May 18 & 19 • Evergreen Park • Grande Prairie
Friday, May 13, 2011
Tuesday, May 17, 2011
Grande Prairie Daily Herald-Tribune â€˘ Tuesday, May 17, 2011
Grande Prairie Daily Herald-Tribune • Tuesday, May 17, 2011 Grande Prairie Daily Herald-Tribune • Tuesday, May 17, 2011
Ninth Biennial Petroleum Show set REMO ZACCAGNA Herald-Tribune staff Looking at the 9th Biennial Peace Region Petroleum Show, you’d never know that the area has experienced a slowdown in the oil and gas industry in recent years. And while activity in the region is picking up, the popularity of the show - the third largest of its kind in North America according to Rob Petrone of the Grande Prairie Petroleum Association – has not wavered. The last event in 2009 had more than 350 exhibitors and this year’s incarnation of the two-day event on May 18-19 is 90% sold out. That includes both the inside and outside booths that will be set up at the TEC Centre at Evergreen Park “We’re really excited about the show, it’s shaping up to be very similar to the show we had two years ago,” Petrone said. The show’s popularity is indicative of the relative health of the local industry, he added. “It’s a sign that things are picking up a little bit and we’ve got some real good people coming in and displaying some of the new technology they have to offer, so we’re pretty excited about it,” he said. Continued on Page 4
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4 Grande Prairie Daily Herald-Tribune 4 Grande Prairie Daily Herald-Tribune • •Tuesday, Tuesday,May May 17, 17, 2011 2011
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Positive permeating the petroleum community Continued from Page 3 Wade Doris, past chairman of the Grande Prairie & District Chamber of Commerce, organizers of the show, said it demonstrates the positive vibe permeating the local petroleum industry. “I think there is and by all indications, by our booth count and how sales are going right now for the booths, everything seems to be doing really well,” he said. The show will unofficially kick off the day before with an exhibitor’s golf tournament at the Grande Prairie Golf & Country Club. A Customer Appreciation Meet and Greet will conclude the first day, giving a chance for everyone to network learn about what’s new in an ever-evolving industry. “What it does is it gives the producers, oil and gas companies, an opportunity to go down there and tour around and see some of the new technology and some of the changes in our industry and hopefully take what we learn from there and apply it to our day-today operations and become more efficient,” Petrone said. “Whether it’s reducing emissions, our impact on the environment, or increasing revenue and improving costs, it’s all about being as efficient as we can.” However, the show is open to the general public as well. “We’re hoping that we can attract a bunch of people to come down and see what we do as an industry,” Petrone said. The size and scope of the show, being held at Evergreen Park for the third time, also underscores how important the region is to
the overall oil and gas industry. “Probably the biggest thing is that it just highlights the huge economic impact and how significant the whole petroleum industry is to Grande Prairie and to our region,” Doris said. “It gives everybody involved in that industry a place to go and promote themselves and hopefully strengthen their business and make networking connections.” But the show is also important to the local economy. For several days, people from as far away as Manitoba will descend upon Grande Prairie, creating spin-off benefits for those in the restaurant and hospitality business. “It just creates a whirlwind of activity for those couple of days, so it’s very exciting,” Doris said. Emilia Hovorka, executive director of the Grande Prairie Regional Tourism Association, said that the event is “more than just a show” in that it not only attracts people to the area, but a particular type of business traveller that may be back for repeat visits. “It is a large chunk of the business for our operators in the region, there’s no doubt about that. It affects everything from dining, to hotels, to even shopping,” she said. “Of course corporate travellers are (already) a large part of the accommodation business here,” she added. “(The show) has long term effects on the corporate travelling business for the hotel industry. So they have an opportunity to build more relationships with some of the key people that come into the region.”
Always at the forefront The Alliance Pipeline was a game-changer in 2000 when the first high energy natural gas moved on our system. We’ve always been at the forefront, so it’s only natural for us to change the game again. Over the next five years, Alliance will move to a multi-service business model, providing customers choice from a suite of transportation services.
Visit our booth at the 2011 Peace Region Petroleum Show (booth #11), call us at 1-800-717-9017 or visit our website www.alliancepipeline.com. Committed to being a good neighbour.
Grande Prairie Daily Herald-Tribune • Tuesday, May 17, 2011 Grande Prairie Daily Herald-Tribune • Tuesday, May 17, 2011
Patch not booming but certainly rolling Remo Zaccagna Herald-Tribune staff While not back to boom-time levels, activity during recent winter drilling season in Grande Prairie revealed that the industry is rebounding from the recession and worldwide economic crisis, says the president of the Grande Prairie Petroleum Association. “It’s a little early yet, but rig activity was up probably 10% more than last year in this area. It was good, it was a reasonable year and I think this is the type of activity we’re going to see over the next several years,” said Rob Petrone. And this even though prices for natural gas, which is what is predominantly drilled in the Peace Country, continue to hover at or below $4 per million Btu, well below the break-even point. That alone has had an effect on the local drilling industry. “It’s a supply and demand and there’s just an oversupply right now of natural gas and we don’t see that changing for the next while, that’s for sure,” Petrone said. “But most of the producing companies have switched their focus from natural gas to liquid rich or oil type plays. So that’s where most of the activities are focused.” Nevertheless, Petrone said the local industry is relatively healthy compared to previous years. “The price of natural gas isn’t as strong as we’d like it to be, but the price of oil is fairly strong and technology has changed such that we’re able to exploit some of the production that we weren’t in previous years,” he said. “So we’re definitely coming out of the bottom and rebounding and things are looking pretty promising.” Industry figures released earlier this year indicate that an industry-wide rebound is underway. In late January, the Petroleum Services Association of Canada updated its 2011 drilling forecast that it had originally made in November. According to PSAC, they forecast that 12,750 wells would be drilled in Canada this year, up 500 wells from its November forecast. Provincially, it forecast 8,390 wells in Alberta in 2011, a 3% increase.
Contracts to buy West Texas Intermediate (WTI) crude oil for delivery in June – so-called futures – at $200 a barrel have escalated amid worsening civil unrest in Libya and rare calls for a “Day of Rage” in Saudi Arabia $110 Speculators now own up to 320 million barrels Mar 8: $106.45 of $200-a-barrel WTI, equivalent to 44% of U.S Strategic Petroleum Reserve of 727m barrels 100 Feb 15-16: Protests start in Libya – WTI trades at $84.32 90
Jan 4: WTI trades at $89.38
Feb 21: Libya’s Muammar Gaddafi pledges to fight to “last drop of blood”
J A N U A R Y
Sources: Bloomberg, Schork Report newsletter
However, Petrone said he doesn’t think much of that increase will be translated to the Grande Prairie region. “I don’t think it will have a major impact on the number of wells drilled in our area. The majority of that would be liquid rich gas or oil. The price of oil is so strong that that’s where the focus is shifting to,” he said. “The majority of those wells that they talked about would be chasing oil plays, which isn’t predominately in this area.” Dan Sumner, an economist with ATB Financial, echoed that assessment. “Whereas earlier in the decade surging gas prices drove activity, almost all the excitement in 2011 is on the oil side of the equation,” he said. “This sentiment is also showing up in the data with oil wells accounting for over half the wells drilled currently compared to less than 25% from 2003-2006.” Gary Leach, executive director of Small Explorers and Producers Association of Canada, said while the drilling numbers are lower than during the boom period in the middle of the last decade, they’re not compara-
F E B R U A R Y
ble because technology has changed to make drilling more efficient and environmentally friendly, and the PSAC figures may not reflect the full level of activity in Alberta. “We may never get to the sheer numbers of wells drilled that we had five or six years ago, but that’s because we’re drilling more horizontal wells, and more multilateral wells, and the expansion costs and the complexity of those wells is quite a but more significant than in a vertical well,” he explained. Meanwhile, the Alberta government is stepping closer to creating a single oil and gas regulatory body. As part of an overall competitiveness review undertaken last year, a “regulatory enhancement task force” delivered a set of recommendations to Energy Minister Ron Liepert. Among the biggest departures from the current process, the task force recommended the creation of the single regulatory body. Currently, certain aspects of oil and gas activity in the province are under the purview of the Energy Resources Conservation Board, the Energy department, and the department of Sustainable Resource Development.
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“(There’s) a lot of bureaucracy right now and that does impact on timelines, no doubt about it, so if there’s opportunities to streamline and get decisions made quicker then I think it’ll benefit everybody,” Petrone said. The idea of a single regulatory entity was also met with approval outside of Grande Prairie. “Our view is that we can improve the efficiency of the system without compromising protecting the public and protecting the environment,” Leach said. “We think this is an important step in setting up a framework that will work towards those goals. We think it makes sense to find efficiencies with a single regulatory, so we approve.” Other recommendations include establishing a new policy management office and better integrating natural resources policies; providing clear public engagement processes; adopting a common approach to risk assessment and management; and adopting performance measures to achieve continuous improvement. One recommendation that piqued Leach’s interest was one to create a mechanism to resolve and enforce disputes between landowners and companies. “That may be something novel, but we haven’t seen much detail,” he said. Liepert said the recommendations will undergo a review process and legislation “will be introduced this spring to begin implementation of the report.” Leach said it was a good first step by the government to lessen the regulatory burden on producers, but results may not be seen for years. “It’s going to take several years, actually, to implement all this. This is really just a report, kind of a high-level report,” he said. “I think for a province where energy investment is such a huge driver of the economy, our regulatory system needs to be an enabler of resource development, not a barrier.” Petrone said industry is ready to work with the government to help streamline the entire process. “It’s very critical for us to continue working with government to run our business, so we’ll adapt and adjust to whatever changes come our way.”
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6 6Grande Prairie Daily Herald-Tribune • Tuesday, May 17, 2011 Grande Prairie Daily Herald-Tribune • Tuesday, May 17, 2011
Understanding Canada’s shale gas deposit process Shale gas is natural gas that is embedded in shale, a sedimentary rock that was originally deposited as clay and silt. Similar in appearance to a chalkboard slate, shale is the most common sedimentary rock on Earth. Shales are less permeable than concrete, so the natural gas cannot easily move through the rock and into a well. In fact, the gas is so tightly trapped within the shale, that in order for it to flow, it must pass through pore spaces that are 1,000 times smaller than those in a conventional sandstone reservoir. Shale gas is one of a number of “unconventional” sources of natural gas, including coalbed methane and tight gas. Conventional natural gas is formed when methane molecules migrate from their original location to an area where they are trapped by an underground geological feature resulting in a higher concentration of methane molecules. These conventional sources are easier and cheaperto produce. However, the production from these accumulations is declining. In order to replace that production, the oil and gas industry is turning to fossil fuels that were previously thought of as too expensive and difficult to produce. New technologies, such as multistage hydraulic fracturing or “fraccing” in industry terms, combined with horizontal drilling, are making it easier and cheaper to produce shale gas. Despite being difficult to drill, there is potentially 30, 1012 cubic metres (1,000 trillion cubic feet) of shale gas in Canada if not more. Normally, only 20% of the gas can be recovered, but this could grow with advancements in drilling and fracturing technology.
It’s important to remember however, that there is a lot of uncertainty around shale gas as the industry is still evaluating the resource. In North America, there are several shale gas opportunities, shown in the map below. While the potential for Canadian shale gas production is still being evaluated, the principal Canadian shale gas plays are the Horn River Basin and Montney in northeast British Columbia, the Colorado Group in Alberta and Saskatchewan, the Utica Shale in Quebec and the Horton Bluff Shale in New Brunswick and Nova Scotia. Drilling anD ProDuction While producers have only been focusing on shale gas for the past few years, extracting hydrocarbons from shale is not new. In fact, natural gas has been produced from shale in the Appalachian Mountains since the late 1800s. Today, there are two primary technologies used to produce shale gas: horizontal drilling and multi-stage hydraulic fracturing. Hydraulic fracturing, or “fraccing,” in industry jargon, involves injecting fluid at a very high pressure into underground rock formations in order to fracture the rock. The fluid pumped down the well is loaded with granular material that helps prop open the fractures and allows the gas to escape the shale. The gas can then flow to the surface through a well. By drilling horizontal wells, where the drill bit is steered along a horizontal trajectory, the wellbore is exposed to as much of the shale reservoir as possible and may intersect more natural fractures.
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The trade-off between horizontal wells and conventional vertical wells is increased access to the reservoir but at a higher cost. The technology and the extra time needed to drill horizontally or to fracture a well makes shale gas expensive to produce. Horizontal shale gas wells typically cost $5 to $10 million. Furthermore, shale gas producers generally only recover 20% of the gas while in conventional reservoirs, more than 90% of the gas is normally recovered. EnvironmEntal EffEcts There are some concerns about the effects shale gas drilling has on the watershed, landuse footprint and increase in carbon dioxide emissions, among other environmental issues. Drilling and hydraulically fracturing wells can be water-intensive procedures. In the U.S. where water is extensively used in hydraulic fracturing, producers developing the Barnett Shale in Texas used one per cent of all the water consumed in the Fort Worth basin in 2007. Water that has been used to fracture a shale gas well can contain chemicals and additives so it is never allowed to enter the watershed. Typically, it is disposed of by injecting it deep below the earth’s surface into rock formations, which is a common practice in Western Canada and strictly regulated by provincial authorities. The landuse footprint of shale gas development is not expected to be much greater than conventional operations because advances in horizontal drilling allow for up to 10n or more wells to be drilled from the same wellsite. While not all shale gas contains significant amounts of CO2, the potential growth in carbon emissions from some shale gas is being addressed with proposals for carbon capture and sequestration. Still, it is very early to make any conclusions about how developing this resource will impact the environment. shalE gas in canaDa With the recent drop in Canadian conventional natural gas production, shale gas could allow Canada to meet its own need for natural gas well into the 21st century. Canadian shale gas plays that are currently being evaluated, includde the: • Montney Formation – The production of natural gas from horizontal shale gas wells in the Montney of northeast B.C. has risen from zero in 2005 to 10.7 106 cubic metres per day (376 million cubic feet per day) and is expected to continue rising. As of July 2009, 234 horizontal wells were producing from the Montney shale. Exploration companies have spent more than $2 billion since 2005
to acquire rights in the Montney Formation from the B.C. government. • Horn River Basin - Wells in this basin in northeast British Columbia are prolific and produce an average initial flow rate of 230,000 cubic metres per day (8 million cubic feet per day) with the top wells ranking amongst the most productive drilled in Western Canada last year. Exploration companies have spent over $2 billion to acquire resource rights in this basin. • Colorado Group - The Colorado Group of southern Alberta and Saskatchewan have been producing natural gas from shale for over 100 years. Because of poor rock conditions and the risk of caving in the wellbore, only vertical wells are planned in the Colorado shale. • Utica Group - These shales, located between Montréal and Quebec City near the Appalachian Mountain front, have an increased potential for natural fractures. The potential for shale gas from the Utica Group is still in the early evaluation stages. • Horton Bluff Group - While still in the early evaluation stage, two vertical wells drilled in New Brunswick have flowed 4,200 cubic metres per day (0.15 million cubic feet per day) after undergoing small fractures. Currently, there is not enough infrastructure in northeast B.C. to handle growth in shale gas production beyond the next few years. In 2008, the National Energy Board approved an application by Spectra Energy to build the South Peace Natural Gas Pipeline which would carry 6.2 106 cubic metres per day (220 million cubic feet per day) through the Montney area to Spectra’s gas processing plant in Taylor, B.C. Nova Gas Transmission Ltd. has also applied to the NEB to build the Groundbirch Pipeline in the same area, with a potential capacity of 28 106 cubic metres per day (1 billion cubic feet per day). The Utica shale gas play is adjacent to the Trans Québec & Maritimes Pipeline while potential shale gas from the Horton Bluff is close to the Maritimes & Northeast Pipeline. Conclusion While there is currently little significant production of shale gas, studies show there is potentially 30 1012 cubic metres (1,000 trillion cubic feet) of shale gas in Canada if not more. However, the economics of shale gas development is still uncertain. The industry will only invest in developing the resource if it is profitable, which means the price of gas from other sources, like LNG, will need to be higher than the cost of producing shale gas.
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Grande Prairie Daily Herald-Tribune • Tuesday, May 17 Grande Prairie Daily Herald-Tribune • Tuesday, May 17, 2011
Devon honoured as one of best employers REMO ZACCAGNA Herald-Tribune staff An energy company with strong Grande Prairie ties was recently named as one of the best places to work in the country. Devon Canada was ranked third on a 2011 list of Canada’s best workplaces with greater than 1,000 employees, in a report released last month by Great Place to Work® Institute Canada. According to Rob Petrone, district superintendent for Devon Canada, the company employs approximately 200 people in the Grande Prairie region, accounting for a large portion of its production among its nine Canadian districts. “Most of our production is natural gas, but we do have some oil production in the area. Our fields extend north, west, east, and south of Grande Prairie,” he said, noting that Grande Prairie drilling accounts for more than a third of the volumes produced in Canada for Devon Energy. “In the Grande Prairie region here, we produce about 45% of the natural gas for Devon Canada.” Devon’s ranking on the Best Workplaces in Canada list was based on two criteria. Two-thirds of the total score comes from a 58-statement survey completed by employees, who also have the opportunity to pro-
vide open-ended comments. The remaining one-third of the score comes from an in-depth review of the organization’s culture, including an evaluation of human resources policies and procedures. “Devon was selected for the 2011 list because employees told us they trust management, have pride in their jobs and enjoy the people they work with,” said Jen Wetherow, director, Great Places to Work Institute Canada. “Employees at Devon care about their work and understand the tangible ways in which each job contributes to the greater good.” Petrone agreed with that statement, stating that the company places an emphasis on ensuring the wellbeing of its employees. “I’ve worked for Devon for several years now and one of their core values is people are their most valuable asset and our senior management walks that talk and it’s a great company to work for,” he said. “They truly believe that one of our core values is to hire the best people and do the right thing and be part of the communities we live in and it’s all about empowering people to make a difference in a positive way,” he added. “It’s exciting to work for a company like that.” email@example.com
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Energy in Action program engages students EIA provides CAPP member companies with a hands-on, tailor-made community relations initiative that brings industry and communities together, with the mutual goal of building co-operative and sustainable relationships, while caring for the natural environment. Since 2004, 59 companies and close to 2,000 company volunteers have participated in EIA events in 55 different communities and 75 schools across Canada. Collectively, they have planted almost 6,400 trees and shrubs, and taught nearly 6,000 students, teachers and community residents about the petroleum industry and the benefits of careful resource development. Through EIA, CAPP member companies partner with local schools, and/or service groups, community leaders and local businesses to participate in one-day educational sessions and environmental renewal projects in rural oil and gas communities across Canada. A TypicAl EiA DAy Energy in Action consists of four main components: An interactive, curriculum-relevant classroom presentation in the morning
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A catered lunch for teachers, community members and oil and gas member company volunteers A school-yard/community based “environmental” activity in the afternoon A donation of environment and natural resource-related books to the school library (in English and French, if applicable) compAny involvEmEnT All CAPP producer member companies and any associate CAPP members can participate in Energy in Action events. In 2011, the cost to companies is $2,000 per community, along with three hours of volunteer time for two or three field staff on the day of the event. The fee covers: Educational presentations and environmental activities at the community school Project management (see CAPP's role below) Promotional materials and library books Photography - participants have access to event photos for use in company literature
Understand the scope of the project and their role Communicate member companies' involvement through internal communications (e-mails, newsletters, etc.) Ensure local field staff are aware of the plan and their role in ‘day-of’ activities’ (supported by the EIA community team lead) E nE rgy in Ac Tion proviDE s A grEAT opporTuniTy for compAniEs To: Contribute to community and school environmental renewal activities in communities where they operate
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Prairie Daily Herald-Tribune • Tuesday, Grande PrairieGrande Daily Herald-Tribune • Tuesday, May 17, 2011 May 17
Making oilsands product environmentally friendly QMI Agency
The head of an Alberta agency devoted to making energy production more environmentally friendly said that Alberta has “pathways” to make oilsands and in-situ extraction as environmentally friendly as conventional oil. Dr. Eddy Isaacs, the CEO of Alberta Innovates Energy and Environment Solutions, made these remarks at the annual general meeting of the Lakeland Industry and Com-
munity Association (LICA) at the Bonnyville Senior Drop-in Centre on May 4. However, before this could happen, he said, certain conditions must happen must be met, including the natural gas bubble popping. As well, there are other environmental concerns in addition to greenhouse gas emissions that currently aren’t receiving the attention they should. During the meeting, he predicted a change
At $90 a barrel 500 million barrels could be recovered Reuters
Rising crude prices have boosted the amount of oil that can be recovered economically from Alaska’s National Petroleum Reserve, even though the military reserve site holds less oil than previously thought, the government said. Some 500 million barrels of oil is recoverable at $90 a barrel while 273 million barrels could be produced with crude priced at $72 a barrel, according to the U.S. Geological Survey. Oil is now trading close to $110 a barrel. The 23 million-acre National Petroleum Reserve - about the size of the state of Indiana was created in 1923 as a fuel source for the U.S. military. It is located in the northwest corner of Alaska near the Arctic National Wildlife Refuge, which the Bush administration tried to open for exploration, with environmental groups opposing the effort. In October, the USGS revealed that the reserve only holds about 896 million barrels of oil, or about a tenth of the 10.5 billion barrels it estimated in 2002 for the area. It said this is due to the companies involved finding more natural gas than oil. About 18 trillion cubic feet of natural gas would be profitable to recover with a market price of $8 per thousand cubic feet, 32 trillion cubic feet could be produced if the gas price was $10. There is no pipeline to carry gas from the reserve so the agency assumes there would be a 10- to 20-year delay in producing gas from the reserve. ConocoPhillips has been the most active explorer in the reserve since the Bureau of Land Management began lease sales in 1999. ConocoPhillips has also explored in partnership with Anadarko Petroleum Corp and Pioneer Natural Resources Co.
in natural gas costs, which are historically low. “The bubble will burst, in my opinion, in the next five years.” Since Alberta is a leading natural gas producer, the province will have to shift to markets outside of the U.S., including Asian countries, to compensate for the increased cost of natural gas. Closer to home, this will mean a change in how oilsands companies get oil. Oil companies will have to shift away from using natural gas in their oilsands operations and move towards other, more environmentally friendly substitutes. Other conditions will have to be met include the development of new technology, including solvents to help in bitumen retrieval, assist with the recovery of bitumen. Another possibility is non-aqeuous extraction. Another promising pilot project discussed by Isaacs was non-aqeuous extraction. In this method, water used in in-situ oilsand operations would be replaced by some other material. This would reduce the amount of energy required to generate steam, which would in turn reduce the amount of greenhouse gases. But these projects have a down side, said Isaac. Many of these pilot projects, including some which have been already been developed, are ten to twenty years away from implementation.
And these projects have additional drawbacks. None of these pilot projects present a solution to both the reduction of energy use and carbon emission, both of which are contributors to global climate change. Isaacs said he and others in industry are currently looking for a project that would do both. While the oilsands greenhouse gas emissions have garnered mainstream attention, there is another oilsands concern that Isaacs brought up that, for many, lurks under the surface. Since the development of the oilsands, he said, there has been a lack of attention to how these developments are affecting groundwater near the operations. “We don’t know all of the ground water we have, how much of it is being used, and what are the baseline issues with that groundwater,” he said. “There is a lot of work that needs to be done.” Regardless, Isaac remained optimistic about the future of the oilsands and its environmental impacts. “If we do things right in terms of production, efficiency, we get some of the way towards being in the range of conventional oil.”
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Grande Prairie DailyHerald-Tribune Herald-Tribune •• Tuesday, Tuesday, May 1010Grande Prairie Daily May17, 17,2011 2011
Lower Athabasca draft plan officially released Carol Christian QMI Agency
North American oilpatch workers are busy not only in this country but in developments all over the world including this rig in Karkur, northern Israel.
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The proposed plan to protect the Lower Athabasca is seen by some as a toothless bit of paper, but to others, it does cut a path across existing oilsand leases. However, already planned developments can go ahead in those conservation areas, and no new land is protected in areas of the heaviest bitumen deposits. Alberta Sustainable Resource Minister Mel Knight released the draft Lower Athabasca Regional Plan, the first regional plan developed under Alberta’s Land-use Framework. One of the highlights of the plan was nearly two-million hectares identified as potential conservation areas – roughly three times the size of Banff National Park – in the Lower Peace Region, connecting to existing and proposed areas in the Lower Athabasca Region and Wood Buffalo National Park. The conservation areas in the two regions include part of the range and habitat areas for six caribou herds and will advance woodland caribou recovery efforts in Alberta. Ten new provincial recreation areas and six new public lands areas have been identified. The province is to work with First Nations on an access management strategy for the Richardson backcountry and to develop historic and cultural sites for tourism in the region. Government is proposing to put only about 10% of the region as new protect areas and an additional 6% as conservation areas that allow for ecosystem forestry, noted Jennifer Grant, oilsands program director for the Pembina Institute. Her concerns include that about 85% of the new protected area is located in areas with no oil and gas or forestry potential, mostly in the Canadian Shield and extreme north, meaning they are not representative of the lands that are being impacted in the region’s backyard. There are also concerns about the size of the areas, especially that the province’s own advisory council suggested upwards of 32% be conserved and Wood Buffalo’s Cumulative Environmental Management Association recommended
40%. CEMA had direct input on the regional advisory council with participation from its executive director and two members, said Corey Hobbs, CEMA spokesman. Its reports, recommendations and data was used extensively by the committee. “CEMA is confident that its recommendations from the TEMF, P2FC, and other data had considerable influence on the twoyear process,” he said, referring to the terrestrial ecosystems and phase two water management frameworks. “We need to set aside the right pieces of real estate at the right time for the right reason. Whether it’s 21 or 22 or 18, that’s not the important thing, chasing a number ... the important thing is to get it right,” Knight said. The plan, he added, puts aside the largest contiguous piece of boreal forest that’s under conservation in the world today. “We’re working on a balance and Albertans want it all,” said Knight. “Albertans want us to make sure that we have a strong economy, they want to make sure we’re protecting the environment. They want to make sure that we have a social aspect and a quality of life in Alberta that they expect and deserve.” Grant is calling for scientists to validate the plan to ensure the regional environment will be protected and to restore trust in government oversight. “It’s important that GOA has acknowledged that science-based environmental limits and protecting ecologically sensitive areas is required if responsible oilsands development is to occur, but we do remain concerned that industry’s interests are still trumping science-based environmental protection.” As for protecting the Clearwater River from oilsands water withdrawal applications – a topic much discussed during the public consultations when the regional council came to town last year – Knight said those details aren’t included in the plan. “You won’t find things like that in a draft regional plan because the plan doesn’t drill down to each aspect of what might happen,” he explained, adding the situation is well in hand with Alberta Environment.
We wish to salute the hard working men and women of the oilpatch, during the 2011 Grande prairie petroleum show
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Grande Prairie Daily Herald-Tribune Grande Prairie Daily Herald-Tribune • •Tuesday, Tuesday,May May 17, 17, 2011 2011
Encana, DU team up on projects Encana’s longtime environmental partnership with Ducks Unlimited Canada (DUC) has made a big splash for wetlands conservation on both sides of the country. In May 2010, DUC announced that resources from its Project Webfoot wetlands education initiative for elementary schoolchildren will be provided to public libraries in northeastern Nova Scotia. Support from Encana ensured these learning materials will be available outside of schools for the first time ever. For the past three years, Encana has partnered with DUC to offer the conservation awareness program to elementary schools in northeastern Nova Scotia near the
landfall for the Deep Panuke project pipeline, as well as in Alberta and northeastern British Columbia. And on June 1, DUC unveiled picturesque Piper Pond near Dawson Creek, B.C., a wetland habitat restored thanks to Encana’s financial support of the Wetlands for Tomorrow campaign. In 2007, Encana became the first corporate sponsor of this DUC initiative by contributing $1 million to map, reclaim and conserve wetlands. The database accumulated by DUC staff through this effort is accessed by Encana staff to avoid disturbing these crucial ecosystems. –Encana
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1212 Grande Prairie Daily May17, 17,2011 2011 Grande Prairie DailyHerald-Tribune Herald-Tribune •• Tuesday, Tuesday, May
Halliburton lands well service contacts in Norway Halliburton (NYSE: HAL) has been awarded a contract by Statoil to provide integrated drilling and well services offshore Norway with options up to eight years in duration with extended scope and activity. Traditionally, Statoil has procured drilling and well services on a discrete basis. This is the first time Statoil has awarded an integrated well services contract in Norway, which includes project management by Halliburton, with the intent to increase efficiency and reduce development costs. Under the first phase of the contract, Halliburton will provide directional drilling and
logging-while-drilling services, surface data logging, drill bits, hole enlargement and coring services, cementing and pumping services, drilling and completion fluids, completion services – including multilateral junctions, SmartWell® completion systems and VersaFlex® expandable liner hangers – and project management. The contract is part of Statoil’s Fast Track Field Development initiative that has been launched to minimize the time from discovery to production and reduce development costs. In the Fast Track project, the service company and operator work more
closely together as an integrated team. This results in better operational efficiency on the rigs, which, in turn, results in lower overall project costs for the operator. This allows the operator to develop marginal oil discoveries that would have been deemed uneconomical using traditional contracting models. For this contract, Halliburton’s onshore operations team will integrate with Statoil’s team in Stavanger, Norway. “We are delighted with this contract, and we look forward to collaborating with Statoil to accelerate the field development and impact the production on the Norwegian
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Grande PrairieGrande Daily Herald-Tribune • Tuesday, May 17, 2011 May 17, Prairie Daily Herald-Tribune • Tuesday,
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14 14 Grande Prairie Daily Herald-Tribune 17, 2011 2011 Grande Prairie Daily Herald-Tribune ••Tuesday, Tuesday, May May 17,
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A recent poll for the Canadian Association of Petroleum Producers shows most Americans put strong value in Canada’s role as a secure, stable, and friendly supplier of oil to meet their needs. The support further strengthens Americans on learning about the jobs Canadian oil creates south of the border, according to a statement released this month by CAPP. “Americans naturally want to reduce dependency on imported oil, but to the extent that the U.S. continues to rely on supply from other countries, Canada is very well regarded,” said Dave Collyer, president of CAPP. “Among Americans, Canada is seen as a friend and ally, with positive environmental values and a commitment to democracy, social justice and human rights. Production growth from oilsands will strengthen the energy relationship between Canada and the U.S., benefitting the economies of both countries.” Jack Gerard, API president and CEO, added that “as the policy-makers debate important questions about our energy security, Americans polled overwhelmingly want the administration to support greater use of Canada’s abundant resources.” The poll was conducted by Harris Interactive for CAPP and its U.S. counterpart, the American Petroleum Institute. The telephone survey of 1,010 Americans was con-
ducted between March 30 and April 3, and has a margin of error of +/- 3.1%, 19 times out of 20. The fact that most Americans are unsure how much oil the U.S. imports from Canada, was a key finding of the poll. The most common estimate was less than 100,000 of the eight million barrels the U.S. imports every day. The reality is roughly two million barrels. Of that amount, most Americans – 56% – feel that more than four million should come from Canada, double the current level. The vast majority gave Canada good marks as a supplier of oil to the U.S. based on such criteria as being an ally that America can trust, has a good human rights records, respects the environment and works to limit environmental impacts, and has a democratic government that operates with clear laws. In addition, 85% believe U.S. government policies should support the use of oil from the oilsands and 79% feel pipelines are likely the best way to move Canada’s oil to U.S. Markets. Overall, found the survey, Americans are nearly unanimous in seeing several good reasons to import oil from Canada, including buying from an ally, a stable democracy with a good human rights record, and the fact that there are important jobs and economic benefits for America. The full Harris poll and background on the oilsands is available at capp.ca/oilsandsor api.org.
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Grande PrairieGrande Daily Herald-Tribune • Tuesday, May 17, 2011 May 17, Prairie Daily Herald-Tribune • Tuesday,
Panel to identify steps to improve safety in 90 days Reuters
After a series of high-profile natural gas drilling spills, the U.S. Energy Department named a panel to recommend ways to improve the safety of hydraulic fracturing, or fraccing, a technique that has expanded the country’s potential to extract the fuel. President Barack Obama asked the DOE to form the panel of academic and environmental experts to identify any immediate steps that can be taken to improve the safety and environmental performance of fraccing, the DOE said on Thursday. The panel, which includes John Deutch, a professor at the Massachusetts Institute of Technology, and Daniel Yergin, the chairman of IHS Cambridge Energy Research Associates, will report those steps within 90 days of beginning their work. Within six months they will also develop advice for the government on practices for shale extraction to ensure public health and the environment. “America’s vast natural gas resources can generate many new jobs and provide significant environmental benefits, but we need to ensure we harness these resources safely,” DOE Secretary Steven Chu said in a release. In fraccing, drillers unlock trapped natural gas by cracking rocks deep underground with
blasts of mixed water, sand and chemicals. Drillers say fraccing has opened up vast new supplies of natural gas that will reduce imports of the fuel. Backers also say it could reduce oil imports in the future, if vehicles are converted to run on natural gas. But residents near drilling wells have complained fracking has polluted ground water supplies. In addition, accidents at wells have led to fires and floods of fracking fluids have reached streams. Late last month Chesapeake Energy suspended fraccing operations in Pennsylvania after thousands of gallons of drilling fluid used in the process spewed from a well after a blowout. And early this year a Congressional probe found a dozen energy companies used diesel in their fracking fluid without permits. The Environmental Protection Agency is studying fracking practices, but initial results are not expected until late 2012. The other members of the panel are Fred Krupp, president of the Environmental Defense Fund, Kathleen McGinty, a former secretary of of the Pennsylvania Department of Environmental Protection, Susan Tierney, a managing principal at Analysis Group, which does economic and financial consulting, and Mark Zoback, a geophysics professor at Stanford University.
…to all of us. We take pride in our reputation and for being good neighbours in your community because our families live here too. Stronger communities are built by the strength of their members and by our ability to communicate with one another. That’s why we established our “Community Matters” program which encourages people to come together to exchange ideas and information about the things we all care about—the safety and well being of our friends and family, stewardship of the land, and having respect for our neighbours. If you have questions or concerns about operations in your community, or would like more information about Penn West, we invite you to contact us at 1-877-454-8844. To learn more about us, please visit our website at www.pennwest.com.
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16 16 Grande Prairie Daily Herald-Tribune 2011 Grande Prairie Daily Herald-Tribune ••Tuesday, Tuesday, May May 17, 2011
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Encana has entered a 20-year commitment to supply natural gas to the community of Tomslake, B.C. along with Pacific Northern Gas, who will be responsible for building and maintaining the system to distribute Encana gas to the community. This is the first access to natural gas for more than 400 residents and small businesses in the greater Tomslake area, who currently use propane or wood as fuel for heating. For the past two years Encana has been working with the Peace River Regional District and Pacific Northern Gas on the agreement that will provide natural gas to residents and businesses in the Tomslake area
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Grande Prairie Daily Herald-Tribune • Tuesday, Grande Prairie Daily Herald-Tribune • Tuesday, May 17, 2011 May 17,
Gulf of Mexico making miraculous recovery KATHY FINN Reuters GRAND ISLE, Louisiana – A year after the worst U.S. offshore oil spill swamped the Gulf Coast with petroleum and misery, Louisiana officials recently declared the hard-hit region reborn. It is still too early to know the long-term damage to the Gulf ’s rich and complex ecosystem. But, so far, predictions made at the height of the spill of an impending environmental Armageddon appear overstated. “The bottom line is, there is a lot of work that needs to be done, but the vast majority of our waters are clean, open and ready for our fishermen,” said Louisiana’s Republican Governor Bobby Jindal at a ceremony to mark the event’s anniversary. “We’re inviting Amer ica to come down here, have a great time, enjoy our seafood and be part of the greatest rebirth you will ever see,” Jindal said. It started April 20, 2010, when an explosion aboard the Deepwater Horizon drilling rig killed 11 workers and released nearly five million barrels of oil that fouled the shorelines of four Gulf Coast states. Louisiana bore the brunt of the BP Plc spill’s damage – about 800 km of its coastline were oiled, versus 250 km in Florida, 200 km in Mississippi and 120 km in Alabama. On Grand Isle, a barrier island at the mouth of Barataria Bay which was heavily oiled, business is returning to normal after the spill shut down fisheries and caused widespread economic damage. “Everything’s opening up again now,” said J.T. Hood, a retired offshore platform worker who came down from Donaldson, La., for
some offshore fishing. “I can’t wait to get back out there.” When Hood’s son, a commercial fisherman, ventured out recently, he had a respectable haul. “By 10 a.m. he had 75 speckled trout,” Hood said. The spill captured the world’s attention for the 87 days that the Macondo well spewed oil, with live images from the “ spill cam” beamed around the world. In places like Bay Jimmy and Barataria Bay, the oil lingers in the form of brownish tar and dead or dying marsh grasses. And there are still perhaps millions of barrels of oil lingering beneath the ocean surface, the effects of which are largely unknown.
Reuters Flocks of shoreline birds inhabit Raccoon Island, one of several barrier islands threatened by coastal erosion and oil exploration, southwest of Houma, Louisiana.
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1818 Grande Prairie Daily May17, 17,2011 2011 Grande Prairie DailyHerald-Tribune Herald-Tribune •• Tuesday, Tuesday, May
Atco reminds Albertans to call before you dig With spring upon us, many Albertans are thinking about outdoor home improvement projects such as building decks, digging fence post holes and planting trees. Atco Gas reminds Albertans to put safety first by calling Alberta One-Call to have their underground utilities marked before starting outdoor projects. “Hitting a natural gas pipeline is extremely dangerous, and it’s also 100 per cent preventable,” said Brian Hahn, President, Atco Gas. “I encourage anyone who is thinking
about starting a digging or construction project to visit atcogas.com to find out more about how to dig safely.” At least two days before starting any project that disturbs the ground, Albertans are reminded to call Alberta One-Call at 1-800-242-3447 to have underground utilities in the work area marked. Once the markings are in place, avoid digging in the area around the markings, unless absolutely necessary. If digging within one metre of the outside
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Grande Prairie Daily Herald-Tribune Tuesday, Grande Prairie Daily Herald-Tribune • Tuesday, May •17, 2011 May 17, 2
Another West-Coast pipeline project pondered QMI Agency
Nexen CEO Marvin Romanow is floating the idea of yet another massive pipeline to the Pacific coast as Western Canadian energy producers are eyeing lucrative offshore markets to sell their wares. The Calgary-based company has started looking for a partner to develop its B.C. Peace Country shale gas holdings. Given the natural gas wealth of the Horn River Basin at the junction of the northern B.C.- Alberta border, it would make sense to build a pipeline from from the area to a terminal on the coast, where the gas would be liquefied, loaded onto tankers and shipped
to Asia. A proposed gas terminal in Kitimat is in the midst of the regulatory process and could start up in 2015. A large pipe to collect Horn River gas, however, is a mere idea for now. The sheer gas volumes, combined with the North American supply glut, support such a plan, Romanow said: The volume of gas found in the Horn River equals the volumes found in all of Alberta. “That’s not a trivial amount of natural gas,” he said. “ And having a single line that serves many regional producers, I think that would serve the government of Canada well, it
would serve the government of B.C. well and it would serve the government of Alberta well, because we wouldn’t all be competing in probably what’s going to be an oversaturated North American natural gas market.” Across the Pacific, due to the economic strength of the Asian economies, gas fetches a higher price and hence promises a higher profit. During the recession, China’s gas demand rose 11% while dropping 2% globally, says a recent IEA study. But fossil-fuel pipelines, as pipeline operator Enbridge knows all too well, are unpopular among First Nations, environmentalists and some politicians, like the NDP’s MP
Nathan Cullen, whose riding includes Kitimat. Enbridge’s proposed Northern Gateway project, an oil pipe that would connect the oilsands to the coast, is still in doubt because of this opposition. Romanow doesn’t r ule out getting involved in either project, most likely as a shipper. “We also have a market reach that can only get better as LNG projects get evaluated and get implemented,” he said. “I stay tuned to how these opportunities unfold.” Other companies, such as Encana, have said they’re following the Kitimat LNG terminal with equal interest.
China showing it has insatiable Calfrac Q1 profits soaring with activity appetite for Canadian energy Reuters
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fited from high levels of pressure pumping activity in the unconventional oil and natural gas plays of Western Canada and the United States. Calfrac said it is seeing a greater demand for 24-hour operations in the Marcellus and Fayetteville shale plays and the company expects that this trend will increase in the future. Canadian drilling activity this quarter has been boosted by an unusually long winter — before the spring rains curtail rig numbers and activity.
China’s hoarding of foreign currency reserves in Canadian dollars is a sign that the Asian country’s appetite for Canadian commodities – including Alberta’s oilsands – continues unabated, says a foreign exchange expert with the Bank of Montreal. “We have seen the Chinese build a very large currency reserve in Canadian dollars, Australian dollars,” said Blake Jespersen, a BMO director who advises the bank’s clients on foreign-exchange issues. “They do want a foothold in Canada. They like our resources. And they would like to take a larger stake in some of these oil and gas companies we have.” China is already importing large quantities of nickel, copper, metallurgical coal and lumber from Canada to feed its rapid economic expansion. One notable exception, however, are energy imports. Although state-owned Chinese oil companies have spent billions on buying into the Alberta oilsands, no Canadian crude is crossing the Pacific, as virtually all of Alberta’s energy exports are shipped to the U.S. Jespersen said it’s difficult to get details about exactly how large China’s loonie-dominated foreign exchange holdings are, as the
Communist regime keeps tight control over any type of information it disseminates. Notable deals this year involving Chinese state-owned companies are Sinopec’s $4.65-billion buy-in into the Syncrude joint venture, as well as a $1.25-billion deal between Chinese Investment Corp and Penn West Energy Trust to develop bitumen assets in the Peace River region.
Canadian oilfield services company Calfrac Well Services Ltd’s first-quarter net profit jumped more than four times on a surge in the company’s North American activity fuelled by higher oil prices. January-March profit was C$49.1 million, or C$1.11, compared with C$11.7 million, or 27 Canadian cents, a year earlier. Revenue rose nearly 49 to C$337.4 million. The company, which gets more than 80 %of its revenue from North America, bene-
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Offshore oil topic of Greenland meeting Reuters
Leaders of Arctic nations gathered in Greenland last week to chart future co-operation as global warming sets off a race for oil, mineral, fishing and shipping opportunities in the world’s fragile final frontier. U.S. Secretary of State Hillary Clinton joined foreign ministers from seven other Arctic states in Greenland’s tiny capital of Nuuk — population 15,000 — for an Arctic Council meeting on the next steps for a region where warming temperatures are creating huge new challenges and unlocking untapped resources. The council includes the United States, Canada, Russia, Norway, Finland, Iceland, Sweden and Denmark, which handles foreign affairs for Greenland, as well as groups representing indigenous inhabitants of the Arctic most directly affected as ice and snow retreat. “It’s an important gathering, but also a symbol of some of the big challenges that the Arctic faces,” U.S. Deputy Secretary of State James Steinberg told a Washington thinktank audience, noting that U.S. Interior Secretary Ken Salazar would accompany Clinton to Nuuk. “There are very core interests that are at stake in the Arctic, but it is an opportunity to find new patterns of co-operation,” he said. Evidence is mounting of climatic transformation in the Arctic, where temperatures are already at their highest levels than at any
time in the past 2,000 years and are rising much faster than elsewhere in the world. Oil companies are alert to the potential of the Arctic, which the U.S. Geological Survey estimates may hold 25% of the world’s undiscovered oil and natural gas reserves. Among oil majors eyeing the Arctic are Royal Dutch Shell Plc, ConocoPhillips, Exxon, Norway’s Statoil and Russia’s statecontrolled oil group Rosneft. Global shipping, too, is adapting to the new conditions. Previously icebound routes such as the Northern Sea Route past Russia and the Northwest Passage along Canada have become increasingly navigable — cutting transport time but raising questions about how the region will be managed. OFFSHORE OIL AND GAS The council will discuss a plan to divide search-and-rescue responsibility across the Arctic region, a step closely watched by shipping lines and oil firms seeking to expand operations. It will also debate guidelines for admitting observer delegations to the council, which could see non-Arctic powers such as China get a seat at the table, and may discuss where the Arctic Council should base its secretariat. U.S. officials say they are also pushing for a broader initiative on oil and gas activity in the region, including how to deal with potentially disastrous oil spills.
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“I think that there will be explicit discussion in Nuuk with the Arctic Council nations about how to take the next step and co-operatively address some of the important offshore oil and gas issues,” Deputy U.S. Interior Secretary David Hayes told a news briefing. Heather Conley, an Arctic expert at the Center for Strategic and International Studies think-tank, said the council was moving to strengthen its governance role that could allow it to take action on weighty issues. “We all are realizing that human and commercial activity are really going to significantly increase as polar ice recedes. We don’t have sufficient infrastructure to keep up with this increasing activity,” she said. Environmental activists say the Arctic challenges require much more aggressive action on everything from fishing quotas to international standards for oil and gas devel-
opment in a pristine, delicate region. “There’s a short window of opportunity to get out in front of it and protect important and vulnerable ecosystems before industries get entrenched,” said Lisa Speer, director of the Natural Resources Defense Council’s international oceans program in New York. The Arctic Council is often criticized as being ineffective, partly because it can only act unanimously. Speer said piecemeal decisions on observer states and the council secretariat threatened to obscure the broader threats — both natural and man-made — to the Arctic’s environment that the Arctic Council needs to tackle quickly. “These are bureaucratic questions. They are important but it is sort of rearranging the deck chairs on the Titanic,” she said. “We are looking at this huge crisis and the response is a lot of inside baseball.”
Increase in tax structure causing scaleback in North Sea CALGARY (Reuters) - Canadian Natural Resources Ltd, the country’s largest independent oil explorer, said last week that the British government’s increase in North Sea taxes has prompted it to scale back activity. Canadian Natural has gone from two platform rigs to one and will hasten the abandonment of one of its fields, called Murchison, as a result of the unexpected 24% tax increase, President Steve Laut said. He called the government’s move, which reduced Canadian Natural’s first-quarter earnings by C$104 million ($108 million), “short-sighted”. “As a result (of the higher tax), almost half of our project inventory does not compete with capital in Canadian Natural’s overall portfolio,” Laut said in a conference call to discuss the company’s quarterly results. The company produced 34,101 barrels a day in the first quarter, an 8% drop from the yearbefore quarter. Laut said Canadian Natural does not expect to exit the region, and said he believes the government will reverse the changes in the coming years as activity drops off. Britain’s economic secretary to the treasury said the government would work with the oil and gas industry to limit the impact of the hike on marginal North Sea fields.
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Grande Prairie Daily Herald-Tribune • Tuesday, May 17, 2011 Grande Prairie Daily Herald-Tribune • Tuesday, May 17, 2011
Stelmach defends oilsands at last Cowtown Premier’s Dinner DAVE DORMER QMI Agency In his final Calgary Premier’s Dinner as
leader of the province, Ed Stelmach again defended Alberta’s oilsands, which was a favourite target during the past federal election campaign. Speaking to a packed Telus Convention
Centre crowd in April, Stelmach used his speech to repeat a message to Ottawa to leave management of the oilsands to Alberta after opposition leaders released election platforms taking aim at the resource. “Just to be a little brash, we don’t need an Ottawa bureaucracy worming their way into the management of the pace of growth of the energy industry and regulating an industry that is critical to Alberta and Canada’s success,” he said. “We must ensure that whether at home, south of the 49th (parallel) or abroad, that our energy industry receives the respect it deserves.” Stelmach stressed the important role Alberta is playing in North America’s economic recovery. “The security of the American way of life is predicted, in no small measure, on a friendly supply of energy,” he said. “And that friend, is Alberta.” But Alberta must also expand its share of
the global energy market. “New economies in China, in India and other emerging markets present an opportunity we need to seize quickly with new port and pipeline capacity,” he said, adding rebuilding efforts in Japan, Australia and New Zealand following natural disasters in those countries will present new opportunities worth billions of dollars. The provincial government launched an advertising campaign to educate the world on the importance of the oilsands, which he said has been successful. “Actually I was quite surprised that the last poll that was done by (Canadian Association of Petroleum Producers) in the United States in terms of the oilsands said 80% of Americans feel Alberta is the place for a secure supply of energy,” he said. “They are very comfortable with our environmental policies and they also feel people working in the industry are treated fairly.”
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2222 Grande Prairie Daily May17, 17,2011 2011 Grande Prairie DailyHerald-Tribune Herald-Tribune •• Tuesday, Tuesday, May in minutes
An illustrative look at news and events
Reﬁning crude oil Crude oil is a useful starting point for so many products because its hydrocarbon molecules are very versatile in making chemical products from synthetic rubber to nylon to plastic
Fractional distillation process
1 2 3
Crude oil is heated to about 400 C, causing many of the hydrocarbons of the crude oil to vapourize. The vapourized mixture is pumped into a fractionating tower. The temperature of the tower is highest at the bottom. As vaporized samples of hydrocarbons travel up the tower, they cool and condense. The liquid hydrocarbons are collected and removed from the tower.
Naphtha is broken down into smaller building blocks known as monomers, such as ethylene, propylene and butylene. These different monomers are used to create various plastics.
Liqueﬁed petroleum gas • Small molecules • Low boiling point • Very volatile • Flows easily • Ignites easily
Used as a fuel in heating appliances and vehicles
• Large molecules • High boiling point • Not very volatile • Does not ﬂow easily • Does not ignite easily
Made from naphtha:
Used as a fuel in internal combustion engines
Jet fuel, paraffin for lighting and heating Diesel fuels
Used in transport trucks and trains
Lubricating oils, waxes, polishes Furnace
What’s in a barrel of crude? One barrel of oil contains 42 gallons of crude oil. The total volume of products made is 44.7 gallons due to processing gain.
QMI AGENCY Sources: Chevron.com, Graphic News, Energyinst.org.uk
Gasoline: 19.4 gallons per barrel Distillate fuel oil: 10.5 gallons Kerosene-type jet fuel: 4.1 gallons Coke: 2.2 gallons Residual fuel oil: 1.7 gallons Liqueﬁed reﬁnery gases: 1.5 gallons Still gas: 1.8 gallons Asphalt and road oil: 1.4 gallons Raw material for petro chemicals: 1.1 gallons Lubricants: 0.4 gallons Kerosene: 0.2 gallons Other: 0.4 gallons
• Plastic forks • Diapers • Car parts • Face masks • Bottles • Clothing • Carpets • Cosmetics
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9.9 9.8 Russia Saudi Arabia
Comparing Libya to the top 10 oil producing countries in 2009 (millions of barrels per day)
4.2 4.0 Iran
2.8 2.6 2.5 U.A.E. Brazil Kuwait
Grande Prairie Daily Herald-Tribune • Tuesday, May 17, Grande Prairie Daily Herald-Tribune • Tuesday, May 17, 2011
Canada consumes 1.8 billion barrels of oil daily: StatsCan CAROL CHRISTIAN QMI Agency Anyone who forgets that oilsands are consumer driven, a Statistics Canada report released recently can serve as a timely reminder. In 2009, more than 1.1 million gasoline deliveries were made across Canada – that’s equal to over 700,000 fully-loaded trucks, filling two lanes of the Trans-Canada Highway, bumper-to-bumper and coast-to- coast. As well, 40.7 billion litres of gasoline were sold across the country. “In Canada today, we consume about 1.8 billion barrels day, and of that, close to 700,000 barrels are from the oilsands,” said Travis Davies, spokesman for the Canadian Petroleum Producers Association. “So in that regard, we see that of the gasoline and other petroleum products consumed by Canadians, the oilsands certainly has an enormous role in providing that secure supply for Canadians.” Bill Simpkins, spokesman for the Canadian Petroleum Products Institute, added that when it comes to production, and refining and marketing of products, obviously there is an important link between upstream and downstream supply and demand. “The refining industry, and distribution and marketing are quite important to the economy,” he said. “Vertical integration of the major companies shows how important that is in terms of being able to manage the business, the economics, and the finances associated with that to provide products to Canadians that are not only quality, but are reasonably priced.” While the number of motor vehicles on Canadian roads has increased by more than three million during the last decade, the number of retail gasoline outlets has significantly decreased.
A point evident in Fort McMurray as the day of the full-serve station has long passed. According to an industry source, there were more than 21,000 retail gasoline outlets in Canada some two decades ago, but in 2009, results from this survey show that there were fewer than 12,000. As for the age of these of these operations, approximately 39% of the gas stations identified the age of their sites as being 10 years or younger, 50% between 11 and 30 years, 10% between 31 and 60 years. A handful of outlets reported nearly a century of service at the same location. Over 43,000 fuel pumps or dispensers were in operation at gas stations in 2009, with newer digital meter display dispensers accounting for almost 87% of the total. About 60% of all dispensers were less than 10 years old, 38% were between 10 and 25 years old, and 2% were more than 25 years old. Gas stations provided jobs for more than 95,000 people, in 2009, half being full-time employees. According to the 2006 census, 44% of full-time employees at Canadian gas stations were female wage earners. The survey of industrial processes is a pilot survey that was conducted to assess the feasibility of collecting data on operational activities and engineering processes of small and medium enterprises across Canada. For the 2009 reference period, the SIP pilot survey covered all retail gasoline outlets, including marinas with gas docks, across Canada. Diesel-only outlets and card-locks were excluded. Nozzle spills are an issue at most gasoline outlets. With absorbents being used to soak up gas spilled during refuelling, gas stations used about 286 tonnes of absorbents during 2009. With this quantity of absorbents used, the total amount of gasoline spilled while refuelling could fill as much as two gas delivery trucks.
Canada consumes about 1.8 billion barrels day, according Statistics Canada.
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24 Grande Prairie Daily Herald-Tribune • Tuesday, May 17, 2011 24 Grande Prairie Daily Herald-Tribune • Tuesday, May 17, 2011
CAPP report outlines oilsands-related discussion CAROL CHRISTIAN QMI Agency How informed Canadians thought leaders are on energy issues was singled out as perhaps the most notable lesson coming from oilsands-focused conversations held last year. “And the fact that we could have these conversations in a very respectful and intelligent, balanced way was refreshing, startling and welcomed,” said Janet Annesley, vice-president of communications for the Canadian Association of Petroleum Producers. CAPP – which describes itself as the voice of Canada’s oil, oilsands, and natural gas exploration and production industry, representing companies that produce more than 90% of Canada’s natural gas and crude oil – released a report in late April on the conversations and to outline the broad consensus response of the oilsands producers to what was heard in the dialogues process. Held as of CAPP’s broader outreach program, participants ranged from CEO to representatives from First Nations and non-government organizations. Government officials observed the dialogues, but didn’t participate. Facilitated by the Canada School of Energy and Environment, the dialogues were guided by the Chatham House rule meaning participants are free to use the information received, but cannot reveal the identity or affiliation of any of the speakers. The rule allows people to speak as individuals and to express views that may not be those of their organizations, and therefore, encourages free discussion. Up until several years ago, the oilsands industry was fairly quiet in defending itself against misinformed criticism, often saying it would let the facts speak for themselves. However, industry including CAPP soon realized those facts needed help getting out. CAPP, as the convenor of the dialogues, was prepared to set the record straight with any participant that was misinformed or had an inaccurate view of the oilsands, but, noted Annesley, that didn’t happen. “Very often, the discussion was at a much higher level. The discussion quickly moved from very specific discussions on tailings or CO2 emissions to one about our energy future, about social justice in some cases, who decides when it comes to major projects
Optimizing waste heat recovery Courtesy: Syncrude Natural Resources Canada
... A lot of discussion about energy strategy and views that in order to achieve our economic, energy and environmental goals, we need an energy strategy in Canada.” Those “big picture issues” is where the discussion needs to be to address the fundamental issue: the ongoing role of oilsands in the energy mix, she pointed out. Agreeing with many participants, the report noted that transparency in performance reporting is essential. As a result, CAPP will report annually on oilsands performance through its Responsible Canadian Energy program, which includes a third party advisory panel and process. There is also general recognition that understanding about energy production and use must improve in Canada. The oilsands industry will continue to take a balanced, constructive, and solutions-oriented approach to engaging stakeholders on issues relating to oilsands, including discussions with those who have expressed strong opposition to their development, said the report. The dialogues have proven to be a positive experience for oilsands producers, providing a foundation for further dialogue and additional impetus to advance solutions. Produc-
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ers, added the report, will continue a public engagement process this year, using this oilsands dialogues paper as a foundation for further discussions. This includes a number of follow-up dialogues planned for the first half of 2011. “It is also our intention this process will contribute to other energy-related initiatives, such as Energy Policy Institute of Canada’s development of a national energy strategy,” said the report. It was identified during the dialogues that Canada’s oilsands will provide a secure source of energy, reduce its impact on the environment and provide economic benefits to society while developing this globally significant resource. This will be achieved through continuous improvement, by developing new technology and by committing to a set of guiding principles. One issue noted during the dialogues was the lack of understanding about energy production and use which was identified as a significant problem by participants at the dialogues in both Canada and the United Sates. Some participants felt there was a lack of trust toward oilsands developers and the CEOs, said the report, leading to a discussion
of a next series of dialogues with broader participation, perhaps including government, to demonstrate that CEOs are listening and will continue to listen for a long time to come. Some felt that the longer the CEOs remain engaged in dialogue with all stakeholders, the more trust would be built. “The dialogues exceeded our expectations, admitted Annesley. “The quality of the feedback was better than we expected; more informed more solutions-oriented. The CEOs have expressed that they valued the opportunity. ... The CEOs feel it was extremely worthwhile and will be going back in the next couple of months to have follow-up conversations in four cities.” Those cities are Vancouver, Ottawa, Toronto and Washington through May and June. People reading the oilsands producers’ response in the report will find an unprecedented summary of the oilsands’ industry position on a wide-range of issues, she said. “As we were surprised by the depth and the thoughtfulness of the stakeholders feedback, we hope people will look at the depth and the thoughtfulness that we have given to big issues like climate change, technology, stakeholder engagement, energy strategy, and energy literacy. These are all issues where the CEOs, over the last number of years, have given significant time and energy in developing an oilsands industry position and for the first time they are outlined int his report altogether in one place.” The report is available on CAPP’s website and will be made available at future dialogues both north and south of the border. “I think many people will be surprise by the depth of thinking on such things like climate change policy, regional planning,” said Annesley. We see the need to have ongoing conversations about all of these things whether in Alberta and at the national level regarding the need for an energy strategy.” She added that Canada’s oilsands are being developed as a resource because “we need energy. Every barrel of crude that comes out of the oilsands, places an import barrel into Canada. “We see a need for Canada to be an energy leader not only in responsible production, but we also see a role for Canada’s industry to be a lead champion in energy efficiency and conservation.”
Prairie Daily Herald-Tribune • Tuesday, Grande PrairieGrande Daily Herald-Tribune • Tuesday, May 17, 2011 May 17,
Gas predicted to rule roost as renewable grows: Study Natural gas will become the world’s most used fuel as countries make the transition to renewable sources and that points to long-term gains in shares of gas producers, a newly established Canadian investment bank said recently. In a report, AltaCorp Capital Inc. said that without heavy subsidies, most renewable energy is currently too expensive to make a
major dent in the use of fossil fuels, which could remain the main energy source into the next century. AltaCorp analyst John Mawdsley said: “We need to be clear that we’re going to be driven to use hydrocarbons for a long time yet. “Coal, natural gas and petroleum account for 84% of energy use globally.” –QMI Agency
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26 26 Grande Prairie Daily Herald-Tribune 17, 2011 2011 Grande Prairie Daily Herald-Tribune ••Tuesday, Tuesday, May May 17,
Northern Gateway Pipeline issued hearing order; to start January 2012
At Enerplus, nothing is more important than protecting the health and safety of our employees, contractors and the communities in which we live and operate. Visit the Enerplus booth at the Peace Region Petroleum Show to learn more about our operations.
On May 27, 2010, Northern Gateway Pipelines submitted its application to the National Energy Board in respect of the Enbridge Northern Gateway Project. A Joint Review Panel (JRP) was established by the Minister of the Environment and the NEB to consider the environmental impact of the Project and decide if it is in the public interest. In the Panel Session Results and Decision document of January 19, 2011, the Panel indicated it would issue a Hearing Order once Northern Gateway had submitted additional required information. The Panel has now issued that Hearing Order (OH-4-2011) outlining the procedures to be followed, and has decided that it will hold hearings starting on January 10, 2012. Enbridge Northern Gateway Pipelines welcomes the announcement and the scope of the public hearings, which clearly meets the widely expressed desire for a full and open review of the project. This process was triggered by Northern Gateway’s application and the company remains fully supportive of, and committed
to, a thorough public review. “This is good news as the next step in a lengthy public process,” said Northern Gateway Pipelines President John Carruthers. “The JRP process is specifically designed to thoroughly test all our assurances, our safety procedures and our planning – in detail and in public. “It enables everyone to have their questions answered and concerns addressed. An impartial, public regulatory process is the way Canada decides about projects like Northern Gateway, and it’s our belief that the more people know about what we’re proposing, our commitment to safeguard the environment, and the tremendous economic benefits for our entire country, the more supportive they will be.” Participation details and associated deadlines can be found on the JRP’s website at www.gatewaypanel.review.gc.ca.
– Northern Gateway Pipelines Limited Partnership
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Grande Prairie Daily Herald-Tribune • Tuesday, May 17, 2011
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Grande Prairie Daily Herald-Tribune • Tuesday, May 17, 2011
Commitment Runs Deep
Being a Good Neighbour. In late 2007, Devon’s Marc LaBerge saw an opportunity to reduce the impact of pipelining on the land and build our relationship with landowners. By working in partnership with provincial regulators, Marc helped Devon introduce innovative pipelining strategies to the company and the industry. This low-impact process involves less topsoil disturbance, smaller rights of way, narrower trenches, reduced clean-up costs, less deforestation and reduced downtime for both industry and landowners. As a result, this technique has become standard practice across Devon’s Canadian operations. Thanks to the creativity and resourcefulness of people like Marc, Devon is continually enhancing our ability to be a good neighbour.
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