Saskatchewan Oil Report 2016

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SASKATCHEWAN

Oil Report

2016

The voice of the oil industry in Saskatchewan.

Those Pipes

Pipelines are among the safest and most efficient methods of transporting energy

People Needs

Oil and gas HR report identifies new requirements in workforce development

The Happenings

Publications mail agreement #40934510

Low crude oil prices and their impact on the Canadian economy

www.saskatchewanoilreport.com


With 90 years of experience in construction, Graham has the resources and expertise needed to complete our client’s oil and gas projects safely, on-time and on-budget. As a leader in the industry, Graham delivers excellence on every project, every time.

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QP1

QP2

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Neptune Pump Services

serving southern Saskatchewan since 2006

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Contents

messages – reports – events

Message from Brad Wall, The Premier of Saskatchewan....................................................................................................14 Message from the Honourable James Carr Canada’s, Minister of Natural Resources...........................................................24 The Breakup from Hell 2.0 – Message from PSAC..............................................................................................................26 Let’s Stick to the Facts – Message from CAODC..................................................................................................................30 We’re All in This Together – Message from the Saskatchewan Chamber of Commerce.......................................................34 Fraser Institute 2015 Global Petroleum Survey Findings – Saskatchewan still seen as the most attractive Canadian jurisdiction for petroleum investment...........................................................................................................36 Public Opinion – Recent poll unveils Canadians’ anxiety about the economy and environment........................................44 New Pipelines Can Support Action on Climate Change – Message from Marg McCuaig-Boyd, Minister of Energy for the Province of Alberta..............................................................................................................48 High Stakes – Arguments remain heated on both sides of the Energy East pipeline debate..............................................50 On Going Saga – Keystone XL controversy becomes important issue in American election year politics...........................56 Those Pipes – With a high safety rating, pipelines are among the safest, most efficient methods for transporting energy...........................................................................................................60 People Needs – Oil and gas HR report identifies new trends and requirements in workforce development......................62 What’s the Price? – Low crude oil prices and their impact on Canadian economy..............................................................65 For the Love of the Patch – Oil drilling fuels passion for Crusader Drilling Corp.’s success...................................................68 A New Tomorrow – Coping mechanisms in troubling economic times...............................................................................70 Gearing up – Keeping safe, dry, and warm in the oilfield..................................................................................................72 Safety first – Commitment remains despite downturn in industry....................................................................................74 What’s In Store – The Petroleum Technology Research Centre’s Aquistore Project has applications and research potential........................................................................................................................76 High-Tech Support – New capabilities in enhanced oil recovery for “light and tight” reservoirs........................................78 Small Idea, Huge Potential – R.I.I. North America Inc. is on the cusp of new technology..................................................80 The Numbers Network – How CAPPA supports production accountants and industry.......................................................84 Clarence Campeau Development Fund – Creating jobs and opportunity for Saskatchewan Métis.....................................88 Resource Development – Reducing costs and improving quality in heritage management..............................................90 Everyone Can Find an Opportunity-The city of Weyburn is a dynamic community.............................................................92 Top of the List – The city of Swift Current offers an all around great quality of life.............................................................94 Great Plains College – Moving dirt and building roads to a brighter future.......................................................................98 YQR Prepares for Strong Growth – Regina International Airport ready for take off..........................................................100 The Best is Yet to Come – The 24th Williston Basin Petroleum Conference.......................................................................102 Learning Like No Other – Lakeland College’s Energy Centre is the first of its kind in Western Canada..............................106 Hot Ticket – The Redvers & District Oil Showcase is fast approaching..............................................................................108 Application of field-portable XRF in oil and gas exploration and production...................................................................110 The Transwest Group of Companies – Highlights of the helicopter division.....................................................................114 Reducing Emissions + Cutting Costs = Black Gold Industries..........................................................................................116 The Right Equipment on Your Terms – A buyer’s guide on whether you should purchase, rent or lease in the current economy............................................118 Temporary Cooling Solutions, Sustain Critical Operations – Aggreko portable cooling solutions reduce costly expenditures.................................................................................120 Pumps & Pressure – 30 plus years of innovation and growth..........................................................................................123 Information Services Corporation provide convenient geomatics solutions for oil and gas industry................................124 Slow Times to Go Times – Kenilworth Combustion uses challenging times to fuel innovation........................................126 Key to Success – Turning to optimization in an industry downturn.................................................................................128 Hometown Humble – Small company’s commitment to local roots continues to pay dividends.....................................131 Always Meeting Needs – South East Electric Ltd. weathers the industry storm by focusing on customer service and satisfaction..........................................................132 Stick to the Fundamentals...............................................................................................................................................134 Park Derochie – Trusted partners in oil and gas...............................................................................................................138 Assessing, Restoring, Protecting – EverGreen Enviro Corp. – protecting the environment of southern Saskatchewan....140 On The Road – Sterling Truck and Trailer Sales keep customers rolling.............................................................................143 Tailor Made – Custom vertical progressing cavity sump pump provided for oil storage application................................144 Done Right and On Time – Estevan Meter Services are the largest local instrumentation service provider because they are the best at what they do...................................................................................................146 Firing on All Cylinders – RAM Industries has become synonymous with delivering quality, custom cylinder solutions to the oil and gas sector.....................................................................................................148 The Quickest Way Around – Suretuf Containments Ltd. is one of the leading distributors of secondary containment systems in Western Canada...............................................................150 Position on Petroleum – Presidential election year likely to be filled with surprising developments...............................151 Index to advertisers.........................................................................................................................................................155 8

Saskatchewan Oil Report 2016

SASKATCHEWAN Oil Report is published by: DEL Communications Inc. Suite 300, 6 Roslyn Road Winnipeg, Manitoba, Canada R3L 0G5 www.delcommunications.com President & CEO: David Langstaff Publisher: JASON STEFANIK Managing Editor: Carly Peters carlypeters@mts.net Advertising Sales Manager: DAYNA OULION dayna@delcommunications.com Toll Free: 1.866.424.6398 Advertising Sales Representatives: ROBERT BARTMANOVICH | GLADWYN NICKEL JIM NORRIS | ANTHONY ROMEO COLIN JAMES TRAKALO Production services provided by: S.G. Bennett Marketing Services www.sgbennett.com Art Director: kathy cable Layout & Design: dana jensen Advertising Art: SHERI KIDD

© 2016 DEL Communications Inc. All rights reserved. Contents may not be reproduced by any means, in whole or in part, without the prior written permission of the publisher. While every effort has been made to ensure the accuracy of the information­contained in and the reliability of the source, the publisher in 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 R2L 0G5 Email: david@delcommunications.com PRINTED IN CANADA | 06/2016 On-Line Revision


Saskatchewan’s Favourite Wireless The best network in the province, owned and operated by SaskTel, just keeps getting better! Covering over 98% of the province’s population, with 11 SaskTel Stores and 138 Authorized Dealer locations, no one has you covered like SaskTel. 4G network improvements will continue in rural communities throughout 2015. 4G Coverage – June 30, 2015

4G LTE Coverage – June 30, 2015

Visit a SaskTel Authorized Dealer or SaskTel Store | 1-800-SASKTEL | sasktel.com The coverage areas shown are approximate. SaskTel cannot guarantee that coverage will be exactly as shown since factors beyond our control also affect coverage. These include weather conditions, terrain, your distance from a cell tower and whether the cell is being used indoors or outdoors. Saskatchewan 4G coverage is as of June 30, 2015. 4G LTE coverage effective date is June 30, 2015. Coverage areas outside of Saskatchewan are subject to change without notice. Long distance charges apply outside local calling areas. Rates vary depending on service plan. Mobile internet access speed provided by the network operator may vary due to the divide being used, network congestion, distance from the cell site, topography, environmental conditions and other factors. Speed on the Internet is beyond the wireless network operator’s control and may vary with your configuration, Internet traffic, website server and management policies and other factors. 4G and 4G LTE are not available in all areas.


Methane Gas Recovery, Utilization and Destruction

W

e, as an industry, have been faced with some hard facts as of late. Oil and Gas prices are in a slump, while political and environmental pressure are forcing our industry to make serious changes about the way we do business and how we extract, process, and distribute our end products both domestically and abroad. It can all feel a little overwhelming, like the sky is falling. Now, if history has taught us anything, it is that in troubled times there are always a few individuals, or companies, who take on the challenge and pave the way for others to follow.

ZERO EMISSION

from the Alberta Government commending them on their achievement.

FOOTPRINT, THE FUTURE

In this case, that company is Kenilworth Combustion, and the challenge at hand is how to effectively capture, utilize, and efficiently destruct the vented BTEX and VRU gases from Natural Gas dehydration still columns or Tank top vapours. In both Alberta and Saskatchewan regulations state that producers must reduce emissions to the guidelines set out in S-10, S-20 and AER Directive 39. These regulations are in place for good reasons, BTEX is a carcinogen, vented metane gas also plays a huge role in GHG emissions and for the health and wellness of everyone and zero vent gas would be ideal. Throughout Western Canada and the United States, government agencies are increasing limitations on Vent Emissions. Producers that are venting up to their limit or flaring, are left wondering how they can continue to operate… but it’s not all dark clouds and bad news. There is hope for reaching emission mandates, and it simpler than you might think!

IS NOW!

In early 2001, Kenilworth Combustion developed their first Waste Gas Recovery and Utilization system. Kenilworth Combustion devised a method of collecting and utilizing the waste gas as a fuel source, opposed to traditional methods of venting and flaring the unwanted casing or overhead gasses. The benefit to this was twofold, no more issues with flaring, and a 90% reduction in purchased fuel. This technology was applied to 100’s of single well batteries as well as facilities across Alberta and Saskatchewan, with millions of dollars being saved by producers. In 2008, this proven technology was applied to a Natural Gas Dehydration system, the results were ground breaking. Third party testing later verified that there was a 99.9% BTEX Destruction efficiency (see www. kenilworth.ca for the report), Kenilworth Combustion even received two letters

To make things even more exciting, the Kenilworth Combustion system does not require compressors or auxiliary blowers for combustion, making it low cost and simple to operate and maintain. These systems typically operate from 2-12 ounces of pressure. The system also uses the same patented natural draft burner technology that Kenilworth Combustion is known for, and with 100’s of units installed over the last 15 years, they have been proven to work in the field. Saturated BTEX/VRU gas is collected from the still column and enters the condensing unit (there are multiple options for condensing units). The condensing unit provides a critical function in the gas utilization process, along with drying the gas to a point where it can be combusted for process heating, it also separates out the condensate which is collected and later sold.

Even if there is a small amount of liquid left after the condensation process, the Kenilworth Combustion BTEX/VRU Burner tolerates these excess liquids. The gas now enters the fuel train of the Kenilworth Combustion BTEX/VRU PHM (Process Heater Module). This is a specially designed fuel train built to handle the specific demands of these types of gas. In addition to the Low Pressure BTEX/VRU fuel train, there is also a High Pressure Natural Gas fuel train that provides supplemental fuel in the event that there is not enough BTEX/VRU gas to heat the process.

Change in our industry is inevitable, in fact, history shows us it is the only thing we can expect. The changes we are seeing now, are the direct result of knowledge we have all gained regarding the impact of our operations on health and wellness in our communities and environment. With this knowledge also comes hope, and beyond that, a real solution to the issues we are facing. Through government regulations and industry support for new technologies, we are all in a position to make this time in history a turning point for a cleaner and brighter future, without sacrificing quality of life.

For more information contact Kenilworth Combustion Directly at 780-853-5340 or visit them at www.kenilworth.ca.

www.kenilworth.ca

TOLL FREE 1-866-744-3974 | MAIN OFFICE 1-780-853-5340 | FAX 1-780-853-5320 Kenilworth Combustion | Main Office | Contact Heine Westergaard 1-780-853-7775 Email : heine@kenilworth.ca | derekr@kenilworth.ca


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First Impressions are Important...

In 2014 we completed our first project in Saskatchewan. The Neilburg Pilot Project demonstrated the technical viability of STRIP, a downhole steam generation technology that reduces costs, emissions and surface disturbance as compared to surface steam generation. Our second project, located 25 km southeast of Lloydminster, is the first production-scale test of the STRIP technology. With industry-best practices including bored underground flowlines and voluntary community information sessions, we continue to build our reputation as a responsible operator committed to the social, environmental and economic health of Saskatchewan.

Second Impressions are what Matter

www.riina.ca


Investing in the Future of Saskatchewan Oil and Gas The STRIP Pilot Project, located in the Buzzard area 25 km southeast of Lloydminster, is the first production-scale test of the STRIP technology. The new oil recovery process generates steam underground to increase oil recovery. Compared to surface steam generation, STRIP is more efficient with lower capital and operating costs, reducing emissions, surface disturbance and water usage.

www.riina.ca


Message from Brad Wall

The Premier of Saskatchewan Saskatchewan is among many resourcebased jurisdictions around the world dealing with the impact of dramatically lower oil prices. It’s a time of great uncertainty for the energy industry and the governments that depend upon it for employment and revenue. I believe Saskatchewan’s economy is better placed than most to remain strong through the downturn, thanks to our diversified, rich resource base, and our competitive environment for investment and business. More than that, I have confidence in the future because our oil and gas sector is composed of tough, resourceful, resilient entrepreneurs who are finding ways to ride out the current market turbulence. They will need to be resilient because most analysts believe there will be no meaningful increase in crude oil prices anytime soon, with the most optimistic forecasts calling for an upturn in the second half of 2016. However, I believe when markets rebound, our industry will be stronger and more competitive than ever. Our government is doing its part to make sure this comeback story unfolds as it should. Our top priority has been to establish a royalty and tax regime that is competitive and stable. While other jurisdictions have considered changes to their royalty structure, we understand that what the industry needs from government now is certainty. And so we are following the ancient medical dictum: first, do not harm. That stability is central to our efforts to maintain a good business and regula14

Saskatchewan Oil Report 2016


Rich in Resources. Rich in Opportunity. The Fraser Institute 2015 Global Petroleum Survey ranks Saskatchewan 1st in Canada for petroleum exploration and development investment potential. Saskatchewan has what the world needs. Discover the opportunities.

saskatchewan.ca/invest |

“We love working in Saskatchewan. Steady regulations, great service and vast resources make it a great investment.� - Scott Saxberg President & CEO, Crescent Point Energy Calgary, Alberta


tory environment. It may explain why our province will account for 50 per cent of Western Canada’s shale and tight oil output by 2017, according to the National Energy Board. We’re grateful the industry continues to invest in Saskatchewan even in difficult times. For example, Crescent Point Energy (Saskatchewan’s largest oil producer) expects that most of its $950 million to $1.3 billion in capital spending will take place in our province; the company is planning to increase production by five per cent over 2015. Husky Oil announced a $500-million capital budget for 2016. Whitecap’s ongoing drilling operations in Saskatchewan include 66 new wells in 2016, an investment of nearly $60 million. Meanwhile, Raging River expects to spend $168 million in 2016, and has a longterm plan to drill nearly 1,900 wells and invest over $2.8 billion over the next 17 years. Our government will maintain its focus on ensuring we have sensible oil and gas policies and responsible governance, in Saskatchewan and across Canada. To that end, we continue to advocate for increased pipeline capacity for Western Canadian oil. All oil pipelines are important to Saskatchewan, not just those that carry Saskatchewan oil, because they can free up space on existing pipelines and open the door for even more investment. This is why our government has been so vocal in our support of pipelines like Energy East that will help bring Western Canadian oil to tidewater and decrease our reliance on imports from other countries; this is important not just for Saskatchewan, but for all of Canada. In addition, we remain steadfastly opposed to a national carbon tax that would unduly penalize Western Canadian oil and gas producers. In our view, a carbon tax would result in an unconscionable and punitive wealth transfer from the west to other regions. It would add insult to the injury represented by Canada’s unfair equalization system. If the objective of a carbon tax is to reduce greenhouse gas emissions, a far better way to accomplish this goal is through an investment in technology. That’s why the Government of Saskatch16

Saskatchewan Oil Report 2016

ewan has committed more than $1 billion to the Boundary Dam 3 project, the first commercial power plant in the world with a fully integrated post-combustion carbon capture system. Our advocacy has also included a call for the federal government to support the industry as it deals with the impact of lower prices. For instance, we urged Prime Minister Justin Trudeau to commit $156 million in federal funding to pay for the cleanup of oil and gas wells no longer capable of production. The Accelerated Well Cleanup Program (AWCP) would create about 1,200 badly-needed jobs in the decommissioning and reclamation of about 1,000 non-producing wells in Saskatchewan. Saskatchewan’s oil production has held up remarkably well despite the turmoil. We produced about 177.6 million barrels in 2015. This is a 5.6 per cent decrease from 2014, but a less severe drop off than what was experienced in Alberta, where conventional production declined nearly 10 per cent between November 2014 and 2015. Our energy sector remains a crucible of innovation R.I.I North America recently commissioned a $60-million enhanced oil recovery project near Lloydminster that uses state-of-the-art downhole steam generation in heavy oil production. The technology will raise recovery rates significantly while reducing the energy and water required in the production process and cutting upstream greenhouse gas emissions. Meanwhile, applications for steam assisted gravity drainage (SAGD) are being examined in projects under construction in the Lloydminster area—four operated by Husky Energy, two by Northern Blizzard and one by Serafina Energy, with more planned. SAGD is an enhanced oil recovery technology for producing heavy crude oil. Current recovery rates under primary production methods are approximately five per cent of oil in place; with these projects fully implemented, recovery rates are expected to increase to as much as 50 per cent. Husky has been investigating the use of carbon dioxide to enhance heavy oil recovery with support from Saskatch-

ewan, and has also been undertaking research to develop new technologies to provide a source of carbon dioxide. We are optimistic that in time, these new technologies will benefit other heavy oil producers. Thanks to the industry’s commitment to innovation, the dubious charge that Canada produces “dirty oil” will become more implausible than ever. Driving all of this is a simple understanding: it is not enough to be blessed with the resources the world needs – the world needs to be able to access these resources. Consequently, we’ve done our best to create an operating environment that is highly competitive. We are a low-cost jurisdiction with an approach to red tape accountability described as “on the right track” by the Canadian Federation of Independent Business. The Fraser Institute Global Petroleum Survey, 2015, a survey of petroleum industry executives and managers, ranks Saskatchewan as the most attractive place to do business in Canada and the sixth most attractive jurisdiction in the world among the 66 jurisdictions ranked in the survey. Our commitment to maintaining a favourable environment for oil and gas investment will not waver. We know how important energy is to the economic and social well-being of our province, our nation and the world. During the last eight years, Saskatchewan has gone through a remarkable period of growth. Our population is now at its highest level in our history – over 1.1 million – and growing faster than it has in generations. Tens of thousands of people have come to Saskatchewan because there is opportunity here. And much of that opportunity has been created by the oil and gas industry and the dynamic businesses that serve it. We’re grateful for this. And we intend to keep a good thing going. v

Brad Wall Premier


Clarence Campeau Development Fund CCDF provides unique and innovative forms of financial assistance to support MĂŠtis business development in Saskatchewan. Can we help you? Contact us today for more information!

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Saskatchewan Oil Report 2016


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Geomatics Solutions:

From Space to the Field


Built on a foundation that dates back to the Dominion Land Survey in the late 1800s, Information Services Corporation (ISC) is your trusted business partner for exploring Saskatchewan’s untapped potential. We can help you capitalize on your valuable exploration resources by offering the most comprehensive and accurate geomatics products and services in the province. From satellite imagery to geographic information system (GIS) data and custom mapping, ISC takes the guesswork out of your oil and gas exploration. By integrating land title and land survey records with geographic data, we help you make efficient and informed decisions without unnecessary expenses. Best of all, it’s simple to use. ISC offers easy, accessible and searchable online access. Priority service is available if you need your information quickly. For up-to-date maps, GIS data and imagery, contact the ISC Geomatics Distribution Centre by: • Calling us toll-free on 1-866-275-4721 or • Visiting us at 1301 – 1st Avenue Regina, SK S4R 8H2 You can also find out more information about ISC products and services at ISC.ca.


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Message from the Honourable James Carr

Canada’s Minister of Natural Resources On behalf of the Government of Canada, I would like to thank

• No project proponent will have to start over;

Saskatchewan Oil Report for the opportunity to discuss the

• The views of the public and affected communities will be

Canadian energy industry.

sought and considered;

Despite the current global downturn in commodity prices,

• Indigenous peoples will be meaningfully consulted;

the long-term prospects for Canada’s energy industry remain

• Direct and upstream greenhouse gas emissions will be part of

strong. In fact, according to the International Energy Agency, the world will need nearly one third more energy by 2040 than we have now – and almost three-quarters of that energy will

the environmental assessment; and, • Decisions will be based on science and traditional knowledge of Indigenous peoples.

come from fossil fuels.

In Budget 2016, we committed $16.5 million to implement

Key to that future is restoring public trust in the way Canada

this interim approach. We also provided $50 million for tech-

reviews and assesses major resource projects. If we’re going

nologies that will reduce greenhouse gas emissions in the oil and

to attract the investments we need to sustainably develop our

gas sector.

resources and get these to markets, we have to better engage

While this is a challenging time for the energy industry, it is

Canadians, conduct deeper consultations with Indigenous

also a time of opportunity. Canada’s oil and gas sector has im-

peoples and base decisions on science, facts and evidence.

mense potential to achieve great prosperity and our government

To ensure greater certainty for projects already in the queue,

is committed to ensuring that the conditions are right for this to

we introduced an interim approach based on five key prin-

occur. Together, we will demonstrate that economic growth and

ciples:

environmental protection can go hand in hand. v

• COR Certified •

Dispatch: (306) 421-9295

Serving the Transportation Industry Since 1975

LARRY ALLAN Cell: (306) 457-7712 Box 162, Creelman, Saskatchewan S0G 0X0 Email: ldallan.jjtrucking@outlook.com

Gravel Hauling | All Types of Aggregate Sealed Trailers for Hauling Contaminated Waste Heavy Equipment Hauling | Excavating Lease Preparation and Reclamation

Office: (306)433-2069 24 Saskatchewan Oil Report 2016

TOLL FREE: 1-888-532-5526

Fax: (306)433-1223



The Breakup from Hell 2.0 By Mark Salkeld, president and CEO, Petroleum Services Association of Canada (PSAC)

Under normal circumstances we in the Canadian oilfield services sector refer to the first quarter of every year as the “100 Days of Hell.” That’s when we go the hardest to get the jobs done for our customers; logistically intense, fast, safe, and efficient. It is one of our many claims to fame in the Canadian oilfield services sector — on top of a hard work ethic, pride in work well done, and teamwork. This is all good when the patch is performing. But last year and this year have been anything but good. Instead, spring breakup came around way too soon last year and this year the same – but more for economic reasons than environmental. We stopped work sooner, and we’re bringing our equipment home where we service, repair, inspect, and rack it against the fence so it’s ready for the next round. And the next round didn’t come last year and it’s highly unlikely to come this year. More and more of our folks are out of work, out of luck, and out of income. Other industries have gone through the same bad circumstances, maybe even worse. For example, think of fishing out east, the automotive sector, and now manufacturing. But what seems almost like adding insult to injury is all the noise in the media and online from so called experts about how the oil and gas industry is ruining Canada. Tell me: How would we be better off leaving these resources in the ground? I mean really? How ill-informed is that? Did those same detractors write their opinions on computers or papyrus paper? I don’t recall reading anything about leaving the fish in the sea, fruit 26 Saskatchewan Oil Report 2016

on the trees, or parking all the cars. And yet, how would all those opinionated Canadian detractors find their way to their computers, fresh fruit, and seafood if it wasn’t for oil and gas. Oil and natural gas products are found in electronics, sports equipment, and in your yard, closet, kitchen, car, bathroom, and local hospital. There are petroleum products in the clothing and accessories you wear every day – shades, clothing, shoes, pantyhose, raincoats, and more. PSAC produced a series of PSAC Product Videos that everyone should check out to see how many products in our world today are made from petroleum products. Find out more and watch the videos at oilandgasinfo.ca/oil-gas-you/ products/. It’s like our detractors can’t see the forest for the trees – all good in their world as long as they are warm at night, have hardworking oilpatch workers to pick on from the comfort of their natural gas heated homes and synthetic bath robes, made in China and flown to Canada on planes using oil and gas derivatives. And how do we get the industry detractors their natural gas? With hydraulic fracturing no less. A very old and proven technology perfected over the years by those now unemployed oilfield services workers. It seems there is a whole generation that doesn’t appreciate the fact that Canada is not an overly hospitable place to live if we didn’t have heat for our homes, garages, and places of work. Oil and gas provides a means to bring food in when we can’t shop for or grow food within walking distance of

our nice warm or cool houses. So industry detractors pick on something they are not educated about. Fracking just sounds good to say in a negative way. From the perspective of the hardworking oilpatch worker, it’s like they’re telling our world they are fools, and uninformed people listen to these same fools because the word fracking strikes an emotional chord. Just how the detractors like it. Let’s play up emotion and throw out facts, good old fashioned Canadian ingenuity and entrepreneurialism out the window. I find it interesting that quite a few universities across Canada and the U.S. teach hydraulic fracturing to their engineering students and have done so for years. Hydraulic fracturing has been researched, tested, improved, taken to such a high level of sophistication and success that other countries are banging on Alberta’s oilpatch door asking for help on how to develop their own natural resources in environmentally responsible manner. And how does the oilpatch fare through all of this? Like the other industries hit with tough circumstances beyond their control, we tough it out, find work elsewhere, ask for help as a last resort and do the best we can. So hats off to the Canadian Association of Oilwell Drilling Contractors (CAODC) for their Oil Respect campaign. I hope it begins to resonate with the generation that thinks gas for their cars comes from gasoline pumps connected to convenience stores, just like carrots and fresh fruit comes from grocery stores, and their snow boards and bindings come from



the same sporting goods stores that supply them with their down-filled ski jackets flown in from somewhere other than Canada for the most part. Oil Respect is about connecting the dots between a high quality of life our industry detractors take for granted and the oilpatch worker that just wants to work for a living. So, get your bumper stickers and T-shirts and sign CAODC’s online petitions at oilrespect.ca. Retweet and share their posts on social media. PSAC is also working hard on initia-

tives to raise awareness of this industry — who we are, how good we are, and how highly respected this industry is by folks from other countries that want what we have. I travelled to India last fall and discovered that many companies from India want to do business with Canadian oil and gas services companies, especially PSAC members, because they hold to high standards and are highly respected in the industry. I also just came back from Mexico and Colombia, where I participated in trade missions to build

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connections with Canadian oilfield services companies interested in doing business internationally. It’s a good idea to diversify your markets in this economic downturn. At home, PSAC is working hard to educate, build relationships with, and influence policy with provincial and federal governments and educating thought-leaders and communities about how safe and technically sound hydraulic fracturing is to produce our resources, as all of the pressure pumping companies in Canada are PSAC members. We are working hard on behalf of our members to pave the way for them to go back to work and stay working. I am extremely proud of this industry, the people, the work ethic, the ingenuity and camaraderie. We are successful, because we communicate between each other, the service providers, the customers, the regulators, and the governments. We are transparent. We are open. We want success for ourselves, our families, and our friends. It’s too bad that our industry detractors also benefit from the hard work that we do. Sometimes I wish they couldn’t, so they could see the value the oil and gas sector brings to their lives. Imagine if those that think we should leave the oil and gas in the ground have all that comes from oil and gas taken away from them, from their families and their likeminded friends. How would they get dressed in the morning, drive their cars to work or use their computers without petroleum products? As long as they live in Canada in comfort, our detractors are truly exposing themselves as ill-informed folks that take everything they have for granted. At the end of the day, we in the Canadian oilfield services sector will survive. We will go back to work, we will hire new people, and we will continue to develop our natural resources better than anyone else in the world. And, because of our efforts, people around the world with less than us will benefit… maybe even to the point where they can take an exceptional quality of life for granted. v


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Let’s Stick to the Facts By Mark A. Scholz, president of the Canadian Association of Oilwell Drilling Contractors

Oil Respect was launched a few weeks ago and public support has been overwhelming. One of the campaign’s objectives is to provide regular Canadians with an opportunity to stand up for Canada’s oil and gas industry and the workers who make it run. It’s a goal that has attracted supporters from Victoria to St. Johns, which isn’t surprising. Oil workers and oil families matter. The industry employs over 500,000 people, and everyone in the industry knows people who have lost jobs; a friend, a father, a daughter; more than 100,000 people unemployed because of the recent downturn. But oil workers aren’t just losing their jobs, families are losing their homes. It’s the worst slump since the 1980s, and soft oil prices aren’t the only problem. Radical environmentalists, foreign celebrities, and grandstanding politicians continue to distort the record of Canada’s oil and gas industry further imperilling job prospects for oil workers. Oil Respect is also about correcting the record against these exaggerations, half-truths, and fabrications. If we don’t push back with the facts bizarre ideas can take root in the media and among people in positions of influence. For instance many opponents of Canada’s oil and gas industry would have you believe that if Canada quit producing oil, the world’s greenhouse gas emissions would go down. This of course is untrue. Other nations would immediately step in to make up the extra production. In fact the current swoon in oil prices has been caused by increased production from countries like Saudi Arabia, Iran, Russia, and Venezuela. Unfortunately, none of those countries meets the same strict carbon emission standards as Canada, not to mention Canada’s far higher labour, safety, and human rights standards. Despite this, imports of Saudi, Nigerian, and U.S. oil are on the rise in Canada. We believe Canada would be better off in every way if eastern refineries were taking oil from Alberta instead of Algeria, but we need pipelines to do that. To put the argument the other way around the world would be better off in many ways if a bigger share of the world’s oil production came from Canada. 30 Saskatchewan Oil Report 2016

Furthermore, the International Energy Agency projects that the world demand for oil will grow in the decades ahead. If so, doesn’t it make sense for that oil to come from a country like Canada? In the meantime many companies are developing new ways to produce clean and renewable energy. In Canada the leaders in the production of wind and solar energy are also some of Canada’s largest oil and gas companies such as Enbridge, Suncor, Shell, and Trans Canada. Profits from oil and gas development and transport make that possible. Again, these are facts. But the revenues from oil and gas development, transport, and processing help in other ways too. Not only do they come back to us in the form of profits in our RRSPs and to the Canada Pension Plan, they also provide billions of dollars in revenues to Canadian governments. On average $17 billion dollars a year comes from oil and gas to fund nurses, teachers, firefighters, and police officers. These are the facts of life in Canada and if we ignore them we risk basic government services. Finally it is a fact that the safest and most efficient way to transport oil, or any petroleum liquids, is by pipeline. Building pipelines also ensures that we can move Canadian oil to market, meaning better profits for companies, more revenues for governments and more jobs for workers. The proposed Energy East pipeline would mean a $14 billion shot in the arm for the Canadian economy. Trans Mountain would inject $9 billion, and all of that $23 billion dollars would be private money. Tens of thousands of workers would be employed without asking taxpayers to pony up. The much discussed “middle class” would benefit as soon as approvals were received. Again, these are facts. Oil Respect ensures that regular Canadians, and the hard facts are at the forefront in the sometimes emotional but entirely legitimate discussion about Canada’s use of our oil and gas resources. Help us get the attention of governments by signing the petitions at www.oilrespect.ca and by liking our Facebook page. Let’s fight together to protect and promote an industry that has done so much to make Canada the best country in the world. v


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We’re All in This Together By Curtis Hemming, Director of Government Relations, Saskatchewan Chamber of Commerce

To quote a successful 1992 American political campaign, “It’s the economy, stupid.” This is something that our provincial and federal politicians, the media, and Canadian citizens need to keep at the front of our minds. Our country’s energy sector is hurting right now. This is clear when you look at the massive layoffs in Alberta, Saskatchewan, and Newfoundland. The manufacturing sector in Ontario has been shrinking for decades. With the value of the Canadian dollar dropping, at least they’re seeing a resurgence right now. Atlantic Canada’s fishing industry has also been suffering for a long time. This is evident when you look at the chronically high EI claims in those provinces. As regions within a giant country, we too often point and mock other regions that aren’t doing well, or tell them that they need to start pulling their weight. Western Canadians have taken great pride in our strong resource economy for years, as we should, but we’ve also too often mocked the less fortunate parts of our country for their hardships. Now when we need their support on issues that are important to us, like building pipelines or creating sensible new environmental regulations, they’re less willing to help. As Canadians, we need to stop doing this. Every region and every industry in the country will have its ups and downs. All we can ever do is hope that it isn’t our own.

Municipal, provincial, and federal politicians need to be working together during these difficult economic times to effectively allocate the infrastructure money that will soon be spent. While there have been many polite conversations in recent months, there have also been too many antagonistic comments exchanged between our elected officials. Even though this is a difficult time for many businesses and employees, especially those closely connected to the resource sector, it is also an opportunity for us to invest in building the infrastructure that will maintain Canada’s prosperity in the future. Whether it is roads, bridges, pipelines, ports, or other projects, we should be investing in our country to make sure it continues to have the capability to ship our resources and products to world markets. Not only will these infrastructure investments help to offset the recessionary effects of the current downturn, they will also provide jobs for people who are eager to work, but are just not able to find jobs right now. In order to ensure that the highest leverage projects receive funding, we need to be able to evaluate them without having to constantly play politics with every major funding decision. As citizens, businesses, associations, and the media, we must constantly remind our elected officials in all levels of government that they need to support projects that make sense, not just ones that are politically convenient. It’s our economy, stupid. v

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Fraser Institute 2015 Global Petroleum Survey Findings Saskatchewan still seen as the most attractive Canadian jurisdiction for petroleum investment By Dr. Gerry Angevine, Senior Fellow, the Fraser Institute As in 2013 and 2014, the 2015 Fraser Institute Global Petroleum Survey of explorers and developers indicates that Saskatchewan is the most favourable place in Canada for upstream petroleum exploration and development. Remarkably, Saskatchewan has now placed in first or second in Canada, and also achieved a very high rating when compared with jurisdictions in the United States and other countries according to the survey’s all-inclusive Policy Perception Index scoring methodology, for eight consecutive years. Manitoba ranked second in Canada for the third year since 2013, but the difference between its score and Saskatchewan’s has widened slightly. The Fraser Institute’s ninth annual survey was conducted during the summer of 2015, and the results were published on December 1, 2015. The findings are based on responses from 439 petroleum industry executives, managers, and experts to questions regarding barriers to investment in petroleum exploration and production development in 126 provinces, states, regions, and countries. As in previous years, the survey questions targeted 16 important factors impacting investment in upstream petroleum exploration and development. These include fiscal terms; taxation and other factors affecting the commercial environment, such as the availability of skilled labour; quality of and access to essential infrastructure; the regulatory climate which investors face including the cost of regulatory compliance, duplication, inconsistent interpretation, and enforcement of regulations; uncertainty regarding how environmental regulations may be altered; and a number of other important issues such as land claims disputes, political stability, and security of personnel and equipment. 36 Saskatchewan Oil Report 2016

The survey scores assigned to the various jurisdictions are based on the percentage of responses that indicate that a given factor is considered to be “a mild or strong deterrent to investment” or is so onerous that respondents “would not invest” in the jurisdiction in question due to that policy factor. Because of the focus on negative perceptions, the jurisdictions with the lowest scores are considered to pose lower or fewer barriers to investment and, therefore, to be the most attractive for investment. It is important to note that the Policy Perception Index rankings referred to above (with regard to Saskatchewan and Manitoba) in which all 126 of the jurisdictions rated in the survey are included, do not reflect the extent of the various jurisdictions’ crude oil and natural gas resources or reserves. When jurisdictions’ proved petroleum reserves are considered, the rankings are much different. For example, when grouped with 14 jurisdictions each holding at least one per cent of total proved petroleum reserves (of the 118 jurisdictions ranked in the 2015 survey which have at least some proved reserves), Alberta – the only Canadian jurisdiction with “large” reserves – ranks as the third most attractive jurisdiction for investment (down from second in the 2014 survey when there were 26 jurisdictions in the group), behind only Texas and the United Arab Emirates but ahead of Iran, Russia, Venezuela, Qatar, Iraq, Kuwait, and five other jurisdictions in the group of 14 large reserve holders. Among 38 jurisdictions holding at least 0.1 per cent of total proved reserves, but less than one per cent, British Columbia (the only Canadian jurisdiction in this group in 2015) ranks as the 17th most attractive for investment. This compares with 19th (of 44) in the 2014 survey

and 14th (of 40) in 2013. Oklahoma, North Dakota, Norway—North Sea, West Virginia and Louisiana are the five topranked jurisdictions in the group of medium reserve holders. All of the other Canadian jurisdictions with proved reserves fall in a group of 66 jurisdictions with relatively small reserves. Although Saskatchewan achieved second place in this group in the Fraser Institute’s 2013 and 2014 surveys, in 2015 Saskatchewan ranked 6th (behind Netherlands—Offshore, Alabama, Mississippi, Kansas and Arkansas). Were it not for a slight deterioration in the province’s survey score from 2014, Saskatchewan would be sitting in third place. As in 2014, Manitoba ranked just below Saskatchewan, lying in seventh position compared with third place a year earlier. The two provinces’ high rankings within the group of jurisdictions with relatively small reserves reflects their generally positive attributes with regard to most of the investment drivers addressed in the survey. Newfoundland & Labrador, Yukon and the Northwest Territories fairly attractive scores placed them in 16th, 22nd, and 23rd place (of 66), respectively. Nova Scotia ranked 33rd and New Brunswick, 38th. On the basis of the Policy Perception Index rankings obtained when all of the jurisdictions for which sufficient survey responses were obtained are included, regardless of the extent of their petroleum resources, Table 1 shows that Saskatchewan and Manitoba were ranked higher by survey participants in 2015 than Canada’s five other significant oiland gas-producing jurisdictions in terms of attractiveness for upstream investment – repeating the success of these two provinces for many years. However, the fact that both provinces have some-


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Table 1 Survey Results for Selected Canadian Jurisdictions Index Values and Canadian Rankings (of 7) 2014

2013

2012

2011

2010

Saskatchewan

10.3 (1)

11.4 (1)

14.6 (2)

17.5 (1)

17.6 (2)

Manitoba

11.5 (2)

16.9 (2)

11.1 (1)

17.5 (2)

12.5 (1)

Alberta

26.6 (3)

24.5 (3)

21.1 (3)

32.7 (5)

36.7 (6)

Newfoundland & Lab.

39.1 (4)

26.4 (4)

33.8 (6)

32.3 (4)

32.4 (3)

Nova Scotia

49.0 (5)

27.5 (5)

26.2 (4)

26.6 (3)

33.3 (5)

British Columbia

49.6 (6)

35.6 (6)

27.7 (5)

41.4 (6)

33.2 (4)

Northwest Territories

53.1 (7)

40.8 (7)

39.6 (7)

64.8 (7)

44.1 (7)

what higher survey survey scores than in 2014 reflects somewhat less enthusiasm on the part of potential investors because the higher scores reflect higher percentages of negative responses with regard to a number of the investment drivers captured by the survey questions. Of the seven jurisdictions compared in Table 1, the Northwest Territories demonstrated the most improvement in 2015, rising to fourth place from seventh position in each of the previous four years as the result of a lower (i.e. more positive) score. Newfoundland & Labrador moved up to third place, from fourth. Nova Scotia dropped to last place from fifth in spite of a slightly improved score. During 2012 through 2014, as Alberta backtracked from the royalty hikes embedded in the so-called “New Royalty Framework” it achieved relatively attractive survey scores and ranked third among the group of seven Canadian petroleum jurisdictions included in Table 1. However, Alberta’s score was worse in 2015 than at any time since 2010, causing the province to slip from third place to fifth. Manitoba ceded some ground to Saskatchewan in the 2015 survey as its less attractive score (up by 6.7 points) exceeded the 3.6 point deterioration in Saskatchewan’s score. With regard to Saskatchewan, although fiscal terms, regulatory uncertainty, and infrastructure were indicated to be of less concern than during the previous year, respondents indicated that land claims disputes had become much more worrisome. In addition, labour availability, uncertainties in relation to protected areas, the cost of 38 Saskatchewan Oil Report 2016

regulatory compliance, taxation in general, and a number of other regulatory concerns were of greater concern than in 2014. The less positive indications with respect to some of the investment drivers were sufficient to more than offset reduced levels of concern with respect to others, thus increasing the province’s score (Table 1). In Manitoba, the cost of regulatory compliance appeared to be of much less concern than in 2014 but, on the other hand, land claims disputes were of much greater concern to investors than previously. In addition, general taxation issues, the availability of infrastructure, and uncertainties over protected areas were all significantly greater. As a consequence, Manitoba’s score not only deteriorated somewhat, but widened relative to Saskatchewan. Newfoundland and Labrador’s improvement from 2014 is attributable to significantly lower negative score percentages on the survey questions pertaining to labour regulations and agreements, labour availability, land claims disputes and regulatory duplication. This, as well as more positive perspectives in relation to fiscal terms, more than offset a rather large increase in the extent of concern pertaining to the cost of regulatory compliance and worries with regard to issues such as taxation in general and environmental regulation. The Northwest Territories achieved a remarkably improved score in the 2015 survey compared with the preceding year (Table 1) because of lower percentages of negative perspectives over a wide range of survey questions but, especially,

regulatory duplication (which had been a major issue there for some time), labour regulations and agreements, uncertainties in relation to protected areas, the cost of regulatory compliance, and access to infrastructure. More concern was expressed than a year earlier in relation to environmental regulation but this was more than offset by the widespread reduction in negative sentiment in relation to other issues. Alberta’s less-attractive score than a year earlier and drop in the rankings is mainly attributable to a significant increase in negative perceptions in relation to fiscal terms. However, increased concern was also indicated by the survey respondents with reference to a number of other issues, especially taxation in general, environmental regulation, and uncertainties pertaining to protected areas. The worries in relation to fiscal terms undoubtedly reflect the new provincial government’s commitment to launch a review of oil and natural gas royalties.1 The rise in the percentage of negative responses with regard to taxation in general is most likely the consequence of both the increase in the corporate income tax rate and increased tax rates applicable to high-income earners. The greater level of concern pertaining to various regulatory issues suggests that respondents were fearful that the new government would advance costly new regulations on the upstream petroleum industry. That concern over labour availability was much less than a year earlier appears to reflect the marked weakening of the Alberta economy because of the drop in oil prices British Columbia’s score improved as the result of lower percentages of negative responses over a broad range of survey questions. The improvement was most apparent with regard to fiscal terms, taxation in general and labour regulations and agreements. Referring again to Policy Perception Index results for all jurisdictions regardless of the extent of their petroleum resources, Table 2 shows that eighth place Saskatchewan (compared with third place in 2013 and 2014) ranks among the top 10 jurisdictions worldwide in terms of attractiveness for upstream investment for the third year in a row. Manitoba, which has been among the top 10 jurisdictions



Table 2 How the Western Provinces Rank Worldwide 2014 (of 156)

2013 (of 157)

2012 (of 147)

2011 (of 135)

2010 (of 133)

Saskatchewan

3

3

13

11

17

Manitoba

5

9

5

12

8

Alberta

16

19

21

51

60

British Columbia

62

47

39

69

52

surveyed by the Fraser Institute for four consecutive years dropped from fifth place to 10th. Alberta fell from 16th (of 156) to 38th place (of 126) globally. British Columbia improved its global standing from 62nd place to 50th place. No doubt that this reflects that province’s improved score. But one needs to be mindful of the fact that had the number of jurisdictions ranked in the 2015 survey remained the same as in 2014 at least some of the changes in rank-

ing might have been less significant or even in the opposite direction. In order to maintain its position as the most attractive jurisdiction for investment in petroleum exploration and production development in Canada, one of the most attractive jurisdictions among the group of small reserve holders, and a top 10 ranked jurisdiction globally, Saskatchewan will need to ensure that the fiscal regime applicable to crude oil and natural

gas production, and taxation in general, continue to contribute to a competitive commercial environment. Moreover, in light the 2015 Petroleum Survey findings, Saskatchewan must strive to create and maintain a regulatory environment in which investors’ concerns with regard to land claims issues, uncertainties surrounding protected lands, and the cost of regulatory compliance do not continue to grow. Footnote 1 Since the 2015 survey was completed the Alberta Royalty Review Panel has recommended that the Province hold the line on oil and gas royalties and the Alberta Government has accepted those recommendations. As a consequence, participants in the 2016 survey are likely to view Alberta somewhat more favourably. v

The Fraser Institute is a non-profit research and education organization. The full report on the results of the 2015 Global Petroleum Survey may be downloaded free-of-charge at: http://www.fraserinstitute.org/sites/default/files/global-petroleum-survey-2015-rev.pdf The 2016 survey will be launched during the summer and results will be available in the fall.

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Public Opinion Recent poll unveils Canadians’ anxiety about the economy and environment By Melanie Franner

Canadians across the country are deeply concerned about the state of the economy. They also have strong support for Alberta and the province’s current energy situation. Such are the findings of a recent CBC-sponsored online poll undertaken by EKOS Research Associations Inc. The poll took place between February 16 to 26, 2016, and included the responses of a random sample of 2,098 Canadians aged 18 and older. “The most striking thing about the results of this poll is the collision of two forces in public opinion, namely the economy and the environment,” says Frank Graves, president of EKOS Research. “Typically, when people feel this gloomy about the economy, their concern for other issues like climate change, is lessened. In this case, we see paradoxical views on the environment and energy.” The poll found that Canadians identify the economy as the most important issue facing the country – capturing 33 per cent of the votes, with education next in line at 12 per cent. The economy also scored high on the list when Canadians were asked to rate their degree of con-

ronment came in at 44 per cent and 39 per cent respectively.

Alberta’s Environment Minister Shannon Phillips

cern with a number of issues. The economy was seen as the most significant, with 57 per cent of the people saying they were “very concerned” and another 35 per cent saying they were “somewhat concerned.” Improving the health care system garnered 46 per cent of the “very concerned” votes and 43 per cent of the “somewhat concerned”, while the envi-

Energy and environment Canada’s oil and gas industry is recognized in the poll for its role in the economy. Some 92 per cent of Canadians think that the oil and gas industry is important to Canada’s economy today, while only 69 per cent think it will be important in the future. The poll also asked Canadians about their support for various pipeline projects – Energy East, Enbridge Northern Gateway Pipeline, and the Trans Mountain Pipeline. Results show that Energy East is by far the favourite, with 59 per cent of Canadians expressing support for the project (35 per cent were in opposition). The other two projects received 48 per cent and 47 per cent respectively. “There are some regional differences, which is less surprising,” says Graves. “For example, Alberta and Saskatchewan are very strong proponents of Energy East.” According to Graves, one of the strong take-aways from the poll is the recogni-

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tion of the importance of energy to the country’s economy and its importance to Alberta’s present and future economy. “From what I see, most respondents say we should be helping Alberta out at this stage,” he says. In fact, the poll showed that six in 10 Canadians support an additional $700 million in spending earmarked for Alberta’s infrastructure. In comparison, only 33 per cent are in opposition. There is also strong support to remove EI restrictions for Albertans, with some 56 per cent of Canadians in agreement versus 34 per cent in opposition. “I think this poll showed that there is broad acceptance across Canada for the fact that Alberta’s energy product powers the country, which is a good thing,” says Alberta’s Environment Minister Shannon Phillips, who adds the province’s leadership on climate change looks like it has been well received – although she adds there is still a lot of work to do. “Canadians have an ethical environmental stance. All Canadians want to ensure that we’re being responsible with the

46 Saskatchewan Oil Report 2016

environment. There is no doubt that we have more work to do. That’s why we’re engaged with the other provinces.” Minister Phillips is also closely following the government’s policy in regards to green energy. The poll found that 73 per cent of Canadians believe the focus going forward should be on green energy investments, with just 20 per cent saying the focus should be on expanding fossil fuel use. “We look forward to government investments in the green energy and green technology space so we can better align ourselves,” says Phillips. Changing it up Despite the broad support that Alberta has received across the country, the province is in no way sitting back and waiting for change. “The number one reason our economy is in the shape it’s in is because we rely too much on one price on product on one market,” says Phillips. “We can’t do anything about the price but we can make some moves toward diversifying,

which we have. In addition, we need to get our energy products to market and to engage with our trading partners and other provinces.” The EKOS Research poll describes the Canadian public as being “conflicted” in their attempt to reconcile the threat of climate change with the recognition that energy will remain critical to the economy. “How people are dealing with these two forces describes the country as a whole,” concludes EKOS Research’s Graves. “There is deep division across many of the issues surrounding these forces, especially once you push down into the regions, demographics and partisan lines. For example, the burgeoning need to deal with the environment is almost completely rejected by the conservatives.” The good news, it would appear, is that Canadians for the most part are in agreement in their concern for the economy. How the environment will play out with that remains to be seen. v


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New Pipelines Can Support Action on Climate Change By Marg McCuaig-Boyd, Minister of Energy for the Province of Alberta

Pipelines are the safest and most efficient way to transport our energy resources, but over the last decade Canada has failed to build a major new pipeline to tidewater. That must change. We have to get a pipeline built. For this to happen, governments have to address the concerns Canadians have with pipelines – not with talk, but with real action. One of the main questions Canadians have is: how can we support the development of new pipelines while also combating climate change? It’s a good question, one that for years has lacked a good answer. As a result, the conversation about pipelines has been reduced to two opposing positions, making it seem contradictory to support new pipelines and also support actions to prevent climate change. Conservative governments in Alberta and federally just didn’t get it. They failed to recognize much of the battle against pipelines was a battle against the expansion of the oil sands. The conversation about pipelines became a conversation about the oil sands, and conservative governments refused to take that conversation seriously. Turns out, they should have. Their inaction hurt our economy along with families in Alberta and across Canada. Alberta’s single largest energy customer – the United States – blocked the Keystone XL pipeline not because of the safety of the pipeline, but because of the reputation of the product carried in the pipeline. President Obama said our energy products aren’t good enough, that they’re too dirty. While this isn’t true, we 48 Saskatchewan Oil Report 2016

need to change our reputation, and we need to do so in a way that’s meaningful. Alberta’s Climate Leadership Plan turns the page on that old debate, and provides the opportunity to show the world that we can combat climate change while also protecting the good, mortgage paying jobs of our oil and gas industry. This plan has brought together an alliance never before seen in Alberta, including environmentalists, oil sands executives, First Nations and the provincial government. These once-unlikely allies support us taking long-overdue, meaningful action to combat climate change, while also demonstrating that Alberta can be one of the world’s most progressive energy producers. One of the key commitments of our climate leadership strategy is to limit emissions from our oil sands. Finding less carbon intensive ways for our oil sands to produce, while also protecting and creating more energy jobs, means investment in new technology. It won’t happen any other way. For Alberta to make the kind of investments necessary to transition away from a carbon emission intensive economy, we need to get full value for our resource exports. Right now, we don’t. Almost all of our energy resources are sold to the United States, who as a result of the shale oil and shale gas revolutions, have in a few short years transformed from our best customer to our biggest competitor. As a result, we are selling our energy products to our only customer at a discount. This discount means that Albertans and Canadians get less value from our natural resources, with lower royalties and less

economic benefit. This in turn deprives us of critical public funds necessary to invest in the kind of technology that will be required to transition our economy toward a more prosperous, low-emission future. Building pipelines to tidewater and to new markets, while at the same time taking action to curb emissions, are the two essential components required to transition away from carbon intensive energy production and assert ourselves as one of the world’s most progressive, responsible and forward-looking energy producers. But pipelines aren’t just good for Alberta. They are good for all of Canada. Canada currently imports almost a million barrels a day of oil from other countries. It makes no sense to finance the economies of other countries in this way, when it would be both more economically and more environmentally responsible for Canada to rely on its own abundant energy resources. There was a time when discussions around pipelines would see new proposals judged on their merit – public safety, job creation, market access. We want to return to those discussions. Doing so will take hard work, an unprecedented commitment from our partners in the oil industry, environmental groups and First Nations, and a long-term commitment from the government of Alberta. The good news? Our climate leadership plan has established the unprecedented coalition needed to get this work done. Together, we can develop the technology to take the carbon out of the barrel. Together, by showing we’re serious about climate change, we can take the politics out of pipelines. v


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High Stakes Arguments remain heated on both sides of the Energy East pipeline debate By Leonard Melman

One look at an atlas clearly illustrates a serious problem for Alberta and Saskatchewan petroleum producers and developers. The simple fact remains that both provinces are located some distance from sizeable markets and therefore, reliable means of transporting huge quantities of petroleum, both Alberta and Saskatchewan light, as well as Alberta’s diluted bitumen recovered from oil sands projects, must be developed. For various reasons, many producers believe that transportation via pipelines represents the only workable option since there are no navigable waters available and using lengthy trains of rail tanker cars has been intensely discouraged since the Lac Megantic tragedy of July 2013, which saw 47 people killed in a fiery inferno. Three important pipeline projects have been proposed; various suggested pipelines to Pacific ports which are presently tied up in regulatory and legal knots; the Keystone XL pipeline which would carry Western Canadian petroleum through the U.S. to refineries and ocean ports located inside that country but which is presently likewise engulfed in time-consuming controversy; and the Energy East Pipeline Project, which would be located entirely within Canada. The proposed pipeline to be built by TransCanada Corp. would extend about 4,500 kilometres from a new tank terminal planned for Hardisty, Alberta across the prairies, Ontario, Quebec, and New Brunswick to marine shipment facilities on the Bay of Fundy in the port city of Saint John. Ocean-going oil tankers would then transport the petroleum to major world markets. As planned, the capacity of the pipeline would be slightly more than one million barrels of crude per day. Underlying economic fundamentals relating to the petroleum market are an important consideration. As matters now stand, Alberta produces far more petroleum than is required for domestic mar50 Saskatchewan Oil Report 2016

kets within that province – and this is also true for Saskatchewan production. Because of the existing difficulties in storing, transporting and marketing excess production, the petroleum industry has inflicted a “negative premium” on Western Canadian production. According to a December 22, 2015, article in Canada’s National Post newspaper, while world commodity markets were pricing crude oil near US$35 per barrel, the article stated that,“ In Western Canada, some producers are selling for less than US$22 per barrel.” Pro-pipeline commentators suggest that a completed Energy East project would allow for efficient transport of all production, eliminating current storage costs and therefore would allow Alberta and Saskatchewan production to sell at prices much closer to world quotes. TransCanada has planned for the project to be developed in three sections. These include converting an existing natural gas pipeline into an oil transportation pipeline; construction of new pipelines where none presently exist or where necessary to link up with the reconstructed sections and construction of associated facilities such as pump stations, tank fa-

cilities in Saskatchewan and at Saint John and construction of marine facilities, also in Saint John. Consultation work began on the project in the first half of 2013 and regulatory applications were filed in mid-2014 with a Regulatory Application Amendment being filed in late 2015. A proposed future timeline includes construction beginning in mid-2017 and final commissioning and actual service starting in 2020. Passions are indeed heated on both sides of the project approval debates with proponents pointing toward significant economic benefits while opponents are strenuously objecting to potentially negative environmental impacts. Not surprisingly, the Alberta petroleum industry itself remains one of the most consistent supporters of Energy East. They note that not only Alberta, but the rest of Canada gains from a healthy oil sands development industry as more than 2,000 companies outside Alberta benefit from the industry’s activities. They claim that as of 2014 the industry provided more than one-half million jobs for Canadians and, therefore, they support the Energy East pipeline as a project which will further economic progress.


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TransCanada Corp. itself also provides additional arguments in favour of the project, noting,“ Energy East alone will support more than 14,000 direct and indirect jobs annually during its design and construction stages. This means employment opportunities for welders, truck drivers, crane operators, engineers and environmental specialists as well as other spin-off benefits.” In addition the company also notes it is working toward a high level of environmental stewardship and the pipeline will be making a contribution toward energy independence as,“ Building Energy East will reduce the need for higher-priced foreign oil imports.” Other voices being raised in support of the project include Saskatchewan’s Premier Brad Wall who was quoted in a Canadian Press article dated February 2, 2016 as declaring that newly-elected Prime Minister Justin Trudeau should take a stand and support the Energy East pipeline. In the article Wall countered environmentalists’ arguments by stating, “If you sift through some of the rhetoric, they just don’t like oil, and I don’t think that is a good enough reason to hold

up a pipeline that will benefit all of the country.” He was referring to objections filed by environmental groups with the National Energy Board (NEB) which is presently evaluating remaining portions of the application approval process. Environmental movement arguments against the pipeline are numerous and varied. One which has shown up with some consistency is the declaration that oil sands petroleum production is a significant producer of greenhouse gases and construction of the pipeline would ultimately result in greater oil sands production and, therefore, greater pollution. The Pembina Institute states filling the Energy East pipeline would help spur 650,000 to 750,000 barrels of additional production per day from the oilsands. Other objections which we found listed in literature provided by The Council of Canadians, an organization which describes itself as “acting for social justice”, itemizes several arguments against the pipeline:: • The pipeline would not result in a stronger Canadian refining industry but the oil would be, “shipped, unrefined, to

places like India, Europe, and possibly the United States.” • Company assurances that the regulatory processes insure pipeline safety are wrong as, “The Harper government’s 2012 omnibus budget bill almost entirely wiped out environmental regulations in Canada.” They also stated that the NEB was, “industry-friendly.” • Converting the existing natural gas pipeline to petroleum transport would incur safety risks such as, “Pre-1970s pipelines are predisposed to cracking corrosion along lengthwise seams.” • Company claims regarding economic stimulation are wrong and that, “TransCanada has a bad record of over-estimating potential jobs.” They would rather see advancement of renewable energy projects which would, “outpace jobs in oil and gas by as much as six to eight times.” Passions on both sides of this project remain intense and many wait to get a clearer picture regarding the future influence of the new Trudeau government in Ottawa on the application process. The stakes are indeed high. v

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On Going Saga Keystone XL controversy becomes important issue in American election year politics By Leonard Melman Few subjects have garnered the amount of media ink during the past couple of years as has been devoted to the unlikely subject of petroleum pipelines. Not only have they become a subject of intense concentration within the world of petroleum exploration, production and transportation, but they have also infiltrated themselves into the highest levels of public interest in political matters. Perhaps the greatest degree of interest in the subject of pipeline construction has been the focus of attention on one such endeavour, the Keystone XL Pipeline project, and headlines continue to be made and rapt attention continues to be paid to the project’s progress – or lack thereof. Keystone XL is a proposed massive pipeline extending almost 2,000 kilometres (about 1,200 miles) from the prolific oil sands of Alberta to Steele City, Nebraska where it would join up with existing pipelines for transport to major refineries and Gulf of Mexico shipping ports. The pipeline would carry about 830,000 barrels of petroleum per day and would be constructed by TransCanada Corp. Financing would be provided by that corporation plus refineries and oil shipping companies which would be recipients of the end product. The matter is of vital importance to two particular petroleum producing regions, the economies of each one having prospered mightily through previous petroleum exploration, development, and production. The two regions are the provinces of Alberta and Saskatchewan, plus the oil-rich regions of western North Dakota, particularly including the Bakken oil fields. In each case, these regions produce petroleum far in excess of their area’s domestic consumption and therefore are heavily dependent on transporting excess production to various markets. 56 Saskatchewan Oil Report 2016

Few alternatives other than pipelines are available to accomplish the necessary transportation functions. Both regions are land-locked so marine tankers are unavailable; trucking is a non-starter considering the quantities of petroleum which must be transported; and shipment via lengthy rail tanker trains has been heavily condemned by environmental and safety experts since the tragic derailing of a lengthy oil tanker train in Lac Megantic, Quebec in 2013 when the resultant fire incinerated much of the town’s downtown and tragically killed 47 people. Some of the strongest arguments for the project come from economists and those politicians who strongly advocate resource development, given that construction of Keystone XL would result in 42,000 jobs and completion of the project would permit continued expansion of petroleum production in both regions. However, consistently strong opposition to Keystone XL has arisen among environmentalists and their voices have made a strong impact on America’s political systems. Because those environmental voices are not quite as potent in Canada as in America, construction permits for the Canadian leg of the pipeline were granted in 2010, but in America, much more powerful opposition emerged. In fact, Keystone XL has even become a major issue in this year’s American presidential election. At the same time Canada approved the northern leg of the pipeline, it was anticipated America would grant similar approval but the Environmental Protection Agency (EPA) strongly suggested that President Obama not approve the project. He followed their advice by verbally discouraging Keystone XL and finally in 2015, he took decisive action

by vetoing a Republican-led bill which would have given the project final authorization. Just prior to the president’s decision, TransCanada Corp asked the U.S. government to simply put any review of the project on hold. Encouraged by the president’s action, the environmental community stepped up their attacks on the project, stressing two points in particular. First, the route chosen through Nebraska would pass through what they regarded as a particularly fragile ecosystem which they wanted to protect. Second, they declared that approval of the project could be interpreted as tacit approval by the U.S. government of expansion of production from the Alberta oil sands which they regard as particularly “dirty” oil. Matters finally came to a head on November 6, 2015, when the Obama administration issued a formal declaration rejecting TransCanada’s application to build Keystone XL, and many believed the seven-year saga was finally at an end as the president declared, with apparent finality, that the pipeline, “will not serve the national interests of the United States of America.” The State Department also added that in its view, the pipeline would not make a meaningful contribution to the U.S. economy. TransCanada’s President and CEO Ross Girling, quickly replied in a positive manner, stating simply that he continued to believe that Keystone XL would be built and that, “TransCanada and its shippers remain absolutely committed to building this important infrastructure project.” As reported by Canada’s CBC, reaction to the president’s announcement was quite predictable. Environmental organizations were quick to heap glowing praise on the president while energy



groups blasted the president, declaring that his decision was based more on political motivation than on adherence to scientific fact. However, one more dynamic development remained and that took place on January 6, 2016, when the company filed a $15-billion claim under Chapter 11 of the North American Free Trade Agreement (NAFTA) on the basis that the denial was, “arbitrary and unjustified.” TransCanada also filed a lawsuit in the U.S. Federal Court in Houston, Texas, asserting that the President’s decision, “exceeded his power under the U.S. Constitution.”

Matters are now winding their way through the U.S. legal system and it is worth noting that for many people, the stakes in the eventual outcome of TransCanada’s legal actions are vitally important and it might be added that several Republican candidates for the U.S. presidency have staked out positions strongly in support of the pipeline’s completion and Keystone XL has indeed become a pivotal issue in America’s 2016 presidential election. Early returns from both Iowa and New Hampshire suggest that Obama’s antiKeystone XL decision could indeed face almost immediate reversal should the

Republican candidate emerge victorious in the November election as several of that party’s leading candidates such as Trump, and Cruz have emphatically issued statements in support of Keystone XL. On the Democratic Party side, early statements from both Bernie Sanders and Hillary Clinton, perhaps mindful of the environmentalists’ historic loyalties to that party, have indicated much less enthusiasm for any reversal of the President’s decision. The background for and against Keystone XL remains fluid in early 2016 and it will be most interesting – and important – to follow developing events closely. v

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Those Pipes With a high safety rating, pipelines are among the safest, most efficient methods for transporting energy By Robin Rorick, The American Petroleum Institute

North American pipeline capacity is in the spotlight after a decade of surging oil and natural gas production in the United States and Canada. While the most famous pipeline, Keystone XL, is one that hasn’t been constructed, the tens of thousands of miles of pipelines transporting oil and natural gas every day demonstrate the benefits – and impressive safety record – of this crucial infrastructure. More than 199,000 miles of liquid pipelines crisscross the United States. According to the latest data collected as a part of the Pipeline Safety Excellence initiative, pipelines transported about 16.2 billion barrels of crude oil and petroleum products in 2014 at a safety rate of 99.999 per cent. Pipeline Safety Excellence, launched in 2014, to ensure continual safety improvements, also reported that pipeline releases along the 60 Saskatchewan Oil Report 2016

sensitive areas of the right-of-way dropped 50 per cent from 1999 to 2013. Particularly, two causes that have been excessive in the past have significantly decreased. These are corrosion incidents, which are down 76 per cent, and damage from third-parties, which have declined 78 per cent, in this same time period. While these trends show progress, the industry focus is prevention of all incidents, so operators continue to advance technology that can better detect threats to pipeline integrity. The industry also continues to develop safety standards promoting best practices that achieve the industry-wide goal of zero incidents. This year, the American Petroleum Institute plans to issue a new recommended practice, RP 1176, to strengthen the industry’s capability to predict and prevent


More than 199,000 miles of liquid pipelines crisscross the United States. crack-related pipeline failures by enhancing the gathering, integration, and analysis of data. RP 1174, issued in December 2015, provides operators with an enhanced framework to enable continual improvement of the pipeline emergency planning and response process. Also issued last December, RP 1175 provides guidance on the development, implementation, and management of a sustainable leak detection program. Finally, RP 1173, Pipeline Safety Management Systems, was published last summer and provides a scalable and flexible framework ensuring companies continually assess their practices to guarantee the appropriate steps are taken to prevent spills. Commitment to continual safety improvements is nothing new, but the 21st century energy resurgence has created new infrastructure needs. Prior to the production advances of the past decade, the priority was to transport imported energy from the coasts to points inland. Now that production is surging in places like North Dakota, Pennsylvania, and the Canadian oil sands, infrastructure priorities have shifted. According to a study from Energy Policy Research Foundation, Inc., shipments of crude oil from the Midwest to the Gulf of Mexico jumped from just 50,000 barrels per day (b/d) in 2008 to over 380,000 b/d in 2013, while shipments from the Gulf to the Midwest decreased 500,000 b/d. For producers, inadequate transportation infrastructure creates bottlenecks that can raise production costs and depress revenue. The lack of efficient access to markets can lead to lower well-head values and reduced revenues for royalty owners, as well as local, state, and federal governments. Failure to address these limitations could discourage production investment -- along with the associated employment and economic advantages that greatly benefit consumers. Updating energy infrastructure in the United States could generate up to $1.15 trillion in new private capital investment and support 1.1 million new jobs over a 10-year period, according to a study by IHS. Pipeline investment alone could support up to 830,771 average annual jobs. Pipeline constraints, on the other hand, can be costly to consumers too. According to the U.S. Energy Information Administration (EIA), residents of the northeastern U.S. paid up

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to 68 per cent more for electricity than the national average in the winter of 2014, while industrial users paid up to 105 per cent more for electricity than the national average. Failure to expand natural gas and electricity infrastructure in the Northeast could cost the region’s households and businesses an estimated $5.4 billion in higher energy costs and more than 167,000 private-sector and construction jobs between 2016 and 2020, according to a study from the New England Coalition for Affordable Energy. Some progress is underway. EIA reports that over the past 10 years pipeline operators have invested more than $57 billion to complete more than 400 projects adding about 15,200 miles of pipeline and approximately 151,300 million cubic feet per day (MMcf/d) of capacity to transport natural gas to consumers and businesses. At the same time, according to EIA, operators have announced plans to invest more than $40 billion on 105 projects to add more than 7,500 miles and more than 72,650 MMcf/d in pipeline capacity. It’s a good start, but more expansion is needed. With a 99.999 per cent safety rate, pipelines are among the safest, most efficient methods for transporting energy. To maintain and build upon the economic benefits of North America’s energy renaissance, additional pipeline investment must be a priority. v

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People Needs Oil and gas HR report identifies new trends and requirements in workforce development By Lisa Fattori

62 Saskatchewan Oil Report 2016


A new report by the Petroleum Labour Market Information (PetroLMI) Division of Enform highlights HR trends in Canada’s oil and gas industry. Released in September 2015, Shifting Priorities and a Shifting Workforce examines business shifts within the industry in recent years and identifies drivers that are changing workforce needs. The report offers insights into emerging occupations, corporate priorities, and current skills gaps, which will help industry, educators, and government stakeholders to implement new workforce training and development strategies. Grooming the next generation of workers to meet future needs will ensure that Canada’s oil and gas industry remains robust and competitive within the global market. The findings within Shifting Priorities and a Shifting Workforce are based on interviews with 28 industry representatives, as well as a broad array of secondary research. The report identified three industry priorities that are prompting changes in workforce requirements: accessing technically complex unconventional reserves; balancing performance and cost management to achieve profitability; and achieving market diversification to grow the business. Advances in the application of horizontal drilling and hydraulic fracturing have increased activity in unconventional oil plays, as producers now have the ability to tap into these reserves. The use of sophisticated technologies has, in turn, necessitated a more technologically savvy workforce. Automated procedures and computer-based tools for enhanced communication throughout the supply chain requires workers who are highly skilled at reading, numeracy, communicating and problem solving. Sophisticated tools that improve drilling accuracy and microseismic monitoring of the fracking process, which has the potential to optimize production

in fewer wells, are state-of-the-art technologies that will become mainstream. As use of these technologies ramps up, the industry will require a higher level of expertise in field operations, geophysics, geology, and reservoir and completions engineering. “The most significant change in the oil and gas industry from 10 years ago has been the advances in technology,” says Carol Howes, vice-president of communications at PetroLMI, Enform. “This has provided accessibility to tight reserves, but it has also made operations more technologically complex, with much more automated and computerized equipment. Even for entry level positions, the expectations are much higher. Rigs are more technical than they were before and we’re seeing new applications being used in the field, such as documentation and communications on tablets and phones.” Another significant business priority is the need to cut costs and improve efficiency for greater profitability. While companies have always been motivated by the bottom line, the current economic downturn in the sector amplifies the need to get more bang for your buck and to implement cost saving practices throughout all facets of a company’s operations. Eliminating redundancies, minimizing down time, scheduling the timely delivery of supplies and equipment, and organizing work crews to maximize productivity is the new corporate culture that requires commitment by all members of an organization. Supply chain management professionals, occupations that deal with organizing rotational workers and those with expertise in asset management, equipment reliability, and preventative maintenance are playing a key role in helping companies to achieve both performance and profitability. “Oil and gas companies are in a very competitive environment,” says Howes.

“With the ramp up of activity comes increased costs, and the focus on efficiency and cost management has been driven further down in the organization, broadening out to field workers. The amount of services required at the well site has grown significantly and you now need expertise in logistics to get large scale equipment and materials to those sites. Many companies are streamlining processes, such as sourcing out supplies and services from their head offices.” The breadth of services required in unconventional oil plays is evidenced in a 2014 Petroleum Services Association of Canada study that reported the need for 45 or more suppliers and up to 300 workers per well, compared to 75 workers for a conventional well. Horizontal drilling and hydraulic fracking activity has increased demand for frack operators; Class 1 and Class 3 drivers to haul equipment and materials; and plant operators in charge of facilities that recycle water used in drilling operations. Multiple well pads and more technically advanced drilling rigs require mechanical engineers and technologists, instrumentation engineers and technologists, and skilled tradespeople, including welders, electricians, heavy duty technicians and electronics/instrumentation technicians. The surge in the U.S.’s domestic supply of oil and gas has reduced demand for Canadian petroleum resources, prompting a shift among Canadian producers to access new offshore markets. The opportunities afforded by Canada’s burgeoning liquefied natural gas (LNG) industry also benefits the midstream sector, which is experiencing heavy investment in pipeline and facility construction. New and retrofitted processing plants will increase the need to hire and train plant operators, and these mega projects require the expertise of project and construction managers, design and project engineers, and supply chain and materials

The most significant change in the oil and gas industry from 10 years ago has been the advances in technology. Saskatchewan Oil Report 2016

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Growth in unconventional drilling has decreased the need for wireline and slick line services and, with fewer exploration projects, the demand for seismic work has decreased. management professionals. In addition, given the pipeline sector’s aging infrastructure, there has been a growing demand for pipeline integrity specialists. “LNG is a new industry for Canada and one that has very specific requirements,” says Howes. “Other countries, including Australia, have a lot more experience in

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LNG development, and Canada can benefit from expatriates who can come here and apply their expertise.” Issues surrounding the environment, safety, and the impact of operations on surrounding communities has added to the growing complexity of oil and gas business. “In the past, exploration projects were located in more remote areas, but with unconventional resources and pipeline development, the industry is expanding into new areas,” says Howes. “The need for more negotiation and discussion has created new occupations in regulation and compliance, as well as stakeholder, community and Aboriginal relations.” More traditional roles in the oil and gas industry are giving way to new occupations and the need to upskill the existing workforce. Field technologists, for example, are replacing workers who had a mechanical aptitude and received on the job training. Growth in unconventional drilling has decreased the need for wireline and slick line services and, with fewer exploration projects, the demand for seismic work has decreased. The proliferation of walking rigs has lessened the demand for workers to dismantle and truck rigs between locations and the trend toward on-site water recycling technologies will decrease the need for trucked in water. Today’s HR requirements, by contrast, include a greater emphasis on supply chain management, project and processing facility management, contingent workforce management, and professionals in regulatory roles and stakeholder/Aboriginal relations. “When we look at the labour market, some of these new occupations are now included in our forecasting,” says Howes. “In May, we’ll also be launching an online tool that will profile these emerging positions and show people how they can transition to these new occupations. Our goal is to support workforce planners within the industry, but we also want to assist people who want to develop new careers in oil and gas.” v


What’s the Price? Low crude oil prices and their impact on Canadian economy By Dinara Millington, Canadian Energy Research Institute For the foreseeable future, crude oil is and will be a key element and input into many economic sectors in Canadian and global economies. The crude oil industry is central to Canada’s energy industry and is a significant contributor to Canada’s economy. The most recent drop in prices has directly impacted the energy sector and reverberated throughout the economy in other industries. The significant decline in crude oil prices over the past 18 months has affected the world economy. Canada was no exception. Oil prices plunged by more than 70 per cent (see Figure 1). Worse yet, Canada’s oil output receives an even lower price: Western Canadian Select (WCS) – a Canadian benchmark for heavy crude exports – trades at a discount to West Texas Intermediate (WTI) because

of its lower quality and regional supply glut. Analysts, the central bank, and governments are now studying how low crude oil prices will effect Canada’s economy, and what policies would help to address the resulting consequences. Some of the effects are positive, some are negative. Whether low oil prices help or hurt depends on where you live, and what sector you work in. This article summarizes the findings from CERI’s recently released study titled Low Crude Oil Prices and Their Impact on Canadian Economy, which attempts to measure potential impacts on the Canadian economy if low oil prices persist into the future. The article will also present the provincial results for Saskatchewan.

Figure 1. Crude Oil Price (WTI in US$/bbl)

Source: BP Statistical Review 2014. 2015 figure is an average of monthly WTI prices from January to August 2015.

Table 1: Economic and Financial Assumptions Parameter Unit of Measurement Time Frame First Year of Forecast

At the global macro level, the positive effects of a decrease in crude oil price on energy-importing countries will likely more than offset the negative effects on exporting countries resulting in a net positive impact on global growth. For exporting countries, like Canada, however, the real complexity appears beneath the surface, where the drop in commodity prices mobilizes sectoral and regional forces that can take years to play out. These include higher consumer spending in response to lower energy costs, lower spending due to higher prices on imported goods and services (as a result of the falling Canadian dollar), falling investment and employment in the economy’s resource sector, and rising investment and employment in the non-resource sectors. This article presents economic impacts on the Canadian economy stemming from two short-term scenarios, spanning seven years, starting in 2015: a Reference Case, where the oil prices are forecasted to grow from current levels to almost $73 per barrel (in 2014 dollars) and a Low Case, where oil prices reach only $51 per barrel by 2021. The modelling of these impacts is done using CERI’s proprietary Input-Output model (I/O) to measure the impacts on major macroeconomic variables such as GDP, employment, and tax revenues. The economic analysis involves establishing the economic impacts of low crude prices on the Canadian economy and comparing them with those stemming from a Reference Case.

Reference Case

Low Case

Years

7

7

Year

2015

2015

US/CDN exchange rate

US$/CDN$

0.85

0.75

WTI price

2014 $/bbl

$53.25(2015)-$72.88(2021)

$46.26(2015)-$51.52(2021)

MMBPD

2.1(2015)-3.1(2021)

2.0(2015)-2.9(2021)

Capital Investment

Oil Sands Production

CDN Mln $/year (avg)

19,575.64

13,702.95

Change in Non-Energy Exports

CDN Mln $(7-yr avg)

No Change

7,557.6

Source: CERI

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Table 2: Comparison of Two Cases: Annual Average Impacts 2015-2021 Unit of Measure Ref. Case

Low vs. Ref Case

% Change

GDP Growth

Mlin CDN$

$118,619

$89,555

($29,064)

-24.5%

Compensation

Mlin CDN$

$54,940

$42,526

($12,414)

-22.6%

Employment

Jobs/Year

587,006

471,118

(115,888)

-19.7%

Federal Taxes

Mlin CDN$

$13,580

$10,187

($3,394)

-25.0%

Provincial Taxes

Mlin CDN$

$8,363

$6,494

($1,870)

-22.4%

Source: CERI

Figure 2: GDP Impacts (2015-2021)

Source: CERI

Figure 3: Employment Impacts (2015-2021)

Source: CERI

Figure 4: Compensation Impacts (2015-2021)

Source: CERI

66 Saskatchewan Oil Report 2016

Low Case

The basic assumptions that were used for I/O modelling are outlined in Table 1. Results The two cases present two alternative outlooks that could emerge into the near future depending on the level of crude oil prices, level of investment, production, exchange rate, and exports, to name a few. In comparison, the Reference Case shows larger contributions to the Canadian economy than the Low Case, echoing the opinion of many analysts and central banks that, on a net basis, lower crude prices impact Canada’s economy in a negative way. Table 2 shows results of I/O modelling, which are the annual average impacts over the forecast period, Figures 2- 5 present year by year impacts. Canada’s GDP will be reduced by lower oil prices. This will cut into Canadian national incomes and spending power. On a cumulative basis, GDP growth will be 24.5 per cent lower in the Low Case versus the Reference Case. Figure 2 shows annual GDP impacts for both cases. The annual average growth under the Reference Case is $118.6 billion in comparison to an annual average of $89.6 billion in the Low Case. The fall in oil prices will have a mixture of positive and negative effects on employment. Thousands of jobs have been lost already as a result of the recent price collapse, and more will be lost (if prices continue to fall) in the energy sector1 – especially on new drilling and construction projects. Meanwhile, new jobs will be created in sectors which benefit from lower energy costs (such as transportation and some manufacturing), as well as for those sectors that would benefit from the low exchange rate. There will be a net negative impact on overall employment levels as a result of low crude oil prices, however, it is the least impacted variable among other measured variables, such as GDP, compensation and tax revenues. Over the seven-year period, employment will be 19.7 per cent lower in the Low Case than that under the Reference Case. The oil industry is very capital-inten-


Figure 5: Federal and Provincial Tax Revenues (2015-2021)

Source: CERI

Table 3: Saskatchewan’s Top Economic Sectors Rank Sector

Low Case

Ref Case

% Change

% Share of Prov. GDP

(CDN$Mln)

Ref Case

1

Other Manufacturing

13.79%

$844

$945

-10.7%

2

Wholesale Trade

12.77%

$781

$485

61.0%

3

Finance, Insurance, Real Estate and Rental and Leading

12.06%

$738

$544

35.5%

4

Conventional Oil

9.83%

$601

$803

-25.1%

5

Transportation and Warehousing

8.91%

$545

$348

56.8%

Source: CERI

sive, but one of the least labour-intensive sectors in Canada’s whole economy. Other sectors such as manufacturing create more jobs per unit of investment than the energy sector. So while petroleum in-dustry revenues and profits will fall sharply in coming years, the impact on overall employment will be less severe. It is important to note that while the job lay-offs are immediate in the energy sector, employment growth in non-energy related sectors might take a few years to materialize, but given the linear and static nature of the input-output modelling, it is impossible to incorporate the time lag feature. Figure 3 illustrates annual changes in employment for both cases. Over the forecast period, it is estimated that, on average, there will be almost 116,000 fewer jobs (direct, indi-rect, and induced) in Canada if crude oil prices remain low. Even though the oil industry is less labour-intensive than other industries in Canada, it requires very skilled workers who are well compensated. The difference between the two cases in terms of compensation amounts to almost 23 per cent, indicating that losing highly-skilled and higher-paid jobs in the oil industry will have a larger impact than creating more less-skilled and lower paid jobs among other industries that are more labour-intensive.2 Over the forecast period, overall compensation in the Canadian economy

is estimated to be about $54.9 billion on an annual aver-age basis in the Reference Case compared to $42.5 billion in the lower oil price scenario, for a decline of over $12 billion on an annual average basis (Figure 4). With decreases in employment, employee compensation and profitability of the oil sector, gov-ernment tax revenues will also be lower in the Low Case scenario. In fact, federally-collected tax revenues are the most impacted variable, with 25 percent difference between the Reference and Low cases. The federal government’s tax revenues depend on corporate oil revenues as well as personal taxes paid by employees, hence with lower prices, production and labour, it is not surprising that federal tax revenues are highly impacted. On an annual average basis, the impact on federal tax revenues amounts to $13.6 billion in the Reference Case and $10.2 billion in the Low Case. As for provincial taxes, under the Low Case, the cumulative impact will be 22.4 per cent lower than under the Reference Case. An annual average adds up to $8.4 billion under the Reference Case and $6.5 billion under the Low Case (Figure 5). Saskatchewan While declining oil price impacts in the province are offset by the fall in the dollar (which helps other export sectors), it is still

going to present challenges for the province’s oil industry, which is one of the topcontributing industries in the province.3 Table 3 presents the top provincial sectors. While the oil sector could potentially decline by more than 25 per cent, other sectors show a positive benefit from higher non-energy exports and related service sector to support non-energy exports. In conclusion, the Canadian economic growth could contract by an average of 23 per cent if low oil prices persist over the next seven years. The regional differences suggest that some provinces will hurt and some will benefit from lower crude prices, but on the national level, Canadian eco-nomic growth will suffer as a result of prolonged low crude oil prices. As a rule of thumb, for every Canadian dollar gain in WTI price, Canadian GDP would gain almost $1.7 billion, on average. v Footnotes 1 http://business.financialpost.com/news/ energy/one-third-of-canadian-oil-andgas-firms-expect-more-painful-job-losses-in-2016-survey 2 One model limitation is its static nature, hence, the model does not account for wage decreases associated with slower activity in the sector. 3 http://economy.gov.sk.ca/economicoverview Saskatchewan Oil Report 2016

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For the Love of the Patch Oil drilling fuels passion for Crusader Drilling Corp.’s success By Melanie Franner

For as long as he can remember, Don Rae has loved the oil patch. And the oil patch has returned that honorific in kind. “I’ve been in the oil industry since I was 16,” says Rae, president of Yorktonbased Crusader Drilling Corp. “I started rough-necking in the summer while I was still going to school. And then I got drawn into it full time. I left school after grade 10.” Since then Rae has never looked back. One step at a time Rae started out on the oil rigs and eventually worked his way up to rig manager. In 1990, he started a consulting company and in 1992, he began hiring the first of what would eventually be 20 consultants. They worked all over North America and were among the first to drill horizontal wells in Western Canada and the U.S. 68 Saskatchewan Oil Report 2016

“I ran that company until 2003 and then my son took over the operation,” says Rae, who then moved on with a group of partners to build an oil and gas company. Rae got out of that venture in 2006. “My love of rigs was my first passion,” he says. “So I decided to return to it. We starting raising money so that we could start Crusader Drilling.” Crusader Drilling was founded in 2008. Construction on the company’s first rig began immediately after and possession of it took place in April 2009 – at a cost of $6.3 million. “Back in April 2009, there wasn’t any work available,” says Rae. “It was a pretty nervous time for us. But we prevailed. Eventually, a small oil company gave us our first well and, shortly after that, a new potash company gave us a threewell program and we were on our way.”

Rig 2, which featured a second pump and a few more bells and whistles than rig 1, was delivered in November 2010. The price tag was $7.5 million. “We were able to bring rig 2 out with a set contract in place,” says Rae. “That helped us get the debt down before we began thinking about rig 3.” Rig 3 came onboard in February 2012 at a cost of $9.3 million. “When we were running all three rigs, rig 3 was running 12-hour shifts, with three crews of five and one rig manager,” says Rae. “Rig 1 and 2 had four crews of five each and a rig manager. Plus, we had about seven office staff, including a couple safety personnel.” Rae attributes the company’s success to a lot of hard work and a bit of luck, as well as some great employees. “The key thing in any company is your people and how you treat your people,”


he explains. “If you treat everyone well, they will want to go that extra mile. And if you get a good reputation, people will want to work for you.” Things were going so well that Rae and his board of directors were already thinking about rig 4. “We were very happy with the company’s growth and were going to expand with another rig or two,” says Rae. “We were going to start a year ago last spring but I saw something on the horizon and I told the board that we should put our plans on hold. We were fortunate in that we weren’t carrying a lot of debt when the downward spiral began.” And then there was none That down cycle has since taken its toll on the entire oil and gas industry, including Crusader Drilling. “What hurts me the most is not being able to keep your people busy,” says Rae. “We’re trying to keep one rig going to help keep our senior people. We’re bidding but we’re not making any money now. Fortunately, we could close our doors and still have enough cash flow to survive for at least a couple years, working with our bank of course. Others aren’t as lucky. But if we had built rig 4 as we had planned, we wouldn’t have survived. We would have been carrying too much debt.” Although Rae has seen his share of down cycles in the past – he cites Bill 42 in the early 1970s as one example and the National Energy Program as a second – he says that none seemed to

have the longevity of this current one. “Sure, we had the downturn in 1992/1993 and 1998/1999 was a bad one,” he says. “But, right now, we can’t see any light at the end of the tunnel.” As a member of the Board of Directors of the Canadian Association of Oilwell Drilling Contractors (CAODC), Rae has plenty of opportunity to discuss the downturn with others in the field. “That’s the scary part,” he says. “None of us can see the light. This particular cycle has a lot of other factors to it, like the government and other geopolitical issues. Can it change in an instant? For sure it can. But will it? We just don’t know.” One thing Rae does know is that he is happy to be in Saskatchewan for the moment. “The people out in Alberta are really suffering,” he says. “I know a lot of guys out there and I feel for them. It doesn’t help to have a government that is raising corporate taxes by 20 per cent and looking to bring in a carbon tax. I think the government is compounding the problem. We’re fortunate that the Saskatchewan government understands the situation and is trying to help.” Rae believes that unless the downturn begins an upward trend in the near future, the industry is going to continue to suffer. “There are going to be casualties,” he says. “And it may not be because of the way the company is being run. It may just be bad timing in that they’re caught with a lot of debt. It’s very unfortunate.”

Remaining positive Despite the current downturn in the oil and gas industry, Rae remains optimistic about the industry and about Crusader Drilling. “With every downturn comes opportunity,” he says, adding that Crusader Drilling will be capitalizing on this opportunity to look at potential mergers or expansions. “If things turn around in the next year or two, then we will definitely be onboard to have five rigs within the next five years and be in a good position to sell.” As to what he will do after that, Rae is uncertain. But he is confident that he won’t be opting for a life of leisure. “I will probably start another company or some form of business,” he says. “I love people and I love the challenge of starting something from scratch.” Looking back on the many years he has served in the oil and gas industry, Rae is appreciative of the bit of potash business that helped kick-start the company in 2009. “We got fairly steady after that,” he notes. “We were fortunate to be able to build the other rigs and have the chance to work down some of the debt. We have some debt now but overall, we’re in a pretty good position.” And, as far as Rae is concerned, part of being in a “good position” is doing something you love to do. “I have no regrets,” he concludes. “The oil patch has always been a passion of mine. It’s something I love. And it’s something I don’t know how to quit. That’s the problem. I can’t see myself ever leaving this industry.” v Saskatchewan Oil Report 2016 69


A New Tomorrow Coping mechanisms in troubling economic times By Melanie Franner

Despite the low oil prices and its impact on the economy, the province of Saskatchewan is poised for an upturn in employment. In the February 2016 Monthly Economic Indicators Report, Saskatchewan’s Ministry of Economy cites the Conference Board of Canada (CBOC) validates this trend. The CBOC’s August 2015 Provincial Outlook states the labour market is expected to, “revive over the next two years, with employment rising 0.6 per cent in 2016 and 1.2 per cent in 2017.” Unfortunately, the numbers aren’t quite as uplifting when it comes to 70 Saskatchewan Oil Report 2016

employment levels in the forestry, fishing, oil and gas sectors. The province’s Ministry of Economy cites a year-to-date decline of 6.9 per cent in employment levels from January 2016 over January 2015. The report states, “Compared to January 2015 on an unadjusted basis, the three industries with the largest employment gains were information, culture and recreation (+5,000), health care (+5,000), and trade (+3,400). The largest job losses took place in educational services (-4,700), public administration (-2,600), and construction (-2,200).”

These are significant job losses, many of which will have professional and personal repercussions on individuals for an extensive period of time. But there are processes and coping mechanisms available to help lessen the anxiety and stress inherent in these life-altering events. Instructional insight “Losing your job can be exceptionally stressful,” states Therese Lardner, registered psychologist and careers specialist with Mining Family Matters, an online support network empowering Canadian families in mining, oil and gas.


It is important for people who have recently lost their job to “remember that it is a process – there will certainly be good days and bad days but you’ve got to hang on for the ride.” “Research shows that it’s one of the top 10 most stressful life events that you can experience, similar to reconciling a marriage or experiencing poor health of a loved one.” According to Lardner, it is important for people who have recently lost their job to “remember that it is a process – there will certainly be good days and bad days but you’ve got to hang on for the ride.” The decision to get out and start to seek employment immediately or to take some time is an individual one. “How quickly to begin job searching will be different for everybody,” she says. “Some people need time and space to grieve for what has happened and process their thoughts and feelings. Others get started right away. How quickly you can start can be determined by how able you feel to carry out an effective job search.” Lardner admits that market conditions, such as a downturn in the oil and gas sector, can have a huge impact on a person’s job-searching experience. But the trick is to not focus on the fact that the market is flat but to ensure one gets creative about how one markets one’s skills and experience. She also adds that networking is key to finding success – and that the job loss itself can turn into a positive. “I can’t tell you how many people I have worked who wish they had the ‘push’ to find a new role sooner,” she says. “Active job seeking following a job loss will force you to really think about what you want to do so job choices are often aligned with an overall career plan. It gives you the opportunity to reflect on your skills, achievements, and how far you’ve come over your career.” Stressful times Job loss can be a very significant source of stress for both the individual in question and for the spouse. “Even small demonstrations of daily support are vital,” says Lardner, in speak-

ing of ways in which a spouse may help. “This is a time when the individual can lean on the spouse, friends, and family. Spouses or partners should try hard not to enquire about what the individual is doing all day, as comments like this may cause them to shut down and get defensive. Instead, they can assist with things like proofreading if that’s a strength. They should also be clear on what sort of job the individual is looking for so they can help with networking.” Lardner cites symptoms such as disrupted sleep patterns (sleeping more/ less than usual, trouble going to/staying asleep), increased or decreased appetite, and the use of coping mechanisms like alcohol or recreational drugs as signs that the individual may be going through depression or anxiety. “You need to talk to the person to understand what’s going on with them,” she says. “If you don’t feel equipped to have this discussion, then you need to talk to your doctor or local mental health professional for some ideas on how you could approach the situation. A simple ‘Are you okay?’ is a great place to start.” Stress and anxiety may also impact one’s family, including children. The impact of such is often dependent upon their ages. “A very young child may only have the capacity to understand that mummy or daddy isn’t leaving the house and returning as normal,” says Lardner. “An older child may grasp the concept of the job that you do and may understand that you’re looking for another place to do that job. A teenager may be more sensitive to the impact of the job loss. The main thing is to keep the message age appropriate and invite questions. Try to be honest about any of the negatives so that the child understands but, at the same time, highlight the positives – such as having more time to play with them.” According to Lardner, there are ways that one can help alleviate child stress. “Try to be a positive role model for coping and talk them through why

you’re approaching stress the way you are – like ‘I’m getting really frustrated now so I am going to take a break and come back to this later,’” she advises. “Job loss can often upset the normal household rhythm so try to create a ‘new normal’ to provide some structure and certainty in their lives. Ask if they have any questions or would like to talk about what’s going on and also try to make the most of job search downtime by doing things that raise your energy levels and nurtures your relationship with your kids.” A new tomorrow Although landing a new job is certainly cause for celebration – Lardner suggests that one celebrate in a way that’s meaningful – it doesn’t necessarily mark the end of the anxiety. “Change can be daunting even if we choose it,” she advises. “To reduce some of the stress, you should think through your short- and medium-term goals of your new role. What will you need to learn? Who will you need to get to know? How can you build your reputation and career through this role? What could be some of the new challenges? How will you overcome them?” By learning how to manage stress, an individual can better cope with job loss and job seeking. This will also have an impact on an individual’s spouse, family and friends. Lardner advises that people maintain motivation and engagement throughout the job loss/job find process. And to help keep stress in check by taking care of oneself through diet and exercise. “Keeping your motivation up and stress down is a sure-fire way to get through tough organizational change or tough career situations,” she concludes, adding change in itself may be frightening but, in the case of job loss, one is often rewarded with a richer and more fulfilling career. v Saskatchewan Oil Report 2016

71


Gearing Up Keeping safe, dry, and warm in the oilfield By Lisa Fattori Compliance with workplace safety regulations extends to the use of personal protective equipment (PPE). Employers providing work wear and gear are obliged to outfit employees with the appropriate equipment for a particular task, and to train workers about the proper use of the PPE. Employees, in turn, must use the equipment in accordance with manufacturers’ specifications, take steps to prevent damage to the PPE, and inform employers if the equipment becomes defective. From exposure to hazardous materials to the potential for impact injuries, PPE is designed to minimize risk and offer another layer of protection for workers. Some commonly used PPE in the oil and gas industry include hard hats, eye/ face protection, hearing protection, steel toe safety footwear, gloves, flame resistant clothing, and high-visibility clothing. Some work sites will have different procedures and equipment, and may require specific types of PPE, such as respirators.

72

Saskatchewan Oil Report 2016

With safety becoming increasingly important in the last decade, many employers are equipping workers with PPE that goes above and beyond regulations. “While flame resistant clothing is standard for oil and gas work sites, some companies want the added protection of ARC flash and are ordering dual approved products,” says David Finlayson, North American product manager for Helly Hansen Work Wear. “We’re also starting to see requests for high-visibility clothing and flame resistant base layers, as an extra safety precaution. The overall interest in these products has increased, which leads me to believe that people are adopting safer practices in the oil patch.” CAN-CGSB 155.20 Workwear for Protection Against Hydrocarbon Flash Fire is the Canadian flash fire standard, while NFPA 2112 is the U.S. standard. “There is no overseeing global body to regulate standards, but we’re starting to see a movement for North America to come under one standard,” says Fin-

layson. “NFPA 70E for ARC Flash is being accepted across the board, which is much better for larger companies operating in multiple sites around the world.” Manufacturers of PPE have long known the importance of designing work wear that is as comfortable as it is protective, to ensure compliance. Workers that are dry, warm, and comfortable stay focused, which improves personal safety, as well as productivity. An outer layer that is waterproof, wind proof and thermal, combined with base layers that transport moisture away from the body to keep skin dry, help to maintain an even, comfortable body temperature. A layered system offers flexibility, enabling workers to add on or shed work wear, so that they remain comfortable throughout a wide range of temperatures and weather conditions. “In the last 10 years, we’ve seen many improvements in the design of flame resistant clothing, which is a change from the standard coverall, work shirt and


work pant,” says Sara Olsen, research analyst at Mark’s head office in Calgary. “Today’s designs are more comfortable and look like regular clothing. Looking good and feeling comfortable are important from a safety standpoint. If people like what they are wearing, compliance increases considerably.” Key gear in the oil and gas sector includes self-contained breathing apparatuses, which require clean shaven faces for the equipment to fit properly. If a worker isn’t prepared, then a supervisor can limit the worker’s access to a work-

site. There are some reported cases of supervisors keeping razors on hand, to ensure that workers are compliant. Proper fitting and comfortable gloves is another safety regulation that some workers may consider less important, but compliance is essential to avoid injury. The number one injury in the oil and gas sector is hand and finger injuries. Wearing proper gloves is the one issue that is the most challenging to address. If the gloves are not comfortable, then workers will take them off. There has to be a balance between protection

and having the dexterity to do the job. It’s important to have good communication between workers and health and safety coordinators, so that people can try different models and find a pair of gloves that they like. A proper fit in protective eyewear is also a top priority. If glasses are not comfortable or are scratched, workers are less likely to wear them and run the risk of impact injuries, including metal foreign bodies and injury from high pressure spraying of materials, such as gravel. v

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Safety First Commitment remains despite downturn in industry Cameron MacGillivray, president and CEO, Enform.

By Melanie Franner The oil and gas industry in Saskatchewan may be in a down cycle but the industry itself remains committed to maintaining the high safety training standards that have become ingrained in its culture. “Even in an economic downturn, our industry’s commitment to safety training and best practices has never faltered,” says Cameron MacGillivray, president and CEO, Enform, a not-for-profit association serving as the hub of safety for the upstream oil and gas industry. “In 2015, we offered more than 90 courses, with over 202,000 enrollments – numbers that are a testament to the safety culture of the oil and gas industry.” Despite the need for many companies to alter their businesses – be it letting people go or cutting down salaries – oil companies have not wavered in their commitment to providing safety training for their employees. “Ensuring that safety remains uppermost has become more crucial than ever,” says MacGillivray. “Losing sight of safety can prove extremely costly in any environment but even more so in times that are particularly tough like the period in which we currently find ourselves.” MacGillivray does admit that cuts in training may come to the forefront of strategy sessions in tough economic times. “There may be some situations where a cut in training is warranted,” he says. “There are two factors at play here. First, you might have fewer workers to train, and second, if there is some uncertainty around whether projects will proceed or not, it does make sense to defer training until they are confirmed.” Regardless, MacGillivray emphasizes the need to be mindful of the economic cycle. “However,” he says, “we have learned from past experience that once again prices will strengthen from their current levels and result in accelerated activity and a growing demand for skilled work74 Saskatchewan Oil Report 2016

ers well trained in safe work practices.” Tools of the trade Like the industry itself, Enform has continued to focus on safety throughout 2015 and beyond. The organization introduced a number of initiatives in the past year, including: • Creating an executive task force on safety culture in conjunction with industry associations to work on developing a common vision and strategic approach to safety culture for the entire industry. • Holding the 64th Petroleum Safety Conference, a successful event attended by over 1,100 guests. • Discounting safety training fees by 15 per cent effective October 1, 2015 to December 1, 2016, to ensure that the programs remain accessible during the economic downturn. • Redesigning the Enform website to make it more helpful and easier to navigate. • Publishing three information-packed reports through its workforce division: Falling Oil Prices and Decreased Spending – Employment Impacts; Rotating, Not Relocating: Alberta’s Oil and Gas Rotational Workforce; and Shifting Priorities and a Shifting Workforce. • Publishing three additional issues of Frontline Magazine, a new magazine designed to be a popular source of safety articles and oil and gas information. Industry responds Numbers from the WorkSafe Saskatchewan show that the province’s oil and gas industry is determined to keep safety top-of-mind. Between 2011 and 2014, statistics show that injury rates for timeloss injuries went from 1.21 to .51 per cent in D32 (operation of oil wells); 3.33 per cent to 2.52 per cent in D41 (oilwell serving); 4.22 per cent to 2.26 per cent in D51 (service rigs and water well drilling);

and 2.18 per cent to 1.55 per cent in D52 (seismic drilling). Between 2013 and 2014 alone (the latest numbers available from WorkSafe Saskatchewan), injury rates for time-loss claims fell from 0.55 per cent to 0.51 per cent for D32. And, it would appear that investors are appreciative of the industry’s ongoing commitment to safety. In January 2016, Regina-based, private-equities firm, Lex Capital Management Inc., made news by announcing that it had received $142.5 million in capital commitments to its Lex Energy Partners LP III fund. The amount surpassed its target of $75 million. Fund III received strong backing from a diverse group of investors, including high net-worth individual pensions, foundations, family offices and institutional investors across Canada and the United States. U.S.-based investors accounted for over 61 per cent of the capital raised, with another 30 per cent coming from Saskatchewan. “Lex is well positioned to execute on the growing pipeline of opportunities that we are currently seeing in this lowprice environment,” stated Dean Popil, chief investment officer, in the official announcement. “We are working with a number of management teams that are eager to take advantage of some of the acquisition opportunities and distressed situations in the market right now.” Lex specialized in investments in earlystage oil companies operating in Western Canada, with a focus on Saskatchewanbased opportunities. Remaining focused on safety and employee training – even during tough economic times – is paramount to remaining committed to the industry itself. It not only strengthens the industry and its ensuing labour force, it may also serve to attract potential investors. v


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What’s In Store The Petroleum Technology Research Centre’s Aquistore Project has applications and research potential for oil and mining companies

76 Saskatchewan Oil Report 2016


The Petroleum Technology Research Centre (PTRC) is known globally for both its enhanced oil recovery (EOR) research and its carbon dioxide storage and utilization (CCUS) research. Although the two program areas appear to be distinct, increasingly the PTRC has identified areas where knowledge obtained from one has direct impacts and potential benefits for the other. In heavy oil research, PTRC has been instrumental in characterizing Cold Heavy Oil Production with Sand, or CHOPS, reservoirs that have lost pressure because of the formation of wormholes in reservoirs leading to a loss of pressure and reduced oil recovery. PTRC has also helped to improve waterflood methods through the development of a Western Canadian waterflood database, and advanced solvent extraction technologies. Field trials were conducted between 2007 and 2010 to demonstrate the success of using various solvents (including CO2) to increase recovery rates in certain heavy oil reservoirs in Alberta and Saskatchewan. In carbon management, PTRC managed the IEAGHG Weyburn-Midale CO2 Monitoring and Storage Project (2000-2012), a program that focussed on validating the permanent storage of CO2 injected into the Weyburn and Midale oilfields as part of enhanced oil recovery (EOR) operations. That successful project led to the creation of a best practices manual for validating CO2 geological storage. The experience gained from that program has since been followed up with the Aquistore Project looking into the measurement and monitoring of CO2 being injected into a deep saline formation from SaskPower’s Boundary Dam capture facility. “As a project, Aquistore has developed into the largest laboratory in the world for the field testing of various measurement and monitoring technologies,” says Kyle Worth, senior project manager. “We have a commercial field research site that measures five kilometres by five kilometres containing the most advanced technologies in the world to image deep underground to verify what, exactly, is happening to the injected CO2.” The Aquistore test site consists of two wells – the two deepest ever drilled in Saskatchewan at 3,396 and 3,400 metres respectively – completed in 2012. The

shallower of the two is the injection well, which receives CO2 from Boundary Dam, and the deeper is a heavily-equipped observation well which measures and monitors the CO2 underground. Tools on the monitoring well include a fluid sampling system, real-time pressure and temperature monitoring, and digital acoustic fibre for seismic imaging measurements. “In addition to the wells we have a near-surface permanent seismic array of 620 geophones located in a 2.5-squarekilometre grid around the observation and injection wells, continuously monitoring for any seismic activity resulting from CO2 injection. We also have various surface monitoring super stations monitoring the surface and subsurface,” notes Worth. Those superstations include InSar that use satellites, GPS, and tiltmeters to determine if there is any uplift or subsidence of the land as a result of CO2 injection, along with ground water and soil gas monitoring stations that provide data to project researchers to indicate CO2 is remaining securely underground. The project has drawn international attention from different organizations and companies. A Japanese research firm has

made significant investment of on-site equipment to take advantage of the wireless seismic array. The combined baseline data, equipment, and industry interest is leading to additional multi-technique, multi-vendor, and multi-source surveys which will evaluate, compare, and establish the efficacy of many technologies. Aquistore data has potential applications not just for CO2 projects, but also for oil and gas, and the coal and potash mining industries. “We’ve always been aware of how our CO2 storage work carries significant potential for application to other industries,” says Ken From, CEO of the PTRC. “This crossover potential is one of the ways PTRC’s research has the potential to benefit many different aspects of our economy.” That’s exciting news for Saskatchewan and Canada, particularly in times of low commodity prices and wanting to reduce costs and maximize returns. For more information on how the Aquistore field site might have applications and research potential for your oil or mining company, contact the PTRC at info@ptrc.ca or visit the PTRC’s website at http://ptrc.ca. v Saskatchewan Oil Report 2016

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High-Tech Support New capabilities in enhanced oil recovery for “light and tight” reservoirs

Photo credit Saskatchewan Research Council

By Petro Nakutnyy, Saskatchewan Research Council (SRC)

A significant portion of petroleum production in Western Canada comes from “light and tight” oil. The industry uses this term to refer to formations with high-quality crude oil in a low-permeability matrix. In Canada, one of the largest of these is the Bakken play, which covers 62,000 square kilometres of the prairies in southern Saskatchewan. At one time, the 1.4 billion barrels of highquality light oil and 2.9 trillion cubic feet of natural gas in the Canadian Bakken were not considered economically recoverable. But thanks to horizontal drilling and multi-stage fracturing technologies, production is booming in tight oil plays 78 Saskatchewan Oil Report 2016

like the Bakken, as well as other Western Canadian sites, such as the Viking, Lower Shaunavon, and Cardium pools. Although initial peak production is good, production rates have declined quite sharply. That’s because these tight formations have complex, heterogeneous geological natures, featuring small and poorly interconnected pores. In fact, these pores are so small that they are measured on the several micrometer to nanometer scale. To the naked eye, these formations look like solid stone. Here is where enhanced oil recovery (EOR) technologies can help. Dr. Peng Luo, Research and Development Techni-

cal Advisor at the Saskatchewan Research Council (SRC), says that technological innovation has led the Bakken boom over the last decade and will be even more important in the years to come. SRC’s engineers and scientists contributed to the design of the commercially successful CO2 EOR project in Weyburn, as well as other miscible and immiscible gas flooding and chemical flooding projects. SRC has many years of proven expertise in characterizing, screening and optimizing EOR solutions for light and tight reservoirs. In order to continue providing excellent leading-edge services and support to oil producers in Saskatch-


Photo credit Saskatchewan Research Council

ewan and around the world, SRC is continuously expanding its laboratory equipment and expertise to help develop light and tight reservoirs. Luo says, “SRC has a diverse service offering, from petro-physical testing to fluid characterization and physical modelling to numerical simulation. We tailor our service packages, including manufacturing customized apparatus and designing special experiments, to meet clients’ expectations.” SRC has several supporting labs and facilities like the Advanced Microanalysis Centre™, the Petroleum Analytical Laboratories, SRC Environmental Analytical Laboratories, and the Pipe Flow Technology Centre™, which provide comprehensive services to the industry. One of SRC’s recent additions is a state-of-the-art, high-speed centrifuge for rock characterization. Tight oil formations have extremely small pores and this makes it very difficult for oil to travel through the reservoir to the production wells. In addition, small pores amplify the effect of the capillary pressure phenomenon, which is responsible for trapping oil in the rock and preventing it from leaving the reservoir. (Capillary pressure is the pressure difference across the interface of immiscible fluids, such as oil and water. An everyday example of this is the way water wicks through paper towels). Wettability is another important feature of the reservoir — if the rocks are oil-wet, the oil will cling to the rock surface and will be difficult to recover. Knowing the values of capillary pressure and wettability in the reservoir can be useful, but they are not so easily measured in tight rocks. SRC has one of the few labs with an advanced centrifuge that can take these measurements for tight rocks quickly, accurately, and in a non-destructive way. The results can then be used to predict the effects of chemical and gas flooding schemes, and help design a successful EOR process in a tight formation. SRC has devised another solution to a problem with designing EOR processes for light and tight reservoirs. Traditionally, laboratories carry out tests using core plugs retrieved from the oil-bearing formations. Such core plugs are difficult and expensive to obtain. In addition, they can be damaged in the process of drilling. SRC is working on an alternative

solution by making synthetic core plugs of various sizes that match the types and proportions of minerals, rock fragments, and cementing material of the actual reservoir rocks. The synthetic plugs can be made to match the permeability, porosity, wettability, and compressibility of the original rocks from the tight reservoir. In order to take advantage of the added versatility of using synthetic core plugs and to better mimic an actual oil reservoir, SRC recently designed and built an apparatus that models a dual-permeability matrix–fracture flow system, similar to a real formation with microscopic and macroscopic fractures. Tight formations can be very heterogeneous — that is, matrix regions of extremely tight permeability and less tight permeability, or even open fractures, can be found side-by-side in light and tight reservoirs. That situation is precisely what SRC’s dual-permeability system simulates. This system was designed, assembled and pressure tested using a novel core sleeve design to simulate a fracture in a tight reservoir. It is another innovative tool that will help SRC’s clients to test and optimize EOR methods for their reservoirs. SRC has also recently acquired several new pieces of equipment for testing chemical additives for improving oil recovery in oil reservoirs across Canada. A glove box with a recirculation system allows tests to be done in a controlled

environment, including an oxygen-free atmosphere. A new, advanced rheometer is able to characterize the complex flow behaviour (rheology) of various liquids, including oils and polymer solutions, often used in oil fields to improve oil displacement. A sophisticated spinningdrop interfacial-tension-measurement apparatus enables accurate measurements of interface properties between oil and water solutions, including interface elasticity, at ambient conditions. Highpressure and high-temperature pendant drop contact angle and interfacial tension instruments allow us to investigate surface and interfacial properties of solids and liquids at reservoir conditions, helping to accurately predict performance of chemical additives in the field. This equipment, combined with many years of experience in the area of enhanced oil recovery, allows SRC to offer innovative solutions to oil companies in Saskatchewan, which helps develop our precious resources in a smart and responsible manner. In addition to working with Canadian companies, SRC has clients from the United States, Europe, China and India. This gives us the opportunity to export Saskatchewan’s know-how, promote Saskatchewan resources and bring in new experience and expertise that will further bolster the province’s competitive advantage. v Saskatchewan Oil Report 2016

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Small Idea, Huge Potential R.I.I. North America Inc. is on the cusp of new technology By Melanie Franner

When Fred Schneider sat his two sons down and asked them if they would be willing to mortgage their inheritance – the thirdgeneration family farm – for what could be a game changer in the oil and gas industry, he did so on simply an idea. Many years have passed since and today Fred has nurtured his idea all the way through to the first production-scale test of what may be a viable commercial technology with the potential to achieve greater oil recovery rates – at less cost and fewer greenhouse gas emissions than surface-based steam-generation methods. Paper and pen “My brother, Tim, was all for it,” confesses Jeffrey Schneider, executive vice-president, R.I.I. North America Inc. (RII). “I, on the other hand, voted to sell the idea rather than mortgage the farm.” Today, Jeffrey is at the helm of RII, alongside his father. Both also sit on the board of directors. Tim remains involved in the business but operates his own hedge-fund company in New York. The Calgary-based, privately-held RII has managed to attract sizeable and credible investors over the years – all of which has 80 Saskatchewan Oil Report 2016

been necessary to get it to this current crucial point of phase two of the pilot project. That’s not to say it’s been an easy road thus far. “My father came with the idea on a whiteboard back in 2005,” says Schneider. “To be candid, over the past several years, our annual strategic plan often hinged on finding a way to stay afloat for the next 12 months.” But stay afloat they have and today, RII is that much closer to making its patented Solvent Thermal Resource Innovations Process (STRIP) a reality.


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The technology STRIP is a proprietary process that is different from other thermal enhanced oil recovery (EOR) methods in that it generates steam downhole, thereby relocating the products of combustion – mostly carbon dioxide – from the atmosphere into the reservoir. The steam and carbon dioxide act as solvents in the reservoir, reducing the viscosity of the oil and increasing the pressure of the formation. “We compare the STRIP apparatus to an upside down Bunsen burner,” notes Schneider, who goes to describe the technology as follows. “The STRIP process injects oxygen, fuel gas and water downhole from the injection wellhead through three concentric tubing strings. These tubing strings connect to the STRIP combustor, which is installed near the top of the target formation and above a combustion cavity that has been reamed out prior to injection activities. The fuel gas and oxygen auto ignite, using an accelerant at the burner tip. Water is constantly injected downhole, where it flows past the burner shroud. This water flow acts as a safety mechanism since it purges the hot combustion gases down and away from the mechanical components. As the water comes into contact with the flame, the steam is generated near the wellbore area of the reservoir.” Schneider is quick to add that RII has not attempted to re-invent the wheel, so to speak. “Steam and carbon dioxide are tried and proven methods used for enhanced oil recovery,” he says. “STRIP simply pro-

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vides a more efficient and cost-effective delivery system.” The road less travelled After RII founder Fred Schneider got his sons’ permission to pursue STRIP, he began what would be a series of steps to make sure the idea was viable. The first of these meant transposing the idea itself from whiteboard to lab. To do so, he went to Sandia National Laboratories (Sandia) in California, an independent third-party research and development institution sponsored by the United States Department of Energy. “Sandia had done previous work along these lines,” explains Schneider. “We sought them out because they had the requisite background to run our idea through the necessary computer modelling to see if the technology could be viable.” After a green light from Sandia, RII next built and operated a full-scale R&D facility at Georgia Institute of Technology in Atlanta. This critical test successfully defined the technology’s operating parametres, procedures, and mechanical integrity. From there, it was a matter of putting STRIP into the ground to see if it could operate in the real world. This took place in 2014 in Neilburg, Saskatchewan. It involved the conversion of an existing Cold Heavy Oil Production with Sand (CHOPS) production well to a STRIP injection well. The conversion did not require any modifications to the existing casing. “We wanted a remote site where we could work unnoticed for the main part,” explains Schneider. “We worked with a company called Rock Energy. They had a single oil well in a field with 60-acre spacing. We were there for six months to do our proof-of-concept test.” This first phase of the pilot project proved successful and RII began thinking about the second phase.

“We wanted to do our proof-of-production test but if we were to do it at Neilburg, we would have had to implement some costly infill wells between the existing spacing. So we opted to look elsewhere.” It wasn’t too long before the company came upon the perfect set-up scenario in the Buzzard area, near Lloydminster, where it farmed into a 50 per cent working interest in approximately three sections of land. “We took over the operations there in October 2015,” says Schneider. “There were 32 existing wells on site, the majority of which were not producing anymore. We drilled two new horizontal wells, four new vertical wells, and converted four existing wells. We are currently in the process of gathering baseline data and expect to see results sometime over the next four to six months, although this commercial demonstration phase will run for 24 months in total.” The game changer To date, RII has invested more than $50 million in its STRIP technology. The


fact that the technology uses steam and carbon dioxide is not the big news, as Schneider has pointed out. It’s that the technology has the potential to raise average oil recovery rates from five per cent to as high as 45 per cent in certain reservoirs – while reducing thermal injection operating costs by as much as 50 per cent, capital costs by as much as 70 per cent and resulting in energy savings of around 30 per cent or greater (compared to surface-based steam generation processes). According to Schneider, CHOPS is a primary recovery method that accounts for one-third of Canadian oil production. But CHOPS recovers only between five per cent and eight per cent of the initial oil in place. “Our initial focus will be to target CHOPS-depleted formations,” says Schneider, who estimates that there are some 150 billion barrels of depleted CHOPS oil resources in Western Canada alone. “Over time, as the company and technology mature, RII plans on implementing STRIP across a variety of reservoir types beyond CHOPS formations, including oil sands, depleted conventional reservoirs and offshore pools.” The potential is – needless to say – significant. But along the way to realizing his dream, Fred Schneider not only mortgaged the family farm, he also brought in investors who now have a seat at the table. “The board of directors will undertake a strategic review process to determine the future direction of RII,” explains Schneider. “Depending on the results over the next few months, there are basically three potential scenarios on the table.”

The first of these is to have RII purchase land and use its technology on a proprietary basis. “Given the current economic climate in this industry, the timing for this scenario could not be better,” says Schneider, who adds that number crunching has shown that the company could break even at $30-$40 a barrel (WTI). The second scenario is to sell the technology and offer servicing to the larger industry players. The third scenario is a hybrid of the two, with joint ventures on the one end of the scale and servicing offered on the other. “This time ‘round, if it were up to me, I vote against selling the technology,” says Schneider, who adds that his father feels the same way. But, in the end, it will be up to the board of directors to make that decision. A milestone moment RII has come to fruition through a series of steps and processes that transformed a small and simple idea into a potential game changer for the worldwide oil and gas industry. The road has been a long and arduous one. Although Schnei-

der says this current second phase of the pilot project is “the inflection point”, he also notes there have been other significant moments in the company’s history. “Going back, the proof of concept was a big one,” he says. “But you need to be able to show that you’re producing oil. And right now, we believe that we have the perfect set up to do just that. We’re very optimistic.” The stage has been set and the players are in motion. From here, it’s just a matter of waiting for the results. But, as the world sits back and watches in earnest, one can’t help but think back to that moment in time when Fred Schneider asked his children if they were willing to put it all on the line. It was a gamble back then and remains a gamble today, albeit perhaps one with better odds. “I’m pretty proud of my father,” concludes Schneider. “Here’s a man who worked in the trades all his life, eventually becoming a trouble shooter for the oil industry. He is not a certified engineer and yet he couldn’t help but think that there was a simpler and more efficient way of recovering oil. And he was willing to risk it all to prove that there is.” v

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The Numbers Network How CAPPA supports production accountants and industry By Kylie Williams

Like so many great ideas, this one started over a pint. In the early 1950s, two oil and gas production accountants, Brian E. Smith and Ian Hartley, met for a drink to discuss some of the issues they both faced in their similar roles. Their gatherings quickly grew and by 1955 a strong fellowship of production accountants had formed to comfortably exchange ideas and information. In 1961, a group of eight founders wrote bylaws and applied to become a society. The Canadian Association of Petroleum Production Accounting (CAPPA) was born. Their application included a vision for CAPPA; to educate its members, to keep its members informed, and to provide opportunities for its members to network and develop friendships. The goals of the association remain similar today. CAPPA membership has now grown to over 1,000 oil and gas production accountants (PAs) and royalty 84 Saskatchewan Oil Report 2016

accountants, and the professional association offers an industry-recognized Certificate Program and numerous opportunities for further education, advocacy and resources. Gavin Schafer has been chair of the CAPPA board for three years and in production accounting for 20 years. He explains that the primary goal of the association is to support its members and their careers. “We’re an open network for members to post job opportunities and benefit from peer support. Current industry austerity measures have led to job losses, so we have been an integral support system for our members seeking career guidance and workshops,” says Schafer. His current role as manager, production accounting at Crew Energy Inc. puts him at the centre of oil and gas accounting in Canada. Calgary-based Crew Energy is a dynamic, growth-oriented explorer and producer focused on development

of their sizeable assets in the Montney Basin in north east British Columbia, as well as some small heavy oil properties in Alberta and Saskatchewan. “The current low price environment, specifically on the oil side, is very challenging for oil and gas companies. Producing at a certain cost per volume and then selling it on a volatile market impacts company budgets on a weekly to monthly basis, as opposed to quarterly to yearly. This poses significant challenges for governments striving to maintain their budgets, given that industry royalties make up a major part of their revenue,” explains Schafer. It is oil and gas PAs who keep track of these numbers. They combine accounting and data analysis skills, and a thorough knowledge of oil and gas regulations, together with the requirements to report revenue and royalties. Joe Chan, a CAPPA-certified PA who works as supervisor, production account-


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Gavin Schafer, chair of the CAPPA board

ing at Crescent Point Energy Corp, explains, “A production accountant performs monthly tasks of gathering, analyzing, interpreting and reporting production data into a specialized accounting system. We are able to work collaboratively with field staff and team members to accurately report financial data like revenues, volumes and payment of royalties.” The information needed to produce these monthly reports comes from a range of sources, including field sites, land managers, joint-venture analysts, marketing and financial departments. The data is critical to company operations, management and financial reporting, so it is vital that the people juggling these numbers are trained and certified. “The data that’s collected on behalf of government regulators is generated and submitted by production accountants. There is a vested interest in making sure those people are well trained and know what they’re doing,” says Schafer, who has been an instructor for the CAPPA Oil and Gas Production Accounting Certificate program for over 10 years. Practicing PAs can take the certification course full-time at Mount Royal University and Southern Alberta Institute of Technology (SAIT) Polytechnic, or via distance education online. “The CAPPA course helped me gain the basic framework and background required to understand my daily work. It led to a better understanding of the industry’s standards and assisted in my daily responsibilities as a production accountant,” says Chan, who obtained his CAPPA certification from SAIT in 2005. In response to student and industry feedback and the changing regulatory front, a three-year project to redesign the course curriculum is currently underway. “We’re just over one year in and we are excited with the progress,” explains Sheila McFadyen, who was appointed as CAPPA’s first CEO in January 2014. “In addition to providing an updated and expanded program, we are structuring our courses to provide a more dynamic, interactive technology-based style for the students. We are also providing new, continuous learning opportunities, including webinars for distance students.” Under McFadyen’s leadership in recent years, CAPPA has rebranded and rejuvenated their website, logo, offerings and advocacy. The association has embarked on a new chapter, and look forward to moving back into better economic times with their membership. 86 Saskatchewan Oil Report 2016

Typically, when there is a downturn, people will take the time to upgrade and hone their skills with courses like the CAPPA certificate. But this time around, observes Schafer, it seems to be a deeper cut and the uncertainty in the industry is a disincentive to invest in that training. Canadian producers have been rocked by falling oil prices and competition with other countries, including the United States. The questions surrounding the approval and construction of pipelines from the land-locked provinces of Alberta and Saskatchewan creates further uncertainty. During downturns like these, PAs face job insecurity like all professions in the oil and gas industry. “When they come to start cutting costs, companies may see production accounting as something that can be outsourced and offshored. Production accountants provide too much value being on site and in the office here, closest to production. They need to be talking to the field, they need to be engaged with the engineers in-house. We’re very much the hub of information,” says Schafer. PAs are the first point of contact for records of the oil and gas volumes and emissions necessary for robust environmental regulation too. In May 2015, the Saskatchewan Ministry of the Economy (ECON) announced plans to update and modernize oil and gas measurement and reporting requirements to align with the existing systems in neighbouring Alberta. ECON are rolling out an Enhanced Production Audit Program (EPAP) in Saskatchewan with the new requirements coming into effect in April 2016. “We’ve been executing EPAP on the Alberta side for about four years and Saskatchewan will have adopted many of the same requirements. Industry should be familiar enough with it to effectively implement on the Saskatchewan side.It definitely should be seen as a positive thing,” says Schafer, who is confident the transition will go smoothly. The value that oil and gas accountants provide to the petroleum industry cannot be understated, particularly during challenging times when regulations, oil prices and the industry itself are changing so rapidly. Many PAs are looking outside the industry as conditions continue to destabilize, but those who remain continue to support each other, perhaps over a pint, as the founders of CAPPA envisioned 55 years ago. For more information, visit www.cappa.org. v


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Clarence Campeau Development Fund Creating jobs and opportunity for Saskatchewan Métis By Kylie Williams

In 2015, a record number of Canadians ran their own business. This entrepreneurial mindset is becoming a major economic driver across the country, but identifying a market opportunity and turning an idea into a viable business can be challenging. Over the past 18 years, the Clarence Campeau Development Fund (CCDF) has helped thousands of Métis entrepreneurs and communities initiate and grow their own businesses, and contributed significantly to the economic and social health of Saskatchewan at the same time. The CCDF has provided flexible financing and mentorship to entrepreneurs and business owners of Métis ancestry since it was established in 1997. Since the fund’s inception, it has provided over $46 million in equity to almost 1,500 projects. This funding has leveraged $131 million and created 7,000 direct and indirect jobs for Saskatchewan. “For every $1 CCDF contributes as equity to Métis entrepreneurs or communities, the province receives $15 in social and financial benefits,” explains Steve Danners, director of Métis Energy and Resource Program (MERP), just one of the nine services and programs delivered by the CCDF. 88 Saskatchewan Oil Report 2016

A Socioeconomic Impact Benefit Study commissioned by the CCDF in 2014 showed that $43 million in project support payments between 1998 and 2013 translated to over $660 million in social and financial benefit for the province of Saskatchewan. This is an impressive return on investment for the province that funds the CCDF annually through provincial gaming revenues. As Canada’s leading Métis Financial Institution, the CCDF provides Métis entrepreneurs with business plan assistance, loan and equity contributions, specific programs for Métis women and youth, community business development, energy and resource industry programs, and tailored business management and marketing skills development. Danners describes 2015 as “tremendously successful” with the CCDF funding 59 projects – almost double the average number of projects per year so far – and providing over $5 million in funding. He oversees the Métis Energy and Resources Program (MERP) which was created in 2011 to increase Métis participation in resource sectors, specifically oil and gas, minerals and forestry.

“CCDF seems to be recession-proof,” says Danners, “During the growth periods, businesses tend to expand and CCDF can assist, and during down-turns, layoffs increase and people look for new ways to support themselves and the CCDF can assist start-up businesses.” MERP began with a $5 million investment from the Government of Canada through the Major Resource and Energy Development Investments Initiative, a coast-to-coast program designed by the federal government to increase Métis and First Nations involvement in resource industries. In 2014, CCDF made the decision to expand the MERP to include a wider range of projects, with a continued emphasis on the energy and resource sectors. In the following year, MERP provided equity for five projects and invested $2.5 million into Métis businesses and communities. Some of the projects supported by MERP in 2015 include: a trucking company in Prince Albert which services the uranium industry in northern Saskatchewan, a business selling drill bits to the oil and gas sector based in Lloydminster, and a vacuum truck business serving the


energy operators in the Bakken Oil Fields of southern Saskatchewan. One standout project supported by MERP in 2014-15, and looking to expand in 2016, is the highly successful Jans Bay regional training facility in northwestern Saskatchewan. The training facility is owned and operated by the Wasaw Development Corporation and prepares northern residents for jobs in the oil and gas sector, providing training in catering, security, 1A driving, and preparing them for camp life. “The training facility gives residents from the north the opportunity to take training and improve their skill set for employment in the energy and resource sectors,” says Roxanne Gamble, manager of the facility. “Our facility has already been a tremendous success with job placement to over 90 per cent of our graduates. Without the assistance of CCDF this would not have been possible.” MERP started out as a three-year pilot program and has since become highly successful, creating 112 direct jobs and 350 indirect jobs since its inception. In 2016, $1.9 million has been earmarked for three soon-to-be-approved MERP projects which will result in another 95 direct jobs. The CCDF has grown to an equity base of $32 million with 11 employees in Regina and Saskatoon. The staff are supported by a professional board of directors which includes five Metis voting members and two ex-officio members from the province. “The work of the CCDF has had a huge impact on Métis entrepreneurs and communities. What benefits the Métis people, benefits the whole province,” says Monica Brunet, director of CCDF’s Métis Economic Development Sector. The Métis Economic Development Sector is a portal for information and connects Métis businesses, like those supported by the MERP, with opportunities in Saskatchewan. It includes an online Saskatchewan Metis Business Directory, as well as business matching and community events. “The online Saskatchewan Métis Business Directory currently lists approximately 300 Métis businesses, and many have received contributions and support from the CCDF,” says Brunet. “We’re providing Métis businesses with the support needed to ensure meaningful participation in Saskatchewan’s economy.” v

Noble Well Services Inc.

Box 393 • Arcola, Saskatchewan • S0C 0G0 • noble.well.services@sasktel.net AREA MANAGER Chris Nidesh | 306.577.8793 FIELD SUPERVISOR Shane Ippolito | 306.577.7807 SAFETY CO-ORDINATOR Van Bot | 306.575.8792

Locally owned and operated. Experienced crews. Mobile freestanding equipment. Saskatchewan Oil Report 2016 89


Resource Development Reducing costs and improving quality in heritage management By Josh Glew, MBA It’s no secret that resource development industries, oil and gas in particular, continue to transition towards a future defined by lower commodity prices. Low commodity prices have had a wide range of effects on Canadian firms, but in every cloud there is a silver lining. Suppliers are doing everything they can to both lower costs and raise productivity in order to improve profitability, and to provide value to their clients and partners. Western Heritage provides heritage management and geomatics services across Western Canada. One of our key goals across all levels of the oil and gas supply chain has been reducing costs while improving quality. We have successfully reduced our costs and improved our response time, while meeting or exceeding regulatory and CSR goals. We don’t believe that you can only pick two out of “speed, quality, and cost.” We allow you to pick all three. To achieve this, over the past 15 months we have continued to innovate our service delivery model. Task-based billing Most professional service firms charge for a professional’s time at the same rate whether they are delivering a high-level professional service or sending you a report. Western Heritage thought this was unreasonable and has adopted task based billing. This means that customers pay a set rate for the task being completed, regardless of the seniority of the person completing it. For example, clerical work is charged at a single rate, even if senior management performs it. While this provides significant cost savings to the customer (up to 30 per cent), it allows us to improve response time as all available staff can be conscripted in order to meet our customer’s deadlines. This innovation has significantly reduced time required to invoice and has effectively reduced our already low error rate to near zero. Field offices Western Heritage has been experimenting with the delivery of services from field offices. In most cases these offices are only open during peak seasonal demand, but customers can book services from them throughout the year, even if the staff needs to be brought in from another office at our cost. Currently our field offices include Grande Prairie and Winnipeg. We will be opening a field office in Swift Current in 2016. To serve the Weyburn area, we maintain an office in Regina year round. Centralized coordination Western Heritage uses a centralized project coordinator to handle coordinating our team across Canada and the world. This ensures a fast response time, and the ability to easily handle multiple jurisdictions for a single client or partner. There is no need to try and manage multiple service providers, with licensed staff and offices across much of Canada, we can provide service for all of your projects. 90 Saskatchewan Oil Report 2016

Discounts for repeat business This is our way of showing appreciation for our repeat customers. Discounts start at the second development in a single project year and range from five per cent to 25 per cent depending on the product or service. We will apply the discounts even if the projects are distributed across multiple jurisdictions. Ongoing innovation Whether it is reforming internal processes or finding a better way to characterize heritage sites, research and innovation have always been part of our DNA (we were originally spun out of a research council). In 2015, for example, we have been developing a new geophysics tool for archaeologists to increase accuracy. Another of our innovations is using satellite imagery to minimize the costs of monitoring environmental change in reclamation sites and project footprints. Satellite imagery provides more comprehensive change measurements at a lower cost and higher density that ground based-measures. This is the basis of our Environmental Footprint Monitoring Platform. Also, a subsidiary of Western Heritage develops software to help manage travel costs for health care practitioners. Over the past few years, they have been developing an advanced scheduling module that reduces travel costs even further. Why should the health care industry be the only ones to benefit from these cost savings? WHFleet Manager is a scheduling/mileage determination app which determines the optimum routing and mileage for your service fleet. It reduces travel time and fuel costs, and if operators are paid by the mile, the software also generates mileage payroll records. These products have reduced travel expenditures by more than 30 per cent for existing customers. We believe that trying times build strong companies. Looking forward we are committed to doing all we can to reduce costs while improving quality. Contact any Western Heritage office to discuss your service needs, and together we will continue to create value for Canadian resource development. v



Everyone Can Find an Opportunity The city of Weyburn is a dynamic community with both a strong and diverse economic base

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Weyburn has long been established as a central figure for the upstream oil industry in Saskatchewan. Weyburn sits geographically atop the Bakken Oil Formation, one of the most prolific oil producing patches in the world. Agriculture has always been the back bone of the community. As the world looks to its farmers to meet an ever increasing need for food supply, Weyburn’s position as one the of the largest inland grain gathering points in North America makes it a vital contributor to a timely issue. As the central community in Southeast region, Weyburn is the preferred locale for the public sector and professional regional head offices, contributing an enduring inventory of stable employment opportunities. Among the several key professional and public sector regional headquarters in Weyburn include: Sun Country Health Region, Southeast Cornerstone School Division, Southeast College Administrative Offices, and SaskPower Regional Distribution Centre. Weyburn’s proximity to Regina offers access to a wide range of support and services. Whether moving goods, services, or people Weyburn companies enjoy access to an extensive transportation network with global reach. Weyburn is located directly through three major highways, two which extend to the U.S. and one into Manitoba. Another advantage is Weyburn is located only an hour from The Global Transportation Hub (GTH), which is Canada’s only autono-

mous and self-governing Inland Port Authority. The GTH provides rail access to all major Canadian ports, Gulf Coast ports, and mid-western U.S. trans-shipment points and trucking connections to all major networks. The ability to efficiently move goods makes Weyburn the ideal location for several major manufacturing firms. Weyburn is well defined by being a safe, friendly, healthy, balanced lifestyle. A close-knit neighbourhood community with low crime rates, and economic strength makes Weyburn a great place for a family to live. Rich in supports, the community values children and youth, with a vast network of high quality

programs and recreation options. High quality public parks and green spaces, create a clean healthy environment. Residents also enjoy beautiful rural surroundings including lakes, parks, and connection to the agricultural lifestyle. Weyburn’s stable economic base, its transportation accessibility and its attractive labour force are why businesses are attracted to Weyburn. While enjoying the luxuries of small city life, Weyburn’s central location in the Southeast maintains easy access to the convenience and services of larger centers. Everyone can find an opportunity in Weyburn. v

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Top of the List The city of Swift Current offers an all around great quality of life

The strength of the city of Swift Current’s economy lies in its diversity. Relying on agriculture, manufacturing, oil and gas, tourism, retail and service sectors, the past 10 years have resulted in all industries realizing significant growth and prosperity. Swift Current has grown tremendously over that 10-year span, so much so that additional lands had to be incorporated into the city limits as development had

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reached the existing city boundaries. In 2011, and again in 2013, the City annexed a total of eight quarter-sections of land from the neighbouring rural municipality, and are currently undertaking area structure plans for the additional lands. They also recently adopted a Strategic Plan which demonstrates commitment to future growth and prosperity, and by the year 2025, the goal is to increase the city’s population to 25,000 people.

With respect to this growth and development, according to Saskatchewan Health numbers, the city of Swift Current advanced from a population of 16,500 in 2009 to 17,990 in 2014. The city has seen obvious growth, including more than 1,000 immigrants from around the globe choosing the city as a location to live and work. Being located on the TransCanada Highway has always proven to be an


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asset. Tourism and business travel have continued to keep hotels busy, as well as many restaurants, the casino, and performing arts centre. Interestingly, the city’s hotel industry continues to have an occupancy rate significantly higher than most areas throughout the country. This trend is certainly going to continue given the many exciting events that will be hosted here in 2016, including: • The Cody Snyder Professional Bull Riding Invitational, May 28 • The Long Days Night and Windscape Kite Festival, June 25 and 26 • Frontier Days, June 29 to July 2 • The Canadian Cowboys Association Finals Rodeo, October 19 to 22 In terms of construction in the city, the trend over the past number of years has been extremely strong, and is expected to continue well into the future. In 2015, the value of building permits issued in Swift Current surpassed the previous historical record set in 2012. Over the past four years, there has been close to 280 million dollars in construction activity in the city, and since 2005, over half a billion dollars. Over these years, it is interesting to note the significant construction numbers really do show the city is progressing on all fronts. Whether it be the two new schools built which will serve youth for many years to come, the much needed 225-bed long term care facility currently under construction, senior and family higher-density rental and condo units, many single family homes, and industrial and commercial investment taking place throughout the city. The year 2015 also saw the City sell eight acres of industrial land, which completely sold out the Munro Industrial Park. Four school sites were acquired which will need the completion of concept plans for potential redevelopment over the next 96 Saskatchewan Oil Report 2016


few years. In addition, there has been great interest in the Elmwood Golf Course Residential Development called Cypress Point, and expect that many new homes will be developed in this prestigious area next year. The residential figures for 2015 include 30 single-family and duplex units and 62 condo and multi-family units. Interestingly, since 2007, the city has had approximately 1,000 new residential units constructed in our city. In addition, we are extremely excited about the start of the Natural Gas Electrical Generation facility that will be constructed just west of Swift Current’s city limits. There have been six companies that were shortlisted to provide the government with proposals to build the $800 million to $1 billion facility. It is expected that the winning bid will be announced in June or July of 2016, with completion of the project slated for 2019. Once the award is given, the majority of the construction work will take place beginning in 2017. During construction, there will be significant activity in Swift Current, given there will be several hun-

dred workers on site at any one time, all of who will stay in and around Swift Current in rental apartments, hotel rooms and campgrounds, which will certainly provide a significant boost to the local economy. With many developments and projects planned to take place in 2016, it demonstrates there is a significant level of activity and confidence in the local and regional economy. Whether it is residential, commercial, industrial, or institutional developments, it is fully anticipated that 2016 will be another strong year for construction in Swift Current. In terms of the local housing market, Century 21 Accord Realty agent Kelsey Adam states, “Swift Current experienced its fifth busiest real estate market ever. Despite a slow start, this past year rebounded very well. It finished behind the past three years and 2007, but considering everyone’s concerns with oil prices, the housing market did very well.” The year wrapped up with 283 residential sales, down from last year’s total of 310 but ahead of the 2011 total of 263. There were more listings on the market

last year than in 2014, up 15.8 per cent from 419 to 485. The median sales price for last year was $265,000 which is up almost 11 per cent from the previous year’s $238,850. “With the increase in selection and the relatively strong sales, our market is in a stable, balanced state right now,” states Adam, adding continued low interest rates and a strong job market has helped Swift Current to remain as one of the more robust real estate markets in the province. “Other areas are being affected more by the low oil prices, and some cities are suffering from over-construction, but we seem to be riding out the storm quite well.” Consistently boasting one of North America’s lowest unemployment rates, a strong housing market, and a great quality of life that includes an exceptionally high number of sunny days, a low crime rate, and a healthy business climate (Swift Current ranks ninth out of 121 Canadian cities in the 2015 Entrepreneurial Communities Report), the city of Swift Current remains at the top of the list of places to live and invest. v

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Great Plains College Moving Dirt and Building Roads to a Brighter Future

The construction, mining, forestry, and oil and gas industries all have one thing in common: the need for skilled workers, and heavy equipment operators are no exception. Through the six-week Heavy Equipment Operator (HEO) program at Great Plains College, not only are students receiving Powered Mobile Equipment certification on two pieces of heavy equipment, but they are also gaining valuable experience on state-of-the-art simulators and actual work sites. This past year, students in the Warman HEO program had a chance to make a major impact in their community. Through a partnership with the City of Warman, Great Plains College students 98 Saskatchewan Oil Report 2016

were put to work on the city’s new Prairie Oasis Park. From shaping the toboggan hill and levelling the ground for additional ball diamonds, to preparing the site for a skateboard park and BMX track, most of the work in the northwest corner of the park was completed by HEO students. Not only is the real-life work experience a great asset for a resume, but for many students, the completion of postsecondary training is an accomplishment that goes beyond academics. “When we celebrated our most recent class of HEO graduates, it was once again demonstrated that our programs offer more than just career opportunities,

they have the power to transform lives,” states Rob Neufeld, Great Plains College region manager. In the recent small and casual graduation ceremony – the HEO class sizes are capped at eight students – one of the students took the initiative to stand up and say a few words of his own. “His message was a thoughtful and eloquent ‘thank you’ to his instructors, the college, his funding agency, and his community,” describes Neufeld. “To this young man, his time as a student was about more than the future job and pay cheque potential. It was about accomplishment and the beginning of a promising future.”


And for many people, particularly in this time of economic instability, training can offer just that – a renewed optimism and sense of purpose. Stepping outside your comfort zone into a new post-secondary adventure can often seem intimidating, but Great Plains College student advisers and instructors are there to help ease the transition and set students up for success in the classroom and beyond. Whether you’re interested in upgrading high school courses, or completing a certificate program, Great Plains College, through its six main campuses, offers a full complement of programs including skills and safety training, basic education upgrading, English language training, university studies and certificate programs ranging from Administrative Assistant and Business to Boom Truck, Crane and Hoist Operator, Welding and Practical Nursing. The combination of programs and services allows students at all levels to start their post-secondary journey in a small campus atmosphere and have a rewarding student experience. Continuous education and training has the power to change lives, and becomes even more important in challenging economic times. In an effort to support those facing challenges or looking for new training opportunities, Great Plains College is pleased to offer a special 15 per cent discount off of tuition costs for select safety courses from March 1 to June 30, 2016. To learn more about the HEO program, post-secondary, industry training programs, and safety course discounts offered at Great Plains College, visit greaptlainscollege.ca. v

SKILLS AND SAFETY

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• Audiometric and Fit Testing • ATV/UTV Training • CAODC Service Rig Competency Assessor (ENFORM) • Confined Space Entry Levels 1 & 2 • Defensive Driving (in-vehicle assessment available) • Detection & Control of Flammable Substances (ENFORM) • Fall Protection for Rig Work and Fall Rescue for Rig Work (ENFORM) • Fall Protection General (ENFORM) • Fire Extinguisher Training • Global Ground Disturbance • H2S Alive (ENFORM) • Hours of Service and Fatigue Management • Oilfield Driver Awareness (formerly GODI) • Powered Mobile Equipment Operator ie: aerial manlift, forklift, skidsteer and more. • Red Cross First Aid/CPR/AED • Well Service and Coiled Tubing Blow-Out Prevention (ENFORM) • Safety Management & Regulatory Awareness (SARA) • Safety Program Development / SECOR Refresher

CUSTOM TRAINING OPTIONS AVAILABLE For details and to register, connect with us at greatplainscollege.ca/skillsandsafetytraining, call Kindersley at 1 (888) 382-7972 or Swift Current at 1 (866) 296-2472.

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Saskatchewan Oil Report 2016 99

1/8/2016 12:14:14 PM


YQR Prepares for Strong Growth Regina International Airport ready for take off

Dick Graham, president and CEO for the Regina Airport Authority.

Saskatchewan Oil Report sat down with Dick Graham, president and CEO for the Regina Airport Authority to discuss his transition from the oil and gas business and the future role of the Regina International Airport (YQR) airport and how YQR is preparing to meet the demands of exciting growth to come. Here is a brief summary of that conversation. SOR: First off, can you briefly tell me about the Regina International Airport or YQR? DG: We have two runways that are used regularly by commercial airlines, charter companies, private cargo companies, and private jets. On average, we transport approximately 1.26 million passengers a year. That makes us the 13th busiest airport in the country. SOR: How does YQR compare to other airports? DG: Regina has been my home for the past 23 years and I have worked in the oil and gas industry for more than three decades. A lot of my time was spent building energy infrastructure and energy projects and businesses across Canada. This took me to a great many places – and airports – as most of the business was conducted face to face. I have to say there are a lot of truly fantastic airports in Canada and North America. And the Regina airport has always been one of the more pleasant places to depart from and arrive in. We have the opportunity here to quickly park, go through security, have a bite to eat, and hop on an airplane that will take you to hundreds of destinations. YQR is a strong, medium-sized airport that delivers all the comforts of air travel in a comfortable and efficient setting. 100 Saskatchewan Oil Report 2016

SOR: How important is YQR to the city of Regina and surrounding region? DG: An economic impact study completed in 2013 stated that YQR generated three-quarters of a billion dollars of GDP activity. That amounts to eight per cent of Regina’s total GDP. This economic activity is comprised of both direct impact activities and total impact activities. The former is reported in 3,296 full-time equivalents (FTEs), labour income of $128 million, $193 million in other expenditures, and a total GDP of $321 million. The latter includes the additional benefits generated by the spending of non-resident visitors arriving by air and from the construction activity associated with airport capital projects. The total impact numbers include 6,029 FTEs, $276 million in labour income, $470 million in other expenditures, and a total GDP of $746 million. A new study based on 2015 numbers and data will be released later this year and is expected to show that YQR is generating over $1 billion in GDP in the southern region of Saskatchewan. The airport has sustained this kind of economic development for quite some time and we’re quite confident that it will continue to do so in the years ahead. SOR: How important a role do airports play in a region’s economic development? DG: According to the recent Canada Transportation Act Review Report, which was submitted by the Honourable David Emerson to the federal government on December 21, 2015, the role of airports in this country is clearly significant. Airports, such as YQR, are vitally important to the economic success of our country and they act as economic engines. Allow me to quote directly from the report, “Canada’s geography and distance from foreign markets means that air transport is


vitally important to our economic success. Not only does air travel provide access and labour mobility to urban, rural, and remote locations in Canada, but airports and air carriers act as economic engines for communities and for the country as a whole, enabling the flow of professional services, tourism, and high-value, timesensitive exports. They are a major factor in attracting foreign investment.” SOR: What sort of growth does the Regina Airport Authority anticipate for the future? DG: There is no doubt that long term, the whole global air industry will grow. Numbers suggest that this will be around five per cent per year. Here at YQR, we feed into many major airports around North America. We reach over 250 destinations worldwide in one stop or less within a three-hour connection window. As such, we expect to grow an average of about three to four per cent over the next 10 years. SOR: What is the Regina Airport Authority doing to help prepare for this growth? DG: Airports have to stay on the forefront of growth. We operate on a five to 10-year short-term planning process. Our longterm planning horizon exceeds 25 years. Airports act well in advance of economic development to help grow the economy. We have had plans in place for years and have been acting on them accordingly. For example, we initiated $40 million in projects last year and have initiated another $30 million worth this year. Many of those projects will be finishing up in the next year or two. The terminal building will be our next big focus and we will begin work on that in about three to five years.

SOR: Why is there a need for YQR to expand its services and offerings in the years ahead? DG: Saskatchewan is fortunate to have a very diversified economy. We believe very strongly that all of our industries will flourish in the years ahead – be they oil, agriculture, potash, mining, services, technology and manufacturing. We have a very significant amount of oil and gas activity. Thanks to this diversification, our passenger numbers are down only about half of one per cent over last year. Other airports have experienced a lot more significant decline. We believe that business will increase significantly once the price of oil and other commodities begins to rise and the economy begins to strengthen. SOR: How has your experience in the oil and gas industry affected your vision of YQR? DG: YQR has undergone a lot of significant changes even in the brief year in which I have been involved with the Regina Airport Authority. With it having been the gateway to a large part of the province’s oil and gas industry for so many years, it’s been rewarding to see this business as one that can continue to grow the airport during my time here. We’re certainly prepared for that growth and will definitely be out in front of it and continue development in order to accommodate the anticipated growth from the oil and gas industry and the anticipated growth of all industries that contribute to our diversified economy and help drive the economic growth of this province. v

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The Best is Yet to Come The 24th Williston Basin Petroleum Conference to focus on the technologies and techniques that will move the Bakken forward

Photo Credit Renae Mitchell

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Photo Credit Renae Mitchell

Certainty is something that all businesses strive for, but it is also elusive. This is especially true in commodities where so many external influences from politics to weather can change the outcome of operations overnight. Yet, as uncertain as certainty may be, it does breed innovation and efficiency. While politics, weather, and even economics can’t be changed, individual operations of companies can, and we’ve witnessed over the course of the past year as the oil industry and related businesses have done what they can to change and adapt to market conditions. And the change has been remarkable. Just two years ago, we lauded the fact that companies were becoming better at what they do, making it economic to produce oil at a “mere” $70 per barrel. Today, we see production continue as the barrels hovers at $35. It has not come without its pains, but industry is rising to the challenge. Slowdowns afford the opportunity to evaluate operations, cultivate ingenuity, embrace efficiency, and deploy the technologies that will take the Bakken forward. Saskatchewan Oil Report 2016 103


Photo Credit Renae Mitchell

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Although the mainstream media is concentrating primarily on the price collapse and layoffs, industry publications are focused on what it this period could be: the opportunity to be better. “This makes the phase that we’re in very exciting. It’s not the best financial time for any of us, for sure, but it’s a great time of learning and reflecting,” Don Conkle of Carbo Ceramics told E&P Magazine. Ryan Hummer of NCS Multistage echoed those sentiments, “We’ve probably learned more as an industry in the last 15 to 18 months than we have in the previous several years where the activity was so high there wasn’t as much focus on costs. Now everyone is laser-focused on making every improvement we can make, whether it’s on the completion side, on the drilling side or reducing operating costs. It’s actually an exciting time for the industry as we go through this, even though it’s painful certainly for the services industry and painful for our customers as well.” In fact, the Williston Basin Petroleum Conference was borne from very similar conditions that we face today. The resource was there, but the ability to harvest them was not quite ready, and so began the Williston Basin Horizontal Drilling Symposium. This symposium brought together industry leaders to explore the technologies that have since unlocked the Lodgepole Field under


Dickinson, the Cedar Hills Field in Bowman County, and of course eventually the Bakken, defining our region as a top energy producer in the world. This is a feat that just a little more than a decade ago may not have seen plausible because at that time, the Bakken was still considered uneconomic to produce. The relentless work of industry pioneers, however, led to the innovation and combinations of technologies that have since made the Bakken shale play a world-class resource. The conference has since evolved into the Williston Basin Petroleum Conference, but its focus is still on making the technology, technical and regulatory improvements needed to move our industry and this resource play forward. This year, we are pleased to welcome many prominent industry and company leaders to discuss the technologies and efficiencies that are changing the way we develop our vast natural resources. Among them will be CEOs Jim Volker of Whiting Petroleum, Rick Muncrief of WPX Energy, and Jay Ottoson of SM Energy who will share their experience in

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the industry and how their companies are deploying technology, people, and resources to protect and enhance their assets in the Bakken. Also joining them will be Gerbert Schoonman, vice-president for Hess Corporation’s Bakken Asset, to talk about the company’s use of lean manufacturing to reduce well costs and optimize well productivity. Attendees will also hear a keynote address from Don Hrap, the president of Lower 48 for ConocoPhillips. Hrap leads the development, operations and services related to the company’s exploration and production business in the Lower 48 region of the United States and will offer valuable insight into the future of the Bakken and ConocoPhillips’ involvement as one of the largest producers in North Dakota. Market Research Analyst John Gerdes of KLR Group will be present to add some insight into how and when prices may rebound and what we can expect from the “new normal” while other speaker panels will focus on optimization, technology and artificial lift to maximize production from existing

WILLISTON BASIN PETROLEUM CONFERENCE

wells. Neel Kashkari, the newly hired president of the Minneapolis Federal Reserve Bank will discuss the regional economy and widespread economic pull of the Bakken. Encouraging our industry’s best and brightest to find these new opportunities will require leadership, especially during these more difficult times. To inspire current and future leaders, legendary coach Lou Holtz will provide the keynote address the final day of the conference. Deemed “the master of the turnaround,” Holtz’s experiences and lessons learned as a coach can be applied outside of sports, especially when and where leadership is needed most. A few years back, the motto for the WBPC was “The best is yet to come.” We still believe that’s true. We look forward to the discussions that will grow out of the 24th annual WBPC and see the investments that can – and will – move the Bakken and our industry forward. v

SAVE THE DATE

May 2 - 4, 2017 Regina, Saskatchewan, Canada

• Technical Talks • Exhibitor Booths • Workshops • Activity Updates “Hot Plays” NORTH DAKOTA

NORTH DAKOTA

OIL AND GAS DIVISION

Department of Mineral Resources

For more information please visit www.wbpc.ca Saskatchewan Oil Report 2016 105


Learning Like No Other Lakeland College’s Energy Centre is the first of its kind in Western Canada

His day started at 7 a.m. and for the duration of his four-hour lab shift in Lakeland College’s Energy Centre, Morgan Meagher and his team put pressure safety valves (PSVs) on boilers, among other tasks. “If the pressure in the boilers becomes too high, the PSVs will open them up so it doesn’t explode,” explains Meagher, a second-year heavy oil power engineering (HOPE) student. “We’re also running the turbine-driven pump for the first time today, which pumps water to the boilers using steam. Every day in the Energy Centre you get to do something 106 Saskatchewan Oil Report 2016

that you have never done before, so that’s pretty cool.” The Energy Centre officially opened for learning at the Lloydminster campus on August 26, 2015. As the only postsecondary institution in Western Canada to create an integrated power plant featuring a once-through steam generator (OTSG) for heavy oil training, Lakeland is offering more student-managed learning opportunities to students like Meagher. “You take what you learn in class and apply it in the lab at the Energy Centre,” says the 19 year old. “We do a different

thing every time we are in here. There are five boilers in here and usually in every lab we run a different one. It’s been an incredible experience so far, especially being the first students ever to work in here.” Before HOPE students are able to take the lead in the Energy Centre and produce up to 350 kilowatts of power for the campus grid, they learn about power engineering in Lakeland’s Husky Energy Power Engineering Lab in their first year. “A lot more [equipment] is automated in the Energy Centre compared to the Husky Energy Power Engineering Lab


Energy Centre highlights: • Two-storey distillation tower • Five boilers of different configurations • Water treatment equipment • Cooling tower • Steam turbine generator • Two 50-seat simulation theatres • Black start generator • Economizers • Feedwater systems • Condensate recovery • Six breakout rooms which has more manual systems,” says Rob Collins, assistant co-chair/steam chief and instructor. Students first use the manual systems in the Husky Energy lab and then in their second year use the automated systems in the Energy Centre where the turbine is connected to the college and creates energy for the campus. The Energy Centre also includes a two-storey distillation tower which is used specifically for the oil portion of the lectures and labs HOPE students complete. “It’s unique to the Energy Centre,” says Collins. “Since it’s a glass distillation tower they can actually see what’s going on, compared to the steeled-in towers you see if you drive by the upgrader.” While working in the Energy Centre, students take turns as the shift supervisor or engineer. Mirroring a real job site, this student-led opportunity enables them to not only put theory into action, but also build essential communication and team-based skills. “Even if you have to go to the bathroom, you need to tell your shift supervisor so they know where everyone is and what they’re up to in case there is an emergency,” says Meagher, who completed his practicum last fall at the Husky Lloydminster Upgrader. “Working in the lab as shift supervisor is preparing us for when we are out on the job. It comes with a lot of responsibility. I take it very

seriously. Every time I come in here, it’s like I am going to work.” At the start of the HOPE program, students are required to draw the lines, flows and processes – where the water comes from, how it gets treated to the steam and where all the different piping goes too – in the 2,500-square-metre building. As students progress in the program, they learn to do water tests, run boilers, and other skills directly related to the power engineering industry. In total, HOPE students must complete 200 hours of “firing time” in the lab, followed by a three-month practicum to gain industry experience to complete the last qualification for their third class power engineering, before writing four government exams. “It all ties in together to become industry ready, and we treat it like industry,” says Collins. As for the types of industry HOPE students will be ready for, there are many when it comes to power generation, adds Collins. From hospitals to pulp and paper facilities, to heavy oil and even breweries, Lakeland students leave campus industry ready. “It’s a team environment, just like a job would be,” says Meagher. “We have three instructors who are first class power engineers, plus these opportunities in the Energy Centre – I think Lakeland has one of the best programs there is for power engineering.”

Construction of the Energy Centre began in 2013. Instrumental partners who helped make the Energy Centre a reality include the Government of Alberta, Canadian Natural Resources Limited, Cenovus Energy, and Husky Energy. “We are grateful for the support of our partners and industry and for the input of advisory committee members and our faculty,” says Alice WainwrightStewart, president of Lakeland College. “Together we are engineering a new future for energy student-led, hands-on learning in energy and petroleum.” In addition to heavy oil power engineering, Lakeland offers heavy oil operations technician (HOOT), a one-year certificate program. Unique to Lakeland, HOOT provides fourth class power engineering training. Lakeland also offers online blended courses for fourth, third, and second class power engineering training, as well as other energy related programs and courses including gas process operator, production field operator, and fired process heater operator. With a curriculum that reflects industry recommendations and a leadingedge facility to provide quality hands-on learning, Lakeland grads are sought after for their skills, experience, education and leadership. Visit lakelandcollege.ca/ energy to learn more about Lakeland’s power engineering programs. v Saskatchewan Oil Report 2016 107


Hot Ticket The Redvers & District Oil Showcase is fast approaching

The sixth Redvers & District Oil Showcase is coming up fast – May 12 and 13, 2016. Don’t miss out as there is limited space available to get in as an exhibitor. This year’s keynote speakers at the dinner on Thursday night are Bernie and Sheila Inman, oilfield safety ambassadors. The schedule of events this year will be kept the same – set-up for exhibitors all day Wednesday and again Thursday morning, while the show will open to the public at noon and run until 4:00 pm. Dinner will be served at 6:00 pm with cocktails prior, and the Inmans will take the stage around 7:00 pm. Friday the show will be open to the public from 10:00 am to 4:00 pm. The committee has made great strides this year and has added online registrations for exhibitors and visitors. Everyone who is going to be visiting the show is encouraged to pre-register online which will help you skip the line at the door. Pre-registering takes just a minute and can be done through www.redversoilshow.com. The slow economy has challenged the show committee but with Redvers being situated right in the middle of the Bakken play in southeast Saskatchewan and southwest Manitoba (as well as adjacent to the same play in North Dakota), this makes it the perfect location to showcase existing and upcoming technologies for the oilfield and related industries. The Oil Showcase will have items and exhibits of interest to everyone from company officers, engineers, consultants, drillers, land people, and many others who work in the oil industry. 108 Saskatchewan Oil Report 2016

Our previous oil shows revealed Redvers as a town progressing and moving forward and we want to show that we are continuing that trend. With our hotel and campground there is ample space for all to stay and play in town at the upcoming oil show. The 2012 and 2014 oil shows were a tremendous success with Tim McMillan, MLA in charge of Energy and Resources being the keynote speaker to a sold out crowd at the banquet on Thursday evening. Over 137 exhibitor spaces were filled both inside and outside at the Redvers arena – showcasing a number of oilfield and other industry technologies – and close to 1,500 people came through the door. Our show was made possible with the tremendous help of dozens of companies and individuals. Feedback from the last oil show was remarkable and we anticipate another successful show yet again with loads of exhibitors and hopefully a similar showing of people taking the opportunity to take a look around and make new industry contacts. The committee would like to thank all of the sponsors and volunteers who helped to make the 2014 event a success and look forward to seeing you in May 2016. v To be a sponsor or to request a booth at the next show being held May 12 and 13, please contact the Redvers and District Oil Showcase Committee at 306-452-3225, e-mail redversoilshow@hotmail.ca, or visit www.redversoilshow.com.



Application of Field-Portable XRF in Oil and Gas Exploration and Production By A. Somarin, PhD, PGeo Department of Geology, Brandon University Field-portable x-ray florescence (FPXRF) is a technique that is gaining momentum and acceptance in addressing applications in various fields in geology and mining including oil and gas exploration and production. These instruments are capable of measuring elements from Mg to U including light elements (Mg, Al, Si, P, S) in an adjustable assay time from 30 seconds to a few minutes depending on the accura-cy and precision requirements (Figure 1). FPXRF can analyze a variety of common sample types in the oil and gas upstream exploration and production industry including drill cuttings, oil and gas cores, outcrops, and piston cored sediments. The geochemical data from these analyses can easily be used in mud logging, as well as chemo-stratigraphy. Although FPXRF analyzers cannot analyze hydrocarbons, they can be used to characterize reservoir properties that influence porosity (cements), permeability (clays, cement type), fracture population (Si content), and productivity (e.g. V, Cr, Mo content). FPXRF is used on site to determine elemental composition of a sample in real time. Then mineralogy of the sample can be often inferred from this geochemical composition. The mineralogy is subsequently used to identify rock type and infer physical properties of the rock unit using a geochemical strip log (Figure 2). Bulk chemistry is used to infer sample mineralogy and thus identify silicates, alumino-silicates (e.g., clay and feldspar), carbonates, and sulfides. For example, a low Si/Al ratio indicates greater alumino-silicate content in a rock unit because these minerals have high Al content. In addition, clay types and their volume can be inferred from geochemical data. In conclusion, FPXRF analyzers can provide fast and reliable geochemical data 110 Saskatchewan Oil Report 2016

Figure 3.2 Strip log of the 16-01-13-27W1 hole. Known oil saturation is shown in grey, all concentrations are in ppm unless otherwise stated.

at the drill site, in the field, and in the core lab. This allows geologists to predict where the oil and gas is in the rock formation, what factors affect the porosity, and predict the volume of oil and gas present. It also allows geologists to determine how the permeability of the rock

can affect the flow of oil and gas from the rock to the well bore, and how a rock formation can be engineered to produce more by fracturing and well treatments. This can help operators to maximize the potential of each well and avoid waste related to ineffective fracture treatments.


Mark Klapheke, fourth year Honours B.Sc. Geology Student, University of Brandon I am looking at the Lower Amaranth Formation which is primarily a silty to shaley Jurassic red-bed with some very fine sand units at its base. Because shale is a very homogeneous looking rock, it is often difficult to notice changes in it by regular examination. However, shale has many more trace elements that are not generally found in sandstone or carbonates for example. As the PXRF can detect these elements very quickly, it can be used to suss out information that may not be as apparent. Changes in these trace elements as well as differences in ratios of more common elements allow me to build a more complete story of what was happening in the past and to see things that cannot be seen otherwise. It allows me to build strip logs of individual elements quickly and to compare them which can reveal relationships and patterns. Although I have been scanning a core at Brandon University, because of its portable nature it is possible to take the PXRF to a well site and even use it on the well cuttings to make decisions on the fly with minimal disruption to drilling. As you know, time is the driller’s enemy. However, used with traditional well site knowledge it can be an extremely useful tool in getting more accurate information to the drillers quickly saving both time and money while making decisions with better information.

Figure 3.1: Strip log of the 16-01-13-27W1 hole. Known oil saturation is shown in grey.

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Maxwell Rogowski, PhD, University of Brandon

Figure 3.20: Strip log of the 16-22-12-27W1 hole. Known oil saturation is shown in grey, EF- Enrichment Factor of concentrations. All other concentrations are in ppm unless otherwise stated.

Figure 3.19: Strip log of the 16-22-12-27W1 hole. Known oil saturation is shown in grey.

Portable x-ray fluorescence is a useful tool for detecting geochemical proxies that help show productive hydrocarbon intervals. Accurate stratigraphic correlations are augmented by chemostratigraphic techniques, utilizing common mineral forming elements and trace element ratios and abundances. Lab data obtained from six Lower Amaranth cores, one Lodgepole core and one Three Forks/ Bakken core located within the Northeastern part of the Williston basin provides a wealth of analytical and stratigraphic information. Visual analysis alone of the three slabbed formations reveals minor color variations but fails to show the subtle geochemical components required for understanding the mineralogical controls of hydrocarbon traps in the carbonate rich Amaranth and Lodgepole reservoirs. The core study also provides additional information about the controls over source rock hydrocarbon potential in the Three Forks and Bakken Formations. Major elements such as Si, Ca and Al were analyzed for rapid rock categorization into specific lithologies at every ten centimeter interval. Minor elements such as Mg, Fe, S, K20 and TiO2 were used to further define lithologies and provide insight into the diagenetic and detrital processes. Further analysis of detrital input in carbonates was indicated by Zr abundance and Th/U ratios. The trace elements utilized in this study provided information into hydrocarbon saturation potentials of prospective units, such as Mo, Zn and U serving as proxies for organic content. U, Mo, Fe and S being utilized as proxies for anoxia. Other comparisons were made to determine silica type (terrestrial, biogenic or authigenic) through Si/Zr correlation analysis. Analysis of micro-fracture populations (Si wt% vs Zr ppm) provided possible target zones suitable for fracking. Fe/S correlation analysis was used to rapidly distinguish sulfides from microscopic evaporites and ferric oxides/silicates. Permeability was analyzed using Al/Si ratios to determine if detrital clays were affecting the hydrocarbon saturation in prospective units. Ca/S ratios were used to define the reservoir characteristics of the Amaranth Formation due to extensive anhydritization.


Process of Analysis Each core was rinsed with distilled water and wiped down with paper towel to remove excess drilling mud from the surface of the 1/3 split core. The slab was marked using a measuring tape and permanent marker and analyzed using a Thermo Scientific Niton X3lt GOLDD+ portable XRF analyzer. The measurement was done at every 10-centimetre interval from the end of the core or a known depth, carried out for accurate depth confirmation. Analysis of the flat 1/3 cut core samples was accomplished using the attachable lead shield that served to stabilize the PXRF in place on the sample, and to minimize backscatter emissions. Cores with zones of brittle rock intervals that may have been mixed in the core boxes were carefully organized and closely monitored for significant chemical changes. Intervals of core that were made up of shattered brittle rock were set into a fixing tray within a lead box that held the sample and minimized the distance from the analyzer to the sample. Brittle intervals and mixed rock types underwent batch analysis and averaging to improve the accuracy of the data collected. The instrument set to “Mining Mode� which had four filters. In each filter, a set of elements were analyzed and timing for each filter was adjustable. The overall analysis time was set to three minutes (30 seconds on Main, Low, High filters each, and 90 seconds on Light filter) to acquire the targeted elements in accurate quantities. Sample data (such as name, date, etc.) were entered and then the samples were analyzed. Once completed, the results were downloaded to a computer and saved as Excel file. Then the raw data were readjusted using certified standards that were previously analyzed by the same analyzer under the same conditions. Elemental abundances were plotted against depth into binary graphs. Major rock-forming elements were converted to pseudo-elements and used in ternary diagrams to determine the bulk lithology of each interval. I should also mention that no one study will be applicable to all regions containing similar formations. For example, other studies completed on the Bakken utilized elemental abundances like V, Cr, and Ni to determine paleoredox conditions successfully. I was unable to use these proxies due to the high Fe content that had diminished V and Cr values in my samples. Figure 3.21: Fe/S correlation analysis, Si/Zr correlation analysis. Bulk lithology of the Bakken and Three Forks Formations.


The Transwest Group of Companies Highlights of the helicopter division By Colleen Biondi

It has been almost one year since Transwest Air was re-branded to create the Transwest Group of Companies. The goal of the reconstruction was to offer a full range of premier support to clients requiring seamless access, not only to airports, but to remote areas of the province, the country, and abroad. The new business provides fixed-wing airline, charter, floatplane, painting/refurbishing, fuel sales, and elite aviation services. It also has a unique helicopter division provided by Northern Shield Helicopters. As chief pilot, 36-year-old Lee Davis sets a high standard for his team. He does the hiring and training of all the company’s helicopter pilots and also leads by example by flying himself. Flying helicopters has been a dream come true for the divorced father of two boys 114 Saskatchewan Oil Report 2016

since he was 21 years old. Davis grew up in southern Saskatchewan and has flown all over North America to become an expert in night flying, utility work, and medical evacuation with companies such as STARS Air Ambulance. “It has been a rewarding career, helping people, and seeing places few have ever seen,” he says. “Where the road ends is where we [helicopter pilots] begin.” Northern Shield’s eight high-tech helicopters transport people and/or cargo to the most inaccessible locations. They support a wide variety of industries – taking oil and gas seismic crews and their equipment to exploration sites; taking mining employees to drilling locations to assess development viability; taking firefighters and their gear, along with water

bucketing, to areas and communities suffering from forest fires. They also rescue people in medical distress from isolated spots – where planes can’t land – and deliver them to the nearest hospitals. And then there are the larger-scale contracts. For example, Davis was recently involved in a remote access power line job in northern Saskatchewan. He delivered the crews and construction materials required to build the power line from Islands Falls to Key Lake (over 300 kilometres). Up to 22 helicopters, from a variety of companies, came together to tackle this enormous job over a threeyear period. The Northern Shield fleet is provided by Bell Helicopters, which is one of the largest helicopter manufacturing companies in the world. It has a manufactur-


ing plant in Mirabel, Quebec. The fleet contains two Bell 206 light category units (capacity of four passengers and up to 1,000 pounds), one Bell 206 L4 unit (capacity of six passengers and up to 1,400 pounds), three Bell 407 intermediate category units (capacity of six passengers and up to 2,500 pounds), and two Bell 205 medium category units (capacity of 14 passengers and up to 4,000 pounds). This fall, Davis hopes to add more diversity to operations; details are still being finalized. These machines require specialized service and maintenance. The airframe is the only segment that stays on the helicopter. Moving parts such as rotor blades, gear boxes, engines, and transmissions all need to be changed out after 2,500 to 5,000 hours of service. They also need well-trained pilots to fly them. Davis is currently in the midst of pilot recruiting and plans to have 13 pilots staffed for the busy season which runs from May 1 to September 30. Training is divided into two parts. Classroom time includes learning about the technical side of the aircraft and how to deal with emergency procedure situations, reviewing Transport Canada regulations, filling out company paperwork, and watching “plenty of power point presentations.” The second part is practical and handson, where the candidates use their skill sets to practice the emergency procedures, hover exit, water bucketing, and long line training. A written test, admin-

istered by a Transport Canada representative, provides a final check and balance. Davis is adding a new dimension to training this year – an obstacle course to perfect long line training techniques. What kind of people is Davis looking for to fly these helicopters? Folks who grew up on the farm, operating machinery, tend to be successful, he says. Good decision makers with steady hands and people who keep cool under pressure are critical. In a helicopter you need to be on the controls at all times and be selfsufficient, so a Type A personality (driven) with a few obsessive compulsive characteristics (constantly checking instrumentation and flight data before, during and after flying for anything out of the ordinary) won’t hurt. But watch for spillover into your personal life. “In the utensil drawer at home, it bugs me when the small forks are in with the large forks,” he adds. Helicopter pilots also need to have a healthy approach to heights. When working with cargo, a pilot often uses a technique called “vertical reference.” This involves hanging his/her body outside a small bubble window beside the pilot door and lowering and raising the materials using a long line and a remote hook controlled by the pilot. Also, a pilot needs to be ready for any circumstance. “I was once contacted to move household items with a helicopter,” Davis explains. “A river had changed course and cut off access to the property so we

brought in a crew to load everything into nets and slung them off the island to the moving truck.” The qualities associated with Northern Shield Helicopters and its pilots are consistent with those of the Transwest Group of Companies at large. This is a company, whose fixed wing segment (on wheels, skis, and floats), for example, is not only the largest in the province, containing over 20 diverse planes, but has provided reliable, safe, and efficient flights (both scheduled and chartered, carrying passengers or cargo, and for personal or corporate use) for over 60 years. Its forward thinking mission has led to the creation of a redesigned passenger/cargo combination aircraft and its dedication to the communities it serves has driven an initiative to recently provide transportation for 53 post-secondary students from the Fond Du Lac First Nation to attend an educational facility for a special event in the Prince Albert area. Davis has a sense of pride about being associated with a company which is a leader in Canadian aviation and committed to unlimited possibilities and technological advances. He looks forward to continuing to develop his passion for helicopter flying and encouraging the passion of future pilots through his work with Northern Shield Helicopters. Because there is no adventure on earth like flying a helicopter. “When you get over the next ridge,” he says, “it is amazing what can be discovered.” v Saskatchewan Oil Report 2016 115


Reducing Emissions + Cutting Costs

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A unique company solving tomorrow’s emissions challenges today Methane venting is fast becoming the number one target for governments in order to start the battle against climate change. Recently Alberta announced a 45 per cent reduction of methane venting by 2025 from oil and gas operations. Venting is the controlled, or sometimes uncontrolled, release of raw gases into the atmosphere which can consist of natural gas, hydrocarbon vapours, water vapours, and any other gases that are found in the processing of oil and gas. The phrase “venting of gases” may seem small enough that it does not affect our environment, especially because you typically can’t see it occurring but the venting of methane is 25 times more harmful to the environment than CO2. Flare stacks are sometimes used to burn vented methane however with the ever growing urban population flaring

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tends to cause more problems than it solves. To the public eye, flaring is typically frowned upon, yet most don’t realize the benefits of burning such waste gas versus venting it. A second option to dealing with vent gas is incineration. Incineration is the mixing of fuel gas, waste gas, and air in an enclosed chamber to allow for much higher efficiencies than flaring. Downside of incineration is you are using good gas to burn waste gas. This creates an ongoing cost but in the end, you can achieve the much higher efficiencies than a typical flare stack without a visible flame. Black Gold Rush Industries Ltd. (BGR) offers a third option called an “Enclosed Vapour Combustor.” This unique patented technology allows for the high efficiencies of an incinerator without the need for additional fuel gas or increased pres-


sures. The included solar package allows for a completely selfsufficient operation and at a fraction of the cost of a typical incinerator. This new technology is fast becoming the choice for methane reduction across Western Canada, the United States and even as far away as the United Arab Emirates. The BGR enclosed vapour combustor is able to achieve 99.99 per cent total hydrocarbon destruction as low as 0.09 psi without any additional fuel gas or air assist. The patented design of the low pressure burner provides for optimal air and waste gas mixture before ignition point. Once the waste gas is introduced to the flame, the results are a smokeless, highefficiency flame which is hidden in an enclosed chamber. The BGR enclosed vapour combustor is ideal for storage tank venting, or casing gas venting where the pressures are generally less than one psi and the combustors can easily handle intermittent flow rates typical of a Cold Heavy Oil Production with Sand (CHOPS) well. BGR in collaboration with various CHOPS operators have recognized the issue of spacing on these sites. Due to the economics or lack thereof, expanding the lease to accommodate equipment such as flare stacks, incinerators and combustors was just not in the budget. BGR went to work and designed a combustor to specifically meet these unique needs and now offers a CHOPS specific combustor which is able to be located within the teardrop of a wellsite and at the same time ensure a safe environment for the operators.

A second unique patented new technology which BGR has developed is the high pressure-low pressure (HP/LP) combustor. This combination unit allows for low pressure combustion at the same time as high pressure flaring. For example, an operator may combust the low pressure vent gas from storage tanks and at the same time be able to blow down the facility through the separate HP flare line. Typically a low pressure flare portrays a lazy smoky flame due to the lack of velocity and air mixing. With the BGR all in one HP/LP combustor the bottom low pressure burner provides additional drafting up the fire tube and assists the high pressure flare at the top resulting in a clean high efficiency smokeless flame. Finally, BGR offers a complete line of proven flame arrestors and burner packages for line heaters, treaters, free-water knockouts, boilers, and dehys. The RUSH BURNER product line that is an all in one combustion solution that is pre-wired with an ACL burner management system and a CSA approved valve train that is pre-tubed. The RUSH BURNER eliminates up to 90 per cent of installation time. The RUSH BURNER comes in various sizes including a 500,000 BTU/hr and 1,000,000 BTU/hr. v A unique company solving tomorrow’s emissions challenges today; visit them at www.bgrindustries.com

Venting is the controlled, or sometimes uncontrolled, release of raw gases into the atmosphere which can consist of natural gas, hydrocarbon vapours, water vapours, and any other gases that are found in the processing of oil and gas.

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The Right Equipment on Your Terms A buyer’s guide on whether you should purchase, rent or lease in the current economy

With 2016 in full swing and the nation’s economic outlook in flux, oil and gas companies are starting to ask questions about how to match their equipment needs to their current jobs. For most consumers, purchasing equipment outright has been the most widely assumed option. When purchasing equipment, you gain ownership of the asset and build equity. Though upfront costs are substantial, over the long haul, resale value and certain tax benefits, such as depreciation, could likely save you money. However, these days, 118 Saskatchewan Oil Report 2016

those upfront costs are becoming more difficult for the average consumer to handle. Redhead Equipment, one of Saskatchewan’s largest heavy equipment dealers of agricultural, construction, and truck and trailer products, has seen this shift firsthand. Melissa Sparrowhawk, financial services manager explains, “For companies who are using their equipment year-round, who have cash or lines of credit available to them, purchasing still remains a very viable option. But many equipment purchasers don’t have

the cash flow to cover the initial costs required. That’s why we need to provide these customers with financial options.” The options she’s referring to are renting and leasing; determining which is right for you varies greatly with each customer’s unique situation. “Renting is a great way to get your feet wet if you’re new to the industry or not sure if the piece of equipment is right for you,” says Craig Slobodian, corporate sales manager for construction equipment with Redhead Equipment. “Demoing a unit doesn’t tell you


enough. By renting, you get the benefit of trying the unit for an extended period without the full investment. Plus, you get the uptime associated with brand new equipment.” The most significant benefit to renting is the flexibility, because there is no long-term commitment and very little risk. If you only need a unit for a few months to handle a specialized job or realize halfway through your job that you require a larger or smaller machine, renting enables you to adjust to those changes on the fly. The downside to this convenience is that you’re compensating for it through a higher payment. “Often we see customers rent for a month or two and next thing you know, they’re five or six months into a piece of equipment,” adds Slobodian. “At that point we convert the product to a rental-purchase and we will apply a portion of that rent to the purchase price. This way they get the best of both worlds.” On the other hand, with most established equipment users in the oil and gas industry quoting jobs based on set costs and timelines, consumers are beginning to adopt leasing as a practical option as well. Leasing provides users with a low down payment, and considerably lower monthly payments due to the residual at the end of the lease term. In addition, it delivers tax benefits in the form of deferring payments of GST and PST to monthly rather than paying them upfront, as well as the potential ability to write-off lease payments as an expense at the end of the year. Leasing also enables you to keep your fleet up to date. In many leases you can purchase or walk-away at the end of a lease term, allowing you to upgrade to a more current model year if you choose.

“By keeping payments low, leasing frees up your cash flow and line of credit to get you through those quiet times during the year,” says Sparrowhawk. “We work closely with our customers to tailor the lease to meet each individual’s specific needs so they can quickly acquire the equipment they need for their job.” Currently in the United States, nearly 60 per cent of heavy equipment in use is being leased, while in Canada, only 15 per cent of users are leasing that same equipment. Why such little uptake north of the border? “There’s a bit of fear of the unknown,” states Sparrowhawk. “However, as equipment buyers have become more familiar with leasing products, perhaps through leasing their own car, they begin to see the benefits. With the economy slowing down in 2016, finance companies have become more aggressive with their lease offerings; this will enable us to offer our customer’s a very competitively priced product.” Another side to it is that many customers are simply not aware that this option is available to them. “Our Redhead Equipment Business Managers across the province are looking forward to having that conversation to educate our customers on the value of leasing,” adds Sparrowhawk. “Once consumers realize they can still get into the unit they desire, at a monthly payment they’re comfortable with, we anticipate an increase in customers choosing to lease equipment this year.” With over 65 years in the industry, this isn’t the first time Redhead Equipment has seen Saskatchewan weather a troubled economy. The province made it through the recent challenges in 2008 and no doubt will do the same in 2016. The key for businesses dealing with these circumstances is financial flexibility.

“There are so many options we can offer our customers who are experiencing the stress of the economic slowdown. We’ve worked jointly with our customers and various finance companies over the past few months to refinance equipment, restructure leases and loans, and we have even taken equipment on consignment if the customer no longer had a need for it in their fleet,” says Sparrowhawk. “We also have financial solutions to assist with equipment repairs and parts purchases. Rather than the customer having to front the whole bill at the time of purchase, we provide some excellent revolving card products, on approved credit. Many of these card products come with a variety of payment terms, and depending on the current promotion offered when you sign up, they could earn you cash back or even 90 days, no interest.” “The last time our economy faltered, we assisted many customers in downsizing their fleets, whether through paying out trades when a new piece was leased or even taking two trades on one,” adds Slobodian. “The key is creating flexibility and available cash for our customers so they can focus on what matters; running their business. “ Though it might not seem like it, with many machines still available at very favourable exchange rates and a variety of financing options to choose from, right now is actually a great time to get into that equipment you need. Whether you decide to purchase, rent or lease, it’s all about fitting the equipment to your job, on your terms. v Note: Redhead Equipment does not provide tax or accounting advice. Please consult with your tax attorney or accountant about your individual financial circumstances. Saskatchewan Oil Report 2016 119


Temporary Cooling Solutions Sustain Critical Operations Aggreko portable cooling solutions reduce costly expenditures By David Dickert, Aggreko, head of oil and gas for the Americas

For producers in the oil and gas industry, manufacturing quality product on time is a challenge especially when one part of the vital process faces a vulnerability. Without a plan B, producers face decreased productivity and revenue when an unforeseen issue or breakdown arises. Many producers are investigating options to mitigate this risk including the use of temporary cooling solutions to: increase production during times of peak demand, improve the quality of products by regulating process temperatures, engineer bespoke cooling and heating solutions to optimize process performance, and plan for contingency during periods of downtime, keeping facilities in production. Portable cooling solutions such as those available from Aggreko, an expert in the provision of temporary power and temperature control, provide significant benefits, such as allowing producers to capture short-term market opportunities by avoiding delays in their production plans. In many situations, these customized temporary solutions also help producers improve their balance sheet by avoiding high-cost capital expenditure (CAPEX) commitments on short- to mid-term duration needs. When considering a temporary cooling system, it is important the equipment matches the specific demands of the environment. Each process is unique and has different needs so there is no such thing as one-size fits all. It is also critical to work with a temporary utility provider that understands how to design a system that seamlessly ties into a producer’s industrial process – versus a nominal temperature application – ensuring continuity whether the need be for seasonal, supplemental, or emergency cooling. Oil and gas producers worldwide are benefitting from the cost savings and operational efficiencies that temporary cooling solutions provide. For example, a large sustainable energy company was facing a high temperature challenge at its tank farm facility located near its main operations north of Fort McMurray, Alberta. The tank farm provides cooling and blending of hot bitumen to produce diluted bitumen for the company’s downstream customers. The customer anticipated the facility was at risk of being unable to adequately cool diluted bitumen below the required temperature needed to avoid flashing of light end vapours. High dilbit temperatures would necessitate a reduction in flow to tankage just when the operator required the storage and processing capacity the most. Without a cooling solution, the customer faced potential impacts to its operations, including a reduction in facility throughput. 120 Saskatchewan Oil Report 2016


Rental Power, Cooling, and Heating for Any Project. Aggreko and ICS have teamed together to provide you with reliable power, cooling and heating for your site. With indirect, indirect hydronic, ground thaw heaters, chillers, air conditioners and generators from 30kW to multimegawatts, we offer planning, installation and distribution with 24/7service support. Contact us today to find out how cost-effective rental power, cooling and heating can support your business.

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Having had experience in cooling heavy hydrocarbons and executing the rapid development of temporary projects, Aggreko, the global leader in modular, mobile power, and temperature control solutions, was engaged to work closely with the customer to develop a reliable solution in a short period of time. A scope review process kicked off the project where numerous components of the design and engineering phase were swotted in order to start simulating and evaluating potential solutions, and to determine the final process system and utility equipment needs for operation. As a result, several deliverables for the project were developed and provided to the customer, including: • The conceptual process design of the trim cooling circuit, including thermal and hydraulic models; • The mechanical and electrical process requirements of the project, including utility needs; • A cooling process control philosophy, including equipment configuration diagrams; • A conceptual project layout, based on the determination of what equipment would be necessary to accomplish the task; and • The final process design package, including overall project scope, engineering data, and simulations validating the installed project would meet the customer’s needs. Upon completion of the aforementioned tasks, project engineering commenced. However, the customer decided to have the project designed and installed to a standard that would

permit for potentially long-term use in a plant environment. For example, the glycol loop connections would be hard piped and a cable tray would be used to run cable between electrical gear. Due to the growing complexities of the project, the customer contracted a Canadian engineering, procurement and construction (EPC) management firm to undertake the engineering and construction phases. Aggreko’s specialized team of engineers were tasked with the responsibility to provide technical support and project management counsel, including oversight of power generation and temperature control equipment delivery to the site, and supervision of work efforts with the EPC to ensure equipment was safely and efficiently installed and commissioned. A temperature control solution was installed by the project partners including 4,000 tonnes of cooling equipment energized by six mega watts of power. The solution currently remains in operation at the customer’s facility and successfully provides cooling of up to 192,000 bbd of dilbit from 134 °F to below 100 °F. The application described here is one of many regarding temporary cooling solutions and how they help mitigate operational hazards, minimize CAPEX spending and ensure optimal production uptime. The maximum benefit of these temporary systems can only be realized by partnering with a provider with the right technical, engineering and project management expertise to execute a customized and scalable turnkey solution, for short- and long-term needs. v

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Pumps & Pressure 30 plus years of innovation and growth By Brian McLoughlin

In our ever-changing world, where so many things seem to have a decreasing shelf life, the ability to grow and prosper over the years becomes an increasingly rare phenomenon. But for Red Deer-based Pumps & Pressure Inc. their 30 plus years as a company stands as a testament to their long-standing belief and confidence in the Alberta and Western Canadian economy and in the vision of Jack and Sandy Tremain in creating a company that has grown from a simple pressure washer repair and maintenance outlet to a premier Western Canadian supplier, manufacturer, and distributor. Pumps & Pressure Inc. began business in 1984 with the idea of servicing a local niche market. “We started with a budget of $275, most of which was spent on a sign for the front of our first location and we still have the sign mounted in our Red Deer Head Office,” says Jack Tremain, Pumps & Pressure president and general manager. Pumps & Pressure has grown over those 30 years to become the largest North American distributor for Karcher Pressure Washers and ranks among the largest North American suppliers of CAT Pumps, DV Air compressors, and SAMSON lubrication equipment. Expanding from two full-time employees in 1984, Pumps & Pressure now boasts 140 employees in eight locations across Western Canada from Burnaby, British Columbia to Brandon, Manitoba, to the company’s newest location in Saskatoon, Saskatchewan. From the beginning Pumps & Pressure has placed an equal value on both the products and services they provide and the exceptional level of customer service they offer. “We can attribute our successes to many things,” says Tremain. “But two of the most important are the quality of the service we provide and the quality of the people who work with us. We wouldn’t have achieved what we have without our customers and our amazing staff. We have a simple philosophy: service, competitive prices, product quality, and customer satisfaction are the cornerstones of our business. We will never change that philosophy.” Pumps & Pressure is a full-service manufacturing, distribution and service company specializing in everything to do with pumping and pressurization. They supply and install air, water, and oil pumps, motors and a host of hydraulic and lubrication equipment used in the oil and gas, agriculture and industrial sectors, as well as small and medium sized businesses. They also manufacture and support a full line of bulk oil, grease, and waste oil equipment and operate a manufacturing and inspection component to produce, repair, and inspect steam trucks and other heavy equipment.

“We’ve always prided ourselves in having the flexibility to provide our customers, big or small, what they need to successfully complete the job,” adds Tremain. The company is also working to address the host of environmental issues affecting business today. They supply and install carwash waste water recycle systems built to government specifications and provide products and accessories to keep these systems functioning at peak capacity. The journey from the small corner location of 1984 has been challenging, exciting, and satisfying to Jack and Sandy Tremain and their family and while the company’s successful growth has been nothing short of amazing, it has been well planned and highly focused. “I’m a firm believer in planning our growth to keep pace with the economy, the needs of our customers and their industries and the best interest of our company and our employees,” says Tremain. v

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Information Services Corporation Provide Convenient Geomatics Solutions for Oil and Gas Industry By Lisa Fattori

Whether it’s a national topographic map or a historical aerial photograph of Saskatchewan, Information Services Corporation (ISC) provides oil and gas industry professionals with a full suite of geomatics products and information to meet their business needs. “ISC’s geomatics solutions provide value through access to continually-maintained, real-time provincial information that has the highest accuracy, integrity and quality standards,” says Wayne Adams, Director of Surveys and Geomatics for ISC. “Through our Geomatics Distribution Centre, our map and photo products provide vital infor124 Saskatchewan Oil Report 2016

mation for customers, assisting them in making important decisions on site selection, development initiatives and emergency response planning.” Seeing Saskatchewan from the skies and beyond As the custodian of the provincial archive of aerial photography dating back to the 1940s, ISC has photographs available as hard copy prints, scanned images or as digital files suitable for geographic information system (GIS) applications. Ortho and satellite imagery are offered to the resource industry to provide criti-

cal geographic area and resolution information for specific mapping applications. In 2008, the Saskatchewan Geospatial Imagery Collaborative (SGIC) began to acquire current, high-resolution imagery of Saskatchewan and ISC is an official distributor of these products. The company now offers SGIC-2 ortho imagery for select locations in Saskatchewan. Satellite imagery can be used for a variety of applications, including base mapping, emergency response planning, land permitting, environmental assessment and land exploration. SPOT satellite imagery provides the most current and accurate imagery for all of Saskatchewan. RapidEye multi-spectral imagery, the first commercial satellites to include the RedEdge band technology and so sensitive it detects changes in chlorophyll content, is very useful for agriculture and environmental applications. ISC also offers QuickBird and Worldview imagery for high-resolution satellite imagery. “These satellite imagery products are in GIS ready format and can be used with ISC’s other GIS datasets, including surface and mineral cadastral, SaskGrid, the Saskatchewan Road Network Database, Saskatchewan Upgraded Road Network and the National Topographic Series maps,” Adams says. “They’re standalone maps or they can be combined with other GIS data for a multi-layered, custom product.” Insights at ground level One of ISC’s newest GIS products is the Saskatchewan Civic Address Registry (CAR) dataset. “This dataset is the first of its kind in Saskatchewan and throughout most of Canada,” Adams says. Created through collaboration between ISC and the Government of Saskatchewan, this innovative product improves public safety by aiding in emergency response planning and dispatch. CAR can also en-


hance evacuation and planning, improve the accuracy of delivery/collection services and increase the efficiency in locating utility connections on a property. “Rural and remote areas of the province can now be easily located and identified,” says Adams. “There are approximately 470,000 address points mapped so far, which is about 95 per cent of residences in Saskatchewan.” A popular GIS product offered by ISC is surface cadastral data, which shows current survey parcels, lots, quarter sections, and roadways, while its mineral cadastral data shows the subdivision of mineral land across Saskatchewan. These datasets serve as a base for various uses, including title registry, mining and oil and gas activities, and any application that requires a current and accurate description of the survey/ownership mineral parcels in the province. ISC also offers a variety of GIS solutions commonly used in the oil and gas industry including: • SaskGrid Township Fabric Map which accurately integrates key datasets into a standardized provincial grid for land parcel identification and location; • Saskatchewan Upgraded Road Network; • Geodetic Control Coordinates; • Digital elevation model contour lines; • Administrative boundary overlaps; and • National topographic maps. “No matter what your geomaticsrelated question may be, we [at ISC’s Geomatics Distribution Centre] can help you over the phone or in person with a full suite of geomatics products and solutions to meet your needs,” says Adams. About ISC ISC is an experienced provider of registry and information services for government, individuals and private sector business. As the exclusive provider of the land titles, surveys, personal property and corporate registries for Saskatchewan, the Company maintains and operates these registries, which are key supporters of economic activity in the province. For more information about ISC and its geomatics products and pricing, visit www.isc.ca. v Saskatchewan Oil Report 2016 125


Slow Times to Go Times Kenilworth Combustion uses challenging times to fuel innovation

There are many ways to deal with hard times in the oil and gas industry and the best way is through innovation. This is not easy sometimes, when it seems the world as we know it is crumbling beneath our feet. However there is always light at the end of the tunnel. The industry will turn; it always does. It may not come back to its former glory but it will keep going. We just need to change our approach. For the past 35 years Kenilworth Combustion has been there to experience the ups and downs of the oil and gas industry. Each downturn forces us to look at how we operate our businesses right from the top to the bottom. Hard decisions are made every day on how we can cut costs, reduce overhead, 126 Saskatchewan Oil Report 2016

and basically survive until things turn around. It’s not just about surviving; it’s about thriving in these hard times and creating winning scenarios for everyone involved. At Kenilworth we look at this as an opportunity to focus our extra time on developing new technology, improving on efficiency, and creating products or refining services that will drive industry forward. The other constant factor is as industry progresses the regulatory bodies do as well. New regulations drive innovation even further as products need to be developed to meet or exceed the updated regulations. Methane gas capture and reduction is the challenge at hand now. How do we effectively capture, utilize, and ef-

ficiently destruct the vented BTEX and VRU gases from natural gas dehydration still columns or tank top vapours? In both Alberta and Saskatchewan regulations state that producers must reduce emission to the guidelines set out in S-10, S-20, and AER Directive 39. In early 2001, Kenilworth Combustion developed their first waste gas recovery and Utilization system. As opposed to venting or flaring unwanted casing or overhead gas, Kenilworth Combustion devised a method of collecting and utilizing the waste gas as a fuel source. The benefit to this was twofold – no more issues with flaring, and a 90 per cent reduction in purchased fuel. This technology was applied to hundreds of singlewell batteries, as well as facilities across


Alberta and Saskatchewan. In 2008, this proven technology was applied to a natural gas dehydration system, and the results were ground breaking. Third party testing has consistently verified that there is a 99.9 per cent BTEX Destruction efficiency (see www.kenilworth.ca for the report), Kenilworth Combustion even received two letters from the Alberta Government commending them on their achievement. Innovation sometimes comes from the simplest things. Take for example the Kenilworth Frost Bag. Operating in Canadian oil and gas poses some unique challenges – the most obvious being the weather. It can freeze off equipment, shut down roads, and limit access to sites. In order to say in the game, our industry has had to be innovative, and one of Kenilworth Combustion’s small contributions to that innovation is the Frost Bag. During the winter we often get a soft rime frost or hoar frost. As beautiful as looks when the countryside is covered in it, it can cause issues with flame arrestor performance and safety. The Frost Bag is a type of screen that encases the

flame arrestor of the burner system and prevents frost build upon the flame arrestor. By keeping the flame arrestor free from frost we ensure the flame arrestor will allow adequate air to the burner. Additionally the Frost Bag is useful in the spring/summer keeping dust and debris from entering the flame arrestor. Enhancing safety is also a main concern at Kenilworth. In 2014, we were approached by a local producer who had five accidental disconnect spills that year and they were looking for a solution for this issue. The “innovation gears” started turning and with this in mind we began to work on the Gate Valve Safety Device (GVSD) and Ball Valve Safety Device (BVSD). The GVSD and BVSD are designed to mount to any existing ball valve or gate valve already on site, and make it impossible for truckers to disconnect from the tank before the valve is closed. This producer has had great success with this product in eliminating accidental disconnect spills by 100 per cent. The GVSD and BVSD were created and over 1,000 units have been installed to date. Considering

the total cost of cleaning up a spill and the risk to operations staff, installing a GVSD and BVSD is the proactive solution the industry needs. The smooth operator. The Kenilworth Skim Systems are built with 316 stainless steel, and were designed with simplicity in mind. The Kenilworth Skim System utilizes a reliable single point pivot system free of cables, pulleys, and hoses. A pivoting drum at the end of the suction arm allows it to float in the fluid as the tank level increases or decreases. Regular maintenance does not require access to the inside of the tank as the system is equipped with an external grease line to keep the swivel internally lubricated. The Kenilworth Combustion Skim System is the clear choice for your Tank Skim System needs. These system are available in three, four, and six inch diameter. These are just some of the innovative products that Kenilworth has to offer. For the rest of our product line please visit our website at www.kenilworth.ca or give us a call at 1780-853-5340. From “slow times to go times” we are proud to serve the oil and gas industry. v Saskatchewan Oil Report 2016 127


Key to Success Turning to optimization in an industry downturn By Christina Dennehy

In today’s economic climate, the elimination of equipment failures and maximization of production is paramount in ensuring the profitability of any producing oil well. The fall of energy prices has prompted a dire need for well optimization. According to industry expert Tom Dennehy of Penta Completions Supply & Services Ltd., now is the perfect time to seek out cost-saving methods by reducing failures and downtime in addition to identifying increased production potential to grow revenues. “When new wells are not being drilled, the optimization of existing wells is the key to success.” For a bigger prize, optimize The Merriam-Webster Dictionary defines optimization as, “an act, process, or methodology of making something (as a design, system, or decision) as fully perfect, functional, or effective as possible.” This definition rings true in the case of 128 Saskatchewan Oil Report 2016

well optimization, and can be achieved using the following steps: The first step in optimization is the collection of data from existing installations to determine efficiency. The second step is to perform an in depth analysis of data, using diagnostic software. Upon the completion of a thorough analysis, the evaluation phase begins. This is the part of the process that sets Penta Completions apart from competing optimization services. With over 28 years of experience in analyzing well data, Dennehy and the team at Penta excel in reducing failures, increasing production, and ultimately maximizing profitability. The two main failure modes associated with rod pumped wells are over displacement and overloaded equipment. Over displacement is a scenario where the well has declined far beyond the equipment’s intended production rate. This results not only in reduced system efficiency due to

incomplete pump fillage, but also in extreme impact loading of the rod string causing catastrophic failure. The second mode, overloaded equipment, is a scenario where equipment is not properly sized to do the intended amount of work required to lift the available fluid – also resulting in frequent failures. Although both cases are prevalent in the Canadian oil industry, over displacement is the most common cause of failure. Both cases can be easily avoided with proper evaluation offered by Penta Completions. Often overlooked in this evaluation stage is energy consumption. By evaluating the overall efficient use of electrical energy, changes can be made to well operating parameters (unit direction, strokes per minute, counter-balance) to reduce power consumption by as much as 40 per cent.



Why now? Very little work goes into identifying surplus lifting capacity (and often over displacement) when an industry is running at break neck speed. Identification of oversized artificial lift systems can economize production expansion projects in these challenging economic times. Consider the following: A new well in a field requires a 912 pump jack. Eighteen to 24 months later, the natural production decline will have reduced the jack size required to produce the well at a lower production rate. The production decline rate will then stabilize for the next 10-15 years. Despite decline, wells continue to operate oversized surface equipment, tying up useful capital. By purchasing a smaller unit to more suitably equip the existing well and transferring the large jack to a new well, equipment is optimized and profitability increases. “It is important to keep in mind that optimization is about a thought process” says Dennehy. “The suggested changes from the optimization analysis can be 130 Saskatchewan Oil Report 2016

made the next time the well requires maintenance, as adjusting prior to necessary maintenance can be cost prohibitive. It is about being ready with the proper design/equipment changes when maintenance is needed.” With each day that passes without drilling new wells, daily overall production declines. Penta Completions provides customers with solutions to increase existing production, attaining production targets without large capital expenditure. According to technical sales manager Jeff Wanner, “one of the most rewarding results of optimization is identifying existing wells with additional available production and realizing the wells potential.” “Stretching” a limited budget All tools available to efficiently produce oil wells with artificial lift equipment must be considered. One material that can have a significant impact on the overall efficiency of the artificial lift systems is Superod fiberglass sucker rods.

Superod can increase the lift capacity of an existing site by as much as 50 per cent, through weight reduction and mechanical properties that differ from those of steel – mainly modulus of elasticity. Sound expensive? Superod is actually comparably priced to high strength steel. When reduced capital cost of the entire installation, reduction/elimination of corrosion failures, decreased cost in tubing, increased pumping unit lift capacity, and smaller pumping unit are taken into account, Superod proves to be a better investment than steel. Superod is particularly effective in wells that have been identified as having more available production. The well may not have enough equipment on site to reach maximum production, which leaves two available options. One, a new pumping unit can be purchased, which can be costly, or two, a Superod string could be used, allowing the existing surface equipment to operate at a higher level to attain available production. Looking at the deeper shale plays being developed in Canada, specifically in southeastern Saskatchewan, the fluid volumes available are beyond sustainable steel rod pumping lift capacity. By considering Superod/steel combination strings, all of the production available can be lifted without overloading the rod string or the pumping unit. When Superod is combined with proper optimization Penta helps its customers to achieve on average a mean time to rod failure rate of 0.062 failures per well per year (calculated from customer data). Putting it all together In these difficult times, considering optimization strategies and innovative products such as Superod ultimately leads to increased profitability. Dennehy and Wanner know the days when it was affordable to service a well due to unexpected equipment failure are gone just like $100/barrel oil. Mean time to failure needs to be in the three plus year range to keep projects financially viable. Optimization and innovation should be a normal part of good production practices but now the future of the industry depends on it. v


Hometown Humble Small company’s commitment to local roots continues to pay dividends By Melanie Franner Although one of the smaller players in Saskatchewan’s nondestructive testing (NDT) industry, GB Contract Inspection Ltd. remains distinguishable for its long-standing commitment to its customers. Founded in 2002 by Graham Ball, a man who began his career in the quality control department of a metal pipe mill before venturing out on his own with only one truck and one employee. GB Contract Inspection has come to be recognized as one of the older and more customer-service oriented companies working in the Saskatchewan oil fields. “We were the original testing company founded in Estevan,” explains Ben Bizzarri, general manager, GB Contract Inspection. “We’ve built our reputation on remaining loyal to our customers and to offering them unparalleled customer service.” That commitment to their customers has been part and parcel of what has helped the company weather the cyclical economic storms that have come and gone over the years. “We’re a Saskatchewan-based, locally owned, and operated company,” continues Bizzarri. “We’ve become part of the bedrock of this industry.” A successful mix Like the oil and gas industry itself, GB Contract Inspection has grown significantly over the years. Today, it has five trucks to deliver its ever-broadening array of services. These include: radiographic, ultrasonic, liquid penetrant, magnetic particle, visual inspections, hardness testing, and vacuum box testing. The company’s NDT methods include X-Ray, Magnetic Particle, Ultrasonics, and Liquid Penetrant and Ground Penetrating Radar. Additionally, GB Contract Inspections offers indoor radiographic facilities at both its Estevan and Regina locations, along with x-ray and gamma ray capabilities, and a magnetic particle wet bench for increased inspection productivity. Having started out in the oil and gas industry offering inspection services for everything from the welds on pipes to conducting inspections on lift equipment and tanks, GB Contract Inspection has also diversified into other fields. Today, the company offers lifting equipment inspections and engineering certifications. Its CGSB and SNT-certified technicians conduct inspections in accordance with provincial government standards and relevant construction codes to ensure client equipment is in safe condition. All lifting equipment inspections are tracked and the client is notified before the expiry date of the engineering certification. Equipment that can be inspected includes, but is not limited to, the following: power piping; process piping; pipeline systems; storage tanks; firetubes; structural steel; mobile and stationary cranes; lifting tackle; forklifts; powered work platforms; sidebooms; pressure vessels; and drill rigs.

GB Contract Inspection Ltd. owner Graham Ball.

“We’ve worked in this province from border to border,” says Bizzarri, who adds the company also offers services to the northeastern area of Manitoba. “But our primary work area is in the central and southeastern areas of Saskatchewan.” GB Contract Inspection operates out of its head office in Estevan, along with a branch office in Regina. “I’d would estimate that about 75 per cent of our total business is oil and gas related,” adds Bizzarri, who states safety has remained top of mind throughout the years. “We’re of the mind that we can always do better. Safety, conformance and quality have been very key issues for us. In this industry, you either comply with the standards or you don’t. It’s very black and white. We work hard to ensure that our customers are in compliance with the current standards. And we also work very hard behind the scenes to make sure that we, as a company, are ahead of the game. We need to know what’s current and what’s coming down the pipe in order to be the best resource for our clients.” GB Contract Inspection has provided proof of this by being one of a handful of companies in the province to demonstrate and attain procedural approval by the Technical Safety Authority of Saskatchewan (TSASK), a not-for-profit company created by legislation in 2010 in response to rapid technological change, industrial and economic growth, and the industry’s need for more timely inspection services. “We’re here for the long term,” concludes Bizzarri. “We’re committed to our customers.” And according to Bizzarri, this commitment will only grow in future years – taking the company into new areas of industry and into new geographical areas as well. Bizzarri estimates the company’s workforce may very well triple over the next five to 10 years to service this demand – a big but worthy step for a humble company that has worked so hard to establish strong roots from which to build a bright future. v

Elad Geological Consulting Ltd. Geological Well Site Supervision Laboratory Studies dwright@sasktel.net

(306) 536-7226 Regina, Saskatchewan

Saskatchewan Oil Report 2016 131


Always Meeting Needs South East Electric Ltd. weathers the industry storm by focusing on customer service and satisfaction South East Electric Ltd. has deep roots in southern Saskatchewan and has earned a reputation for service and quality that has helped it thrive and grow right along with the communities it serves. The company was first established in Carnduff in 1961, under the name L.R. Electric. In 1972, it became Rogers Electric and moved to Carlyle, and in 1999, with the company’s geographical reach expanding throughout southern Saskatchewan and into Manitoba, it was rechristened South East Electric Ltd. In 2012, the company gained an office in Estevan. “Being located in both Carlyle and Estevan is a big advantage for us,” says Brad Grimes, general manager of South East Electric Ltd. South East Electric Ltd also rents electrical generators for a variety of applications. Garth Newell, a supervisor in Carlyle, ex-

plains, “Our main customers have been oil companies that have drilled new wells, but we will rent out units to anyone requiring temporary power. We’ve rented to towns in emergency situations to power pumps to keep sewer systems from flooding and also to companies that simply need to power their booths at trade shows.” As an added benefit, South East Electric Ltd. employs full-time mechanics that service and maintain the equipment fleet. This in-house advantage minimizes unnecessary down time. Well site controls are another area of expertise for the company. “We work with everything from complex variable frequency drives to simple pump controllers,” says Newell. “Things like controllers designed for anything from town lift stations, water treatment plants, to down hole pump controls.” But he says oil field controls are the firm’s main work, from

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Ph. 306-937-7741 Toll Free 1-800-263-7741 Prince Albert,SK Ph 306-764-6639

complex batteries to oil wells. It also works with radio well shut-down systems that allow the oil battery to shut down multiple wells, as well as call-out systems, designed to automatically call operators to a down well or battery. Craig Rogers is another supervisor in the Carlyle office, and he is the son of the company founder Larry Rogers. He says the company has weathered the ups and downs of the resource-based Saskatchewan economy by keeping on its main goals of customer satisfaction and employee retention. “We understand that our customers are our most important assets. Without them, we would be nothing. Keeping satisfied customers has meant maintaining talented staff members, ensuring fast response times, and providing a guaranteed conformance to safety,” he states. South East Electric has always been a leader in safety, and its regulatory requirements always meet, and quite often exceed that of its clients. The firm is Enform COR certified and retains an external auditor to constantly give it that outside pair of eyes. Another important focus of the company is efficiency. Rogers explains the extensive customer equipment information system they maintain, “Search engines allow us to respond to our customer’s questions literally within minutes. It contains every location, pumping unit, and production facility we have ever worked on. This saves time and money when upgrading facilities and equipment and drastically reduces critical downtime, we know what we need and what we are facing before we get there.” “We have fully equipped field service units in Estevan, Bienfait, Lampman, Manor, Carlyle, Arcola, Kenosee Lake, and Oxbow, and our average response time is 30 minutes,” says Rogers. “South East Electric Ltd. is 55 years old this year, we are proud of our history, we are excited for the future and meeting the always changing needs of our customers.” v



Stick to the Fundamentals By Scott A. Hubert, PMC. The recent downturn in oil and gas commodity prices has seen the slash of capital project spending unlike anything in decades. Now more than ever all spending is under extreme scrutiny. What was once a free for all has turned into brick wall. Almost every major player has elected to either defer, shelve, or stop projects in their tracks. Why such an abrupt stop? One of the reasons is lack of confidence. When commodity prices are high, everyone emphasizes on getting the facility up and running. The sooner something is built, the faster everyone can cash in on the black gold. My son (eight years old) asked me one time when a traffic light turns yellow, why some people speed up and other chose to stop? It seems at even a young age we start to wonder about how to manage risk and the decision making process. This question, the events, and experience around it influence everyday life. How does it all tie back? Experience. When we all start off in life there is a training cycle. Every trainer’s concept is essentially the same, whether they know it or not – introduce tested habits over and over again. As the learner begins to apply tested actions in a controlled environment, the success will build confidence. As we get out on our own we start to apply these concepts. Look at the issue, apply tested concepts to overcome the challenges, execute, and success. The unfortunate part is our inherent nature as humans is to take shortcuts. The flip side of performing the same steps over and over is that after a while we start to think that we don’t need them. There has been not failure, no crash, so why shoulder check, right? WRONG. Most of you as professionals have gone through some sort of training, be it university, college, or just the school of hard knocks. We all know the formula (I forget who gets credited with it) that unplanned work will typically increase cost on any project by about 40 per cent. Let’s take that concept now and see how it influences where we are today. Owner of company X decides to expand since com134 Saskatchewan Oil Report 2016


modity prices have quadrupled over the past year – what better timing. The manager begins the process of building their feasibility studies and compiling a basis for expansion, an analogous estimate is put together, the proposal is taken to the board, and boom, the funds are approved. Congratulations you’re off to the races. Now its time to begin. Problem number one: this project is in a similar region to the one used in the feasibility study. Similar, but not the same. Now you have issues with soil compaction and drainage. Not a big a deal. The commodity price is sky rocketing. We will just add a few lines to the budget, bring in some equipment, and help things along. Now we need to land equipment modules at the marshalling yard, and, well shoot, they are getting stuck in the mud. No problem, we will just bring in some heavy equipment and cranes to move it right? No, wrong again. These modules were built to maximum density in order to save shipping costs, and they are now blocking the road to get to site, you can’t even mob the crane in. Smaller issues that may have been corrected by adding a few lines to the budget here and there can no longer be swept under the rug and it’s a disaster. So now comes the question, how can this be avoided? Simple, stick to the fundamentals. This is what has been key to the Phoenix Industrial success story. That doesn’t mean there can be no innovation. It just simply means you need to stick to certain key basics that allow you to see the risks quickly, asses the issues, and come up with ways to work around it. Sound proven systems, stern financial control this is what allows risk identification to happen. Every time a proposal comes in to Phoenix the same processes are applied; all of the work is quantified and coded. These codes will follow through the project for its entire lifecycle. The activities and codes that support the quantification are what allow for true earned value management. The codes are applied to stamps placed on the drawings, the budgets, and the schedule. How can one determine their next step, or whats been completed with no baseline? Often times, because of past experience, planning is seen as one of the activities Saskatchewan Oil Report 2016 135


that can be cut. This is one of the worst decisions that can be made. Quantification and proper planning is what allows the professionals at Phoenix Industrial to understand, original scope, additional scope, spend plans, manpower curves, and material requirements. These plans also give us the ability to do proper forecasting, reporting, and present things we see as risk to our clients. From having those understandings, we can then put together risk mitigation strategies to help steer the course. None of this is possible without a proper plan. One of the more popular contract strategies these days is to have pricing based on a lump sum basis. Many industry professionals will tell you this is the only way to have cost certainty. Ever ask yourself about what is being left on the table? In my personal experi136 Saskatchewan Oil Report 2016

ence, having good engineering, proper quantification, and the ability to speak to the work has resulted in 12 to 17 per cent cost savings on labour alone. Working in a properly structured cost reimbursable scheme can allow the client not only the ability take advantage of productivity but innovation as well. The tools need to be put in place that allow this to happen, and hard work will get the results desired. If your project is on the edge of receiving approval, start a conversation with us and let us help you. There are many options that may be considered, we have the experience and tools you need. Perhaps consider choosing a company that can offer visibility, value and accountability. After all Phoenix Industrial is “Built to Deliver!”.

About Phoenix For more than 20 years Phoenix Industrial has been one of Western Canada’s premier heavy industrial service providers. Offering services from planning through to progressive turnover, Phoenix Industrial has been involved in every aspect in almost every construction and maintenance project in Western Canada. Having started in the Whitecourt region of Alberta, Phoenix Industrial’s focus in the beginning was to service the maintenance needs for the local pulp and paper/forestry sector around Whitecourt. As the industry went through a downturn, Phoenix was invited to participate in one of Alberta’s newest sectors, SAGD Oilsands, growing it from a 20 to 30 man company into today’s workforce nearing the 1,000 count. v



Park Derochie Trusted partners in oil and gas by: Krystal Simpson and Michelle Ward With 59 years of experience offering services including coatings, fireproofing, mechanical and spray foam insulation, scaffolding, and abrasive blasting, Park Derochie has earned its reputation as one of Canada’s most trusted partners in the oil and gas industry. As Saskatchewan’s economy and industry continue to grow, large commercial and industrial clients can rely on Park Derochie’s unique ability to provide services individually, or as a combined package of coordinated services with a single project manager, resulting in superior coordination that translates to time and cost savings for projects. Expertise gained by having worked with and applied product from several of the large coatings manufacturers allows accurate recommendations regarding products to be utilized for numerous varied and specialty applications. Park Derochie Coatings (Saskatchewan) Inc. heads up the company’s polyurethane spray foam insulation services. Mobile units offer this service to clients throughout Saskatchewan and across Canada. Certified by BASF The Chemical Company (one of the largest manu-

138 Saskatchewan Oil Report 2016

facturers of spray foam and spray foam chemicals in the world) Park Derochie is capable of spraying according to client formula specifications. Where required, they are willing and able to make necessary accommodations to ensure exceptional service and quality, including additional consideration for rough, rocky or steep terrain. Most commonly considered for building insulation, spray-applied polyurethane foam (SPF) services can be beneficial to the oil and gas industry in multiple capacities including roofing, insulation of tanks and buildings and pipeline applications. When polyurethane spray foam is used for roofing, the seamless and monolithic placement keeps water out, and its excellent wind uplift resistance withstands even hurricane force winds. It can provide up to 30 per cent savings in both heating and cooling costs, allowing full cost recovery to occur in as little as five years, the benefits of which have been seen in commercial applications and in many Saskatchewan potash mines. Polyurethane foam can also be used to cool off tanks by insulating them with

spray-applied polyurethane foam and coatings. It uses the same principle as a thermos jug, the spray-applied insulating foam system helps maintain the desired internal temperature, as well as protect from rust, age and harsh weather. Proven spray-applied products and applications perform equally well in hot and cold temperatures with high R values. In addition to temperature control, the foam and coatings help dampen sound on interior and exterior surfaces and reduce thermal shock between changing summer and winter conditions. Additionally, spray foam is a cost efficient, environmentally friendly alternative to traditional pipeline pillows, breakers and shields. Spray foam pillows are used to prevent and protect the pipe from laying on rock or rough surfaces can be pre-formed on site or sprayed directly in place using our mobile spray foam units. To prevent flooding and control erosion, water barriers or breakers can be installed that do not require the use of forms. Polyurethane foam adheres to almost any surface, including itself, allowing breakers to be sprayed vertically eliminating the pyramid effect necessary


when using sand bags. Spray foam application is less labor intensive as spraying can be done from the top of the ditch, making installation more economical and timely than traditional methods. When spray foam is applied it reacts and becomes totally inert, making it safe for the environment. Doug Barker, president of Park Derochie Coatings (Saskatchewan) Inc. says, “We recently increased our Saskatoon facility shop space to 20,000 square feet and our yard area to 39 acres. Our shop is capable of handling materials 42 feet wide, 23 feet high and 100 feet long, and has a crane capacity of 120 tonnes. The temperature controlled environment provides the perfect setting for facilitating both spraying and curing times year round. To allow Park Derochie to better serve our clients in southern Saskatchewan we have also built a 5000 square foot paint shop in north Regina on 5.2 acres. We continue to grow our field services business handling Tank Linings, above and below ground Pipeline coatings, and have taken on more Potash facility and other site maintenance work. Adding this location allows us to quickly and easily mobilize equipment and manpower to clients throughout the southern part of the province.” QUALITY Park Derochie staff includes NACE Certified Coatings Inspectors and NACE

Corrosion Technicians; aiming to provide NACE certified supervisors on every job and ensuring quality workmanship. As a result of continuing efforts in education, training and safety, Park Derochie has achieved SSPC QP 1, 2, 3 and 6 certifications. This makes PD the only Canadian company to hold all of these certifications. Adhering to the stringent standards set out by the Society of Protective Coatings (SSPC), the BASF Raising Performance to New Heights® program, and guided by ISO 9001-2000, their quality management system is designed to meet the specific requirements of the client. SAFETY Park Derochie is proud to be an industry leader in safety and its WCB experience ratio, which is consistently lower than the industry average, speaks to Park Derochies’ dedication to protect people and the environment. For client convenience, Park Derochie is a member of prequalification management companies such as ISNetworld, PICS, ComplyWorks and the CQ Network, (formerly CanQual). EMPLOYMENT Park Derochie is an equal opportunity employer, dedicated to fostering an inclusive and supportive work environment. The company is built upon four core beliefs of respecting the individual, providing exceptional service to our cli-

ents, striving for excellence and giving back to the community. We respect and value the diverse backgrounds and traditions of all employees and the rich diversity of the communities in which we operate. We believe that an inclusive environment at all levels of our company improves teamwork, strengthens our business through increasing the diversity of perspectives and fosters strong employee and client relationships. We invest in our employees by providing mentorship, offering advancement opportunities and providing financial support for educational pursuits. Park Derochie values and recognizes hard work and talent and strives to equip our people with the skills and knowledge to enable them to develop a lasting connection with our company and the community. To support the growing needs of our clients and surrounding communities, we are proud to have a long serving workforce with diverse cultural backgrounds, are engaged with numerous Aboriginal communities in Saskatchewan, and have entered into a workforce training and labour utilization agreement with Pasqua First Nation. Park Derochie is known for providing highly trained people, expertise, quality, safety and value to all of its clients, demonstrating time and again a well-earned reputation for being “Proven Partners since 1956”. v

Saskatchewan Oil Report 2016 139


Assessing, Restoring, Protecting EverGreen Enviro Corp. – protecting the environment of southern Saskatchewan

EverGreen Enviro Corp. (EverGreen) is in the business of protecting the land and water, flora and fauna for future generations. To accomplish this, EverGreen helps oil companies find the best well and pipeline locations to minimize the disturbance footprint by conducting a series of pre-site assessment studies. EverGreen has the experience to provide remediation and reclamation services to aid oil companies return disturbed areas to their pre-use state. EverGreen offers numerous services to their clients from the start to finish of a project. Some services include: Assessment and audits • Assisting surveyors, archeologists and construction supervisors in flowline routing, creek crossings, well site, and access selection on government and private lands in forested, prairie grasslands, and cultivation. • Gathering background information (archaeological and rare or endangered species checks). • Completing field assessments by assessing soil depths and textures, vegetation, wildlife, topography and hydrology. • Preparation and submission of reports to client and regulatory bodies. Monitoring for compliance in environmental sensitive areas during all phases of drilling a well or construction of a pipeline. • Preparation and submission of “as built” reports to client and regulatory bodies. 140 Saskatchewan Oil Report 2016

Environmental audits and assessments • Phase I: Identification of potential environmental liabilities (oil spills, saltwater spills, flare pits, and more) through the review of past and current on-site and off-site activities. • Phase II: Confirmation of environmental liabilities identified in the phase one through oil and groundwater sampling and analysis in order to understand the liabilities and financial impacts. • Phase III: Preparation and submission of reports to client and regulatory bodies and implementation of remedial plans, as well as supervision of remedial procedures with accurate daily cost tracking. Electro-magnetic (EM) survey equipment • An EM survey can help identify possible environmental liabilities, as well as assist in the determination of the extent of contamination. • Contaminant mapping – EverGreen’s combined EM/GPS sure system collects data which is used to help identify possible soil contamination prior to soil sampling, as well as optimizing the efficiency of the reclamation equipment in order to obtain a cost effective and timely clean-up. Pre/post water well testing • Obtain all yield and draw-down/recharge parameters. On-site sampling and water quality analysis. Preparation and submission of the report to client.


EverGreen Enviro Corp. (EverGreen) provides a wide variety of expertise in the upstream oil and gas industry. These projects include environmental protection plans, environmental impact assessments, pre-disturbance assessments, vegetation and wildlife risk assessments, environmental audits, environmental monitoring, pre and post water well testing, gas migration testing, drilling waste management and reclamation plans for oil, emulsion and produced water spills and flare pits. EverGreen provides clients with a professional and practical approach to field investigations which are followed by cost-effective reclamation and remediation services.

EVERGREEN ENVIRO CORP.

Box 40, 104 Turriff Avenue E. Carlyle, SK S0C 0R0 E: info@evergreenenviro.ca F: 306.453.4476

T: 306.453.4475

www.evergreenenviro.ca Saskatchewan Oil Report 2016 141


EverGreen’s offices are located in Carlyle and Shaunavon, to help the company provide comprehensive environmental services throughout Southern Saskatchewan. Waste management • LWD – drilling waste disposal – Liaison between client and landowner; submission of disposal application; sample and analyze waste; supervise disposal operations; final report preparation and submission to government. • Drilling fluid disposal – Experienced in all phases of drilling waste sampling, treatment, and disposal since 1978. Remediation and reclamation • EverGreen can provide salt and oil spill remediation programs, as well as supervising the field activities. Reclamation services also include: removal of contaminated soil; design and installation of tile drainage systems; site reclamation programs and confirmatory sampling; underground tank management; and report to all regulatory bodies. • EverGreen personnel have a balanced combination of practical hand-on field experience and a strong technical background.

• Reclamation approach – EverGreen provides clients with practical and cost effective solutions to a wide variety of environmental challenges. The company’s goal is to provide timely remediation programs making effective use of local resources and reducing overall project costs. • EverGreen can provide flare pit remediation programs, as well as on-site hydrocarbon testing during the excavation. Abandonment and releases Whether it is a former well site or battery site, EverGreen will provide the necessary supervision and job coordination to get the job done right the first time. The site is assessed, all necessary corrective actions are taken, confirmatory sampling is completed and a report confirming compliance with relevant regulatory criteria is prepared and distributed to clients and to the appropriate government agencies.

INDUS T RY RECOGNI ZED S AF E T Y T R A INING - Confined Space Entry & Monitor – OSSA Certified - Safety Construction Orientation Training - Enform Chainsaw Faller Competency Program Level 1 - Fall Protection – OSSA Certified - Fire Extinguisher – Danatec

Battlefords Campus Ph: 306-937-5100

- First Aid & CPR “C” with AED - Global Ground Disturbance - Enform H2S Alive - TDG – Danatec - WHMIS – Danatec

Meadow Lake Campus Ph: 306-234-5100

www.northwestcollege.ca 142 Saskatchewan Oil Report 2016

After a successful site restoration is achieved, compliance with relevant criteria is met, and landowner satisfaction is confirmed, many clients wish to attempt to obtain complete release from their leasehold obligations. EverGreen acts as a liaison between the landowner and the oil company handling any negotiations and transactions necessary to ensure proper documentation and that documentation is received by all parties involved including the necessary government boards and regulations bodies. Environmental monitoring services – EverGreen can offer clients a variety of environmental site supervision services. Environmental monitors can provide regulatory compliance, as well as cost control capabilities. Environmental testing – EverGreen performs a wide range of on-site sampling and testing procedures. Analytical results obtained in minutes can be quickly communications to the clients and/ or used as confirmatory results during a clean up operation. Evergreen’s field technicians are equipped with digital cameras and laptops allowing for immediate repots and data transmission. Field inspection – EverGreen provides clients with a professional and practical approach to field investigations which are followed by cost effective reclamation and remediations services. About EverGreen EverGreen’s offices are located in Carlyle and Shaunavon, to help the company provide comprehensive environmental services throughout Southern Saskatchewan. The company combines recent graduates with seasoned veterans to create a team of environmental professionals with clean up experience dating back to 1978. Their approach to providing environmental field services to the oil and gas industry is based on understanding the ever-changing guidelines and requirements of the energy sector. As their name says, EverGreen Enviro Corp. is about protecting the environment of southern Saskatchewan. v


On The Road Sterling Truck and Trailer Sales keep customers rolling

They have been Saskatchewan’s Volvo dealer since 1992. Sterling Truck and Trailer Sales has been serving the transportation industry since 1972. The company’s founder Sterling Hornoi spent the early years of his life behind the wheel of a truck as a driver and then running a transport company before getting into the truck dealership business. They like to think that the company brings a unique perspective to a dealer group, as they can walk the walk. Having been in the shoes of their customers, the company realizes the importance of the truck as an asset; one that if the wheels aren’t turning the truck is not earning. Sterling Truck and Trailer Sales are now a second generation family business with their focus on continues growth that will benefit customer in their day-to-day operations and help them continues to succeed. They have been Saskatchewan’s Volvo dealer since 1992, and are proud to offer the full line of Volvo products to customers. They are also actively involved in their community and believe in sharing their success with many worthy associations, giving back to the province that has supported them over the past 43 years. The company has three state-of-the-art families in Regina, Saskatoon, and Lloydminster to serve customers better. All of these locations offer drive-thru bays, quick lube bays, wash bays, and the best factory-trained technicians. Sterling Truck and Trailer

Sales also carry a vast parts inventory to keep their equipment on the road. The company invests heavily in the development and training of their 115 staff members, knowing this helps customers in keeping their equipment going and ultimately meeting their commitments to their customers. Sterling Truck and Trailer Sales are proud of the services they provide, and their people will always go the extra mile. Sterling Truck and Trailer Sales’ sister company, Hornoi Leasing, a NationaLease affiliate offers complete rental and full leasing services for customers. Whether it’s highway tractors, straight trucks, dry vans, reefer vans, flat decks, low beds storage trailers os seas cans, they have what customers need when they need it. As a member of NationaLease, they offers support with service locations across North America. Sterling Collision Centre located in Regina is a SGI accredited and ICAR trained facility, Sterling Collision Centre they give you the very best in service and repairs in the industry. We have specialized in heavy truck and trailer repairs since 1987; in fact, it’s all they do in the body shop. Sterling Truck and Trailer Sales is determined to earn your business and committed to the success of their partnerships. v Saskatchewan Oil Report 2016 143


Tailor Made Custom vertical progressing cavity sump pump provided for oil storage application When a major energy pipeline company looked to streamline their pumping system for their waste oil storage tanks, they called on NETZSCH to design and build customized vertical cavity sump pumps for lower maintenance and operational efficiencies. For over six decades, the Canadian energy company has been in the business of delivering energy, including oil and gas across North America. A large part of the company’s business is the operation of the world’s longest crude oil and liquids transportation system, conveying crude oil and other liquid hydrocarbons from the point of supply to refining markets in the mid-western United States and eastern Canada. Along the customer’s pipeline are pumping stations needed to power the liquid fuels through the pipeline. At each pump station, there is a 5,000-gallon (19,000-litre) underground storage tank (buried below the frost line to prevent the liquid from freezing) used as a collection point for waste oil from service work that is performed on main pipeline pumps. As the collection tanks fill to capacity, the customer needs to pump the liquid from the tank back into the pressurized pipeline. This process had consisted of a two-pump system – with a cantilever pump used to lift the waste oil out of the tank and a high-pressure piston plunger injection pump to move the oil back into the pipeline system. NETZSCH pump engineer Dave Hinecker notes, “The main issue for the customer is that with two pumps for each storage tank, there is twice as much maintenance. In addition, with the high pressure required to operate the piston pump, there was a lot of pulsation that was causing pipe stress. The customer wanted to eliminate the pipe stress and simplify the system with one pump that could provide the smooth, almost pulsation free, conveyance they were looking for.” 144 Saskatchewan Oil Report 2016


Custom-designed NEMO® BT series pump recommended After several meetings with the customer and by understanding the process and the challenges the customer was having with their two-pump system, NETZSCH engineers designed a custom 10-stage vertical, semi-submersed, progressive cavity sump pump that would lift the heavy oil out of the tank and also have the capacity to achieve 700 psi (48 bar) of differential pressure should the system require it in an upset condition. A number of technical issues were addressed including the use of a mechanical seal to the customer’s specifications. A common pump length with a drop tube and strainer was specified to accommodate any changes in sump depth. NETZSCH also performed chemical compatibility tests on several different elastomers. The unique selection of this pump allowed NETZSCH to eliminate any universal joints by incorporating a flexible connecting rod. NETZSCH design engineers also took into consideration the requirements of

electrical service at the site and selected a 20 hp driver that corresponded with the existing two-pump electrical requirement. There were other minor design challenges, such as building the stuffing box to accept the customers selected mechanical seal having the capacity to operate at 700 psi (48 bar). The NEMO® BT pump is tailor-made for this application, with dimensions (length, mounting flange, etc.) to fit the customer’s existing underground tank. This pump is also designed to operate in reverse, requiring the seal to be on the discharge side and the entire housing to be pressurized. The rotor/stator system (pump elements) are located at the lowest point, so dry-running will be avoided. The space-saving design of the entire pump (besides the drive and discharge flange) disappears into the tank, providing for a very neat and clean installation. No additional effort needed to heat and isolate external equipment – a very important attribute in ambient operating temperatures down to -40 degrees C (-40 degrees F).

With the critical operating nature of the oil and gas transport industry, the customer has very high quality control requirements. NETZSCH NEMO® Pumps are produced in accordance with API 676 and shaft seals in accordance with API 682. Prior to placing the order, the customer also sent a team to the NETZSCH Brazil manufacturing plant to verify that the manufacturing processes would meet its high quality standards. NETZSCH was successful in supplying 14 pumps for the customer. To date, all of the pumps are in operation with no concerns or issues from field operators. With many of these pump stations in remote locations, major benefits to the customer include less operational cost and field maintenance with only one electric motor running a single pump, as well as a solution to the pipe pulsation issue. With the success of this installation, the customer has changed their current specification regarding these sump pumps to include or recommend the use of the NETZSCH NEMO® BT series pump for this application. v

Leader Inn In business for over

100 years.

Ph: (306) 628-3854 Fax: (306) 628-3788 BOX 327 LEADER, SASKATCHEWAN S0N 1H0

Newly renovated, flat screen TVs with built-in DVD Free to use laundry/free wireless Wi-Fi Saskatchewan Oil Report 2016 145


Done Right and On Time Estevan Meter Services are the largest local instrumentation service provider because they are the best at what they do Estevan Meter Services has been a local provider of instrumentation, technical sales, and services to the petroleum industry since 1967. The knowledge, skills, and experience of the company’s people have allowed them to provide superior service and enhanced product application to help maximize returns for all stakeholders. They have instrumentation solutions to fill the needs of the upstream petroleum industry with locations in Estevan, Saskatchewan, and Virden, Manitoba. Continuing to evolve by providing a growing range of service and enhanced product application to meet the dynamic needs of clients, the company does business with the belief that the greatest product is having the right people and goods that are truly the best suited for the applications clients require. This is accomplished through knowledge, experience, training, and a desire to improve that is second to none. Estevan Meter Services Ltd. understands that success is dependent on the success of clients, as well as the communities they do business in. They support many sports, recreation, and

charitable organizations throughout the region, province, and country and have done so for many years. The company knew what corporate responsibility meant long before the term was created. They will continue to strive to improve, grow, and get better. Put their skills to work for you and find out that we are a company that truly “gets it.” Safety Estevan Meter Services Ltd. is focused on keeping safety a primary concern at the work-site and at home for staff and all stakeholders. They achieved Enform COR in 2007 and work diligently to not only maintain a framework of best practices and compliance but continually strive to improve our safe work environment. They are fully compliant in ISN and Complyworks. Products Estevan Meter Services has access to a broad range of products that they either distribute or represent. Sales volume, service capabilities, geographical location, and inventory quantities have allowed them to negotiate special dealer representation and discounting on many products. They are able to provide extremely competitive pricing on most of our product line because of these sales arrangements. Services Services are augmented by the competence of the people on their team. They provide both in-house training, take part in factory training, and although the company boasts people with unique skills they encourage cross training and lateral movement within the company so clients always have a competent service provider available to meet their needs. As well as competent staff they can provide scheduled maintenance and track the service history on many of the items the company works on.

Drilling Production & Geology 6844 Highway 40, Tioga, ND 58852

Kathleen Neset | Geologist nscoffice@nesetconsulting.com www.nesetconsulting.com

Office (701) 664-1492 • Fax (701) 664-1491 146 Saskatchewan Oil Report 2016

Community The company attributes much of their success from being a strong corporate citizen and understand the importance of reciprocating the local support they have been given from clients by supporting a large number of charitable groups and organizations. They have created a locally-owned successive business model that not only serves clients well but has also contributed to local communities since 1967, and will do so well into the future. Many other businesses have come and gone, Estevan Meter Services have remained committed to clients and improvements since 1967. v


SALES & SERVICE FOR:

¬ Instrumentation Service ¬ PLC/RTU Programming PUMPS / METERS / VALVES / CONTROLS / SWITCHES ¬ Treater Parts ¬ Shopdistributor & Field Calibrations Exclusive Saskatchewan and Manitoba of the ¬ Combustion Service Tank Level Transmitter ¬ SCADA Services ¬ PSV• Low Servicecost of ownership Accurate • Reliable • Installs in any tank • Standard output signal connects to any control system ¬ Shop & Field Repairs • Superior after-market service

LEVEL-PRO

Exclusive Saskatchewan and Manitoba distributor of the

LEVEL-PRO

Totally sealed gauge eliminates gas venting

Tank Level Transmitter

High-level alarm/shutdown

• Accurate • Reliable LEVEL-PRO digital gauge

• Installs in any tank

ensures accurate readings

• Low cost of ownership • Standard output signal connects to any control system

Daily level text reports

• Superior after-market service Optional Wireless connections eliminates all onsite wiring

ISO 9001:2008 Certified

321 Imperial Avenue Estevan, SK | 306-634-5304

www.estevanmeter.com

www.estevanmeter.com (306) 634-5304

130 Anson Road Virden, MB | 204-748-3704

Want to avoid a spill? - Use a Pro!


Firing on All Cylinders RAM Industries has become synonymous with delivering quality, custom cylinder solutions to the oil and gas sector

RAM is a hydraulic cylinder manufacturer with the experience and expertise to service the needs of the oil and gas Industry. RAM has been producing hydraulic and pneumatic cylinders for over 40 years, developing a strong name around the quality and reliability of its products and services. RAM is well versed in cylinder applications within the oil and gas industry including – drilling and exploration equipment, production and service equipment, mast scoping cylinders, hydraulic pump jacks, and rig moving systems. Many RAM cylinders have been designed for OEM applications such as these, and have been used extensively for many years in large oil and gas operations in locations such as Alberta, Oklahoma, and Texas. As a custom manufacturer, RAM’s approach is to establish a close technical rapport with every customer to share ideas and gather critical information regarding cylinder fit and performance requirements. Within the oil and gas sector, this relationship is often with project managers, engineering consultants or teams, branch operations, service shops, rig sites, end users, and of course many entrepreneurs developing new applications to serve this market and its changing needs. Specifically for the oil and petroleum sector, RAM has integrated two models of mast raising telescopic cylinders. These featured RAM cylinder designs are fully interchangeable with accepted current market cylinders. The designs are pressure rated for 2500 PSI, utilize precision honed and chromed material and have a 148 Saskatchewan Oil Report 2016

stroke length of 132 inches. Mast raising cylinders are available for quick shipping turnaround – which is important to an industry where time matters. Standard and ball end stabilizer cylinders are also available for levelling and outrigger applications. Standard models are available, or if required, RAM offers customizable options like bore size, stroke length, mounts, ports, jacking pads, and internal pilot operated check valves. These stabilizer cylinders come standard with an external adjustable locking ring mechanism, eliminating the need to adjust because of drift during use. RAM also offers subcontract machining and metal fabrication services. The company’s vast line up of modern production equipment, CNC lathes and machining centres, manual machines, and production departments has the flexibility to handle a wide range of material sizes and order quantities. RAM is continuously investing and upgrading its equipment and expertise to stay abreast of technology advancements in machining, welding, and manufacturing processes that ultimately enable RAM to consistently meet the high quality and cylinder performance requirements of this industry. RAM can supply cylinder products from pre-engineered cylinder drawings; however complete design services are more often the norm. Custom cylinder designs by RAM may originate from something as simple as a customer’s conceptual idea or a new product innovation. RAM also has the technical expertise to deliver cylinder solutions for other needs, such as cost

reduction or performance improvement, reverse engineering for replacement or repair cylinders, or re-engineering foreign designed cylinders to North American dimensional and material standards. Our engineers will work with you to design for your specific needs. Engineering services using 3D modelling are available to customers to provide critical dimensions and simulated images of their custom cylinder. This service is beneficial for design verification, customer pre-approval, and integration of the product into the customers’ overall equipment design. On-site visits, engineering meetings, technical support, and prototype services are also available to ensure cylinder fit and function testing before full production. For over 15 years RAM Industries Inc. has maintained ISO 9001 certification for cylinder manufacturing and custom machining services. Throughout this period of time, RAM has continuously upgraded its quality systems, inspection methods, inspection tools and equipment to stay abreast with the ever changing and advancing technology. RAM is also experienced with accommodating quality requirements to American Petroleum Institute (API) standards or other customer-specific inspection or technology requirements. Every RAM customer receives after sales support, installation guidance, parts, and warranty services as part of its ongoing commitment to every relationship. The RAM name has become synonymous with delivering quality custom cylinder solutions to the oil and gas sector. v


Custom Cylinder Solutions for the OIL and GAS Industry RAM Industries has over 40 years of expertise in the design, engineering and manufacturing of custom hydraulic cylinders. We have extensive experience serving the Oil and Gas sector across North America, working closely with teams responsible for cylinder applications on drilling and exploration equipment, production and service operations, and specialty accessories. RAM is ISO 9001 certified and can meet API or customer quality requirements, specific to cylinder fit and performance requirements. The RAM name has become synonymous with delivering custom cylinder solutions to the Oil and Gas sector.

01

01 Mast Scoping Cylinder 02 Top Drive Grabber Cylinder 03 Top Drive Counterbalance Cylinder 04 Top Drive Backup Wrench Cylinder

17

02

05 Link Tilt/Grabber Leg Cylinder

03

06 Power Wrench Grabber Cylinder

04

07 Power Wrench Arm Cylinder

05

08 SubFrame Leveling Cylinder 09 BOP Trolley Cylinder

06

16

10 Power Catwalk Indexer Cylinder

07

11 Power Catwalk Outrigger Cylinder

08

09

12 Power Catwalk Kicker Cylinder 10 11

15

13 Stabilizer Pad Cylinder 14 BOP Handler Lift Cylinder 15 Doghouse Cylinder

14

16 Rig Mover Jack Cylinder

13 12

17 Mast Raise Cylinder

RAM Industries Inc

33 York Rd E., PO Box 5007, Yorkton, SK S3N 3Z2 Canada T: 1.877.799.1005 F: 306.786.2651

www.ramindustries.com


The Quickest Way Around Suretuf Containments Ltd. is one of the leading distributors of secondary containment systems in Western Canada Suretuf Containments Ltd. is a full manufacturing and service company of secondary containments providing secondary containment products to the Canadian oil and gad industry. They offer a complete selection of engineered galvanized steel containment solutions for various sizes of storage tanks and vessels. Suretuf also provide various types of Geomembrane liners and Geotextile fabrics for secondary containment applications. All Suretuf secondary containment systems are manufactured by fully-employed, full -ime Suretuf Containments Canadian skilled employees located in Lloydminster, Alberta. No subcontractors are used in the manufacturing of their products further guaranteeing workmanship and quality. Local manufacturing allows the company to control costs, as well as constantly improve upon systems. Suretuf Containments local manufacturing facility also means a quick turnaround time from order to installation. No more backorders or wait times to delay your site construction. With the help of the engineering department they can design site specific containment solutions for the most difficult of projects. Suretuf Containment systems are a patented design (Patent # 2362105) P. Eng. stamped and have been manufactured for over 20 years. All containment systems comply with Environment Canada Section 3.9 Secondary Containment Requirements and are D-055 (Alberta) and S-O1 (Saskatchewan) certified. Their unique patented drop pin connecting panels with slide in legs require no nuts or bolts or special tools to assemble. Further the drop pin panel connections with slide in legs allow containment systems to be easily relocated or expanded with minimal labour. Also the slide in legs allows the entire containment system to float with any ground heaving that may occur. No calking or gaskets are required to attach the liner to the containment wall. The top mount liner with square top cap eliminates sharp hazardous edges providing greater safety when working near or climbing over wall. Lastly, with Suretuf there is no dead stock verses competitors’ containment systems with bolted wall connections and legs. A Suretuf panel manufactured today will fit together with a Suretuf panel manufactured 20 years ago. Suretuf Containments Ltd. offers professional installation of all of their secondary containment systems, as well as liner installations and repairs. The company fabricate and stock liners in Lloydminster to provide the customer with fast and efficient service. Their longstanding relationships with liner and textile fabric manufacturers allow the company to provide a complete line of Geosynthetics for civil construction projects. Through independent dealers, as well as Suretuf Containments stocked warehouses in key areas of British Columbia, Alberta, Saskatchewan, and Manitoba they are one of the leading distributors of secondary containment systems in Western Canada. v 150 Saskatchewan Oil Report 2016


Now Available in 25” Tall for Multi-Pad Well Setups New Walk Through Access Door - Patent Pending

100% Canadian owned and operated

THE QUICKEST WAY AROUND

Suretuf Containments Galvanized Wall Suretuf containment packages are a patented (patent #2362105) and P.Eng. certified design. Suretuf containment packages meet or exceed all D-055 (Alberta) and S-01 (Saskatchewan) secondary containment requirements. Suretuf has been manufacturing containment packages for over 15 years. All package components past and present are compatible with one another- no dead stock.

HUGE COST SAVINGS ON SETUP LABOUR

The lightweight easy to handle drop pin connecting panels with new single slide in leg design do not require nuts and bolts for assembly providing safe, quick and easy installation or complete package relocation without special tools. Further the slide in leg design allows the entire containment systems to float with ground heaving while maintaining wall integrity. Suretuf containment packages are a zero ground disturbance system.

NEW 25” WALL

No caulking or gaskets required to attach the liner to the containment wall or to attach the walls together. The top mount liner with square top cap eliminates sharp hazardous edges providing greater safety when working near or around the wall.

Secondary Containment Access Door Our Suretuf patiented pending secondary containment walk through access door is P.Eng. stamped. This innovative walk through access door design meets or exceeds D-055 (Alberta) and S-01 (Saskatchewan) secondary containment standards. This industry first eliminates the need for crossover stairs and/or sting doors providing greater safety to operators and fluid haulers as the walk through door elimates the safety hazards associated with crossover stairs in all environment and weather conditions. No more slippery surfaces and potential fall hazards.

NEW ACCESS DOOR

CROSS OVER STAIRS

45º Corners t os No Extra C

Available in 36” and 44” tall packages and now 25” for multi-pad well steps

STING DOOR

25” Wall

36” Wall

44” Wall

ACCESSORIES • Sting Doors • Crossover Stairs • Walk Through Door • Geotextile • All types & Sizes of Liners Available • Fire Retardant Coating Available | C.O.R. Certified Set Up Crews Are Available

WE WILL CUSTOM BUILD TO SUIT OUR CUSTOMER NEEDS Contact Greg Gessner:

Saskatchewan Oil Report 2016 151

Phone: 780-875-0032 • Cell: 708-214-7808 • Fax: 780-808-2273 • Email: greg@suretuf.com DEALER / DISTRIBUTORS WANTED


Position on Petroleum Presidential election year likely to be filled with surprising developments By Leonard Melman

These are indeed difficult times for the world of petroleum and natural gas in both Canada and the U.S. as the number of problems created by falling prices and declining industry activities is beginning to have a serious impact on many areas which only recently had been enjoying true “boom times.” The Canadian provinces of Alberta and Saskatchewan are excellent examples. It was not too long ago that the corridor from Calgary to Edmonton and up to the rapidly-growing community of Fort McMurray was widely regarded as one of the most prosperous regions on earth. Then the industry came face-to152 Saskatchewan Oil Report 2016

face with price collapses for both crude oil and natural gas. Crude oil plunged in a spectacular manner from a relative peak of US$112 in mid2013 all the way down to below US$30 per barrel in January 2016, while natural gas suffered through declines from above US$6.50 per contract in early 2014 to below US$2.00 per contract in late December 2015. As a result of these declines, many projects which had been very profitable suddenly found revenues had fallen below their production costs and, unable or unwilling to sustain losses, they began to reduce or even cease operations. At the

same time, many exploration and development projects which had previously been able to attract investment financing suddenly found those sources had dried up – and many such projects were put on “care and maintenance” or entirely abandoned. The effects of these pullbacks on previously prosperous areas have been significantly negative. In the province of Alberta, famous for relentless growth of oil sands recoveries, the news has taken on an ominous overtone. Waves of newcomers to the province are now unable to find work and are returning to their home areas.


The situation is bleak for those areas of southern Saskatchewan involved in exploration, development, and production of oil within the northern regions of the Bakken deposit.

Apartments and condominiums are being abandoned in cities like Fort McMurray. The Alberta government reported that recent job losses are the worst since the 1980 recession – more than one-third century ago. Moody’s Investors Service recently indicated it was placing many Canadian oil companies under review for downgrading of their debt. The situation is also turning bleak for those areas of southern Saskatchewan involved in exploration, development, and production of oil within the northern regions of the Bakken deposit. In early February, Saskatchewan Premier Brad Wall reported a deficit during this fiscal year was very likely and it would be difficult going forward to maintain the government’s programs. He blamed “falling resource revenue” as an important source of the province’s fiscal difficulties. North American problems associated with falling energy complex prices are hardly limited to Canada as several areas within America are also being hit hard with North Dakota, primary home of the Bakken discovery, feeling particular pain. State Governor Jack Dalrymple reported in late January 2016, that state revenues would fall by more than $1 billion this year and state agency budgets would face deep cuts. The epicentre of Bakken activity, the city of Williston, has gone from “boom” to “bust” in short order with lengthy lineups each day at the city’s job centre. One-bedroom apartments that used to rent for $2,000 per month are now sitting empty.

In addition to North Dakota, other states such as Colorado and Texas, both heavily involved in petroleum recovery via the controversial method known as fracking, have likewise seen prosperity quickly evaporate like water in the hot Texas sun. Given this difficult situation and the array of problems the industry is facing, some are now turning more than ever toward government action to help provide meaningful assistance but in fact, many others within the industry believe that government itself might be a source of new difficulties given the powerful influence of the environmental community. Despite the evident problems, concerns relating to government policies continue to mount including taxation; climate change; cap-and-trade; pipeline non-approvals; water purity; promotion of alternative energy sources and continued land set-asides. And now, another vital ingredient is in place and that is the reality that 2016 is a presidential election year for America and the stated energy-related policy preferences of many of the candidates in both parties contain sharp differences. Accordingly, candidate statements on this topic are truly worthy of note. In the Republican Party, three candidates have emerged from the pack following the initial round of primaries. Those candidates are Senator Ted Cruz, Donald Trump, and Ohio Governor John Kasich. Each one has issued policy statements regarding petroleum development. Saskatchewan Oil Report 2016 153


TED CRUZ – Senator Cruz has given several indications that he is a strong supporter of the petroleum industry. He has come out strongly against cap-and-trade legislation, declaring that this measure, which would add considerably to industry and consumer costs, would, “weaken the nation’s global competitiveness with virtually no impact on global temperatures.” He has argued against government setasides which would prevent oil exploration and development over wide areas. In addition, and in line with an expressed goal of reducing general government interference in commerce, he has specifically come out against excessive government regulations, stating he would attempt to, “Stop costly new regulations that would increase unemployment, raise consumer prices and weaken the nation’s global competitiveness.” On the issue of the Keystone XL pipeline, Cruz has spoken strongly in favour of the pipeline’s completion and cosponsored Bill S2280, a “bill to approve the Keystone XL Pipeline.” (The bill subsequently passed but was vetoed by the president.) He also co-sponsored Bill S2181 which called for a prohibition on the adoption of any new Environmental Protection Agency regulations until a final cost-impact analysis had been completed. DONALD TRUMP – Candidate Trump has openly questioned the science behind the “human-caused global warming” concept. During a Fox News interview in 2014 he declared the concept to be a “hoax.” He has also stated that many of the suggested “remedies” such as the widespread use of wind turbines to actually be “an environmental and aesthetic problem.” Like Cruz, Trump has also spoken out against cap-and-tax laws stating that they would force Americans to, “face ever-increasing (petroleum) prices.” He heaped scorn on President Obama’s opposition to Keystone XL, calling the president’s rejection “disgraceful.” In regard to the Keystone XL project, the San Antonio Business Journal noted that, “Trump is in favour of the Keystone XL Pipeline, which would run from the tar sands oil region of Canada to the Houston and Port Arthur areas.” JOHN KASICH also has taken a stand against excessive environmental regu154 Saskatchewan Oil Report 2016

lation by voting “no” in 2000 on an amendment which would have allowed full implementation of the international Kyoto protocol of 1997. In addition, he has been a strong supporter of the Keystone XL Pipeline and sharply criticized President Obama for his decision to terminate the project. However, he has taken some heat from the petroleum industry for favouring a sharp increase in taxation when recoveries take place through the fracking process. While several candidates dropped out of the race by early spring, some of their industry-related comments show generally strong support among Republicans for petroleum exploration and development. Senator Marco Rubio has been quoted regarding climate change that he would not do anything which would make, “American a harder place for people to live, to work or to raise their families.” He has been quoted by ABC News as declaring that he does not believe humans are responsible for current climate trends but rather believes that climate has always been changing and has never been static. As a result, he is opposed to the complex regulations being proposed which would control vast areas of human activity. Rubio also strongly opposes cap-andtrade schemes. During his 2010 senatorial campaign he stated, “As a U.S. senator, I would oppose a national energy tax on American consumers, farmers and business owners. At a time when our economy is struggling, a cap-and-trade scheme would further strain family budgets and destroy jobs.” Ben Carson declared his antipathy to government domination in general by stating, “I have concluded that the best policy is to get rid of all government subsidies, and get the government out of our lives and let people rise and fall based on how good they are. It goes back to the concept of regulations. Every regulation costs in terms of goods and services.” On the Democratic Party side only Hillary Rodham Clinton and Vermont Congressman Bernie Sanders remain as viable candidates for the Democratic nomination. Both appear to favour strong environmental regulation. HILLARY CLINTON – During a 2015 broadcast of a CNN debate, Clinton stated her opposition to the Keystone XL pipe-

line by noting, “I now oppose Keystone, but I withheld opinion at first.” Regarding energy markets, she stated that a Clinton administration would, “go after energy traders and speculators.” She would also use government to investigate high gas prices when they occur. In point of fact, Clinton has made few definitive statements regarding petroleum over the past few years, causing the National Journal to discuss her energy issue statements in this manner, “At the same time, there is genuine sense of uncertainty about the front-runner, who has yet to offer detailed energy policy positions.” There was some hope among oil industry leaders that Clinton would be more open to their cause than President Obama, but Clinton recently supported Obama’s Keystone XL decision. BERNIE SANDERS – Representative Sanders is the most avowedly leftist of all the important candidates and, in fact, has described himself as a democratic socialist. As such, it is not surprising that he describes his commitment to climate change legislation as very advanced. He has issued statements describing climate change as a “moral matter,” he advocates a tax on carbon, and he opposes the Keystone XL pipeline. Sanders recently made the sharply partisan statement that, “the fossil fuel industry is funding the Republican party” and he has made no secret of his advocacy of moving away from fossil fuels and toward sustainable energies.” In a June 2015, statement he defined those, “sustainable energies” as wind, solar, geothermal, biomass, and other forms of sustainable energy. Many observers agree that in general, the positions espoused by the Republican candidates appear to be in closer conformity to the goals of petroleum developers and producers than those of the two leading Democrats who indicate they are in agreement with the environmental movement’s goals and with the concept of using government’s regulatory powers to advance those objectives. The year 2016 is well underway and it should be fascinating for the world of petroleum to follow its progress. v


Index to Advertisers A Better Panel Inc............................................................................... 49 Affinity Credit Union............................................................................ 4 Aggreko........................................................................................... 121 Anderson Pump House Ltd............................................................... 132 Annugas Compression Consulting Ltd................................................ 32 Big Bore Directional Drilling Ltd........................................................... 5 Black Gold Rush Industries Ltd........................................................... 29 Brandt Tractor.................................................................................... 87 Bravo Target Safety – Formerly Target Safety Services Ltd................. 25 CAPPA................................................................................................ 85 Canadian Linen & Uniform Service................................................... 122 Canadian Western Bank..................................................................... 61 Cat-tek Cathodic Services Ltd............................................................. 45 City of Swift Current........................................................................... 97 Clarence Campeau Development Fund............................................... 17 D&G Polyethylene Products Ltd.......................................................... 46 Days Inn Swift Current........................................................................ 19 Easy Rider Trucking Ltd....................................................................... 51 Elad Geological Consulting Ltd......................................................... 131 Energy Auctions Inc............................................................................ 81 Estevan Meter Services Ltd............................................................... 147 Evergreen Enviro Corp...................................................................... 141 FlareTech, Inc...................................................................................... 44 Flo Tech Inc......................................................................................... 75 GB Contract Inspection Ltd................................................................. 33 Graham Group Inc..............................................................................IFC Great Plains College........................................................................... 99 Ifp Technologies Canada.................................................................. 123 IFR Workwear Inc............................................................................... 27 Import Tool Corp Ltd........................................................................... 28 Information Services Corporation ( ISC )............................................. 20 JJ Trucking.......................................................................................... 58 Kenilworth Combustion..................................................................... 10 LD Allen Enterprises Ltd..................................................................... 24 Lakeland College..............................................................................OBC Leader Inn........................................................................................ 145 Level Best Technologies Ltd................................................................ 64 Meter-Man Flow Products Ltd............................................................ 34

Millennium Directional Service Ltd.................................................... 47 Ministry of Economy.......................................................................... 15 Neptune Pumps Services..................................................................... 6 Neset Consulting Service.................................................................. 146 Netzsch Canada, Inc........................................................................... 54 Noble Well Services Inc...................................................................... 89 North West College.......................................................................... 142 Park Derochie Coatings (Saskatchewan) Inc......................................... 3 Penta Completions Supply & Services.............................................. 129 Petroleum Technology Research Centre............................................. 25 Phoenix Industrial Ltd...................................................................... 137 Pipetech Corporation......................................................................... 95 Praxair............................................................................................... 34 Pumps & Pressure Inc......................................................................... 35 Pyramid Corporation.......................................................................... 64 Quality Mat Company...................................................................... 157 RAM Industries, Inc.......................................................................... 149 RL Supervision Ltd. & Prairie Storm Construction Ltd......................... 53 R.I.I. North America Inc...................................................................... 12 Racken Enterprises Ltd....................................................................... 40 Redhead Equipment............................................................................ 7 Redvers Oil Show............................................................................. 109 Regina Airport Authority.................................................................... 11 Saskatchewan Workers’ Compensation Board................................... 31 Sasktel................................................................................................. 9 South East Electric Ltd...................................................................... 133 Southeast College.............................................................................. 18 Sterling Truck & Trailer Sales Ltd......................................................... 41 Suburban Extended Stay Hotel.......................................................... 59 Suretuf Containments Ltd................................................................ 151 Transwest Air..................................................................................... 37 Tranter, Inc......................................................................................... 89 Tremcar Inc........................................................................................ 52 Volant................................................................................................ 42 Western Heritage............................................................................... 91 Weyburn Regional Economic Development...................................... IBC Williston Basin Petroleum Conference............................................. 105

Please support the advertisers who help make this publication possible. Saskatchewan Oil Report 2016 155


MATS ARE THE SOLUTION. 1 - 8 0 0 - 2 2 7- 8 1 5 9 5-ACRE ROCK DRILL SITE

ROCK drill site

\\

Q M A T. C O M 5-ACRE MAT DRILL SITE

MAT drill site

AFTER ROCK DRILL SITE

Disadvantages - Damaging native farm land - Lost work time due to unsafe work surface - Delays in drilling - Unable to access due to bad weather - Wasting unnecessary amounts of rock - Unnecessary extra cost - High reclamation expense

WORLDS LARGEST SUPPLIER

AFTER MAT DRILL SITE

Advantages - No reclamation cost - Reduce the environmental impact - Reduce the amount of rock on native farm lands - Minimize unnecessary accidents - Mats provide a safe and stable work surface - 24/7 all-weather access with no down time - Potential to drill one to two more additional wells per year - Reduce the amount of truck traffic on roads - No additional cost - Protect existing flowlines

MANUFACTURING SINCE 1974


your next investment opportunity in Weyburn, SK Business Information Site Location Investment Market Research

The prosperous healthy diverse economy is attracting investors from around the world the fastest growing city in Southern Saskatchewan.

Weyburn Regional Economic Development 11 Third Street (306)842. 4738 opportunity@weyburn.ca www.weyburneconomicdevelopment.com


Energize Your Future with Lakeland College Our new Energy Centre, opened in 2015, is home to a state-of-the-art once-through steam generator (OTSG) which no other post-secondary institution has invested in for heavy oil training. Other leading-edge technology includes: • Four other boilers of different configurations • Two-storey distillation tower

Heavy Oil Power Engineering Two-year diploma program 4th and 3rd class power engineering training Heavy Oil Operations Technician One-year certificate program 4th class power engineering training

• Water treatment equipment • Cooling tower • Steam turbine generator Industry helped design this facility and our curriculum. That means no matter which one of Lakeland’s full-time heavy oil programs you choose, you’ll develop needed skills.

Campuses in Vermilion & Lloydminster lakelandcollege.ca • 1 800 661 6490

Online options too Lakeland College also offers online and blended delivery options for 4th and 3rd class power engineering, gas process operator and production field operator.