Manitoba Oil & Gas Review 2018

SERVING MANITOBA’S OIL & GAS INDUSTRY

MANITOBA Oil & Gas Review 2018

looking up:

PUBLICATION MAIL AGREEMENT #40934510

Manitoba’s oil industry continues to rebound from 2016 downturn Economic impacts of the Manitoba oil industry on the U.S. economy

manitoba industry overview and stats

PTRC building on past successes to take bakken research to the field

ON THE BAKKEN’S DOORSTEP Daily direct WestJet flights to and from Calgary Highly diversified industrial and commercial business sectors A large, dedicated, and skilled labour force Full urban amenities and services Birdtail (135) Manson (125) Kirkella (120)

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Distances from Brandon, MB

Oilfield Location (km)

Virden (80)

Souris Hartney (70) Regent (80)

Tilston (145)

Pierson (160)

Waskada (140)

Whitewater (95) Mountainside (100) Lulu Lake (105)

High-end oilfield safety certification via Assiniboine Community College Thousands of acres of industrial land Overall business cost competitiveness consistently ranked in Top 10

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In this issue...

6 Manitoba oil activity for 2017 10 Message from the Honourable James Carr, Canada’s Minister of Natural Resources

11

Message from Virden Mayor Jeff McConnell

12 Manitoba’s oil industry continues to rebound from 2016 downturn

16 Economic impacts of the Manitoba oil industry on the U.S. economy

18 PTRC building on past successes to take Bakken research to the field

22

The deal with worker safety in oil & gas

24 Canada is falling behind in fierce global competition for oil and natural gas investment

26 DRIVING FORCE delivers new vehicle options for Manitobans

28

Working to keep everyone safe

30 Return to Work programs: essential for employers, attractive to workers

32 The advantages of satellite imagery for long-term environmental monitoring

34

Bakken is back on track in 2018

36 LodgeLink creates online accommodation marketplace for remote workforce lodging

38 For the world’s sake, Canada should be last to phase out oil

40 How the Keystone Pipeline spill proves pipelines are safe

42 Index to advertisers

Published by: DEL Communications Inc. Suite 300, 6 Roslyn Road Winnipeg, MB R3L 0G5 www.delcommunications.com President & CEO: David Langstaff Publisher: Jason Stefanik Editor: Lyndon McLean lyndon@delcommunications.com

Advertising Sales Manager: Dayna Oulion TF: 1-866-424-6398 Advertising Sales: Mic Paterson KARI PHILIPPOT Anthony Romeo Gary seamans Production services provided by: S.G. Bennett Marketing Services www.sgbennett.com Art Director / Design: Kathy Cable Advertising Art: dave bamburak DANA JENSEN ©Copyright 2018.

Manitoba Oil & Gas Review. All rights reserved. The contents of this publication may not be reproduced by any means, in whole or in part, without the prior written consent of the publisher.

While every effort has been made to ensure the accuracy of the information contained herein and the reliability of the source, the publisher­in no way guarantees nor warrants the information and is not responsible for errors, omissions or statements made by advertisers. Opinions and recommendations made by contributors or advertisers are not necessarily those of the publisher­, its directors­, officers or employees.

Publications mail agreement #40934510 Return undeliverable Canadian addresses to: DEL Communications Inc. Suite 300, 6 Roslyn Road Winnipeg, Manitoba, Canada R3L 0G5 Email: david@delcommunications.com PRINTED IN CANADA 05 | 2018

Servicing Wells in Alberta Saskatchewan & Manitoba

Since 1988

overview

Manitoba’s oil activity 2017 Courtesy of the Manitoba Petroleum Branch 2017 Wells Drilled: 240 2016 Wells Drilled: 81 Total producing wells: 3,814 Total SWD wells: 110 Total WIW: 585 WSW: 16

Where are the new oil discoveries?

• Extension of the Daly Sinclair Field: 111 wells • Extension of Virden Field: 64 wells • Extension of Waskada Field: 12 wells • Extension of Pierson Field: 23 • Extension of Manson Field: 23

7 wells were drilled in other areas outside of known field boundaries.

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Manitoba Oil & Gas Review 2017

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overview

MANITOBA DRILLING ACTIVITY

Manitoba Drilling Activity

Average Oil Price ($/bbl)

Wells Drilled

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100.00

500

80.00

400

300

200

100

0

60.00 40.00 20.00 05

06

07

08

09

10

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Manitoba Oil & Gas Review 2018

Vertical

Average Oil Price

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message a message from canada’s minister of natural resources

THE HONOURABLE JAMES CARR As the world makes the transition to a low-carbon future, our government has a clear goal: to make Canada a leader in the clean growth century.

We are in a unique position to do so. Our country is blessed with an abundance of natural resources, highly skilled workers, world-leading research facilities, supportive government policies, and a business-friendly tax structure. Our responsibility is to develop those resources sustainably and competitively, to create good jobs, a stronger economy and shared prosperity for generations to come. That means striking the right balance.

How do we get there? By using this time of transition to Canada’s advantage – building the infrastructure to get our resources to global markets and using the revenues to invest in clean forms of energy. In other words, leverage the resources

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Manitoba Oil & Gas Review 2018

we have today to deliver clean-energy solutions for tomorrow.

In February, our government announced legislation that proposes better rules to review new major resource projects. This new system would help restore investor confidence, rebuild public trust and advance Indigenous reconciliation – all while ensuring good projects go ahead and our energy resources get to markets responsibly.

With this new legislation, we are laying the foundation for a sustainable energy sector in Canada to get good projects built, grow the economy, and create middle-class jobs from coast-to-coastto-coast.

That’s good news for Manitoba, and it’s good news for Canada. v

message a message from THE MAYOR OF VIRDEN

JEFF McCONNELL Hello from Virden, the Oil Capital of Manitoba!

We are strategically located at the intersection of two major highways and within the heart of Manitoba’s petroleum producing region. We have 3,322 people who call Virden home.

Our region is continuing to grow and develop, and several companies are making long-term investments in our region to grow their business.

In fall 2017, a fire destroyed a part of our historic downtown area. Our people, including the people and businesses associated with the oil & gas industry, have stepped up once again to show that we help our neighbors and we have lots of heart. We may have lost some buildings, but we haven’t lost our drive and desire to make Virden a thriving community − just one more example of why Virden is a great place to live and work.

We are the Oil Capital, but we have so much more than oil. Virden is well known for its cultural activities and recreational facilities. Tundra Oil & Gas Place, a multipurpose facility, is home to large banquet functions, our famous indoor rodeo, concerts, and regional and provincial sporting events. The Virden Oil Capitals, a Manitoba Junior Hockey League team, have a large fan base and are working hard to bring home a championship! The CP Station Art Gallery is home to Arts Mosaic, which hosts an art gallery and offers many shows in the 500-seat Aud Theater, Western Canada’s oldest opera house.

Our airport is a surprisingly busy facility, offering a paved runway and tarmac, as well as Jet Fuel and Avgas. Industrial development continues to pop up in our industrial park next to the airport. The agriculture and oil sectors contribute to

the need for our many retail and service businesses.

We welcome the opportunity to discuss your commercial or industrial concepts for our community, whether it is in Virden or in the surrounding communities.

On behalf of the council, staff and people of Virden and area, we hope you find exactly what you are looking for in Virden, where we have a proud heritage and strong future! v

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Manitoba Oil & Gas Review 2018

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LOOKING UP Manitoba’s oil industry continues to rebound from 2016 downturn

by Jillian Mitchell

Corex staff at the Virden barbecue.

Corex Virden barbecue.

Daly area.

The oil well is a significant staple in the prairie provinces, and for good reason.

Manitoba remains high atop the country’s top producers of oil , and its rating has held through the good times and the bad.

The recent industry dip in 2016 was felt by all the region’s producers – some folks hit hard, pulling out of the region entirely; some selling off interest; some in a waitand-see, hopeful the storm had promise in its wake.

Tundra Oil & Gas remained firmly in the latter camp. And despite reporting lower than usual numbers in 2017 – an average of 25,000 barrels per day (bpd); 5,000 bpd lower than its all-time high of 30,000 bpd

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Manitoba Oil & Gas Review 2018

– the region’s top producer remained optimistic that things would turn around.

Approximately 85 per cent of Tundra’s production is in Manitoba, with the remainder in southeast Saskatchewan. 2016 brought with it a 25 per cent decrease in the province’s production, which though a natural happenstance, hit hard when coupled with the downturn in the commodity price cycle.

According to Tundra president and CEO Ken Neufeld, 2018 projections tell a much different story. In fact, the company anticipates an average of 27,000 bpd in 2018 – 1,500 bpd over 2016’s average. The year’s program, he says, will remain similar to

2017’s, though expansion is not out of the question.

“That’s modest growth, but it’s growth,” says Neufeld.

The recent rise in oil prices – $65US/ barrel, roughly $79.95CAD/barrel – is undoubtedly fodder for optimism. But, at the same time, Neufeld remains mindful of the industry’s ebb and flow.

“We’re cautiously optimistic,” Neufeld says of the future. “We’re in a pretty good place right now. Activity has ramped up since 2017, which saw us back to active drilling, and we exited at a higher rate than the start of the year. At the end of the day, oil prices will dictate some of the activity levels and our ability to reinvest.”

Tundra employs over half the province’s oil patch – a total of 300 people, with more than 200 in the Virden area alone. The privately-owned company − headquartered in Winnipeg, along with a field office in Virden and a technical office in Calgary − has big plans for the industry’s current incline, which allowed the company to drill 125 wells last year operated through two rigs, instead of the usual five or six.

High atop the priority list is the company’s recent and largest acquisition in its 30-year history – the Waskada field ac-

Tundra president and CEO Ken Neufeld.

quired from EOG Resources and PennWest Exploration, which at the time added 6,000 bpd – as well as continual involvement in the Waskada-Cromer pipeline, which Tundra owns.

Of equal importance is the company’s partnership with Manitoba Hydro, which formed in 2014 in an effort to process off-

A cheque presentation to the Foxwarren rec centre in 2016. Tundra and Richardson Pioneer together donated $30,000. set gas from oil production to power their capacity operations. In 2016, 22 additional capstones were introduced through the Tundra-Hydro partnership, resulting in 85 per cent energy savings.

Neufeld cites the Hydro partnership a “win-win.”

“We’re always looking to be better stew-

ards of the environment, and it was a great opportunity to help the environment and our cost structure in the long term,” he says. “I think it’s gone really well, and we’re talking about doing a few more installations going forward, probably 2018-19 timeframe.”

Corex Resources Limited also felt the

Committed to achieving a balance of economic, social and environmental sustainability. To learn more, visit our website www.tundraoilandgas.com.

Proudly investing in Manitoba since 1980.

Manitoba Oil & Gas Review 2018

13

recent industry pinch, starting in mid-2014, and like Tundra, remained hopeful. Similarly, 2017 proved a catch-up year for the province’s number-two producer, which employs upwards of 50 people, running a two-rig program in the latter half of 2017.

“It was a catch-up year for us because we had a very quiet program in 2016,” says Corex president and CEO Monty Bowers. “In some ways, the downturn has allowed us to

control our capital cost structure; it’s come down. Even though the cost of oil is low by a historical standpoint, it’s allowed us to execute our 2017 drilling program.”

Long term, the privately held Calgaryand Virden-based company has plans to reach 8,500-12,000 bpd by 2019-2020, a plan that was delayed two-and-a-half to three years after the recent commodity price downturn.

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Corex’s production peaked at 5,000 bpd in the first quarter of 2015, but as Bowers notes, the commodity price cycle shortly thereafter prompted the company to quickly “pull in the reins.” In 2017, Corex bounced back with a total of $196.7 million of capital investment (an investment Bowers labels “extreme,” four times 2017’s funds flow from operations), half of which was used to buy out partner Crescent Point Energy Corp.’s interest in the Daly-Virden area.

By Q3 of 2017, drilling had picked back up and production numbers rose from 4,500 bpd to 7,125 bpd by year end. Net wells drilled rose to 73.8 in 2017, a significant increase from 2016’s 9.6. The compa-

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ny’s forecast for 2018 is for 47 net wells to be drilled.

The rise in oil prices is, of course, good news across the board, but there’s more to be done, says Bowers.

“The price of oil (WTI) is about $65US – up quite a bit – but to put it in context, many of the oil and producers are trading at not far from their 52-week share price lows, even though the price of oil has recovered,” he says.

Bowers cites egress, or the ability to get product to market, as the biggest issue facing the industry for both oil and gas producers, noting that outside of Canada, the country’s investment climate is viewed as “poor,” particularly at a federal level.

“It’s the lack of capital investment in our industry as a whole and the lack of new money coming from outside of Canada that’s the big issue facing the industry right

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now,” he says. “Basically, because there’s low capital influx into the industry, the share prices are floundering, and that’s resulting in less activity. The CAODC predicts drilling activity 2018 will be up nominally over 2017 as an industry. If we could do one thing in

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Manitoba Oil & Gas Review 2018

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Economic ImpactS

of the Manitoba Oil Industry on the U.S. Economy Provided by the Canadian Energy Research Institute Introduction The longest undefended border on the planet runs 8,891 kilometres and is shared between Canada and the United States (US). The two countries share not only the longest international boundary but also the largest bilateral trading relationship in the world with trade totalling CAD$752 billion at the end of 2016. Canadian exports to the US at end-2016 were CAD$392 billion, and imports from the US were CAD$360 billion.

In many respects, this interregional interdependence grew with the signing of the North American Free Trade Agreement (NAFTA), a trilateral trading agreement between Canada, Mexico, and the US. The agreement came into effect on January 1, 1994 and was a natural expansion of the predecessor agreement, the Canada-United States Free Trade Agreement, signed in 1988.

Any out-of-Canada spending by the Canadian oil & gas sector implies a spill-over effect, where economic impacts accrue outside of Canada but can be attributed to the development of Canadian oil & gas resources. But they are often overlooked. It is important to note that like some Canadian provinces that supply materials necessary for producing oil and natural gas, the US benefits from not only importing oil and gas from Canada but also from supplying products and services used by the Canadian oil and gas industry.

In fact, prior to the 2014 oil price collapse, the Canadian oil & gas production sector imported CAD$6.5 billion worth of products and services from the US in 2013.

Supply of those products and services spur economic activity and create or preserve jobs in respective US states.

This analysis is timely, particularly as NAF-

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Manitoba Oil & Gas Review 2018

TA is being re-negotiated. The recent threat

by US President Donald Trump to impose 25 per cent levies on foreign steel and 10 per cent duties on imported aluminum spur fears of higher costs for everything from pipelines to drilling equipment, which could make American-produced equipment more expensive to buy in Canada.

While the benefits of the Canadian oil & gas industry across Canadian provinces are well documented, the impact of the Canadian oil & gas industry across US states is lesser reported. The Canadian Energy Research Institute (CERI) published a study that examined the economic impacts of the Canadian oil & natural gas industry on both Canadian and US economies, down to the provincial and state levels, utilizing CERI’s proprietary Input-Output model and the US IMPLAN model. This article draws from the study findings and only presents the impacts of Manitoba oil & gas industry development on the US economy.

Figure 1 illustrates operations and capital investment forecast in Manitoba as a result of crude oil production. In the case of Manitoba, only crude oil is included, with the province not producing any natural gas. Over the period of the study (20172027), crude oil capital investments needed to produce crude oil in Manitoba total CAD$5.4 billion. Total operation investment in Manitoba between 2017 and 2027 is CAD$12.3 billion, peaking at CAD$1.4 billion in 2027.

US Economic Impacts The contribution to the US economy as a result of Manitoba’s oil firms purchasing goods and services in the US to develop their projects is positive and significant. The Manitoba oil industry is not only a significant contributor to the Canadian economy, but to the US economy as well. Overall, for the forecast period of 2017-2027, it is estimated that the total economic impact (in-

Figure 1: Manitoba Operations and Capital Investment, Million $CAD

Figure 2: US Employment Impacts of Canadian Oil & Gas Development Source: CERI

cluding direct, indirect and induced) on the US gross state product (GSP) will amount to almost US$0.4 billion (US$35.7 million). The total employment impact is measured in creating or sustaining 265 full-time equivalent jobs in the 11-year period in the US economy.

The top ten states that benefit the most from Manitoba oil development are presented in Table 1, in descending order. Together the top 10 states make up 75 per cent of the total GSP impact and 72 per cent of total employment impact. Illinois is the largest beneficiary in terms of gross state product and employment.

To put it in perspective, economic impact on the US GSP associated with total Canadian conventional oil and gas industry (excluding oil sands) will amount to almost US$29.6 billion. The total employment impact is measured in creating or preserving 260.5 thousand full-time equivalent jobs in the 11-year period; the employment impacts by state are shown in Figure 2.

In summary, total economic impacts from investment and operations of Manitoba oil projects contribute to economic growth and employment in both countries.

For every US million dollars spent by the Canadian oil & gas and related service sectors in the US, US$0.6 million (CAD$0.8 million) is generated in the US GSP. v

Table 1: US Economic Impacts of Manitoba Oil Development by Top 10 US States, 2017-2017. Source: CERI

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PTRC Building on Past Successes

to take Bakken Research to the Field

By Norm Sacuta, Petroleum Technology Research Centre The Petroleum Technology Research Centre (PTRC) has a 20-year strong reputation in Canada for guiding new enhanced oil recovery technologies from incubation, through research and development, and on to field trial and demonstration. With so many of Saskatchewan’s oil reservoirs presenting significant recovery challenges – both the heavy oil deposits along the border with Alberta, and tight oil in reservoirs like the Bakken and Viking in the south – it’s perhaps no surprise that the PTRC has been at the forefront of working with oil companies to provide technological and scientific solutions to their most pressing field challenges.

“We’ve had some remarkable successes in helping major operators in heavy oil improve both their recovery rates and energy efficiencies in operations,” notes Dan MacLean, PTRC’s CEO. “We’re currently involved with three of the major companies in the Lloydminster area trialing a hot water vapour technology that could see significant improvements in post-CHOPS production along with reductions in energy use. “ MacLean also notes previous vapour extraction trials conducted by PTRC with three other heavy oil operators from 2005 to 2011 (see the JIVE Project at https://ptrc.ca/projects/jive/research for more) which led to Husky’s commercial ap-

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Manitoba Oil & Gas Review 2018

• Field Trials of Innovative EOR • Proven Results (Millions of Barrels of Incremental Production) • Government and Private Sector Leveraging • World Leader in CO2 Utilization and Storage

PETROLEUM TECHNOLOGY RESEARCH CENTRE MOVING THE NEEDLE ON ENHANCED OIL RECOVERY

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plication of solvent and CO2 at its operations at Lashburn and Luseland.

“Our Heavy Oil Research Network (HORNET) has had success at combining laboratory and bench-scale research with the needs of field operators that help fund our programs. And now we’re expanding that successful model to tight and light research.”

Innovation Saskatchewan, which funds cutting-edge R&D and demonstration projects in many different industries, recently provided PTRC with additional funding to develop its tight oil program. This has included support of surfactant research work potentially leading to field application in the challenging Viking reservoir, and examination of Bakken reservoirs that might accept injection of CO2. As well, PTRC has approved the purchase of a high-resolution industrial X-ray CT scanner for use by both the Saskatchewan Research Council and the University of Regina to examine and characterize Bakken and other tight oil cores.

“This new research infrastructure and our extensive demonstration project successes in the past 20 years – with CO2-EOR in the Weyburn oil field and deep subsurface characterization at the Aquistore CO2 storage project – means PTRC and its network is ready to take on the Bakken. We welcome the opportunity to help operators in Alberta, Manitoba, North Dakota and Saskatchewan improve recovery rates. We’re ready for an exciting few years ahead,” says MacLean.

Visit PTRC at http://ptrc.ca for more on our research, look for our booth at the Williston Basin Conference in Bismarck, and follow us on twitter @ ptrc_sk. v

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The Deal With worker

Safety in Oil & Gas Provided by Energy Safety Canada With an oil strike in Turner Valley, Alberta launched Canada’s energy industry in the early 1900s. Resources were abundant, but experience was in short supply. Workers were expected to learn on the job – and avoid the dangers of a drilling rig’s many moving and often oil-slicked parts: pulleys, wheels, cogs, belts, gears, chains, ropes, planks, tools and equipment.

Not everyone could, and worker injuries and deaths occurred. In 1938, the Calgary Herald described working on an oil drilling rig “as one of the most hazardous occupations in the world.”

As the industry grew and advanced, so too has the role of safety. In 1949, the Petroleum Industry Training Service (PITS) was formed to equip oil & gas workers with the knowledge and skills needed to be safer on the job.

Gone are the days when workers would walk off a farm field or out of a high school classroom and on to a rig without knowing the safety risks – and how to avoid them.

With unparalleled development, oil & gas has seen profound changes since that first

discovery well in Turner Valley. Canada’s diverse energy sector now includes all matters of resource extraction and processing, with presence from coast to coast to coast.

Companies have made worker safety as much a part of their operations as advancing technologies, maximizing production and delivering shareholder value.

Evolving with a Constant Goal

In an industry known for its up and down business cycles, worker safety is now an unfailing constant. For the past 10 years, the companies, workers, contractors, trade associations and other stakeholders in our industry have collectively worked toward a common goal of zero injuries and incidents.

Formed on October 2, 2017 through the merger of Enform Canada (Enform) and Oil Sands Safety Association (OSSA), Energy Safety Canada now represents one voice for safety in the oil & gas industry across the country.

“The merger of these two organizations signals a new day for our industry,” says John Rhind, Energy Safety Canada’s CEO. “Energy

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Manitoba Oil & Gas Review 2018

Safety Canada will advance the work of its legacy organizations to prevent incidents and to improve the tools, systems, and the communications that will accelerate safe work performance.”

Energy Safety Canada will represent and advocate for the industry’s most valuable resource: workers. For workers, that means a reduction in duplicate training and more consistent safety rules from worksite to worksite.

“I’ve been a frontline worker in this industry,” adds Rhind. “I know that workers often experience different sets of safety rules from site to site, which can be confusing and frustrating. Having a single set of safety standards will make it easier for both workers and companies. When we drive complexity out of the system, the result is reduced confusion and safer worksites.”

Through collaboration, industry will pool its expertise and work together to find simple, agreed-upon safety solutions and standards. In turn, these solutions and standards will save time and money, and increase efficiency.

“This merger marks progress in driving continuous improvement in safe work performance across the entire industry,” says Murray Elliott, President of Energy Safety Canada. “We expect that safety performance will improve faster and provide benefits both to workers and companies.

Energy Safety Canada will be a one-stopshop for safety expertise − a hub of safety knowledge that delivers effective learning, shares improved safety data analytics, and advocates for the health and safety of those working in the industry and those impacted by industry activity.

Elliott emphasizes, “With our new organization, oil & gas safety in Canada is changing for the better. Our goal is the same as industry’s: zero injuries, zero incidents.”

For more information, visit energysafetycanada.com. v

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Canada is falling behind in fierce global competition for oil and natural gas investment Provided by the Canadian Association of Petroleum Producers

Rising government costs, the burden of

leum Producers President and CEO Tim Mc-

customer – the U.S. – has become our num-

inefficient regulations, and the lack of in-

Millan. “We want to see governments at all

ber one energy competitor,” McMillan says.

frastructure to move Canadian energy to

levels take real steps to attract investment,

“Across Canada, government costs and reg-

growing markets are all undermining inves-

create jobs, and build prosperity across the

ulatory barriers are on the rise – making it

tor confidence in Canada and negatively

country. “Energy jobs and investment will

harder to grow our industry and create and

affecting the country’s ability to attract the

leave Canada for other countries unless

support jobs for Canadians.”

capital needed to create jobs and national

there are changes to encourage growth the

prosperity, according to A Global Vision for

industry can build on.”

“In Canada we need pipelines – not barricades – to supply the world with more Ca-

Canadian Oil and Natural Gas, the first in a

Total capital spending on Canadian oil &

nadian energy. If we don’t export Canadian

series of economic reports to be released

natural gas was $45 billion in 2017, down

energy, we will just be exporting Canadian

by the Canadian Association of Petroleum

19 per cent from 2016 and 46 per cent from

jobs.”

Producers (CAPP) in 2018.

2014. By comparison, capital spending on

Capital investment in Canada’s energy

Around the world capital investment in

oil and natural gas in the United States last

sector generates economic activity across

the oil & natural gas sector increased glob-

year increased by 38 per cent to $120 bil-

the country, spurring job creation and

ally in 2017 but was down in Canada.

lion. It has taken Canada 150 years to grow

growth for all levels of government – in-

“Canada is falling behind other countries

its oil and natural gas production to current

cluding about $19 billion in annual govern-

in attracting oil & natural gas investment to

levels and only eight years for the U.S. to ac-

ment revenues in 2015 and 533,000 jobs

create job and national prosperity for Cana-

complish the same.

across the nation in 2017.

dians,” notes Canadian Association of Petro-

“Today, Canada’s number one energy

The International Energy Agency (IEA)

• In 2014, Canada generated two per cent of the world’s total GHGs, while the United States contributed 14 per cent, making it the world’s second largest emitter.

• At one time there were more than 20 liquefied natural gas export projects proposed in British Columbia. To date, only one small-scale project has come to fruition.

• Since Canada’s Oil Sands Innovation Alliance (COSIA) was launched in 2012, its oil sands members have investment almost $1.33 billion to develop 936 distinct technologies to improve tailings management and reduce impacts on air, land and water.

• Canada imports 600,000 bpd to Eastern Canada from the U.S., Africa and the Middle East. Another 2.4 billion cubic feet per day of natural gas is imported to Eastern Canada.

• At present, our four million barrel-per-day (bpd) pipeline network is full and will continue to see increased constraints by 2030 when Canadian oil supply is expected to grow to 5.4 million bpd.

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Manitoba Oil & Gas Review 2018

• In 2015 and 2016, about $3.3 billion was invested in 396 Indigenous businesses across 66 communities.

“We operate in one of the world’s most stringent regulatory environments.

It’s important that we have a robust regulatory framework that meets environmental goals, but not one that creates additional costs, delays and inefficiencies.” forecasts that although renewable energy is on the rise, oil and natural gas will con-

to other jurisdictions competing for the same global capital.

The Canadian Association of Petroleum Producers (CAPP) represents companies,

tinue to make up the largest part of the

4. Government policies must spur and ac-

large and small, that explore for, devel-

total energy mix with increased urbaniza-

celerate innovation and technology in

op and produce natural gas and crude

tion and population growth, accounting for

the oil and natural gas sector.

oil throughout Canada. CAPP’s member

52 per cent of the total energy demand by

“We operate in one of the world’s most

companies produce about 80 per cent of

stringent regulatory environments. It’s im-

Canada’s natural gas and crude oil. CAPP’s

This analysis leads CAPP to call on the

portant that we have a robust regulatory

associate members provide a wide range

federal government to establish a four-part

framework that meets environmental goals,

of services that support the upstream

vision for the oil and natural gas sector that

but not one that creates additional costs,

crude oil and natural gas industry. Together

creates jobs for Canadians and national

delays and inefficiencies,” McMillan says.

CAPP’s members and associate members

2040.

prosperity.

1. Global connection for Canada’s oil and natural gas resources is essential.

2.

Globally competitive policies that increase the country’s ability to attract capital are needed to create jobs and national prosperity.

3. Any climate plan must be comparable

“In an international survey of citizens

are an important part of a national industry

from more than 30 countries, Canada was

with revenues from crude oil and natural

ranked number one as the global supplier

gas production of about $110 billion a year.

of choice for energy. The world wants more

CAPP’s mission, on behalf of the Canadian

Canadian energy, now and for the future.”

upstream crude oil and natural gas indus-

A Global Vision for Canadian Oil and

try, is to advocate for and enable economic

Natural Gas can be downloaded at

competitiveness and safe, environmentally

www.capp.ca/economicseries.

and socially responsible performance. v

Livingstone Landscaping Ltd is located in Brandon, MB and provides landscape design and construction services; certified paving stone installation. We also specialize in soil work, seeding, sod, hydroseeding, erosion control, chain link fence installation and repairs, general skid steer and excavator work, dump truck service, single and tandem, landscape design, and certified pesticide applicators for weed and pest control. Our full service company has other offerings such as grounds maintenance, parking lot sweeping and line painting, and a full fence and deck crew.

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25

DRIVING FORCE

delivers new Vehicle Options for Manitobans It’s been three years since DRIVING FORCE opened its first location in Manitoba, and the company continues to grow its presence in the oil & gas industry. Already a well-known and trusted brand in Alberta, the proudly Canadian company has two Winnipeg locations to serve customers – including a handy vehicle rental desk at 1750 Sargent Avenue, just minutes from the James Armstrong Richardson International Airport by shuttle.

Success has necessitated moving DRIVING FORCE’s main operations to a larger, more customer-friendly building at 106B Mountainview Road, a few kilometres north of the airport. It’s convenient for retail customers, but also easily accessible to our industrial clients who recognize our expertise in keeping them properly supplied with the right equipment at the right time.

DRIVING FORCE brings decades of industrial vehicle expertise to the province.

Established in 1978, the company has expanded from its Edmonton roots to cover most of Western Canada, with 30 locations to date ranging from Langley, B.C. to Mississauga, Ontario. Over the last 40 years we have become one of the most respected and wide-ranging rental and leasing brands in the oil and mining sector – first in Alberta, then in B.C. and the north. The company’s ability to form solid bonds with its clients is transferring well as the company moves eastward.

Although each project and customer is different, our Winnipeg staff know that some points are always important with oil & gas customers – whether they’re operating in the Rockies or the backwoods of northern Manitoba. Our Winnipeg staff has years of experience in the Manitoba

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Manitoba Oil & Gas Review 2018

truck market, and close support from additional petroleum project and mining site expertise whenever they need it.

“Experience has shown us that our customers value the convenience of ordering vehicles for a specific destination; it can save them time and money while creating peace of mind,” says Bruce Jackson, DRIVING FORCE’s Edmonton and Area rental manager. “For example, when we get a call for a specific mining project, we know exactly what is required – a buggy whip, amber light, back-up alarm, a 30-pound fire extinguisher, first aid kit and flares. We also install GPS (Global Positioning Satellite) equipment and unit markings. When the customer picks up the vehicle (or we deliver it), they’re literally able to sign off, get in, turn the key and head off for work on-site.”

DRIVING FORCE takes pride in giving customers exactly what they want, whether it be half-ton pickups for yard work, one-ton crew cabs for on-site hauling and transportation, two-ton half-decks, cube vans or any of a variety of picker trucks and service bodies. Their long-term relationships with trusted and respected truck builders mean they really can deliver on that promise.

Understanding

that

some

compa-

nies have specific preferences for certain makes, models and body styles, DRIVING FORCE deals with all major truck manufacturers; so whether you’re looking for Ram, GM or Ford products, DRIVING FORCE can deliver them completely equipped to meet the specific standards of the mining site. v

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27

Working to keep

everyone safe

Elite Safety Services is a Canadian company that provides customized safety training and standby services to industrial, construction, manufacturing, and energy sectors. Owned and operated by former professional firefighter paramedics, our company provides a level of professionalism and expertise only gained through realworld experience.

Our company specializes in shutdown, turnaround, and rescue roles. We have provided paramedics, confined space and rope rescue technicians and even construction safety officers to some of Western Canada’s most prominent companies. We have been improving our services daily since our company started in 2002.

Paramedics

Our primary care paramedics are used throughout the prairies and staff emergency transport vehicles (ETV) and mobile treatment centres (MTC). They’re able to “geo-post” in service areas and are available to you 24 hours a day. These units are equipped with either BLS or ALS capabilities. The paramedic is also rescue-trained and would be mobile, have instantaneous dispatch by you, and would geographically stage to ensure availability and coverage.

Technical Rescue Services

Our rescue teams regularly provide high-angle, confined-space, industrial firefighting, and hazardous materials response to our clients. Elite Safety Services will identify and assess the risks that workers are likely to be exposed to when performing high-risk work and provide the specialized services to ensure you are protected.

Rope Access Teams

Rope-access technicians utilize ropes, specialized hardware and techniques as a primary means of providing access and support to workers. Rope access is safe, versatile, efficient and economical.

Our company and supervisors follow IRATA requirmenets when performing rope access work.

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Manitoba Oil & Gas Review 2018

Health and Safety Training

At Elite Safety Services Inc., our intent is not to “rubber stamp” participant certificates. With every course, we strive to change work habits and attitudes before a workplace incident or emergency occurs. Courses are based on the most current relevant information, provincial or federal legislative requirements, and applicable NFPA standards.

Drug & Alcohol Testing

We are committed to providing safe working environments and deterring drug and alcohol use in the workplace. We can help in identifying problems before they affect those in your workforce.

Whether your requirement is for pre-employment or pre-access, reasonable suspicion, post-accident or post incident, return to duty or follow-up, Elite Safety Services can provide the applicable tests.

Elite Safety Services complies with Industry and the Department of Transportation regulations. We will undertake our due diligence through data collection to reduce organizational risk and liability.

Our testing services are available 24 hours a day.

NCSO/CSO Staff

We have long been synonymous with health and safety programs. Our continuous involvement in training, program review, health and safety legislation, and course instruction reaffirms our commitment to our clients. Our NCSO’s not only have extensive backgrounds in construction, plant turnarounds and shutdowns, but also have working relationships with Provincial Workplace Safety and Health Officers. These relationships help to ensure that everyone’s interests are protected while projects are occurring.

Our company has evolved and diversified based on our client’s needs. We consider ourselves professionals and work hard to ensure our operations keep everyone safe. Feel free to contact us if you have any questions. v

OUR COMPANY SPECIALIZES IN:

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29

Return to Work Programs: Essential for Employers, Attractive to Workers Every year, more and more businesses are seeing the tremendous upside of implementing a Return to Work program in their workplace. That’s because Return to Work minimizes WCB claim costs, reduces the

cost of training replacements and helps workers stay productive. What many employers are also discovering is that a lot of workers see the value in it as well.

Having a program in place that antici-

Return to Work for better business and better recovery

The WCB is here to help you get started.

• Help workers heal faster with modified duties and gradual return

wcb.mb.ca 204-954-6161 • 1-855-954-4321 ext. 6161 RTWProgramServices@wcb.mb.ca

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Manitoba Oil & Gas Review 2018

• Retain valuable employees • Reduce WCB costs

pates how to deal with a workplace injury – in a manner that makes workers feel appreciated – is an excellent way to increase engagement and remind them that they are a valued member of the team.

“Business owners are starting to see the strategic advantage that a Return to Work program can provide in recruiting and retaining workers,” says Darren Oryniak, Vice President of Compensation Services, WCB. “They are realizing that if they promote workplace safety and support Return to Work, they can attract and retain workers in the competitive labour market. At the same time, they are maintaining productivity, enhancing team dynamics, and improving workplace morale.”

Each workplace and worker is unique.

Therefore, Return to Work programs must evolve and be customized to meet the specific needs of individual workers and workplaces. Key principles based on participation, communication, responsibility, and early intervention help ensure the program’s success.

“Return to Work programs lead to a faster and better recovery, help ease financial worries and help the worker avoid isolation by reconnecting to social networks,” says Chris Poot, WCB’s Manager of Return to Work Program Services. “Medical professionals believe that Return to Work is a healthy and invaluable part of an injured worker’s recovery, as there is substantial evidence to support the positive link between work and physical, mental, and social health.”

An effective Return to Work program is one that is well-designed, communicated clearly, and understood by everyone in the company. It must be well-implemented, maintained and kept current. It involves

“ Medical professionals believe that Return to Work is a healthy the employer, injured worker, healthcare provider and the WCB. For Oryniak, the key is to have all four parties willing to do what it takes to return the injured worker to meaningful work.

“When all players are on the same page and the employer knows how to implement Return to Work, then we at the WCB never even hear about it,” he says. “The process happens seamlessly without any intervention from us. That’s the goal, and it’s definitely possible.”

To help organizations reach this goal, the WCB offers a free workshop strictly focused on helping employers create or enhance

their program to ensure an injured worker can safely return to meaningful work.

Called Return to Work Basics, the one-day course introduces the basic components and best practices of a Return to Work program.

“When a worker is injured, it’s vital for an employer to be actively involved in creating a meaningful Return to Work strategy,” adds Oryniak. “When there’s a way for injured workers to stay invested in the workforce while they recover, everybody wins.”

For more information, contact Return to Work Program Services at 204-954-6161 or toll free 1-855-954-4321, extension 6161. v

and invaluable part of an injured worker’s recovery, as there is substantial evidence to support the positive link between work and physical, mental, and social health.”

Tough Times Require the Right Decisions As a player in Canada’s volatile oilpatch you’re as tough as they get. Agile, hard-working, able to move forward in prosperity or adversity. To stay on top of this highly competitive industry you need a strong team behind you. MNP’s oilfield services professionals deliver the financial management, analysis and business advisory tools you require to make the right decisions at the right time. No matter where the markets go, we’ll keep you ahead of the curve.

Contact: Julee Galvin, CPA, CA Virden T: 204.748.1340 E: julee.galvin@mnp.ca

Deb Calverley, CPA, CGA Deloraine T: 204.747.2842 E: deb.calverley@mnp.ca

Corie Wudrick-Mohrbutter, CPA, CA Moosomin T: 306.435.3347 E: corie.wudrick-mohrbutter@mnp.ca

Manitoba Oil & Gas Review 2018

31

The Advantages of Satellite Imagery

for Long-term Environmental Monitoring Monitoring environmental health and tracking change over time is important to every operation in the resource development sector, but it’s especially so for oil & gas operations. Oil & gas organizations often have footprints that cover large areas, they often utilize potentially harmful chemicals and processes, and some operations can have lifetimes spanning decades.

The challenges they face monitoring environmental health can be numerous.

Areas that began operations decades ago often lack full information about the environmental conditions that existed before development. In addition, the ground testing required for monitoring can be very time consuming and expensive. Getting quality information about past and current environmental health in an efficient and cost effective manner can be difficult.

32

Manitoba Oil & Gas Review 2018

In order to address these challenges, Western Heritage has developed the Environmental Footprint Monitoring Platform, or EFMP. This platform uses 30-centimetre high-resolution satellite imagery to extract important information about environmental health and delivers it to environmental managers through an easy to access online platform. The platform identifies landcover types and monitors change and fragmentation of the landcover. It measures vegetation health based on vegetation greenness and productivity, or the change in biomass. It also measures aquatic health and change based on surface water depth, salinity and turbidity. These indices are well suited to the needs of oil & gas producers, and the platform has been designed to accept any other relevant data.

Using 30-centimetre high-resolution

satellite imagery to monitor environmental health has a few key advantages. One of these is the ability to look back using archival imagery to assess environmental conditions prior to or early on in the projects life cycle. Imagery is available from the early 1970s on, and this can be used to more accurately assess baselines for reclamation and investigate the source of past and current environmental conditions.

Another advantage is the ability to monitor the entire project footprint at once.

This allows managers to identify areas of potential concern and schedule ground testing or further analysis. This creates efficiencies in applying company resources, making sure that time and money is used as effectively as possible.

Because the EFMP uses satellite imagery, WH Geomatics has had to be creative

Previous page: 30cm resolution provides detailed overviews of the entire project footprint.

in ways to identify indices. An example is measuring salinity. Salinity does not naturally alter the reflectance of water, and therefore, there is no way to directly detect saline water. Knowing the importance of this information to our customers, we had to find contextual clues to detect saline bodies of water. Salinity does alter the vegetation communities near the water, and based on this, we have been able to map salinity in their project areas.

As technology changes, the way we look at the world is also changing. Environmental monitoring using satellite imagery has the potential to save time and money, and ensure the best possible information is available to decision makers. v

Monitoring water depth across a project footprint and surrounding area.

Manitoba Oil & Gas Review 2018

33

Bakken is Back on Track in 2018

The Williston Basin Petroleum Conference returns to Bismarck this May and will host another tremendous line-up of speakers to discuss what the future holds for the Bakken.

At CERAWeek in March, Torgrim Reitan, head of Statoil’s U.S. operations, said in an interview that “We have quite a lot of running room [in North Dakota]. We still see a great opportunity in the Bakken.”

Reitan is not alone in his assessment.

More than seven other executives will take the stage at the WBPC to share their insights and companies’ plans in the Bakken.

Among them will be Harold Hamm and Jack Stark from Continental Resources; Greg Hill from Hess; Don Hrap from ConocoPhillips; Brad Holly of Whiting Petroleum; Thomas Nusz from Oasis; Mark Pearson from Liberty Resources; and several others.

The Bakken’s resurgence has also caught the attention of investors, and several re-

34

Manitoba Oil & Gas Review 2018

nowned energy economists will discuss what they see for the future of the Bakken.

Financial news leader CNBC will also be onsite broadcasting live to hear from these and other leaders as they share their insights and expertise.

The increase in activity, however, is not without its challenges. Chief among them is the ongoing need for more natural gas infrastructure. Even in the downturn, natural gas production continued increasing. A panel will discuss the latest investments and needs in gas capture and processing, and review some of the newest technologies and innovations allowing for remote capture and more.

Attracting and retaining workforce is another challenge facing the industry, especially as the permanent employment in production jobs overtakes the more temporary, transient positions. U.S. Census figures show

that for every three people who moved to North Dakota since 2010, two are moving west of Highway 83. While communities have used the last few years as an opportunity to catch up to the frenzied activity of the past, it is becoming clear that there is more to do.

Once again, communities may see a need for more single-family housing and additional amenities. “Growing the Energy Workforce and Advancing Our Western North Dakota Communities” will include invaluable information for community leaders and developers, investors, and real estate developers who want to get ahead of the curve and begin building to meet the needs of North Dakota’s newest residents.

Many speculators have talked about the Bakken as though it’s a play of the past, but that is far from the truth. The Bakken continued to stay a step ahead in the down-

turn through innovation and has emerged as strong as ever. The Bakken is Now. This will be a major theme at our Williston Basin Petroleum Conference in May, and we are excited to welcome more than 40 speakers to present on that will take the Bakken to the next level. The WBPC has become an international business development event offering the latest information and trends that are valuable to everyone, from the multi-national corporations to our local Main Street businesses, and from federal government leaders to those leading our local governments. We hope you will

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35

LodgeLink creates online accommodation marketplace for remote workforce lodging Finding remote workforce lodging in the oil & gas sector can be a challenge during normal times.

However, it was during the tragic Fort McMurray wildfires of 2016 – as thousands of relief workers flooded the area and other evacuees fled the scene – that the requirement was felt most urgently and acutely.

“As the fires unfolded, a manual process was engaged to get people in and out of the area with phone calls each morning and Excel spreadsheets keeping track of available accommodations,” said Black Diamond Group president and CEO Trevor Haynes.

“While the industry and government team did a great job with establishing this impromptu system, we subsequently felt that the process could have been far easier with technology that could have quickly tracked and seen lodgings within a safe proximity of the wildfires.”

It was an event that ultimately led the Calgary-based Black Diamond Group to launch a new business, LodgeLink, last winter.

LodgeLink offers oil & gas staff, contractors, and sub-contractors a transparent online directory to easily find accommodation that best meets the needs of workers in remote areas. Users can then select and book accommodations after assessing availability, proximity and price. With over 20,000 rooms at over 100 remote properties across Canada, customers can use LodgeLink to book their accommodation.

The bulk of the accommodations are in B.C. and Alberta, with plans to slowly grow the listings across Canada, parts of the United States and Australia.

While the tragedy in Fort McMurray was a catalyst for LodgeLink’s introduction, the general downturn in the industry also meant that contractors who drill and complete oil wells, infrastructure developers and professionals who service and maintain facilities in the field were looking for cost-effective solutions to their day-to-day operational requirements.

“We know there is still a lot of business going on, but organizations are more cost-conscious,” Haynes said. “Project sizes are smaller and so are the number of crews, so you end up with smaller groupings staying for shorter periods of time before moving on to other project sites.”

And if you can cut expenses and travel times moving crews from one accommodation to another, so much the better.

Users have an opportunity to compare prices and amenities in

36

Manitoba Oil & Gas Review 2018

nearby locales and towns, while looking at a google map showcasing most of the remote roads located around oil & gas projects.

“Those looking for accommodation point to the visibility through LodgeLink – they see facilities they didn’t know existed before – as well as the opportunity to reduce the burden on office staff who previously had to find accommodations through word-of-mouth, phone calls, or e-mails,” said Haynes.

Additionally, many of the lodges have spare capacity due to the slowdown in project development after the 2014 oil price decline; but even during times of high activity, lodges tend to have periods of reduced occupancy which can be more efficiently used.

For owners of remote lodgings, opportunities are afforded to sell incremental rooms that often sit empty in the current environment, as well as adjusting pricing and amenities to remain competitive in the marketplace.

“It’s excellent timing for improved and efficient access to remote accommodations for oil & gas workers and professionals,” said Mark Salkeld, past president of the Petroleum Services Association of Canada (PSAC).

“For 2018, we expect a year-over-year increase of about seven per cent for wells drilled in Canada. That said, it remains more important than ever to keep operational costs as low as possible as the industry stabilizes, and LodgeLink promises to play a role in helping that happen with this innovative solution.”

Along with oil & gas, crews or individuals servicing power lines, wind farms, pipelines, potash mines, roads and other remote facilities, as well as loggers, firefighters, prospectors, and stakeholder relations personnel who engage with remote communities could also take advantage of the service. v

For the World’s Sake, Canada Should Be Last to Phase Out Oil If we stop now, then other countries – often far less focused on human rights and the environment – will be happy to take our place.

Cody Battershill.

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Manitoba Oil & Gas Review 2018

I encourage you to take a moment and think back to your swimming lessons as a kid. After a few hours of intense swimming, your instructor blows a whistle and says, “Everybody out of the pool!”

Today’s global oil & gas sector is no stranger to self-appointed officials making demands on producer countries. But unlike your childhood swimming instructor, these critics are singling out Canada for expulsion. The rest of the players are free to stay in the pool – only Canada is being told to get out by the network of environmental activists who have labelled their attack as the “Tar Sands Campaign.” Why is it just our country that they are singling out of all the oil producers in the world?

We all know that the future champion is usually the one who was always the last out of the pool during swimming lessons – the one that showed real commitment and genuine drive.

In global petroleum markets, there’s a pool of suppliers that includes Saudi Arabia, Iraq, Iran, United Arab Emirates, Kuwait and Nigeria. These are no paragons of virtue in the democracy, environmental transparency, and human rights departments.

In some of these jurisdictions listed above − like Saudi Arabia, for example − women are banned from driving cars or leaving their homes unaccompanied by a male, while in others, collective bargaining rights and environmental, health and safety regulations are virtually non-existent or vastly inferior to Canada.

Let’s also not forget that many other countries produce oil with higher emissions than Canada.

The usual state of play in these jurisdictions is that programs to regulate carbon dioxide emissions fall well behind Canada’s programs – and in many cases, programs to progress technological innovation to reduce emissions in the oil & gas sector are virtually non-existent as well.

A little further down the list of suppliers in the global pool is Venezuela, where the failed socialist state brutally

smashes political opposition through violence, trumped-up prosecutions for treason, and a unilateral constitutional overhaul.

Canada’s in the top global supplier pool, too. But unlike most of the others, we’re also a top-ranked country for freedom, democracy, equality, social progress, freedom of belief, freedom of the internet, freedom of the press, best places to live, human development, places to raise a family, transparency, and environmental performance.

We’re also doing more than our share in the alternative energy space. Worldwide, Canada has the seventh largest wind power capacity, and we’re ranked 13th for solar and second for hydro generation. Per capita, we generate more renewable energy than most countries, and we’ve invested more than India, for example, in alternative energy over the last couple years. In 2013, we ranked seventh in the world – one spot behind Germany and ahead of India, the world’s second most populous country. Today, Canada is ranked fourth globally for clean tech and we’ve invested more than $45 billion in renewables in the last five years.

When you look at our oil & gas sector you can also see numerous and ongoing examples of Canada’s commitment to produce our oil and gas using a marriage of clean technology and technological innovation. Look at the work being done by Cosia and others. Let’s also not forget that many other countries produce oil with higher emissions than Canada.

That’s Leadership

At the same time, however, world energy demand is growing; forecasts for 2035 suggest fossil fuels will drop to 75 per cent of global energy from today’s 85 per cent.

And yet we’re the only supplier country where energy exports have effectively been blocked by sophisticated PR campaigns that have spent close to a decade and tens of millions of dollars, if not more, to build a coordinated activist campaign that falsely brands our sector as uniquely destructive.

We know organizations like Pembina Institute, Greenpeace, and Forest Ethics have played roles in a coordinated campaign to pro-

mote this damaging viewpoint of Canada’s energy sector, and it’s clear that similar activities continue – led by these same groups or by their allies.

If Canada is prevented from supplying oil to the world, then other countries – often far less focused on human rights and the environment – will be happy to take our place.

On the other hand, all Canadians win when our energy sector is strong. Between 2007 and 2015, Albertans paid $221.4 billion more in federal taxes than they received in transfers and federal programs.

In fact, according to respected Canadian economist Patricia Mohr, “Without crude oil exports, Canada simply cannot pay the rent.... We have no alternative way to pay for machinery, electronic equipment, and diverse other goods that Canadians depend on for their health and everyday existence.”

The best projections suggest the world will continue to use fossil fuels for generations. If in a hundred years the world reduces its oil & gas consumption, then we should plan on being the last ones out of the pool.

As Canadians, our social programs and economic well-being come largely from our own industry. It’s a made-in-Canada opportunity to maintain the best possible level of social security and quality of life for all Canadians.

While activist groups are quick with negative slogans and unrealistic demands, other more qualified experts are urging caution.

The world needs our oil and gas, and we produce it to the highest global standards.

For now, lets stay in the pool and remain the best swimmers in the class. Canadian resources are a positive force for people and the planet. v 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.

Manitoba Oil & Gas Review 2018

39

How the

Keystone Pipeline Spill

Proves Pipelines Are Safe

By Isaac Orr, The Heartland Institute On November 16, 2017, a section of the Keystone Pipeline that was completed in 2011 sprung a leak, spilling approximately 210,000 gallons of oil in South Dakota. Despite claims made by pipeline opponents that such incidents prove that pipelines cannot be operated safely – and therefore other pipeline projects such as Enbridge’s proposal to expand Line 3 should be denied – a closer look at the numbers proves pipelines are a safe, effective, and efficient way to transport the energy Americans rely on every day.

Before one can truly appreciate the safety pipelines provide, it’s important to have a basic understanding of how many oil spills are reported and how much oil Americans use on a daily basis. Reports of oil spills generally report the quantity of oil spilled in gallons. The reason for this is probably two-fold: (1) Most people can visualize the gallon of milk in their refrigerator, and thus it gives people a frame of reference, and (2) reporting spills in gallons results in larger numbers and thus more “click-worthy” headlines.

While reporting oil spills in gallons may help people conceptualize the size of spills, it is a poor way of giving the public the context necessary to understand the magnitude of an event when compared to daily oil consumption.

Oil is bought and sold in barrels, not gallons. There are 42 gallons in each barrel of oil, which means the November 16, 2017, Keystone leak resulted in about 5,000 barrels of oil spilling from the pipeline.

The Keystone XL Pipeline will transport 830,000 barrels of oil per day when completed, meaning the spill accounted for approximately 0.6 per cent of the total daily capacity that Keystone will be able to move when finished, and it’s just a tiny fraction of the amount moved in a single month.

More importantly, the flow rate for the section of Keystone that leaked is approximately 410 barrels per minute. At that rate, a spill of 5,000 barrels means the pipeline only leaked oil for approximately 12 minutes before operators noticed the leak and shut down the pipeline. This is quite astounding considering the national average response time for police responding to a 9-1-1 call is 11 minutes.

In many rural communities, it’s much longer. That means pipeline operators can respond to emergencies at least as quickly as emergency responders can.

The ability to quickly identify and rectify oil spills is incredibly important, because according to the U.S. Energy Information Administration, Americans use approximately 19.7 million barrels of oil per day. This total includes the gasoline used to power our cars, diesel fuel for trucks and tractors, heating oil to keep our homes

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warm in winter, and jet fuel that helps thousands of American travelers move swiftly across the world each day.

Data provided by the Association of Oil Pipelines (AOP) estimates 9.3 billion barrels of crude oil were transported by pipelines in the United States in 2014, amounting to nearly 25 million barrels per day.

(The difference between the number of barrels of oil consumed by Americans and the number transported by pipelines is likely the result of AOP’s figures including both imported and exported oil transported via pipeline.)

With these large numbers, it’s truly amazing that so few spills occur.

Additionally, it’s worth noting new pipelines are even safer than old pipelines, because they are equipped with more sophisticated technology that help identify leaks. This means even fewer spills will likely occur in the future.

Although pipeline opponents attempted to promote the story of the spill to push their anti-pipeline agenda, a closer look at the numbers demonstrates the Keystone Pipeline spill and the response by TransCanada, the company that operates the pipeline, were actually an energy success story, not a reckless environmental disaster. v Isaac Orr (iorr@heartland.org) is a research fellow for energy and environmental policy at The Heartland Institute.

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