the autonomous frac evolution.

Whereas the traditional method is to manually track frac operations by hand using Excel spreadsheets at the wellhead (each service company tracking and formatting its own data), SmartPAD replaces this inefficient, inaccurate and dangerous job by digitally tracking all of the data from sensors on the frac trees. The data is formatted into the 100 per cent accurate workflow and accessible to all service companies and the operator. “Everybody on the pad sharing one platform and one database that is fully audited in real time,” Chell says. “All while still being able to use their own control systems on location.”

SmartPAD also provides a full real-time analytics platform, with the ability to set alerts and alarms on any service company’s raw data feeds, or share raw data between service companies. This allows them to feed each other’s algorithms and drastically improve operations in dozens of different areas.

“Once we’ve connected all the services with a master control system and made them visible to everybody,” Chell explains, “we then implement automation. We automate all of the inefficiencies and cut unnecessary human interactions out. There is a massive operational efficiency gain, which equates to faster completions.”

“We’re selling informational efficiency gains,” he continues, noting SmartPAD is a giant step above an analytics platform. “Once you fix your information, the visualizations from your analytics are going to be infinitely better and it will be obvious how your operation must change.

9 • Business of Energy • April 2021

Digitally Transforming Frac

SmartPAD™ Dashboard displaying frac tree and pressure data.

Cover | Digitally Transforming Frac

You’ll see what you’re missing and can change it automatically. You’ve affected infrastructure, safety, operations, automation - and all of the services will define best practices jointly.”

That operational efficiency also helps operators ‘green’ their completions. “Less time on the pad means less water and chemical usage,” Chell points out, “but also less time that pumps are burning fuel and creating emissions.” Most importantly, because there is a single timestamp of operations on location, operators can provide audited proof of reduced consumption, greenhouse gas emissions and ESG improvements.

All of this means money to operators, more and more of whom are using SmartPAD. “We have clients in Canada and all over the U.S. now,” Chell says. “Eastern Pennsylvania, Pittsburg, Dallas, Houston, Colorado and North Dakota. We’re also inbounded by companies in Australia, the Middle East, Saudi Arabia and Argentina.”

Not bad for a guy from Lethbridge who started his career on a drilling rig. “After high school I went to art school in Vancouver, and then dropped out because I decided I wanted to make money,” he laughs. “All my friends were going out to the oil rigs and I figured I could spend one, maybe two years there.”

Seven years later, Chell had worked his way up the chain, from leasehand (scrubbing the outside of the shacks) to getting offered a drilling job. Wanting a change, he joined Xtreme Coil Drilling in 2005, where he was involved in building drilling rigs and technology development.

A couple of years later he joined a group of Calgary entrepreneurs involved with various tech startups. “That’s where I learned finance from a startup perspective,” he says. “I learned the game of private equity, venture capital, how to raise money, how to build financial narratives, when, how and what you can raise money for in Canada versus the U.S.”

Brett Chell & Engineer Permian.

However, by the end of 2015 the price of oil collapsed, bringing drilling activity down with it. “We had actually been working on a side project digitizing wellheads, so we thought why not take the acoustic tool we have and go to completions,” Chell explains.

“We pivoted,” he continues. “We were basically broke. We’d spent the first $2 million we’d raised from friends and family but had no product, nothing. The industry was down, nobody liked oil and gas. But we bootstrapped another million bucks together, a hundred grand at a time, just keeping it alive, and went to completions.”

To refine the product, Chell spent many hours on completions pads testing the digitized wellheads. Coming from the drilling world, where all of the sensors send data to a centralized computer, he quickly realized there was no centralized control system in frac. “The data was all over the place,” he says, “unformatted and a mess. Some was used, some went to the cloud, some just disappeared.

I had nothing to plug into and it became obvious that that was the big opportunity.”

He co-founded Axial Energy Tech in 2014, to fund and build energy startups, one of which was Cold Bore. In time, it became his (and CFO Blair Layton’s) sole focus.

The initial idea for SmartPAD was a centralized control system: “Plug everyone in and show the data, then automate the processes. Network the entire pad. But the original concept is nowhere near what we have today.”

Their original concept for the company was to build directional drilling tools out of acoustics.

Convincing operators to use SmartPAD in the beginning (when still in development) required

10 • Business of Energy • April 2021

Digitally Transforming Frac | Cover

Digitally Transforming Frac

A control station for monitoring fully autonomous frac on-premises. This view is replicated in the cloud for remote ops as well.

thousands of air miles logged by Chell, who, prior to the pandemic, spent almost every week in Houston, Dallas or Pittsburg. “About two years ago we got to the point where six major companies were using the product and we met up with the Rices (of the Rice Investment Group (RIG)). When I showed it to Toby Rice, he saw the opportunity right away and was in.”

With a cheque for $4 million from the RIG – one of the largest names in U.S. private equity – Cold Bore was well on its way. “We’ve spent the last year-and-ahalf selling and maturing,” he says. “We’ve spent $300,000 to $400,000 a month on software development for two years. We’re now at the point where we’re rolling over.

We’re now profitable.”

The company is currently raising a large growth equity round of $14 million in the U.S. “Cold Bore very much has come through its shit kicking,” Chell reflects. “We’ve built into

a sophisticated software company. We really now stand in a league of our own.”

It’s that league, Chell believes, which is prime to meet the needs of today’s operators, who spend 60 per cent of their costs on completions: “While a lot of the focus is on controls and automation, it also needs to be on informational efficiency, which will give operators a tenfold uptick in their operational efficiency.”

Having come into itself, Cold Bore is now comfortably leading the digital transformation of the hydraulic fracturing industry. At the company’s helm, Chell does not lack confidence: “This is the space to be in. This is where all the money’s going to be for the next few years. SmartPAD at its core is an automation platform. It follows the same path and methodology Amazon did when it implemented a standard platform for e-commerce, which completely changed B how that industry did business.” OE

11 • Business of Energy • April 2021

Scott Crockatt | Let’s Lean into the ESG opportunity for Canadian Energy

LET’S LEAN INTO THE ESG OPPORTUNITY FOR CANADIAN ENERGY

by Scott Crockatt

A

s we begin to see some light at the end of the pandemic tunnel, more attention is returning to climate change as one of the greatest global, environmental, and economic challenges of all time. There was a time when that reality looked like a threat to Alberta’s and Canada’s energy sector. But Alberta is potentially Canada’s epicentre of emissions reductions efforts and innovative clean energy investment and activity.

This is the way the world is going, what society and customers are asking for, and what Canada has committed to. Canada has staked out a global leadership position committing to reduce carbon emissions by more than 30 per cent this decade, and to work toward net zero by 2050. This is not just a challenge, it’s a huge opportunity. We can be the best on earth at the energy, food and resource systems of the future.

• A dramatically greening electrical system.

Alberta’s largest power generator has already reduced emissions by 50 per cent – 21 Million tonnes of CO2. This is more CO2 reduction by a single company than most nations

Alberta, its companies, and innovators, are poised to play a central role in achieving these goals. People don’t realize this, but Alberta is an emissions reduction and environment, social and governance (ESG) leader. Consider that the province is already home to: • The largest carbon capture project in the world: the Alberta Carbon Trunk Line • Canada’s largest hydrogen blending project • Many of Canada’s leading Indigenous partnerships in reconciliation,

economic opportunity and environmental stewardship, including Canada’s largest off- grid solar project, in partnership with three First Nations

• Alberta Solar One, which supplies Canada’s largest pipeline with renewable power • Utility-scale battery storage with WindCharger

• A 30 per cent reduction in emissions intensity from oil sands production; •

Innovative companies working to repurpose CO2 into products like soap and pens, developing green lithium extraction from innovating geothermal approaches

• Countless more innovations, investments, and projects working to reduce emissions and help Canada achieve its climate goals All that just scratches the surface. In fact, natural resource companies account for 75 per cent of all the clean energy investment in Canada.

Most of these are based in Alberta. The reality is humanity has a big problem, and Canadian energy is a big part of the solution.

12 • Business of Energy • April 2021

“

Let’s Lean into the ESG opportunity for Canadian Energy | Scott Crockatt

Canada’s largest energy companies want to do more. Many have set their own net zero targets, along with other ambitious goals around emissions reductions, Indigenous partnerships, environmental performance, diversity and inclusion, and other aspects of economic and ESG leadership.

Dramatically reducing emissions, getting to net zero, and building a new energy future; this is the new vision for Canada.

So how do we achieve that vision?

Canada has a huge resource bounty, and a strong start in areas like carbon capture, hydrogen, and renewables. Other countries are moving quickly in these areas and we risk being outpaced in places where we could lead. To reach the scale and scope necessary to reach net zero Canada will need to create the right conditions and accelerate the pace of greenhouse gas (GHG) reductions.

To succeed, however, Canada must dramatically increase its efforts. We must make and attract major investments to realize net zero opportunities. We must foster innovation and innovative systems and find ways to de-risk the investments needed in early-stage technologies. In order to attract the investment capital required, it is also imperative that we dramatically increase the pace and certainty of regulatory approvals. Today, our country’s own regulatory systems are too slow to reach our climate goals – we need faster and more agile regulation. All this will require strong leadership and collaboration amongst Canada’s business community, people, and governments.

If we do this right, we’ll not only achieve our environmental objectives, but we’ll also enhance the competitive position of Canada and everything Canada produces. As we lower the emissions of our energy systems, we also lower the emissions of every other industry that uses those systems. That means that it’s possible for every product Canada exports to have a competitive climate advantage over similar products made elsewhere.

The ESG Opportunity Capital and our global reputation are critical elements of this, especially as the global ESG movement continues to grow and direct massive amounts of capital around the world. Canada’s energy sector can already stake a strong claim to having world-class ESG performance in areas like environmental regulation and monitoring, human rights, Indigenous partnerships, and excellent governance. But efforts to divest from Canadian energy continue globally.

13 • Business of Energy • April 2021

Let’s Lean into the ESG Opportunity for Canadian Energy

Canada’s largest energy companies want to do more. Many have set their own net zero targets, along with other ambitious goals around emissions reductions, Indigenous partnerships, environmental performance, diversity and inclusion, and other aspects of economic and ESG leadership.

“

Scott Crockatt | Let’s Lean into the ESG opportunity for Canadian Energy

That’s partly because we’ve done a poor job of globally marketing Canadian energy. It’s also because the one area of ESG where we still lag, is unfortunately also the one area that the world is most focused on: GHG emissions.

Yes, our most modern projects have similar or lower carbon emissions than the average barrel from elsewhere. Yes, we’ve taken 30 per cent of emissions intensity out of oilsands over the last decade. Yes, we are one of the few large energy producing nations investing aggressively in emissions reduction. And yes, Canadian natural gas has the lowest lifecycle emissions of any LNG on earth. Even with all that, we still have room to go to improve the emissions performance of Canadian energy production.

This is a huge opportunity disguised as a challenge. If we can undertake a strategic, ambitions, and material effort to truly “break the logjam” of the emissions challenge, Canada can market ourselves unreservedly as the best producer and exporter of energy on earth, now and for decades into the future.

This has the potential to take our energy products beyond being a simple commodity and into a territory of having a unique point of differentiation, a competitive advantage, to our customers. Forestry, fishing, mining, and diamonds have all done a version of this. It’s time for this to come to Canada’s energy sector.

The reality is that neither industry nor government can do that alone. The kind of decarbonizing super-initiatives we’re talking about here are generally not economic today – or else companies would be doing them – and they often involve major unsolved engineering, market, or technology challenges. Here’s a few to give you an idea: carbon capture (CCUS), small modular nuclear, hydrogen, and even direct air capture. We would argue that Canada should be THE world leader in CCUS – it will be vital for oil and gas emissions reduction and for blue hydrogen – a future fuel that the Government of Canada is placing a lot of importance on. To make these possible, governments and business are going to need to come, together, to the table and figure out how we get this done. It will involve adjusting some perspectives. Including a shift to focus on reducing GHG emissions, rather than reducing the fossil fuel industry. But it is possible – for what could be more aligned to our climate

Canada can market ourselves unreservedly as the best producer and exporter of energy on earth, now and for decades into the future.

ambitions than projects resulting in less carbon being emitted into the global atmosphere?

A recipe for success To achieve our Albertan and Canadian climate goals, and enable economic recovery, the path is clear, we must do two things: First, we must accelerate reductions in the carbon emissions from the energy produced and used domestically today, and that are our largest exports. In doing so, establish Canada’s brand as the world’s leading producer of ESG-focused products, services, and energy. This includes rapid investment in proven areas such as carbon capture utilization and storage (CCUS), natural gas and electrification.

Second, we need to act boldly to achieve Canada’s 2050 net zero goals by harnessing Canada’s natural resources and human assets to build the next generation of energy and technologies, including hydrogen power, small modular nuclear, nature-based solutions, direct air capture and other technologies.

None of that scares Albertans. This is the place where we’ve figured how to get oil out of sand, how to drill sideways and hit a tiny target kilometres underground, and how to mix vodka, celery, horseradish, clamato and Worcestershire B into a single drink. Let’s get after it. OE

14 • Business of Energy • April 2021

EQUIPMENT AND SERVICES FOR OILFIELD DRILLING, COMPLETIONS AND PRODUCTION NEW, UNUSED, IN-STOCK AND READY TO GO TANK SIZES:

TANK TYPES:

AVAILABLE OPTIONS:

EQUIPMENT IN STOCK:

• • • • • • • •

• • • • • • •

• Single and Double • Internal and External Coatings and Insulation in Accordance with Industry Standards • Custom Skid or Anchor Chair Design for Pile Installations • Fire-Tube/Burner Heating Systems, Immersion Heaters, Electric Heat Coils, Glycol Heat Coils Etc. • Heated Vaults

• Well Site Separator Package, Skid-Mounted • Oil Treaters and Flare Knock Out Drums Free Water Knockout (FWKO) systems • Line Heaters • Dehydration Packages and Amine Packages

400 BBL 750 BBL 1000 BBL 1250 BBL 1500 BBL 2000 BBL 2500 BBL 4000 BBL

Storage Process Production Skim Pop De-Sand Rental Style

BUY BACK OPTIONS • RENT-TO-OWN • IN-HOUSE FINANCING • FLEXIBLE PAYMENTS Inclusive Energy Ltd. is the fastest growing service company with a vast variety of high quality equipment and quick turnarounds to meet the demands of the growing energy industry.

We offer all related services for turnkey projects to help customers execute projects from start, to finish helping us to establish ourselves as an industry leader.

HEAD OFFICE: (403) 444 6897 | SUITE 5050, 150 6TH AVE SW

INCLUSIVENERGY.COM

INFRASTRUCTURE CONSTRUCTION & MAINTENANCE

22 Locations across Western Canada

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