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OF ENERGY VOL 1, ISSUE 3 | JUNE 2019
Victoria’s Mayor Showed Leadership in Learning About Oilsands by Cody Battershill
by Melanie Darbyshire
06 10 14 17 19
How A “Made In Alberta” Oilpatch Recovery Can Be Achieved byFEBRUARY David Yager 2019 How Do I Get into the Permian?
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Off The Top | The Myth-busting Approach
THE MYTH BUSTING APPROACH
t’s exciting – but not necessarily easy – being an Alberta mythbuster. It takes determination, perseverance, thick skin, a whole lot of patience and the proverbial iron hand in a velvet glove. Countering and dispelling some of the myths about Alberta’s oil and gas industry can be a particularly tough challenge. But a dynamic Alberta group, led by Cody Battershill (founder and gung-ho advocate of the pro-energy lobby group Canada Action) and Calgary’s Ward 6 Councillor Jeff Davison, are opting for a supercharged, proactive approach. And there is encouraging response to their focused show-and-tell, reaching out to politicians and other influencers who are interested and willing to be open-minded. “It’s basically an urgent but open invitation to politicians and other decision-makers to come on a tour,” says the revved Battershill. “An oilsands tour – to see first-hand how we do things; how we are world leaders when it comes to developing new methods and protecting the environment.” Councillor Davison admits the goal of the unique and personalized oilsands tour is to achieve factual, evidence-based conversation versus opinion regarding Canada’s energy industry and oilsands operations. “The development of our energy industry is something that affects Canadians from coast to coast to coast,” he notes. “This is not just a Calgary or an Alberta story. It is a Canadian story that affects us all.” Battershill explains that although he is not an engineer, “We talk with them. We show them. We answer their questions. We’re trying to make sure their opinions are based on facts, not misinformation. Because, most importantly, they really don’t know what they don’t know.” Davison emphasizes opponents of the energy industry have been making inaccurate claims that the industry has been utilizing strip mines, destroying landscapes, contaminating water
and creating tailing ponds. “In reality, Canadian oilsands companies devote heavy attention to wildlife, forest restoration, water reuse and methane capture as well as an incredible amount of capital is focused on technology to minimize environmental impact.” Last month, Battershill, Davison and their dynamic group hosted Lisa Helps the mayor of Victoria, B.C. and a frequent critic of the environmental effects of Alberta’s oilsands, to be their guest to tour the Cenovus in-situ steam-assisted gravity drainage (SAGD) operation at Foster Creek. “What many people don’t realize when they come on a tour is that 97 per cent of our oilsands deposits are in situ, more than 75 metres deep, too deep to be mined,” Davison adds. “So, technologies like SAGD make extraction possible. These new technologies contribute to less deforestation and use less energy to produce oil.” Mayor Helps explains she didn’t go on the tour to have her mind changed but admitted to learning more about the industry and gaining a broader perspective. Last month, the group made the rounds at the big Federation of Canadian Municipalities annual conference, huddled, pitched (and invited) decision-makers to come and see for themselves. Battershill enthusiastically hopes to eventually host the mayors of Vancouver, Burnaby, Toronto, the premier of Quebec and others on the proactive oilsands tour. “It’s overdue time for dialogue,” Davison says with determination. “The biggest challenge is overcoming the false information that has led to a negative perception in certain parts of the country, particularly relating to oilsands development.” Battershill shares the urgent passion. “We have to stand up for ourselves. We’re not out to change their minds as much as creating a balanced discussion and wanting to make sure their B opinions are based in facts.” OE
5 • Business of Energy • June 2019
Cody Battershill | Victoria’s Mayor Showed Leadership in Learning About Oilsands
VICTORIA’S MAYOR SHOWED LEADERSHIP IN LEARNING ABOUT OILSANDS by Cody Battershill
t’s lush, temperate and visually stunning. And in 2018, Conde Naste Traveller Readers’ Survey found it a top-10 friendliest city in the world. It’s known around the globe as the City of Gardens. I’m referring to Victoria, B.C. If you’ve visited there, you probably loved it. Who could blame you? I have a new appreciation of Victoria, and it’s not because of the information I just listed. It’s because of a rare opportunity I had recently to take Victoria’s Mayor Lisa Helps on a tour of an oilsands facility in northern Alberta. First, let me provide some background. Victoria council earlier this year passed a resolution to begin tracking climate change-related costs – much as Whistler, B.C. and others had done before them. Victoria also requested the Union of BC Municipalities (UBCM) explore legal action against international oil companies, a resolution that was recently defeated. So, at least for now, the issue is on hold and won’t advance to the UBCM table for debate and a vote any time this year. We see this development as presenting an opportunity for outreach and education. Mayor Helps is an experienced political leader, so I won’t speak for her. But I can tell you
the on-tour conversation we had and the statements she made to media and others during and immediately following her visit were genuinely constructive, balanced and, in my opinion, very hopeful. While Mayor Helps stated clearly to Star reporter Madeline Smith that it was too soon for her to say whether the trip has completely shifted her perspective on the future of the oilsands, she also added: “But I believe in the work that’s happening here.” The Cenovus steam-assisted gravity drainage (SAGD) facility at Foster Creek is a perfect example of environmental innovation and progress. Distinct from oilsands mining, this successful, small-footprint Alberta in-situ technology represents how 97 per cent of oilsands land area and 80 per cent of oilsands reserves can be produced with more than half of current production done in situ today. It’s a technology that should be shown off to the world. I’m appreciative that Mayor Helps was gracious enough to make the trip and see our technology for herself. Among comments made by the mayor and reported by Star Calgary and other media outlets were the following: “I believe in the work that’s happening here (at the SAGD
6 • Business of Energy • June 2019
And given that oil and gas make so many other endeavours possible, and that global demand for it continues to grow, our product is going to be a key ingredient for global society for some time to come.
facility). If the oilsands are going to have a future, what I saw today really lends itself well.” I want to give Mayor Helps time to sift through the experience she had at the SAGD facility. It’s technical, and it involves a lot of new information. But in general, I can say Mayor Helps’ initial positive reaction seems to be part of a growing understanding across the country that we’re world leaders in environmental protections and continual technological innovation in oil and gas, and that Alberta’s oil and gas sector is vital to the country’s economy. And given that oil and gas make so many other endeavours possible, and that global demand for it continues to grow, our product is going to be a key ingredient for global society for some time to come. Working with Councillors Ward Sutherland and Jeff Davison as well as the City of Calgary,
we’re pleased we reached out to Mayor Helps. We intend to continue to build bridges with the rest of the country so our neighbours fully understand we’re all Canadian, and we all benefit when our resource sector is strong. As someone strongly committed to building bridges and working across conventional boundaries toward establishing common ground, I think it’s important I leave the last word to Mayor Helps. “What is possible – as Victorians, as Calgarians and as Canadians – is to have these conversations where we really understand each other’s points of view.” I couldn’t agree more. Thanks for the visit, Mayor B Helps! OE Cody Battershill is a Calgary realtor and founder/ spokesperson for CanadaAction.ca, a volunteer organization that supports Canadian energy development and the environmental, social and economic benefits that come with it.
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7 • Business of Energy • June 2019
FREE PRESS RELEASES FOR ALL TSE ISSUERS! TheNewswire.com Celebrates 15 Years plus Senior Board Approval By Kavi Mohan
f you run a publicly-traded company, press releases are not just a luxury, they are mandatory. But they don’t have to be expensive. Until now, the cost of issuing press releases has been determined by “word count” and images inclusion, costs that can generate bills of over a thousand dollars. Per press release. That is no longer necessary. Newly Approved as a Senior Board (TSE) Press Release disseminator and SEDAR filing Agency, Calgary’s own TheNewswire.com is offering Free Press Releases to showcase its services. And its Flat Rate billing is designed to save issuers over half of what they currently spend – for the same distribution. TheNewswire (TNW) is now just one of two accredited Canadian press release agencies available for publicly-traded companies to use for dissemination and although TNW may be new to many TSE-listed companies, it has been the smallcap newswire of choice for over 500 TSX Venture, CSE and OTCMarkets-listed companies since 2004.
FREE PRESS RELEASES No Obligation. Traditionally, newswire services have charged on a “per-word / per-page” basis, which is based upon 1950s technology when agencies used to manually type - then re-disseminate - press releases (via Telecopier machines) to newsrooms nationally and beyond. Today the only telecopiers that exist are in museums, but the traditional newswire services (conveniently and lucratively) continue to invoice companies “per word” which raises an obvious question. If no one actually re-writes your press release, then how can you be billed “per word” for a press release that you actually wrote? That makes zero sense. TheNewswire.com is disrupting that broken paradigm and instead offers unlimited press releases for a fixed,
flat rate that allows companies to issue more news, more often – for less.
minnows, someone pays for that buyout. And that ‘someone’ is going to be Canadian companies.”
Just $250 Per Press Release – All Canada and US – Unlimited words / pages or just $2,500 for Unlimited Annual for TSX Venture-listed companies and just $5,000 annually for issuers listed on the TSE.
Beechinor says TNW’s TSE inclusion, coupled with a new pro-business Alberta government, provides a major opportunity for TheNewswire to introduce tremendous cost-savings for potential new clients as companies publish more news – for less.
Unlike its competitors, TheNewswire does not charge for image and/or multimedia inclusion – and in fact encourages companies to include it, as it helps convey a more engaging, compelling story. TheNewswire also provides the most affordable SEDAR filing rates in the industry at just $650 per year and also offers EDGAR and XBRL services. But the groundbreaking news service hasn’t stopped at price-savings. TNW has also integrated an array of additional market-friendly features that leapfrog its competitors, including Social Media inclusion within all press releases, Free Streaming Video within press releases (yes, you can watch a corporate video within a press while still reading it) and Audio Enhanced press releases. “Technology has advanced so greatly in even the last ten years it’s changing what we do and how we do it,” says CEO Pat Beechinor, the innovative founder of TNW. “We simply couldn’t do then what we can now. And now that we’ve started, we’re not going to stop.” TNW itself is in a growth spurt, having received TSX and IIROC approval as fully accredited Senior Board TSE disseminator.
To hear more: www. TheNewswire.com/energy Beechinor, a thirty-year broadcaster and news veteran says TNW’s inclusion as a TSE distributor is fantastic news for Canadian issuers (particularly in the oil and gas and mining sector) looking to cut costs because recent acquisitions and mergers within the newswire industry itself are costing Canadian issuers more than ever. “Sellouts by some of the smaller Canadian news services to large US-based companies have resulted in price hikes that will only increase,” says Beechinor. “When US whales gobble up Canadian
He adds that most publicly traded oil and gas companies would like to issue 15-20 press releases per year, but if it costs more than what a company can afford just to keep its shareholders informed, there is no perceived ROI. Conversely, by taking advantage of TheNewswire’s fixed rate, companies can certainly save enough to initiate additional proactive marketing initiatives to augment their press release announcements.
TheNewswire.com: Reallocate the $10,000 - $15,000 we save you annually on extended awareness and promotions TheNewswire helps companies spend less. “If anyone has any questions about our overall service, I would suggest giving one of our existing clients a call. They are our greatest Ambassadors. Or, better yet, just try a Free Press Release. Nothing ventured, nothing gained.” Offering free press releases isn’t a new marketing strategy for TheNewswire. Beechinor says he adapted it from a renowned chocolate maker. “If you make the best chocolate in town, be prepared to give some away. If people like it, they’ll buy more and tell others to try it.” The recipe is working.
FREE PRESS RELEASE: 877-456-6241 • firstname.lastname@example.org Also visit: www.MarketRadio.com
Melanie Darbyshire | Unlikely Champion
UNLIKELY CHAMPION VIVIAN KRAUSE AND HER DEFENCE OF CANADA’S OIL AND GAS INDUSTRY
by Melanie Darbyshire
hen it comes to unlikely champions, Vivian Krause is a category unto herself. The Vancouver piano teacher with a background in nutrition never intended to uncover a foreign-funded campaign against the Canadian oil industry – but that is what she’s done. Working on her own dime for over a decade, Krause has painstakingly tracked what she and many others now believe is a multimillion-dollar, decade-long, coordinated effort to sabotage Canada’s oil industry. And until recently, she was all alone in the fight. “I believe in activism,” Krause explains from her home in North Vancouver. “It’s an important part of a strong democratic society. We need activists to keep government on its toes and look over the shoulder of industry. But activists
need to play the role of honest broker. If they’ve taken a side, they can’t do that. That’s the problem we have today.” She has not reached this conclusion lightly. Rather, it was reached after years of digging into the U.S. tax returns of large American charitable foundations, as well as the annual reports, financial statements and tax returns of hundreds of charities. The gist of her findings? Over $600 million (and counting) transferred from American charitable foundations to Canadian organizations over the course of the past 15 years. Most of that went to large conservation initiatives: the Great Bear Rainforest, the Canadian Boreal Initiative and the Yellowstone to Yukon Conservation
10 • Business of Energy • June 2019
Initiative. A relatively small but highly-impactful portion of that $600 million went to fund the Tar Sands Campaign. As Wendy Mesley at the CBC reported in January, the Tar Sands Campaign aims to landlock oil from Western Canada within North America so that it cannot reach overseas markets where it could attain a higher price per barrel. The Tides Foundation, based in San Francisco, has sent more than 400 cheques and wire transfers totalling US$40 million to more than 100 organizations involved in the Tar Sands Campaign in Canada, the U.S. and in Europe, Krause has documented. Pages of the tax returns of the Tides Foundation showing each of these payments are posted at her blog, ReThink Campaigns. Since 2009, Krause has been following the money behind environmental and elections activism, posting her findings, letters and research on her blog and her Twitter account, @FairQuestions – aptly named. Only since last fall, when the price of Alberta oil crashed, has she received broader attention from the media and industry, though her work remains funded and directed by her. For eight years, she has eked out a modest living from honorariums for speaking engagements. “It’s been a rough ride,” she admits. “But since the Alberta election, it’s the first time in 10 years that I don’t wake up every day and feel like I’ve just got to get back on that treadmill. To see that Premier Kenney has the courage to call the Rockefeller Brothers Fund on the carpet and investigate properly, that’s a huge weight off my shoulders. “Premier Kenney has a daunting task,” she continues. “Building pipelines is far more than a construction project. What these pipelines are really about is breaking the U.S. monopoly that has Canada over a barrel. That’s an enormous undertaking. Plus, Premier Kenney needs to work through the differences with B.C. and Quebec while beating the environmentalists at their own game. That’s another huge challenge.” Krause’s journey began unexpectedly. She grew up in Kitimat and Kamloops B.C., then attended university in Montreal where she received a bachelor of science in nutrition from McGill and a master of science from the Université de Montréal. Upon graduation,
11 • Business of Energy • June 2019
Only since last fall, when the price of Alberta oil crashed, has she received broader attention from the media and industry, though her work remains funded and directed by her. For eight years, she has eked out a modest living from honorariums for speaking engagements.
Melanie Darbyshire | Unlikely Champion
she worked on a diabetes research project with Algonquin people in northern Quebec and then, for 10 years, she worked for the United Nations Children’s Fund (UNICEF) in Guatemala and Indonesia. Having been away from B.C. for 15 years, Krause returned home with her daughter in 2001. A desire to work again with First Nations led her to the B.C. coast. At the time, the David Suzuki Foundation was conducting the Leggatt Inquiry into salmon farming. “I sat in the meetings and listened,” she recounts. “When the report came out, I was shocked because it bore so little resemblance to what was actually said.” Some First Nations communities, Krause says, were involved in salmon farming but the Leggatt Report barely mentioned that. Instead, it called for a moratorium. It was a wakeup call for Krause, who saw the disconnect between the reality of salmon farming, the activism against it and how that brought the industry to its knees while benefiting the Alaskan commercial fisheries whose market had been devastated by competition from farmed salmon. This led Krause to begin thinking about environmental activism from a market, economic and trade perspective. She got herself hired by Nutreco, one of the world’s largest producers of farmed salmon and worked during 2002 and 2003 in corporate development, mostly media relations. Then she lost her job and was out of the industry. In 2006, while on the board of the Adoptive Families Association of BC, she was looking for funding for that charity and was also preparing a submission to a public hearing on aquaculture, held by the B.C. government. That’s when Krause came across a US$560,000 grant from the Gordon and Betty Moore Foundation for something called an “antifarming campaign.” In tax filings, the Moore Foundation said the purpose of this campaign was “to shift consumer and retailer demand away from farmed salmon.” For Krause, that’s when the lights went on. According to her analysis, since 2003 the Moore Foundation has donated $267 million to organizations working in Canada. More than $115 million of that is for marine planning and related purposes. None of the marine plans developed with Moore funding would allow for pipelines
and other infrastructure necessary for the overseas export of Canadian oil and natural gas. In 2010, while still digging into the funding of activism against farmed salmon, Krause stumbled upon three little words, “Tar Sands Campaign,” in the tax returns of the Tides Foundation. “I spent July and August of 2010 looking at the beginnings of the campaign against Alberta oil and by the end of that summer, I was convinced that the same thing that had happened to salmon farming, and before it, to forestry, was about to happen to Alberta oil,” Krause says. “By generating bad press and positioning farmed salmon as the bologna of the seafood market, they blocked market access to restaurants and grocery stores,” she continues. “This swayed market share back to wild salmon, most of which is from Alaska. Likewise, activism blocks access to the global oil market by creating a trade barrier of FUD: Fear, Uncertainty and Doubt about pipelines and tanker spills. After enough years of that, government capitulates, investment confidence wanes, capital shifts and then industry collapses.” Krause’s research has found that the Tar Sands Campaign was launched in 2008 by the Rockefeller Brothers Fund, the William and Flora Hewlett Foundation, Corporate Ethics International (“CorpEthics”), the Tides Foundation and about 20 other environmental groups in the U.S. and Canada. “Forget for a moment that this activism is supported by the Rockefellers and others whose founders have a long history in the U.S. oil business (Marisla Fund and Pew Charitable Trusts),” Krause submits. “Anyone who cares about global oil consumption has to be disappointed because the Tar Sands Campaign has not kept one single barrel of oil in the ground. Rather, it has simply shifted production out of Canada to elsewhere.” Case in point: U.S. oil production has more than doubled during the Tar Sands Campaign and the U.S. is now exporting oil to more than 20 countries. “The Rockefellers and other U.S. foundations have been funding activism in Canada since the early 1990s,” Krause points out. “But during the ’90s, the grants were small. Then, around
12 • Business of Energy • June 2019
Since the summer of 2018, Krause was in communication with then-Premier Rachel Notley’s office, providing information, including a legal opinion paper prepared by a Calgary law firm. When Notley made a televised address in December, Krause was certain Notley would talk about the Rockefeller juggernaut that has been sabotaging Alberta for a decade. “I was astonished that she didn’t even mention the Rockefellers,” Krause says. “But once I realized that organizations funded as part of the Tar Sands Campaign (Progress Alberta and Leadnow) were campaigning to defeat Jason Kenney, it made sense to me. “If Rachel Notley had called out the Rockefellers, there’s no way that organizations funded as part of the Tar Sands Campaign would have helped to get her re-elected,” she says. Krause points out that Notley did many of the things activists were calling for, including imposing an emissions cap on the oilsands and creating the world’s largest boreal forest reserve. “The elephant in the room is the geopolitics of oil,” she says. “Canada is one of the only countries in the world that can use oil without having to think about the geopolitics of the country that we’re buying it from. Europe, on the other hand, is 90 per cent dependent on Putin and the Middle East. The Americans want off Mideast oil, that’s clear. Funding the climate movement is a roundabout way to address the geopolitics of oil without having to talk about it. Since all renewables are domestic, fostering renewables inherently reduces dependency on foreign oil.” Canada, of course, has one of the largest deposits of oil in the free world. “With great privilege comes great responsibility,” Krause urges. “We have the opportunity to create wealth and use some of it to develop new technologies for addressing environmental impacts of oil while also helping to free other countries from the geopolitics of oil.” Going forward, Krause anticipates testifying at the Kenney government’s public inquiry. “I’m willing to testify under oath and I hope that Rachel Notley, Ed Whittingham, David Suzuki and Tzeporah Berman will too,” Krause says. “My hope is that Premier Kenney will beat the Rockefellers at their own game,” she offers. “They have funded a lot of work on energy efficiency and the development of electric vehicles but they still haven’t fully developed the technologies needed to substantially reduce the use of oil. As Peter Tertzakian has taught us, global oil consumption is about a thousand barrels per second (90 million barrels per day). That’s too much too fast. We need to slow down, and that means we need technologies that don’t exist yet. My hope is that Premier Kenney makes this his legacy, that he leads Canada into global energy markets and also that he funds energy ingenuity so that we can make the very best possible use of every barrel of oil that we still do need to burn.” Krause would love to see Calgary become the energy ingenuity capital of the world. “I believe in Alberta,” she says. “I appreciate the practical, hard-working spirit and the generosity of Albertans. My dad’s an Alberta farm boy. My parents taught us kids to be self-reliant and to help others. That’s my understanding of the Alberta spirit,” says Krause. An unlikely champion who’s given practically everything of herself to search out and expose B the truth. Let’s hope her fair questions get answers at Premier Kenney’s public inquiry. OE
13 • Business of Energy • June 2019
2004, not long after the beginning of the Iraq war, the amounts went into the millions. This coincided with a decision on the part of some of these foundations to address energy security and get the West off of Mideast oil. Back in 2004, the U.S. couldn’t even dream about going off Mideast oil without Canada on lockdown.”
David Yager | How A “Made In Alberta” Oilpatch Recovery Can Be Achieved
HOW A “MADE IN ALBERTA” OILPATCH RECOVERY CAN BE ACHIEVED by David Yager
he landslide election of the United Conservative Party led by Premier Jason Kenney on April 16 has put a spring in the step of Alberta’s battered and bruised oil and gas industry. Since oil prices began falling in late 2014, Alberta and the country’s most important resource industry have been struggling through seemingly endless bad news for four and onehalf years. Finally, the light at the end of the tunnel is clearly not a train. But what a long stinking tunnel! The UCP campaigned on righting every wrong that has impaired and irritated Alberta’s private sector since the NDP was elected in May of 2015. Fight back against the radical greens. Cut off transportation fuel to the enemies of oil sands in B.C. Eliminate the dreaded consumer carbon tax. Force Ottawa and the country to recognize that Alberta is more important to confederation than simply a source of federal transfer payments for Quebec and its pipeline opponents. The reality, of course, is that Alberta can’t do much about any of the major issues. They are beyond the province’s control. Yelling louder will not change the mind of millions of people across Canada and in the U.S. who are convinced climate salvation only requires the end of the
oil sands, and therefore will do whatever they can to block pipelines. Demanding Ottawa do something positive for Alberta like approving Trans Mountain – at the expense of alienating Liberal voters in B.C., Quebec or Ontario as the fall federal election looms – will likely fail. However, the UCP policy platform was full of ideas that can rekindle Alberta’s struggling oil and gas industry, initiatives which are completely under the control of the provincial government. As importantly, many of the regulatory improvements or changes require no new bills or enabling legislation to be tabled and debated in the legislature, or even a vote among all MLAs. Alberta has a split personality. One is the increasingly mythical land of unbridled free enterprise and pro-business conservative politics. The other is the most expensive provincial government per capita among the four larger provinces which include B.C., Ontario and Quebec. Too much oil money for too many years, combined with growing expectations from voters about what they should receive from the province as their birthright (I’m entitled to my entitlements!), has created regulatory and administrative overkill. The mountains of red tape are expensive, complicated, and an
14 • Business of Energy • June 2019
obstacle to investment and growth, particularly in the increasingly cost-competitive oil and gas sectors. The UCP has vowed to attack big government on three fronts. If the province delivers on its commitments the opportunity to do better with current production volumes and prices is real. It can be done without the support or even consent of the opponents of fossil fuels, inside or outside Alberta. The policy change that attracted the most attention was titled “Job Creation Tax Cut to Get Albertans Back to Work.” This was a reversal of the NDP’s 20 per cent corporate tax increase introduced shortly after the 2015 election which raised the rate from 10 per cent to 12 per cent. Over the next four years Edmonton will cut the corporate tax rate by 1 per cent per year starting in 2019 until it reaches 8 per cent. Then it will be the lowest in the country. During the campaign the corporate tax cut was attacked by the NDP as unaffordable without reductions to health care, education and social programs. Reducing the corporate tax rate was a hallmark of the Ralph Klein administration in the early 1990s. Alberta was also heavily in debt and floundering when Klein became premier. Once in place, the anchor policy of the so-called “Alberta Advantage” persuaded major corporations such as Canadian Pacific, Imperial Oil and TransCanada Pipeline to move their head offices to Alberta, bringing jobs and spending with them. The NDP spent its entire term in office vilifying the inhumanity of the Klein administration while it presided over the greatest capital exodus in Alberta history. The Notley administration never could connect the dots between tax rates and investment. So Albertans did it for them on April 16. The second major platform that didn’t attract as much media attention was titled, “Cutting Red Tape to get Albertans Back to Work.” The UCP pledge was to create a Ministry of Red Tape Reduction to help all government departments and agencies do the same work but with reduced application times, forms, regulations and (one must assume at some point) staff. The UCP cited a study by the Canadian Federation of Independent Business (CFIB) claiming a regulatory compliance cost of $6,700 per employee on average for small business, even more for the smallest companies. This includes incorporation, licensing, permits, payroll setup, inspections, worker training, compliance with health safety and environment regulations, and many other things companies must do that are not directly related to selling products or delivering services.
15 • Business of Energy • June 2019
How A “Made in Alberta” Oilpatch Recovery Can Be Acheived
Yelling louder will not change the mind of millions of people across Canada and in the U.S. who are convinced climate salvation only requires the end of the oil sands, and therefore will do whatever they can to block pipelines.
David Yager | How A “Made In Alberta” Oilpatch Recovery Can Be Achieved
In terms of regulations, the UCP reports in 2014 and 2015 Alberta was graded D by CFIB. By 2017 and 2018 it was downgraded to an F once the NDP had worked its big government magic. Everyone who runs a business knows what the NDP did with new policies and programs for agriculture and increasing business costs in the areas of minimum wages, employment rules, and employee benefits, protection and rights. All regulations are well intentioned, but for the oilpatch the new worker protection rules were particularly grating. The upstream oil and gas industry has, for many years, had the best safety record by any measure of any employer group in the province. The changes to employment law for an historically seasonal and cyclical industry demonstrated no grasp of how this key industry functions.
The new government has committed to a new board of directors to ensure application review and decision-making processes are thorough yet expeditious, plus foster an “investment climate which will welcome green power and the jobs that renewable energy producers will create.” Alberta’s natural gas supplies are so abundant, the price has all but collapsed due to pipeline constraints and U.S. competition. To do more with gas, UCP will streamline project approvals, review the main takeaway pipelines including tolls and tariffs, and examine how to increase shipping volumes, reduce price volatility and reduce shipping costs.
Under Red Tape the UCP identified how long it took to get a license to drill a new oil or gas well in Alberta compared to other jurisdictions. Citing data from the Canadian Association of Petroleum Producers, it can take 79 to 220 days to license a well in Alberta. The range is 90 to 128 days in B.C., 72 – 120 in Saskatchewan, 120 days on federal lands in the U.S., 30 to 60 days on U.S. freehold land (lots of that in places like Texas), and 90 days in U.S. states.
On the well abandonment and reclamation front, the UCP has realized that helping the industry get ahead of its cleanup obligations is good business for the oilfield services sector and the economy. The plan is to ensure the regulations aren’t a roadblock, review the liability management framework with the AER to such that compliance isn’t putting companies out of business thus rendering them unable to meet their environmental responsibilities, and examine fiscal tools like tax incentives to help put more capital into the system to get on with the task at hand and stimulate more economic activity.
The last area where the new government will try to stimulate economic activity is titled, “Creating Oil and Gas Jobs.” This commitment is to streamline processes with the Alberta Energy Regulator (AER), do more with natural gas, and work with the industry and Ottawa to get on with the job of decommissioning depleted oil and gas wells and redundant surface processing facilities.
Will this work? It cannot help but improve things. The bar has been set pretty low since Alberta oil prices collapsed again in late 2018. The Canadian oil and gas industry generates more cash flow from existing production than it is currently reinvesting. This is due to a number of factors including pipeline takeaway capacity, share buybacks, balance sheet repair and a lack of investor confidence.
The AER has been a work in progress since it was created through the 2012 merger of the Energy Resources Conservation Board, Alberta Environment and Alberta Sustainable Resource Development. While it had some teething pains in the first couple of years while activity levels and applications were high, in recent years the mission of the AER has been challenged as it grapples with its historic function as a technical regulator and a new role providing oversight for the environmental and social impacts of continued oil and gas development. The National Energy Board is faced with the same issues.
But the obvious point is Alberta’s oil and gas industry has the cash to reinvest in Alberta should economic conditions make it attractive to do so. As conservatives, the UCP government has figured this out and is making numerous changes to the things it can control to persuade producers to do it. Here. Now. This is the best news in years.
O & G
David Yager is the author of From Miracle To Menace – Alberta, A Carbon Story, a book about climate change, carbon politics and the future of Alberta. More information at www.miracletomenace.ca.
16 • Business of Energy • June 2019
Chuck Bean | How Do I Get into the Permian?
HOW DO I GET INTO THE PERMIAN? by Chuck Bean
“H these days.
ow do I get into the Permian?” is the number one question I hear from anyone in the Alberta oil industry
With almost 50 per cent of all U.S. activity and three times as many rigs running as Canada, the Permian Basin is an attractive target. But before you jump in with both feet, consider this. The Permian has the highest percentage of targeted sales activity with the highest cost of doing business for small/medium-service companies. Many service companies report high volume but low-profit activity. Other U.S. basins such as the Scoop & Stack, the Marcellus/Utica, Haynesville, Eagle Ford and Williston have less activity with less competitive pressure. This is worth pondering before you take the leap. Going to leap anyway? Be sure you study these factors. First and foremost, the locals in Midland have a propensity to buy from other locals. If your plan is to sell and service that market, you will be advantaged by having a U.S. presence with U.S. people on the ground. Flying in on Sunday night and flying home on Friday will not cut it. Just like Calgary, Edmonton, Red Deer and Grande Prairie … Midland-Odessa is a relationship town.
Once you are on the ground, be ready for a grind. Last in means last picked. Unless you have a revolutionary product, don’t expect instant results and if you have dumb iron, it will be worse. As noted above, west Texas is all about relationships. West Texans are damn friendly and respectful people, but that doesn’t mean they will buy from you. Being inundated with lateentry providers, they are going to move slow and steady and to be clear, they will not care about you, until they know you care about them. The recent downturn and resulting quick U.S. energy ramp-up has created a shortage of qualified and experienced people from rig hands to engineers in the U.S. and nowhere is this more apparent than in the Permian. It may look like a boon, but it is more a hassle. The E&Ps that waited out the downturn are exceptionally busy which translates into very little time to experiment with a new tool or service, never mind develop a new relationship. Unless you have an established relationship, get ready to be left out in the cold. There is an expression in the oil business, “nobody gets fired for hiring Baker.” If you want to get into this market, you are going to get more traction by aligning or partnering with an established, well-regarded, local service company that has the relationships and reputation required.
17 • Business of Energy • June 2019
How Do I Get into the Permian?
Chuck Bean | How Do I Get into the Permian?
Be ready to step up with support. Support will mean regular joint sales calls, product on the ground, participating in local events and painting yourself with Midland colours. Just because your offering is on a line card does not mean your product will be first out of the bag on a sales call.
Is partnering your path? Be ready to step up with support. Support will mean regular joint sales calls, product on the ground, participating in local events and painting yourself with Midland colours. Just because your offering is on a line card does not mean your product will be first out of the bag on a sales call. In the fast-paced Permian market, sales agents don’t have a lot of time. Perhaps better than most salespeople, the folks in west Texas understand the value of their relationships and will never do anything to risk that. So be prepared to step up and step in, with immediacy, if called on. Stepping up and stepping in will have a payoff and it will be big. With just shy of 500 rigs running and another 250 within a 400-mile radius, it doesn’t take long for good news to travel. Big wins in the Permian can translate into big wins everywhere! Planning to move to Texas? I was once told there are two sets of skid marks on the highways leading in and out of Midland-Odessa. The first set are those left by people dragging their spouses into Midland to start a new life and the second set of skids are people dragging their spouses out due to a career move. Midland-Odessa is a great life. There is no reason why Alberta energy businesses can’t do business in Texas. After all, we share a lot more of that Texas charm and vitality with those folks than we do with Eastern Canada and we are versatile, innovative and know the business. We just have to remember that Midland-Odessa is the heart of the U.S. oil and gas industry and at the end of the day, it’s the relationships that count. Visit me at www.chuckbean.com.
O & G
18 • Business of Energy • April 2019
INSPIRED BY THE PAST LEADING INTO THE FUTURE BY RENNAY CRAATS
HALLIBURTON â€¢ 100 YEARS
John Grisdale, Anitha Ilangovan, Alexis Hunter, John Gorman, Ray Smith, Drew Plasek and Tyson Dunlop Photo by Riverwood Photography.
f ever you needed proof that one person can build a legacy, look no further than Erle P. Halliburton. When this inventor and former navy man tried to suggest improvements to the new practice of cementing wells to his boss, he was fired. So in 1919, he took his ideas and built them into a business of his own. With a borrowed pump, a wagon, a team of mules and a wooden cement-mixing box, Halliburton founded an oil well cementing business in Duncan, Oklahoma, which soon became the Halliburton Oil Well Cementing Company. In 1922, Erle Halliburton established his company as the authority on cementing when he invented a jet mixer that allowed him to quickly produce cement of a consistent quality, and his techniques prevented well casing from collapsing. Today, Halliburton continues its founder’s quest for excellence by investing in cementing innovations in its more than 100 cement labs across the globe, contributing everything from new equipment to slurry design to 3D modelling and predictive analysis to the industry. “We come from very humble beginnings in 1919. By 1926 Erle had sent his two brothers, George and Paul, to Turner Valley to start Halliburton Canada, and we’ve been here ever since,” says John Gorman, vice president of Halliburton Canada.
HALLIBURTON • 100 YEARS • 2
7403 36 Street Leduc, AB 1-888-986-0155 email@example.com firstname.lastname@example.org
SAFETY QUALITY INTEGRITY
2019 is an exceptional year. As Halliburton celebrates its 100th anniversary, we celebrate our 15th year in business. Through many challenges and successes we are grateful to have worked closely with Halliburton and will never forget that our 1st job, our 1st success, was completed with Halliburton.
From all of us at New Age Oilfield Services, we congratulate you and appreciate our working relationship.
Since then Halliburton has expanded across the world. While a North American entity to start, Halliburton established operations in Venezuela in 1940 and in the Middle East in 1946, and was listed on the stock exchange for the first time in 1948. The company also enjoyed growth in Germany, Italy, Argentina and England in the 1950s and continued to expand into new markets as opportunities arose throughout the 20th century. Today, Halliburton has more than 60,000 employees working in 80 countries on every continent. “We are probably one of the most multicultural companies in the world,” Gorman says. “We have 140 different nationalities who work for us in 80 different countries.” In Canada, Halliburton employs about 1,500 people in 30 offices across the country. While most are field locations, the company has a larger presence in the major hubs of Calgary, Edmonton, Red Deer, Grande Prairie, Lloydminster and St. John’s. In Canada and around the world, Halliburton has become one of the largest oilfield services companies. Over the past 100 years, it has added to its cementing stronghold with a variety of diverse products and services operating worldwide. Halliburton has grown beyond cementing wells to include 14 product service lines that involve everything from wireline and perforating to pipeline and process services; directional drilling (including measurement while drilling and logging while drilling) and coring to well control and prevention; chemical services and project management to software. While some of the growth has been organic, many of these businesses resulted from key acquisitions. “If we decide that we have a hole in the portfolio that we need to fill, we will either develop internally or acquire that technology and the people, and run it as a fully-integrated product or service line of Halliburton,” Gorman says. In 1999, Halliburton acquired Dresser Industries and with it Sperry Drilling, Baroid and Drill Bits & Services (DBS), thus greatly enhancing the company’s drilling capabilities. All of these entities were top performers in their markets and ideal to fill that hole in the portfolio. Today, drilling comprises about half of Halliburton’s work, with the company drilling more than 80 per cent of all the SAGD wells in Canada. In 1949, Erle Halliburton blazed the trail in hydraulic fracturing and Halliburton has remained a leader in this area. Hydraulic fracturing, or production enhancement, currently represents its largest product service line. The company introduced a new approach to fracturing that improved production and efficiencies while also addressing health, safety and environmental concerns. The advanced pumping designs, sand delivery and pump monitoring have helped decrease the environmental footprint of many operations. Halliburton’s Q10 pump balances components on the trucks, minimizing vibration damage and noise, while reducing maintenance time; almost doubling the time between preventative maintenance in many instances. These innovations helped Halliburton lead the shale revolution and hydraulic fracturing boom beginning in 2008. In Canada, Halliburton has
HALLIBURTON • 100 YEARS • 4
“We are probably one of the most multicultural companies in the world,” Gorman says. “We have 140 different nationalities who work for us in 80 different countries.” John Gorman, vice president of Halliburton Canada.
focused over the past five years on the area from central Alberta to northeast British Columbia, from the Cardium formation to the Duvernay and Montney formations. “That’s where there are better returns. Canadian E&P companies are no longer focusing on increasing production but rather are focusing on increasing returns because of the lack of new investment in Canada from domestic and international private equity,” Gorman says.
Congratulations to Halliburton on your 100th anniversary. We are proud to be a trusted supplier, and look forward to many more successful years!
403-550-3477 24HRS 27-27123 HWY 597
HALLIBURTON • 100 YEARS • 5
The economic and political situation in Canada has been a challenge for resource companies and has made them re-evaluate how they do business. Halliburton adapted to the new market conditions by providing industry-leading innovative solutions that seek to reduce costs and increase productivity. Something as simple as maintenance has given Halliburton a competitive advantage such as implementing onboard sensors on certain equipment so engineers can monitor and help prevent overheating and washouts. “We’ve had to find a way to differentiate ourselves by reducing internal costs and improving efficiency. The only way we’re going to be able to win work is to be able to save our customers money,” says Gorman. “If customers can’t reduce costs, they’re not working and neither are we. It’s been a forced new normal.” Halliburton is also helping customers maximize their existing well sites by developing a ranging technology by which they can possibly drill infill wells on existing pads. Customers may not have to build a new pad or change their surface infrastructure, essentially doubling the life of a field in many cases. While customers may extract around 35 per cent of the oil contained in conventional reservoirs, steam-assisted gravity drainage (SAGD) technology may allow them to get up to 85 per cent of the resource out of a reservoir. This high level of efficiency is critical in today’s oil and gas industry, and Halliburton takes pride in working to maximize production while decreasing environmental impact and costs. The industry has found ways to reduce its potable water use dramatically. While the misconception is that these processes deplete freshwater sources, the truth is Halliburton uses primarily subsurface saline water, brackish surface water and processed water from sewage treatment plants, not fresh potable water. The Halliburton team is dedicated to protecting the environment and encourages innovative solutions to environmental, safety and quality challenges. In fact, the company holds 50,000 patent grants and pending for technology and services that aim to make projects more efficient and customers more profitable. It’s investment like this that lets customers know that Halliburton will deliver on its promises and will strive to get the job done and done well. Halliburton teams are dedicated to maximizing the asset value for customers and are known as globally-competitive, creative and ethical thought leaders who deliver an exceptional customer experience. Despite downturns and challenges, Halliburton continues to grow and provide superior service as it helps its customers navigate the new normal in global oil and gas markets. “We still feel that there is a large demand for oil and gas for the foreseeable future. And given the fact that Canada contains 55 per cent of the world’s nonOPEC or non-NOC oil, Canada has a bright future as well,” says John Gorman. To continue to meet that demand, Halliburton will do what it has done for the past 100 years – provide quality service, innovative technologies and specialized expertise to best serve its oil and gas customers across the globe.
HALLIBURTON • 100 YEARS • 6
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CANADIAN HIGHLIGHTS & MILESTONES In 1937, Halliburton introduced electric wireline services, drill stem testing, and acidizing in Canada, and expanded its pumping fleet by adding a combination acid and cement pumper and three-steam powered cementing units. In 1951, Halliburton performed its first fracturing job at Virden, Manitoba. In 1953, Sperry-Sun Drilling Services (now Sperry Drilling) launched advanced hole-measurement systems in Canada. In 1955, Baroid began mining and grinding bentonite and barite in Canada. In 1969, Sperry Drilling drilled its first offshore well off the East Coast of Canada in Sable, Nova Scotia. In 1978, Halliburton opened a technology center in Calgary. In 1983, Sperry Drilling introduced logging-while-drilling services. In 1993, Sperry Drilling completed the first horizontal mechanically connected multilateral technology junction in the world in Canada. In 2003, Halliburton pumped the first piston fracturing treatment in the world. In 2004, Halliburton opened the largest Real Time Operations Center in Canada. And, Sperry achieved a world record when it connected two horizontal wells toe-to-toe underneath a three-kilomenter rivier gorge to form a gas pipeline.
On-Site Sand Storage, B-Train, Pnuematic Aircans, On-Site Sand Management, 24 Hour Dispatch
AG Sandman would like to congratulate Halliburton on their 100th Anniversary
24 HOUR DISPATCH LINE 403-347-2008 MAIN OFFICE 403-347-2013 www.agsandman.com
HALLIBURTON â€˘ 100 YEARS â€˘ 8
In 2005, Halliburton completed the first geosteering real time StrataSteer® 3-D job in heavy oil and was awarded World Oil magazine’s “Best Data Visualization Solution” for its Sperry StrataSteer® 3-D visualization. In 2006, Halliburton completed 120 horizontal geosteering wells in heavy oil.
At LAPRAIRIE, we solve your project challenges with a highly skilled workforce, innovative thinking and state-of-the-art equipment. Our operational team and comprehensive fleet of cranes, trucks and heavy equipment are ready to deliver – anytime, anywhere. Whether it’s executing super-heavy, engineered lifts, hauling extra-heavy loads, maintaining the safety of your roads, mining and trucking aggregates, or supplying and delivering quality frac sand products – LAPRAIRIE gives you the advantage. Congratulations Halliburton on your 100th year, from your PARTNERS at
HALLIBURTON • 100 YEARS • 9
In 2007, Halliburton acquired Ultraline Services Corporation, a Canadian cased-hole company; it also acquired the active-ranging intellectual property from Vector Magnetics LLC, providing the company with a stronger position to assist in steam-assisted gravity drainage (SAGD) well placement. In 2010, Halliburton acquired The Permedia Research Group Inc., a leading supplier of petroleum systems modeling software and services based in Ottawa. In 2014, Halliburton announces the release of the CYPHER® 2.0 Seismicto-Stimulation Service, a proprietary and collaborative workflow that links geoscience and reservoir, drilling, and completion engineering to allow operators to better predict and produce unconventional reserves. In 2015, Halliburton’s Completion Tools business line, a long standing industry leader in total composite plug technology, introduced the Illusion® Frac Plug, the only fully dissolvable frac plug on the market. The new highperformance product shortens the time to production by eliminating the need to mill out plugs after fracturing, saving time and money for operators. In 2017, Halliburton acquired Summit ESP which provides integrated Electric Submersible and Surface Pumping systems to enhance daily well production and total reservoir recovery. Our commitment to providing superior technology and exemplary customer service raises the standards of the artificial lift industry.
HALLIBURTON • 100 YEARS • 10
In 2018, Halliburton unveiled ProdigiTM AB Service, a first-of-its kind offering that introduces automation to hydraulic fracturing. Prodigi AB Service provides consistent design execution, better distribution of fluid across the perforated interval, and improved treatment pressures and rates.
Petro Carbon NDT Solutions and PCNDT Technologies Inc. would like to congratulate Halliburton on their 100th anniversary. We have been a vendor of Halliburton since 2006. It has been a pleasure working with and around Halliburton staff and we look forward to many more years to come.
Services provided to Halliburton: • Specialty Bottom Hole Assembly Inspection • Specializing in Directional Drilling Equipment • Precision Refacing and Beveling • API Spec. 7 Thread Gauging for R.S.C. • T.H. Hill DS-1™ - Drill Stem Inspection • Handling Equipment
• Structural Inspection involving MT and PT • Glass Beading Service • Third party auditing, monitoring and NDT Level III services • Precision Mill Slotting • DVD Video Boroscope • Hardness Testing • Service History Tracking and Management
Petro Carbon NDT Solutions Inc.
PCNDT Technologies Inc.
Bay 8, 1804 4th St Nisku Alberta T9E 7T8 PH: 780-612-9580
3173 Indian Scout Dr. Casper, Wyoming, 82604 PH: 403-835-0728
HALLIBURTON • 100 YEARS • 11
In 2019, the Completion Tools team in Canada successfully deployed the first Elect™ single-entry monobore frac sleeve system for a customer in Western Canada. Our Elect™ frac sleeve is a monobore, cementable, solution that offers unlimited stage counts in multistage fracturing operations and minimal inside-diameter (ID) restrictions in order to optimize contact with the reservoir. Today, Halliburton is a fully integrated service company that consists of two divisions: Drilling and Evaluation, and Completion and Productions. “We have 14 product service lines in total and we run 13 of those lines in Canada,” says John Gorman, Area Vice President, Canada. Under the Drilling and Evaluation division, there are six product service lines: Sperry Drilling, Baroid, Drill Bits & Services, Landmark Software and Testing & Subsea. On the Completion and Production side, there are six product service lines: Artificial Lift, Cementing, Completion Tools, Multi-Chem, Production Enhancement and Production Solutions. In addition, Halliburton has a Consulting and Project Management organization that offers a range of services and solutions across the two divisions.
Congratulations to Halliburton on 100 Years! From Camrock Capital Partners Proud Landlord of Halliburton Canada
Congratulations on your 100th Anniversary, Halliburton!
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Congratulations to Halliburton on their 100th Anniversary! We wish you many more years of success.
HALLIBURTON • 100 YEARS • 12
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