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SASKATCHEWAN’S PETROLEUM MONTHLY Canada Post Publication No. 40069240

August 2019

Vol. 2/13

Complete list at 306-421-2928 or 306-487-7815 PL 311962

Oilman of the Year

Steel Reef Infrastructure Corp. founder and executive chairman Lane McKay was named Oilman of the Year during the Saskatchewan Oil and Gas Show in June. McKay, in turn, expressed it was really a company honour. This is the company’s first of several gas plants, located near North Portal. See related stories Page A6, A8 and A12. Photo by Brian Zinchuk

Carbon tax might spur more CCS A2

All social and no license A3


Dennis Day, SE Sask Oilman of the Year A17


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Carbon tax to be applied to new natural gas plants built after 2021, changing Saskatchewan’s options By Brian Zinchuk Weyburn – Saskatchewan had been shifting towards natural gas-fired power generation, but a change in carbon tax regulation for new power plants of that nature announced by the federal Liberal government has thrown a monkeywrench into the strategy, and could have wide-ranging impacts on the province’s energy mix going forward. It could even mean a continuation of coal, using carbon capture and storage and cause SaskPower to reconsider its planned upcoming Moose Jaw power station, to be fueled by natural gas. Environment Minister Dustin Duncan, who also holds the portfolio of Minister Responsible for SaskPower, explained these implications on July 8 by phone from Weyburn. (Duncan was formerly Minister of Energy and Resources.) He pointed out that the initial regulations announced in December, and the province had been consulting with the feds with for the last six months, were not what they saw come out in late June. Federal Environment Minister Catherine McKenna met with provincial environment ministers on June 27, yet didn’t tell them about the changes. Duncan said Saskatchewan found out about them via a press release from the federal government the following day, by which point McKenna

was in Brussels. “This is completely different from what was contemplated,” he said. The issue at hand is the carbon dioxide emissions of what is known as combined cycle natural gas-fired power plants. A simple cycle natural gas power plant burns the gas to heat a boiler, and the steam passes through the generator once. Plants like that are used at Spy Hill and North Battleford, among other places, as peaking plants when the utility needs additional power right away. But a combined cycle plant is much more efficient, capturing heat that would otherwise be unused, and using it to create more power. They are up to 50 per cent more efficient, according to GE. The result is a much more energy efficient powerplant that is used for baseload power. Northland Power built a 260 megawatt facility of this type at North Battleford in 2013 to provide power for SaskPower, and SaskPower itself is currently completing the 360 megawatt Chinook Power Station at Swift Current. Duncan explained that when it comes to coal-fired power, our coal plants generally put out 1,100 tonnes of CO2 equivalent per gigawatt hour (GWh) of power produced. We must pay carbon tax on anything over 800 tonnes. That carbon tax is currently $20 per tonne now, but ratchets up

by $10 each year to $50 per tonne in 2022. Duncan does not expect it will stop there, despite what McKenna has been saying. By 2022, SaskPower is expected to have paid cumulatively over $500 million in carbon taxes as a result. Going past 2030, coal plants can only emit 420 tonnes CO2 equivalent per GWh, which effectively means they must have carbon capture and storage applied. “Really, you can’t get to 420 with coal without carbon capture. So basically, today’s combined cycle natural gas is better,” Duncan said. But a combined cycle natural gas plant produces typically 370 tonnes per GWh, which is one of its key points. “The cost equation wasn’t going to be that onerous,” Duncan said. The new rules will see any new combined cycle natural gas power plant that goes into operation after 2021 have the carbon tax applied, on a sliding scale that will reduce the exemption to zero by 2030. The new regulations, as printed in the Canada Gazette on July 10, say in their regulatory impact statement, “Starting in 2021, new industrial or electricity generating facilities that start generating electricity from gaseous fuels using equipment or a unit that has a capacity of 50 megawatts (MW) or more and that is designed to operate at a thermal en-

Does a carbon tax on new natural gas power plants mean more life for coal? Photo by Brian Zinchuk

What does a dragline have to do with carbon taxes on a combined cycle natural gas power plant? If the recent announcement that a carbon tax would be imposed on any new combined cycle natural gas power plant built after 2021, it makes for a stronger case for coal using carbon capture and storage. And any captured carbon dioxide would most likely be utilized for enhanced oil recovery. Such a scheme has greatly extended the life of the Weyburn Unit. A lot more CO2 could mean a replication of such efforts, perhaps at Steelman, a likely candidate. Photo by Brian Zinchuk ergy to electricity ratio of less than 0.9 will have a standard that starts at 370 t of CO2e per GWh in 2021 declining linearly to 0 t of CO2e per GWh in 2030.” Since the proposed Moose Jaw power station is not yet in the request for proposals stage, it would be directly affected by these new rules, but Chinook and Northland would not. “That 370 standard, from 2021 to 2030 goes to zero,” Duncan explained. “Basically, by 2030, you will not be able to create a single tonne of carbon dioxide emissions from a natural gas plant that won’t be taxed. It’s going to be taxed 100 per cent.” And that has real repercussions. “We’ve got to put pause on the Moose Jaw plant, because we don’t know what the cost is going to be” he said. “This is so short-sighted.” Duncan said the federal government had been implying that everyone shouldn’t “dash to gas,” and now we know why. The federal government is pushing renewables and hydro power. Indeed, the discussion of the new regulations in the Canada Gazette alludes to just that, stating, “In regards to the outputbased standard for elec-

tricity from gaseous fuels (i.e. 370 t of CO2e/GWh), some industrial stakeholders commented that a 420 t of CO2e/GWh would be more appropriate for peaking units and cogeneration. Non-emitting industry groups and environmental stakeholders commented that the standard for new gas units is not sufficient to prevent an investment in new natural gas over lower emitting generation sources, and will result in Canada falling short of the PCF (Pan-Canadian Framework on Clean Growth and Climate Change) target of 90 per cent non-emitting electricity target by 2030. The non-emitting sector and ENGOs (environmental non-governmental organizations) recommended a long-term signal for new investments in electricity generation to shift toward lower emissions intensity electricity generation over time, i.e. an output-based standard for new gas generation facilities that ramps down from 370 t of CO2e/ GWh to 0 t of CO2e/GWh in 2030. The Department recognizes that, over time, new electricity generation capacity should come from non-emitting sources and agreed to implement this recommendation.” Duncan said, “We can’t bring on renewables without baseload to sup-

port them. In the past, our baseload, in this province, has largely been coal and natural gas. And they’re making it impossible for both of those. So if they want Saskatchewan or any other jurisdiction to bring on more renewables, this doesn’t help. It only hinders. “The second part is, if they want to drive us to more hydro, who is smiling today? I would say Manitoba’s smiling, because they know we don’t have any alternatives now.” Other options could be small modular nuclear reactors, but they’re a long ways off, or coal with carbon capture and storage (CCS), but we still have to figure out the cost on that. Duncan said, “Natural gas is looking less and less like an alternative, and we have no bargaining power with Manitoba, because Manitoba knows that natural gas, likely, is not, under these regulations, an alternative. So thanks, Ottawa, for really giving away our bargaining power with Manitoba. And the same would be for any other jurisdiction that has hydro, and they are looking to sell it. The price just went up, because of these regulations.” Manitoba is the most likely place to get more ► Page A6

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It’s all social and no license, says Doer By Brian Zinchuk Regina – Social licence was a hot topic at the Williston Basin Petroleum Conference, with two former premiers speaking their mind on the subject. Brad Wall, former Saskatchewan premier, said on May 28, “We should never use that term, social license again. “There’s a whole bunch of things implied by that term. First of all, that you don’t have it already, as a sector. You need to apply for it from someone. We really don’t know who is the issuer of the social license. “We especially don’t know who the issuer is after the first Western Canadian foray to earnestly earn social license, was the Alberta carbon tax, which resulted in precisely zero change in the environmental political support for a pipeline project. “It is not just a speaking point, to highlight for our fellow Canadians, that social license has long been paid by this industry. “It’s paid in the taxes this industry has provided, to all of Canada. It’s paid in the direct support to transfer payments, that have quite literally ensured the survival and the viability of social programs. It’s paid for in

the jobs that are created for Canadians. It’s paid for the taxes we’ve already talked about, both directly and indirectly. “That doesn’t mean, as a sector, that we ought not to be trying to better by the environment. But really, my view is we should separate these two things.” He went on, “We helped, as and industry, and I would say governments are to blame. I share in it. I was around for 10 years as premier of Saskatchewan, the country’s second largest producer of oil. We have been very flatfooted. We have been not at all effective in telling the story that already exists about the sector, which would have earned whatever social license implies, and maybe avoided some of the challenges they’ve faced recently to get the right public policy and pipelines built in Canada.” Wall said Canadians are getting there on their own. “It’s not to late, for us as an industry, to demonstrate through action, technological advancements we talked about like pipeline integrity and carbon mitigation, but also to tell the true story.” “It’s not too late for us to build support. We should call it that. It’s not a license.

It’s support. “And there is a compelling case we have, in Western Canada, to build that support with Canadians, because Canadians, by the way, when given the facts, are very pragmatic.” He said when the rest of the country finds out the significance of the resource, that global demand will continue to increase through 2050, according to the International Energy Agency. “When Canadians do realize that, they do ask the very pragmatic Canadian question, if it’s not our oil because we can’t get a pipeline to tidewater, then whose is it? And from the list of competitor countries, Canadians are smart enough to realize that most of the countries we compete with probably aren’t as responsible, or as interested in the sustainability of the industry as we are.” Wall said his theory is that when Kinder Morgan’s Ian Anderson, president of Trans Mountain, gave the federal government a deadline of May 31 last year, “The country started paying attention to this issue – of pipelines, of our oil and gas resource.” Poll after poll showed increasing support. “If we make our case to

Canadians, and if we demonstrate by our actions, we continue to demonstrate by our actions that we don’t just care about the environment, we have a plan to protect it, and a plan to reinvest in it and we rehabilitate it, I think we won’t need to ask for a license for anybody. I think we’re going to see support grow.” Gary Doer on social license Gary Doer, former Manitoba premier and Canadian ambassador to the United States, said on May 29, “Social license has almost become a strategy to get a veto, as opposed to get approval. “Consultation with people affected, absolutely. It’s part of the due diligence process. In my way of thinking, it’s better to be done before you even propose something. You bring in engineers, lawyers, accountants proposing something. Know what the lay of the land ahead of time, through consultations. “My view is projects should be approved under the definition of public interest. It’s public interest which should determine the final outcome of these applications. “Energy is a public

“Do you know what my problem with social license is? It’s all social and no license,” said former Manitoba premier and former Canadian ambassador to the United States Gary Doer. Photo by Brian Zinchuk interest. Reliability, affordability of energy is a public interest. Clean air, clean water, is a public interest. To me the criteria for making decisions should be public interest. “I’m not sure what Brad said, but I’m sure he would be very upset about social licence, because it’s become

a de facto veto for some people, which is unacceptable for the public interest of Canada, and in my view, is unacceptable to the people of Manitoba.” Doer added, “I find it’s a phoney term. Do you know what my problem with social license is? It’s all social and no license.”

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Published monthly by the Prairie Newspaper Group, a division of Glacier Ventures International Corporation, Central Office, Estevan, Saskatchewan. Advertising rates are available upon request and are subject to change without notice. Conditions of editorial and advertising content: Pipeline News attempts to be accurate, however, no guarantee is given or implied. Pipeline News reserves the right to revise or reject any or all editorial and advertising content as the newspapers’ principles see fit. Pipeline News will not be responsible for more than one incorrect insertion of an advertisement, and is not responsible for errors in advertisements except for the space occupied by such errors. Pipeline News will not be responsible for manuscripts, photographs, negatives and other material that may be submitted for possible publication. All of Pipeline News content is protected by Canadian Copyright laws. Reviews and similar mention of material in this newspaper is granted on the provision that Pipeline News receives credit. Otherwise, any reproduction without permission of the publisher is prohibited. Advertisers purchase space and circulation only. Rights to the advertisement produced by Pipeline News, including artwork, typography, and photos, etc., remain property of this newspaper. Advertisements or parts thereof may be not reproduced or assigned without the consent of the publisher. The Glacier group of companies collects personal information from our customers in the normal course of business transactions. We use that information to provide you with our products and services you request. On occasion we may contact you for purposes of research, surveys and other such matters. To provide you with better service we may share your information with our sister companies and also outside, selected third parties who perform work for us as suppliers, agents, service providers and information gatherers.

Who speaks for the Saskatchewan oilpatch? We got an interesting call on June 11 from one Scott Donald, who works out of Winnipeg for Calgary-based Envision Group. His outfit offers leadership training, and has done such work in North Dakota’s oilpatch via the North Dakota Petroleum Council (NDPC). He was looking for the overarching group in Saskatchewan, and found none. Thus, he asked for our help. The answer took over 20 minutes. But put simply, there is none. Oh, there are various groups and associations that represent this sector and that area, but nothing, really, for the province. Here’s the list we gave him: For oil producers, there’s the Canadian Association of Petroleum Producers (CAPP). It represents the largest oil producers in Canada, but a criticism we’ve often heard is that it seems to not care so much about Saskatchewan. This, despite its current president and CEO being a former Saskatchewan Energy and Resources minister. The next is EPAC, the Exploration and Producers Association of Canada. Formerly the Small Explorers and Producers Association of Canada (SEPAC), it is a similar Albertacentric focus group. What does exist, solely in Saskatchewan, and as something of a reaction to the previous two groups, is the rather informal organization known as SHOP, Saskatchewan Headquartered Oil Producers. These are small junior companies, and Pipeline News regularly interacts with almost all the CEOs involved in it. They are down-home to the core, with real issues. This paper has been pursuing some of them of late, including competitiveness and rural municipalities permit nonsense. If any group would be close to what Donald was looking for, this might be it, but they are too small, and not formal enough, to fit the bill. On the drilling and service rig side, there’s the Canadian Association of Oilwell Drilling Contractors (CAODC), which, again, we often hear is Alberta- and large company-centric. The Petroleum Services Association of Canada (PSAC) represents many of the service companies in the oilpatch. They used to hold a breakfast at the Saskatchewan Oil and Gas Show in Weyburn, but this year were a no show. That was likely a large misstep on their part, as we don’t see them on the ground here in prairie chicken land that much otherwise. The big-inch transmission pipelines are represented by the Canadian Energy Pipeline Association (CEPA). We’ve had very few dealings with them over the years. There are other organizations for seismic survey, engineers, and what not, but we hear next to nothing from them. Most of these industry associations fall under the umbrella of what used to be known as Enform, and what is now Energy Safety Canada (ESC). It’s the overarching group for all those associations, and they often hold highly informative sessions throughout Saskatchewan. Maybe his leadership

training could find a home there? ESC, however, is specifically not a lobby group. Thus, it’s not really able to represent the oilpatch as a whole. Then there are three regional colleges that offer a lot of informational sessions – Southeast College in Weyburn and Estevan, Great Plains College in Swift Current, and Lakeland College in Lloydminster. But these could never be considered a provincial group in the sense he was asking. Several communities have their own local groups, but these are primarily for social aspects. They include the Estevan Oilfield Technical Society, Weyburn Oilfield Technical Society, and the Lloydminster Oilfield Technical Society. The Society of Petroleum Engineers (SPE) Lloydminster chapter has also provided a tremendous resource to that community in lunch and learn sessions over the years. If any groups have the broadest reach across the industry, it would be the three oil show boards. That would include the Lloydminster Heavy Oil Show, Saskatchewan Oil and Gas Show (Weyburn Oil Show Board) and the much-smaller Redvers Oil Showcase. These groups, with their respective biennial events, probably have the broadest cross-section of representation across the oilpatch. They might be the closest starting point for a provincial group. But that’s really not their mission, and they all work independently of each other. However, their boards would likely be the first people to recruit if one wanted to set up a provincial group. They have ties to everyone. Finally, in the last half year or so, a number of ragtag protest organizations, fed up with the federal government’s energy policies, have emerged across the province. Some are more organized, like Canada Action. But most of the big companies, and organizations, aren’t willing to be seen as part of these protests. So who, really, speaks for the entire oilpatch in Saskatchewan? Who represents everyone from the guys turning wrenches in oilfield maintenance all the way up to oil producer CEOs? And, perhaps more pertinently, who has a Saskatchewan focus, and a Saskatchewan perspective? In other words, a group to speak for the Saskatchewan oilpatch, that is not based in Calgary? Right now, the answer is no one. Perhaps it is something to consider. The government of Alberta is putting together a war room to fight back, in realtime, against the slings and arrows and outright lies and misconceptions being levelled at our industry. Here, we have no true champion, besides our provincial government. One could say that the Jason Kenney government in Alberta is taking up that mantle, itself, in setting up this war room. Any organization speaking for the industry should be of the industry, not of government. Does Saskatchewan need an overarching oil industry group? Who is the voice of our industry? Who speaks for you?


Better start feeding those unicorns beans. We’re going to need their farts to power Saskatchewan The federal government is leaving Saskatchewan with nowhere to turn when it comes to baseload power generation. First coal, now natural gas, are on the outs, just as we are turning to natural gas as the solution to coal. A little over a decade ago, I moved to coal town, Saskatchewan, also known as Estevan. The future was bright, not only due to Bakken oil boom which was underway, and $100+ oil, but the fact the federal government had recently announced a $240 million contribution to the carbon capture and storage project at Boundary Dam. That project was meant to make “clean coal” acceptable in a world where carbon dioxide emissions were the devil. It would cut the emissions of the associated generating unit up to 90 per cent, give or take, depending on how high they turn it up. Then we saw regulations saying that any current coal-fired coal generating unit in the country, upon turning 50 years old, needed to be either retired or replaced with a carbon capture system that reduced its emissions to that (or below)

a combined cycle natural gas-fired power plant. (Remember this point, it’s key, going forward). Unfortunately, no other coal-fired power generator in Canada, including SaskPower, decided to implement carbon capture and storage on any other unit in the country, despite the fact that, now, five years later, they’ve pretty much figured out the bugs of carbon capture. The current thinking is they can build the next one for 67 per cent less, per tonne, compared to Boundary Dam Unit 3, if implemented at Shand Power Station. Boundary Dam Units 4 and 5 will be shut down, despite this. The federal Conservative government brought in the 50-year rule. The federal Liberal government brought in new regulations saying all conventional coal-fired power generation (without carbon capture and storage), must shut down by 2030 (remember that date, too.) So we, here in Saskatchewan, and in Alberta, must do something in a big way to replace our reliance on coal for baseload power, and get it done in


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what is now 10.5 years. To this end, SaskPower’s president and CEO Mike Marsh has been talking about how the economics of natural gas, whose prices have been extremely low during the intervening decade. It makes it really hard to go forward with new coal investment when natural gas is so price competitive. Indeed, in recent years, there are times in various places on the continent where gas is, for brief times, actually negatively priced. As in, the producer had to pay someone to take it. That’s beyond free. A little under a decade ago, Northland Power built a $700 million combined cycle natural gas plant at North Battleford that generates 260 megawatts for SaskPower. The Crown corporation will soon be in the process of firing up operation its 350 megawatt Chinook Power Station at Swift Current, costing for $680 million. These plants went up incredibly quick and easy,




By Brian Zinchuk

compared to almost any other alternative source of baseload power, be it coal, hydro or nuclear. It’s easy to see why the announced Moose Jaw plant is next on the horizon. I would expect the future could see a plant just outside, Regina, and another in northeast Saskatchewan, too. As long as you are close to a pipeline and a bit of water, they’re easy-peasy, and with about half the emissions from coal. But what is happening now? The federal Liberal government is implementing regulations, initially gazetted Dec. 12, 2018, that says new natural gas-fired combined cycle plants that fire up after 2021 will be subject to the carbon tax after 2030. Wait, what? Wasn’t combined cycle natural gas supposed to be the better alternative to coal? And let’s be real here: the 2021 date might as well be now. It takes several years to design and build a plant. If a plant has not already

scratched dirt before today, there’s no way in hell it will be ready before a 2021 deadline. That effectively means that all combined cycle natural gas plants, going forward, are subject to the carbon tax. The ever-increasing carbon tax. Or, as Premier Scott Moe likes to quote his SaskPower Minister Dustin Duncan, “A Justin Trudeau, Ralph Goodale, Liberal Party of Canada, job-killing, soul-sucking, unconstitutional, supported by the Saskatchewan NDP carbon tax!” Saskatchewan has precious little left in the ability to build new, major hydro plants. To make hydro power, you need either a.) elevation, b.) lots of water, c.) all the above. Saskatchewan has d.) none of the above. If we decided, today, to build a large scale, two-unit nuclear power plant at 1,000 megawatts each, there is no way on earth they would be complete and generating by 2030. It would be easier to hook up to Marvin the Martian’s flying saucer’s Il-

ludium Q-36 explosive space modulator than get a nuke plant up in that time. And even then, would any of these projects, either nuclear power or space modulators, be able to get through a Bill C-69 impact assessment before my 12 year old son is a senior citizen? So what, pray tell, are we supposed to use for baseload power generation in Saskatchewan after 2030? Is this the federal government’s way of forcing us to buy large scale hydro power from Manitoba? If so, will that part of, oh, I don’t know, a national energy corridor? What alternative will we have? Better herd up your unicorns and start feeding them navy beans, because the only way we’re going to be able to power this province without incurring mammoth carbon taxation will be with unicorn farts, by the gigawatt. Brian Zinchuk is editor of Pipeline News. He can be reached at brian.zinchuk@



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McKay says Oilman of the Year honour is really a company award for Steel Reef By Brian Zinchuk Weyburn – When Steel Reef Infrastructure Corp. founder and executive chairman Lane McKay took to the podium to accept the honour of Oilman of the Year on June 5 in Weyburn, he wanted to make something quite clear. “This is a company award,” he said. Indeed, he said it several times. He wanted to point out the relationships, saying, “What I really cherish is the friendships.” He started by introducing Steelreef ’s two key shareholders, Rob Duguid of Regina-based PFM

Capital, and Greg Smith, of Toronto-based Instar AGF. Directors Steve Magus and Jamie McVicar were there, but Jonathan Stone and Robert Lehodey couldn’t make it. McKay recognised their two special advisors, Dean Potter (who was inducted into the Hall of Fame that night, and Oilman of the Year in 1991), and Neil Roszell, who was the Oilman of the Year at the last oil show. “Those special advisors give us the technical capabilities to have confidence in these long term investments in Saskatchewan.”

Their recent foray into North Dakota had two other advisors, Ryan Kopseng and Clark Crawford, who came up from Bismarck. “My two partners are here who helped start the company. We took two years to write the business plan. They would come over and we would write the business plan after work,” McKay said. They were Scott Southward, president and CEO, and Austin Voss, vice president and COO. “This award’s for you, you just don’t get to take it home,” he said to Southward and Voss. McKay pointed out

that he’s the old guy, and their average age is around 28-30. “We have a very vibrant team, very bright, and all up to speed about what’s going on in the industry,” he said, indicating a number were at the table. “The most important thing Steel Reef has is its customers. I would like to thank all our customers for allowing us the privilege of gathering and processing your associated gas and liquids. Without customers having the confidence in us to sign long-term contracts to build these facilities, we wouldn’t have a company,” McKay concluded.

Lane McKay said it was really a company award, and here are the members of the team who made it out to see him receive the honour of 2019 Oilman of the Year. From left are director Jaimie McVicar, president and CEO Scott Southward, director Rob Duguid, vice president and COO Austin Voss, executive chairman Lane McKay, director Gregory Smith. Photo by Brian Zinchuk

If natural gas is no longer as promising, coal with carbon capture and storage could be the next option ◄ Page A2 hydro power, but Duncan said this new regulation substantially damages this province’s negotiating power with our neighbour to the east. He noted that some people are concerned with the environmental damage caused by large-scale hydro. “The notion of cheap hydro

is antiquated, because it’s not cheap anymore,” he said. And then there is the question of how Manitoba would be able to supply such large quantities of power to this province, with Duncan saying we would need to upgrade our grid interconnects. Saskatchewan recently signed a deal to bring in 215 megawatts of power from

Manitoba, and have that capacity. But anything more would require hundreds of millions of dollars to upgrade the interconnects. He said he doesn’t know how much surplus power Manitoba could provide for Saskatchewan, but “We don’t have any way to get large scale hydro into the province beyond what we’re

already getting.” Manitoba’s recent “Bipole III” direct current transmission project from northern Manitoba dams to the Winnipeg area ended up costing more than twice its original estimate, according to the Winnipeg Sun. Duncan said, “The regs don’t only put pause on future natural gas, it also will

likely change the spread that currently exists between gas and CCS. Too early too say how much it tightens up, but it might be good news to CCS.” If carbon capture and storage were to be implemented, the captured carbon dioxide would most likely be sold for utilization in enhanced oil recovery,

such as what is being done in the Weyburn and Midale Units. To see the regulations yourself, go to http:// p2/2019/2019-07-10/pdf/ g2-15314.pdf and start on Page 5232 with the Greenhouse Gas Pollution Pricing Act. They run 110 pages to Page 5442.

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Steel Reef plans on spending $100 million a year on growth for the next five years By Brian Zinchuk North Portal – In recent years, Steel Reef Infrastructure Corp., a new entrant into natural gas processing in Saskatchewan, has built up a significant presence in Saskatchewan. Its founder and executive chairman, Lane McKay, was honoured with the Saskatchewan Oilman of the Year award at the Saskatchewan Oil and Gas Show on June 5. McKay, in accepting the award, stressed it was a company award. So how did Steel Reef come about, and where is it going? Pipeline News spoke to McKay at length about this on April 10. His partners, president and CEO Scott Southward and vice president and COO Austin Voss, contributed by email. The whole nature of Saskatchewan’s natural gas market has changed significantly over the last dozen years or so. As natural gas prices bottomed out, and stayed that way for over a decade, tar-

geted drilling for gas in Saskatchewan went from thousands of wells per year to effectively zero. Saskatchewan is now a net importer of gas. Additionally, regulations like Directive S-10 were driving gas conservation, and sought to crimp venting and flaring in the oil wells. Most of Saskatchewan’s gas production is now from oil production associated gas, and that’s where Steel Reef comes in. The company was launched in December 2012, after two years writing the business plan. Construction started in the spring on 2014 on the first phase of the North Portal plant. Early 2013 they raised just over $65 million of equity, principally sponsored by PFM Capital of Regina. Rob Duguid, CEO of PFM, is a board member and major investor. Following a smaller equity issue, Instar/AGF, a major Canadian Infrastructure fund, lead by Greg Smith, made

a major investment in the company. Steel Reef ’s start in Saskatchewan was near North Portal, where they built a new sour gas plant. It went into operation in early 2015, with a second phase completed in late 2015. A new plant was also built at Alameda that was completed in 2016. The next year Steel Reef bought ATCO’s share of the Kisbey gas plant and bought out TransGas’s share a few years later. They also picked up the Nottingham gas plant from NAL in 2016. In 2018, the venerable Steelman gas plant as well as the Glen Ewen gas plant, which were acquired from Plains Midstream. In the meantime, Steel Reef built an oil pipeline and terminal in the Viking play, from Plato to Kerrobert. By 2018 they bought the Coleville gas plant and gathering system from TransGas. The company has a half share in a “clean products terminal” for oil and NGL storage with pipeline gathering and truck-

ing loading/offloading access at Gordondale, Alta., and an oil battery at Kaybob built in 2014. In 2019 Steel Reef bought the Lignite, North Dakota, gas plant and gathering system. The year before, they built a short three-kilometre pipeline from North Dakota to Saskatchewan at North Portal. This was a significant feat as they were able to secure a Presidential Permit to do so, something the Keystone XL pipeline struggled with for the better part of a decade. “In November of 2018, we constructed and commissioned an international natural gas line between North Dakota and Saskatchewan, tying it into the North Portal plant. That was really cool,” McKay said. “We hired the best law firm in Washington to help us navigate the complicated process. In the eyes of the U.S. government, this was a three-kilometre pipeline. They were excited to approve that, because it was a small scale project. “Do you own the right of way? Yes. Do you have anyone complaining? No. Have you held your

Derek Fichter stands before the Steel Reef Alameda gas plant. Photo by Brian Zinchuk community events? Yes. isn’t approved unless there Has anyone complained? is a gas capture plan in What does the Canadian place, first. So expanding government think? into North Dakota is key “It was check check, on the agenda. More on check, check, approved! that later. And the Trump adminisDoing it the hard way tration was very positive, A discussion about ‘We just approved an in- the refinery that never was ternational line!’” McKay at Stoughton led McKay recalled. to say, “Many people are It was a three-kilo- promoters, they’re not metre, ten-inch line, but builders. They don’t ever with a big web of gather- want to do it the hard ing systems and gas plants way. We don’t mind doing on each end. it the hard way. In recent years, North “We have over 600 Dakota implemented a investors. It takes a year to policy where a well licence ► Page A9


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An in-depth look into Steel Reef, who has grown substantially in associated natural gas processing ◄ Page A8 raise capital through current relationships and we are always starting new relationships. “At companies like Steel Reef, you put your nose down, you work your ass off. You have good people. You work with the government. You work with the communities. We’ve built a really beautiful system of associated gas and liquids processing for Saskatchewan. To me, that’s why you have a company. You have it to enrich all the stakeholders and employees within the business plan. That provides the platform to build the company.” Southward added, “The business plan was simple; smaller infrastructure can provide great service to customers. Associated gas capture in Saskatchewan was under-serviced, relatively small compared to the larger projects being contemplated in Alberta and gave us a chance to enter a market with a supportive regulatory regime and local stakeholders, and world class geology.” Did S-10 factor in? One might think the driving force in getting the company going was the Directive S-10 to limit venting and flaring in Saskatchewan. But that wasn’t the case. “Our business plan’s move into Saskatchewan was and is predicated on the quality of the oilfield rocks, the geology, and the quality and economic competitiveness of the reservoirs. This area was led by Dean Potter and Neil Roszell, as they know these reservoirs better then anyone. We didn’t build our company because of the new government regulations. We had no idea that was going to happen. “We had already started our company.” McKay continued, “I think that legislation led to projects getting done quicker. The projects still have to be economic projects. They have to be economic to us, the producers, to everyone. But it makes everyone more aware that we have to be good stewards of all hydrocarbons. We can’t just burn some as waste.” New federal methane regulations haven’t driven any new business to this point. “It’s a commodity business. If oil prices go up, we’ll have more natural gas. Our business is driven by the quality of

the reservoirs. These are the best rocks in Canada, you know,” McKay said. The gas they collect is highly liquids rich, he said. They get about 72 barrels of liquids per million cubic feet at North Portal, for example. Voss described their gas as “difficult to process.” He noted, “It is low pressure, liquids rich, and contains H2S. The small gas plants we build and operate in Saskatchewan are just as complex as some of the largest gas plants in Canada.” McKay said, “We make our money by charging processing fees. The producer owns the hydrocarbons, in the form of gas and liquids that come into the plant. We charge them a processing fee. And when the different products come out of the plant – the sales gas goes to TransGas, the liquids go into bullets – the oil company owns them at the end of the plant. We don’t own any product. The oil companies own it all, and we charge a fee. We’re processors.” Southward said, “The oil and gas sector is evolving in that all stakeholders are driving industry to be come more socially conscious through reducing emissions, recovery of associated gas and generally reducing its environmental footprint. The introduction of these regulations have helped Steel Reef establish our core focus and expertise around flaring reduction both in Saskatchewan and in North Dakota.” Strategy and plans Asked about their strategy going forward, McKay said, “Our strategy is to build an interconnected associated gas and liquids gathering and processing system. Call it a supersystem, in the Williston Basin, a fully interconnected system in Saskatchewan and North Dakota.” That’s why they built that international pipeline and bought Lignite, as well as opened an office in Denver. “We will build and/or acquire. We worked on buying that for four years, and we took three years to put that international line in,” McKay said. “We have an updated five-year plan. Our goal is to continue to develop the associated gas business in Saskatchewan, and to extend into the northern part of North Dakota. We’d like to invest $100 million a year

for the next five years. That’s how much money we’ve organized between our equity, our available debt, and reinvestment of cashflow,” McKay said. “On our model, it would give us on our EBITDA of about $110 million per year, with an implied value of the company of about $1.1 billion down the road. “We want to double ► Page A10

Steel Reef built The Alameda gas plant in 2016. Photo by Brian Zinchuk


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McKay sees a “supersystem” in the future for gas in Southeast Saskatchewan and North Dakota ◄ Page A9 our size over the next five years by acquiring and building smaller-sized associated gas plants and interconnecting them, and all the bells and whistles that go into the systems.” McKay added, “In some areas there may be opportunities to do rail. Other areas might see fractionation. With a big supersystem, you’ve got economies of scale, and you can start throwing in the bells and whistles. It makes it more profitable.” Steel Reef and Ceres Global Ag. recently reached a deal to ship product out of Ceres’ Northgate Terminal. The letter of intent is to form a joint venture ( JV) with

Ceres. Cere’s third quarter 2019 “management discussion and analysis” stated, “The potential JV would involve handling natural gas liquids and condensates at Northgate for movements by rail connecting Canadian and U.S. markets. The parties are currently negotiating definitive agreements. In order to capitalize on seasonal customer contracting opportunities, the corporation and Steel Reef have begun jointly marketing the anticipated service capabilities of the potential JV.” To that end, Voss said “Energy egress is an issue in Canada at multiple different scales. Everyone knows about Keystone XL or TransMountain’s hurdles,

but at a smaller scale developing and marketing egress for oil and gas is a huge challenge and an amazing opportunity. This is what the focus of the Northgate terminal is – a supportive offering of egress services for our producer clients.” “We’re in the Williston Basin, and we want to stick to associated gas,” McKay said. “We’re very focused.” North Dakota has been pressing the industry to build more gas plants. In 2018, six were built in the state. Skeptics told Steel Reef they would never be able to build an international pipeline. It was commissioned last November. Similarly, they were told they’d never be able to buy into the mar-

ket there, but this spring they bought the Lignite plant and its gathering system covering Burke County. Steel Reef has been both builders and acquirers of gas plants and infrastructure. “You have to do both,” McKay said. Steel Reef employs 110 people, up from three when they started. “We’ve grown to be a really good partner,” McKay said. “We bought that plant at Coleville from TransGas. We got these hats that said, ‘Make Coleville great again,’” he laughed. “We’ve spurred a lot of jobs, for great families. Associated natural gas is a thriving industry,” he said.

Weyburn – OSY Rentals of Major, Sask. had some news to share when they were at the Saskatchewan Oil and Gas Show. The company has substantially expanded its fleet by recently purchasing similar units off of a competitor. Brothers Dallas and

Greg Cairns reported they recently purchased 47 production packages, similar to the vapour-tight tanks they already operate, plus some extra flare stacks and flare knockout drums. The addition puts them at 117 tanks, about 150 flare knockout drums, and about

170 flare stacks. “It was huge,” Dallas said. They’re going through the acquisitions and preparing them for deployment. OSY’s existing fleet was close to full utilization. This acquisition provides them the iron which will al-

low them to expand. Asked if they got the equipment for a good price, Dallas responded, “We think so. We started a discussion with them last fall, but the way things were with the price differential, it was like, it doesn’t matter how cheap you get it, did it actu-

Alameda was the second gas plant Steel Reef built. Photo by Brian Zinchuk

OSY Rentals greatly expands its fleet

ally make sense to be spending a lot of money right now? It felt like we were going back to January 2016. So we thought we better hang tight.” “But it felt like the winter went good, so in March I reached back to them and asked if they were open to

discussions about this again, and they were.” The units were located in Alberta. “Our best spot, right now, is right down here,” Dallas said about likely locations for the additional units, referring to southeast Saskatchewan.

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Saskatchewan Oilman of the Year Lane McKay Weyburn – On June 5, Lane McKay was honoured as Saskatchewan Oilman of the Year for 2019. The ceremony took place at the Saskatchewan Oil and Gas Show. Here is his biography, as read by Minister of Environment Dustin Duncan: As the founder of Steel Reef Infrastructure Corp., Lane McKay has made a career of building companies in insurance, private equity and now associated natural gas and liquids processing in Saskatchewan. Lane was born in 1960 in Calgary. His father was once a roughneck, but in his late 30s, he became the director of the Calgary Zoo after he quit the rigs. In high school the family moved to Waterton National Park, and Lane graduated high school in Cardston, Alberta in 1978. He went to Grant McEwen College in Edmonton and earned a diploma in general insurance administration and risk management in 1985. He started working for Aoen, where he learned how to insure drilling rigs, gas plants and facilities. He was a commercial marketing broker in the oil and gas property department. Even though it was a slow time

in the oilpatch, rigs still had to be insured as they were collateral on loans. In 1990 Lane married Shannon Gellatly of Calgary. He worked with Aoen until 1990, when he went on to be cofounder of Canada Brokerlink Inc. As director and executive vice president of business development, he completed a total of 42 acquisitions in Ontario and Alberta from 1991 to 1998. This built Brokerlink into the largest independent property and casualty insurance brokerage in Canada before selling the company to Allianz Insurance in 1998. During this period he learned consolidation strategies which would be helpful down the road. Having “retired” at 38, his wife soon pushed him to go find something to do. In 1999, a new industry, private equity, was just getting going, and small private equity funds in North America were funding junior oil and gas companies. With partners in Houston and New York, he cofounded COSCO Capital Canada in 2001. With his partners, Lane built this New York-based private equity investment bank

into the leading oil and gas private equity focused investment bank in North America, before selling the company to New York brokerage firm Rodman & Renshaw in early 2007. They would originate and start up oil and gas companies, and market them to private equity funds. They only worked with private companies, at a time when the public junior market was going crazy. Some examples were McCaw Energy, Action Energy and Stratagem Energy. These firms would explore and develop a field, then sell it to an energy trust. By 2007, they had completed 42 startups in North America. They sold the company at the peak of the New York Wall Street investment bank market, selling four months before the crash. Lane remained with Redman & Renshaw on contract for another two years, commuting from Calgary to New York. He left in mid-2010 and started writing the business plan for Steel Reef. He took more than two years writing that business plan. The company was launched in November 2012.

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He brought in two good friends as key advisors, Dean Potter and Neil Roszell (Both of whom have also received the Saskatchewan Oilman of the Year award). They kept directing Lane towards Saskatchewan. Dean’s company, Elkhorn Resources, was in need of sour gas processing near Northgate, where they had done extensive work. Steel Reef ’s first gas plant, North Portal I, was in response to that need, launching the company. As with his other ventures, Lane brought on two young partners, Scott Southward and Austin Voss. Together with the backing of PFM Capital in Regina, construction was started in the spring of 2013. It was the first gas plant in the area built in ages. Steel Reef remains, to this day, PFM’s largest investment, with multiple rounds of backing. North Portal went into operation in 2015 with a second phase completed in 2015. A new plant was also built at Alameda in 2016. The next year Steel Reef bought the Kisbey gas plant from ATCO and Nottingham gas plant from NAL. In 2018, the Steelman gas

Lane McKay. Photo by Brian Zinchuk plant was acquired from Plains Midstream. In the meantime, Steel Reef built an oil pipeline and terminal in the Viking play, from Plato to Kerrobert. By 2018 they bought the Coleville gas plant and gathering system from TransGas. In 2019 Steel Reef bought the Lignite, North Dakota, gas plant and gathering system. The year before, they built a short one-kilometre pipeline from North Dakota to Saskatchewan at North Portal. This was a significant feat as they were able to secure a Presidential Permit to do so, something the Keystone XL pipeline struggled with for the better part of a decade. Lane notes that the

midstream business is like a tortoise race, and you always have to be looking ahead four or five years, as it takes a year to raise money. His job is to be strategizing three years out. Their goal is to develop the associated gas system in Saskatchewan and do similar work in North Dakota. An office was recently opened in Denver to that end. In 2017, Lane was the Saskatchewan graduating class valedictorian of the Institute of Corporate Directors. He has served on the board of the Kid’s Cancer Foundation and New Jane Institute for Oncology Research. Lane and Shannon have four children and reside in Calgary.

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Southeast Saskatchewan Legend Dean Pylypuk By Brian Zinchuk Estevan – You might think someone whose job for more than three decades has been to act as a regulator would tend to wear a tie. But when it comes to Dean Pylypuk, you’d be wrong. He’s more likely to show up at an oil show on his Harley, wearing leather. Dean Pylypuk was honoured at the Saskatchewan Oil and Gas Show on June 5 as a Southeast Saskatchewan Legend. As part of the award ceremony the Minister of Energy and Resources Bronwyn Eyre, read out the citation. Before he became the Regional Manager for Area 4 (southeast Saskatchewan) with the Ministry of Energy and Resources, Pylypuk worked his way up on the drilling rigs, working in western Canada, the Artic Islands and overseas. Dean grew up in Raymore. “My dad was a general contractor, sold and built houses, and my mom had a hairdressing shop. I was fortunate. I had two working parents, but my mom was a door away from me. Dad built the hairdressing shop in the front of our

house,” he said on May 2. Graduating in 1972, he went pipelining for Moosomin-based Shamrock Construction, doing mainline installation for the rural gasification program. Way up north “That winter drilling season, I went to the Mackenzie Delta with Regent Drilling,” he said. There he was introduced to the oilpatch. The following summer he drove lowbed truck for United Pipeline. The arctic islands were his next destination, working on a drilling rig with Gustavson Arctic Drilling on Cameron and Melville Islands for Panarctic Oils. “I drilled in the only commercial oilfield that was ever discovered there, the Bent Horn Field,” he said. “That field was discovered in 1974, and I think in 1985, they shipped their first 100,000 barrels, just to prove they could do it.” The window of opportunity, due to the ice, was only weeks long to get supplies in and oil out. There were 10 to 12 rigs working there in the high arctic,

drilling onshore and offshore. Panarctic was a consortium of oil companies and the federal government. “For a couple years, they shipped from up there, down to Quebec. They were receiving high arctic oil at a Canadian refinery but they soon found there was no profit in this, so they decided instead to take the product, a condensate, to Resolute, to use as fuel in the communities power generator.” In 1975 Pylypuk married Laura Anderson, a farm girl from the Serath district. “We started dating when we were 15. We dated for six years and we’ve been married 44 years,” he said. She was an elementary teacher until they moved overseas. Northern Ireland during The Troubles The arctic work lasted from 1975 to 1979. From there Pylypuk went to Northern Ireland as a toolpush on a big triple land rig, drilling for the British Geological Society. They weren’t drilling for oil, rather, it was a geothermal energy project. It was the deepest well in Ireland at the time.

Dean Pylypuk worked on drilling rigs in the arctic, Northern Ireland, England and Holland before settling down in Estevan, where he’s been a regulator ever since. At the Saskatchewan Oil and Gas Show on June 5, he was honoured as a Southeast Saskatchewan Legend. Photo by Brian Zinchuk “In Ireland, we were at gated the streets. Certain looked out. “I just happened Larne, about 40 miles out areas within the towns and to glance out … and there of Belfast. We were drilling cities, you were not allowed was a rifle pointed right at for subsurface geothermal to be in vehicles at night. the car. I looked across the We were expecting to en- You could still walk in those other way, and there’s his counter a hot reservoir at areas. buddy, sitting across, also 8,000 feet.” “I remember the first with his rifle pointed at our He noted they were time we were doing a crew vehicle. Two young soldiers. there when tensions due to change at 11 o’clock at Here we were, 11:30 at “The Troubles,” were very night, I had picked the crew night in a car, and they take high. “It was quite an expe- up, and, of course, I was no chances,” Pylypuk said. rience for us to leave here, learning how to drive on They got used to the and go over there. You were the wrong side of the road. military presence, but their basically going from free- The rig was not that far son’s baby stroller wouldn’t dom to military rule. When from the harbour.” be allowed into stores. they shut the streets down, They were sitting at a Searches were a regular they shut the streets down. stoplight with three other thing. “The Irish are very They barricaded and cattle- men in his vehicle when he ► Page A14


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Up north and overseas on rigs before coming home ◄ Page A13 genuine people all they wanted was what anybody else wanted, a roof over their head, some food in their belly, and enough at the end of the week to have a pint of beer at the local establishment,” he said. Similar to today, there was a big push to find alternative sources of energy. Hard rock drilling in England Cornwall, England, was the next stop about six months later. It was another geothermal project, this one for the Cameron School of Mines. He was drilling in a quarry in solid, PreCambrian granite, but they were too efficient, hitting total depth in nine months instead of the expected 16. “There’s a thermal anomaly there,” he said. “The secret was we used Russian turbodrills and mining bits,” he said. “Those Russian turbodrills we used could take up to 80,000 pounds bit weight and rotate at 40 RPM. It was proprietary technology that the Russians had at that time. What they had done was stacked the stators, doubling the stators up. “We’ve got that tech-

nology here, now.” His last overseas work was in Holland, managing a rig drilling natural gas wells for Petroland, the Dutch subsidiary of Elf Oil out of France. When his contract was up they came home to Canada in December of 1983. Pylypuk joined the Petroleum Development Branch of the then Department of Energy and Mines in June 1984, a career that allowed him to be home with his family. “I started as a petroleum and natural gas technician,” Pylypuk said. He has worked continuously as a provincial regulator out of the Estevan office and in 2004 he was appointed regional manager. Finding perspective He soon learned to put things in perspective. “When I started here, oil was $16 to $18 a barrel. I remember one time, it had gone to $15, and that was at the time when all your big multinational companies were turning people out on the streets of Calgary by the thousands. That was the Imperial Oils, the Gulfs, the Shells. And you were like, ‘’Oh this could get interesting.’’’

He remembered a producer coming in to pull a file and asked about this drop, and was told, “Dean, we might see $10 a barrel before this is over,’ and he kept looking at his file. “When it was all said and done, it was $8 a barrel, before it started to recover. I learned from that experience, things go up, they go down. Shortly thereafter we were at spring meetings in Regina and the deputy minister at that time was speaking to us at one of the seminars. The question was raised, what was the future of the industry?” The deputy minister, whose education and background was not from the oil industry, said, “Well, it’s this way: if you’re in the oil business, for every barrel of oil you sell, you eventually have to replace it. So they’ll be drilling again.” Pylypuk went on, “Now, that philosophy has always stuck with me. We’re working with diminishing returns. You have to be drilling to stay in the game, and it cycles up and down.” The job of regulator has been fundamentally the same, no matter who is in government. Pylypuk’s lengthy experience lends to


a wider perspective. While some might consider 30 rigs working in the area to be a low number now, he remembers when the same number of rigs was considered boom times. And of those thousands laid off in Calgary, he said, “A lot of those people became your next operators, your next CEOs. And a lot of them looked at southeast Saskatchewan as fertile ground.” He added, “A guy told me many, many years ago, if you want to spend money quick, go to southeast Saskatchewan. Alberta, at that time, it took six months to get a lease prepared. Here, at that time, over a morning cup of coffee, a landman could sign the farmer up, and you could have the Cats on location by midafternoon. Two days later, you would have a lease built. You could have a licence within a week, a well drilled and completed – in two weeks, and now you had cashflow.” Bakken Boom During the following 35 years Pylypuk saw oil go down to $8 a barrel and up to $147 a barrel. The spike in oil prices coincided with the Bakken boom in southeast Saskatchewan, with

a billion dollars in land sales in that region in 2008. They were extremely busy, especially as this was before the implementation of online business processes. It made for some long days. One week saw 105 drilling rigs working in Area 4, southeast Saskatchewan. “It was exciting times. They were good times,” he said. On the regulatory standpoint, Pylypuk has found Saskatchewan has become much more environmentally conscious, with a lot more oversight with respect to environmental concerns. An example would be the elimination of flare pits in 2001. One thing that has changed has been the incredible increase in drilling rig efficiency, especially with polycrystalline diamond cutter bit technology and solids control. Wells that took 14 days are now done in five. He saw this himself back when he was drilling in England, when his rig completed that 16-month drilling program in nine months. “In some ways, the drilling industry is its own worst enemy, because of the efficiencies they’ve been able to make. I see bit

technology and solids control as big improvements,” he said. Rigs also take fewer loads to move. A graduate of the University of Regina Extension Program, Pylypuk has two certificates in administration and has been a member of the Saskatchewan Applied Science Technologists and Technicians since 1987. Dean and Laura have three children, Nathan, Ira and Renee, and three grandchildren. Nathan works for the Department of Canadian Heritage, Ira works with Enbridge in Regina, and Renee with her husband Scott own Buffalo Head Environmental. “In summary, when I look back over the past 47 years, I’ve been truly fortunate. I had a tremendous run. There were ups and downs. The first 12 years were working away from home. When I moved here, I moved from a job to a career. I don’t want that to be seen as derogatory in any way. But I was able to be at home, raise a family. And they sacrificed, too, because you were still servicing an industry that works seven days a week, 24 hours a day,” he concluded.

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Campbell Oilfield Rentals explains their giant “Minion Tank” at the Saskatchewan Oil and Gas Show By Brian Zinchuk Weyburn – You absolutely couldn’t miss the giant water tank that Campbell Oilfield Rentals Ltd brought to the Saskatchewan Oil and Gas Show as it towered over the west side of the outdoor exhibits. While it wasn’t the tallest object on display, it certainly had the most bulk. It’s known as a “Minion Tank,” because it looks very much like the loveable sidekick characters in the Despicable Me and Minions movie series. Its shape is unmistakable, with the air-pressure driven bulging dome at the top. That dome is very functional, as Pipeline News found out in speaking to Campbell representatives on June 6. The Minion tank set up for the show was their middle-sized unit. The company offers 1,033 cubic metre (6,500 bbl.), 1,589 cubic metre (10,000 bbl.) and 3,200 cubic metres (20,000 bbl.) sizes, with diameters of 40, 49 and 67 feet respectively. Steve Wiseman, Minion Tank supervisor said the Minion is “vertical fluid storage, mostly being used for frac sites right now, and discovering new applications as we go. It’s kind of like a C-ring, but instead of being more horizontal, this is more verti-

cal. It’s higher. A C-ring is usually 12-feet. This one is 32-feet.” C-rings have a much larger footprint on the ground. “That’s one of the plusses of this tank, the footprint,” Wiseman said. “Typically, a 3,000 cubic metre C-ring is around 110 feet (in diameter), and our 3,000 cubic metre Minion, which is the next size up from this one, is 67 feet.” They have 25 Minion Tanks in Canada. The units are enclosed, resulting in better heat efficiencies. “A C-ring, they have to put a lid on it or a bird net over it. The liner is reusable. Positive air pressure is used to maintain the integrity and shape of the bladder, similar to how the roof on B.C. Place used to be, or how a golf dome works. Not only does it retain heat, but by being enclosed, it also reduces evaporation loss. On a windy day, a large, open C-ring can actually see whitecaps form, and splash water out of the ring. The enclosed Minion does not allow that to happen. “The way a C-ring works, they have a gooseneck that goes over the wall, and you have to have a pump outside to pull the

The crew from Campbell Oilfield Rentals posed with two premiers in front of their Minion Tank on June 5. Photo by Brian Zinchuk

fluid over the wall. Our tank, the bladder is flanged onto a manifold on the bottom. You just open the valves, and gravity gives you your water pressure, so it works on hydrostatic pressure. You’re eliminating pumps and manpower.” To empty out the bottom of the tank, the blender’s pump is used. To fill it, a speedloading system is used. It involves a manifold that trucks connect to, and has a diesel pump, which allows for quicker unloading

of trucks. While fracking it is typical to keep the water at a certain level for most of the frac. At the end, a pump-down is conducted. Campbell has been offering the Minion for three years. “This is the first one in Saskatchewan. They’ve been in B.C., Alberta and the U.S.” Campbell has a location on the northeast corner of Estevan, just outside the truck bypass. “We’re looking to move into this area, so we’ll see what interest is,”


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Wiseman said. Wiseman is based in Grande Prairie. He noted that Campbell is the Canadian sales and marketing service provider on this side of the border. Corey Verge is the operations manager for Campbell Oilfield Rentals. He noted it took four hours for them to assemble the minion on the oil show site. The assembly uses a pin-pocket system. The liner is attached to the main headboard, and it drops down. It’s always connected at the top. “It

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Southeast Saskatchewan Oilman of the Year Dennis Day Weyburn – Dennis Day was honoured on June 5 as Southeast Saskatchewan Oilman of the Year, an honour his, Tony Day, father received in 1999. Here is Dennis’ citation, as read out by Ministry of Environment Dustin Duncan. For greater depth, Pipeline News did a significant feature on Fast Trucking’s 60th anniversary, which can be found at pipeline-news/docs/pipeline_20170906 starting on Page A14. Dennis Day was born and raised in Carnduff, Saskatchewan to Tony and Vi Day. Along with siblings, Linda, Teresa and Larry, Dennis was raised in a trailer that was kept at his uncle’s farmyard or at the rig. They eventually moved onto the land that is now the Fast Trucking Service yard. Dennis gained experience in the oil industry working for his dad at Fast Trucking. At a young age he started riding with his dad hauling water and moving rigs, sleeping on the seat of the truck – graduating to the floor when he grew too tall to fit on the seat. He started working in

the shop at a very young age changing tire after tire. At 14 he started swamping, at 16 he started driving trucks on rig moves, and in his early 20’s he started truck pushing. Although he did not attend university, Dennis believes he earned a PhD in oilfield business from men like Rick Hayward, Lynn Stevens and his father. Dennis is now president of Fast Trucking Service and runs it alongside his brother Larry. Dennis’ boys Harly and Nathan have been learning the business to one day take over. Fast Trucking Service Ltd. was established in 1957. Starting with only a winch truck and a water truck, Fast Trucking has grown into one of the largest family owned rig moving companies in western Canada. If you drilled an oil well in the area from 1983 to present there is a high probability Fast moved the rig. Fast Trucking was just the beginning for the Day family. The Day family founded Day Construction in 1979, General Well Servicing in 1996 and purchased Sam’s

Trucking in 2005. Dennis started Competition Environmental in 1997 and Runcible Oil in 2001. Along with his family, Dennis acquired Fontana’s Trucking in 2006, Forsyth Hauling in 2010 and Jet Trucking in 2013. With a few key partners, Dennis is a major shareholder in VP energy and Morris Fracturing. Dennis notes that none of these companies would be successful without strong leadership from management and hard work of close to 300 employees. In 1986 Tony, Dennis and Larry started their own oil company, TDL Petroleum. They drilled their very first oil well south of Carnduff, along with several other wells over the years. Apart from being a major player in the south east Saskatchewan and south west Manitoba oilfield industry, he owns the apartment complex in Carnduff, and oversees the operation of Day family farm which now farms over 6,000 acres and 200 head of cattle. When Dennis isn’t running with work he likes to spend time with

From left, Minister of Environment Dustin Duncan, 2019 Southeast Saskatchewan Oilman of the Year Dennis Day, outgoing oil show chair Del Mondor and incoming chair Dan Cugnet. Photo by Brian Zinchuk his kids Emily, Harly, Nathan, Julia, and his grandkids Nevaeh, Rilee, Haizley and Hugh. He enjoys travelling and has been to over 50 countries. Dennis loves going to auction sales; he is a huge supporter of the Ritchie Bros auctions. When he was young family vacations were road trips to Edmonton for a sale. His father taught him from a young age two things


about auctions; what’s one more bid? And you are only one bid higher than the next guy. Dennis and his family are strong supporters of Carnduff and surrounding communities, donating both time and money to many organizations and foundations. Dennis attributes his success in business to learning from his parents, that you work hard and

surround yourself with hard working people. Even with all the companies he owns it isn’t uncommon to see him out helping move rigs. Persistency, taking care of your customers and a good attitude are things he believes make you successful. Call and ask Dennis “How’s it going?” “Couldn’t be any better!” will be his response every time.


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Oilman of the Year in 1991, now Dean Potter is a member of the Oil Patch Hall of Fame Weyburn – Dean Potter has had a big impact on the southeast Saskatchewan oilpatch. That is being recognized with his induction to the Saskatchewan Oil Patch Hall of Fame on June 5 at the Saskatchewan Oil and Gas Show in Weyburn. This is the citation, as read by Minister of Energy and Resources Bronwyn Eyre: Dean Potter is a petroleum geologist with over 39 years of experience in exploration and development of oil and gas reserves in western Canada, U.S. Rockies basins and the Middle East. Dean grew up on a farm just outside Regina, and he still owns that farm today. He graduated from the University of Regina in 1976 with a bachelors degree in geology. In 1980, he completed his masters degree in geology on base metal deposits at the same university. He married Judith Casson, initially from the United Kingdom, in 1979. She is also a geologist. From 1980 to 1985

he worked in district geologist positions with SaskOil. This included work in Saskatchewan, Manitoba, and Alberta. With SaskOil he was responsible for mapping and generation of viable exploration prospects in a wide variety of stratigraphic horizons under the supervision of experienced geologists and geophysicists. From there in 1985, he moved to PreCambrian Shield Resources Ltd, which became Mark Resources Inc. He spent seven years there, mapping and generating exploration prospects in Saskatchewan and Alberta. In 1991, Dean was honoured as the Saskatchewan Oilman of the Year for the discovery of the Minton pool in Saskatchewan. While at Mark Resources he had the opportunity to explore the U.S. side of the Williston Basin. At Upton Resources from 1992 to 1998, Dean was initially vice president of exploration and then senior vice

Three men were inducted into the Saskatchewan Oil Patch Hall of Fame on June 5. The are, seated in the front row, from left, Ray Frehlick, Dean Potter and Eldon McIntyre. Behind them, from left, is Alberta Premier Jason Kenney, Saskatchewan Premier Scott Moe, Energy and Resources Minister Bronwyn Eyre and oil show chair Del Mondor. Watch for stories on Frehlick and McIntyre in next month’s Pipeline News. Photo by Brian Zinchuk president. He directed the growth of Upton Resources from 850 barrels daily production in 1992 to over 5,000 barrels of daily production in 1997. Growth was accomplished through company-generated exploration

and development drilling projects in Saskatchewan and North Dakota. For the next seven years, Dean established his own geological consulting company, Sito Geoconsulting Ltd. He focused on both sides of

the border in the Williston Basin, and other U.S. Rocky Mountain basin plays. He also worked in Alberta and B.C., and consulted on projects in Dubai for four years while working from Canada. In 1999, Dean also

founded DPX Inc. It continues to this day as a private royalty company that remains active today in petroleum exploration and development. Starting in 2005, Dean founded and led ► Page A19



Fast Trucking Service Ltd. has been servicing the oil and gas sector for more than 60 years.

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Mark, Upton, Medora, Elkhorn, Burgess Creek... ◄ Page A18 two successful private exploration and development companies, Medora Resources Inc. and Elkhorn Resources Inc. Medora was a southeast Saskatchewan exploration and production company with a wide focus, from Goodwater, Saskatchewan to Sinclair, Manitoba. This included Crystal Hill,

Weyburn, Kisbey (Star Valley) and Fairlight. Medora built up 1,600 barrels per day equivalent of production. The company was sold in 2009 to Glamis, which became Legacy Oil + Gas Inc. Elkhorn Resources fired up in 2009 and sold in April 2014 to Vermillion Energy Inc. at the peak of the market.

Focused on the Northgate area of southeast Saskatchewan, Elkhorn had grown to more than 4,000 barrels of oil equivalent per day by the time it was sold. Today, Dean is executive chairman of Burgess Creek Exploration Inc. and maintains an active role in the geological development of drilling opportunities. He acted as technical advi-

sor to CAMCOR Partners Inc. and is currently working technical advisor to Steel Reef Infrastructure Corp. Dean is a member of the Association of Professional Engineers and Geoscientists of Alberta, Association of Professional Engineers and Geoscientists of Saskatchewan and American Association of

Petroleum Geologists. Over a 30-plus year career, Dean has published numerous technical papers, most notably on topics relevant to the Williston Basin in Canada and the U.S. He intends to write several more papers for future generations of geologists working in the Williston Basin. He enjoys his summers at the lake in B.C., upland

game bird hunting in the fall, and winters in the Arizona sun. As passionate as he is for Williston Basin geology, he also has a passion for collection and restoration of vintage Fords. Dean and Judith have three children, a daughter who is a pediatrician, a son who is a petroleum engineer and another son who is a petroleum geologist.

Magnum Cementing launches Magnum Infrastructure Weyburn – Magnum Cementing Services is known for its wellbore cementing, but the company is now parlaying its expertise into the use of cement to stabilize large areas of the surface. The company, which has a location at Bienfait, servicing southeast Saskatchewan, was showing off their new business line, Magnum Infrastructure. In Saskatchewan, they also have offices in Kindersley and Shaunavon. David Kennedy, business development manager, spoke to Pipeline News on June 6 at the Saskatchewan Oil and Gas Show. “It’s new to this area, and it’s new to areas in Alberta, but it’s been going on in the east and down south for over 20 years. We introduced it here because we thought it would be a compliment to our business, because we’re doing a lot of drilling pads and commercial yards. “Basically, we bring

equipment in to grade the site, then we have a tilling machine that blends up the in-situ soil, cement, and water. There’s a precise blend of cement designed for every client’s soil conditions. We till it in 12 inches deep, pack, and grade, finishing with a smooth drum packer,” Kennedy explained. “We’ve done feedlots, laneways, roads, pits, but a lot of the interest is in large drilling pads. There’s a substantial cost and environmental impact with rig and swamp matting, renting that matting and cleaning that matting.” “There’s a good lifespan on it, but the good thing is when you’re done with the pad and want to put it back into natural state, we can come back and grind it and put it back to the original soil pH levels,” he said. The tilling machine has a large drum studded with many teeth. “It’s basically cement mixed into the existing

soil. It’s impervious to water. That’s what the grading process is all about, so water runs off it. It is flexible and works well with freeze/thaw cycles,” he said. “Depending on traffic loads longevity has proven to last 15 to 20 years or more. If troubled areas arise and somehow have been damaged we are able to come back and fix specific areas.” Stabilization can be reclaimed or undone if needed. “You can seed with natural grasses, or flowers, or whatever you want to do with it. We bring the pH levels back to the original levels.” Kennedy said, “We’ve been getting a lot of interest, people looking at Magnum Infrastructure, the equipment, and curious about the process, because they’ve never seen it before.” So far Magnum has done some commercial yards in Saskatchewan but are looking to expand to

roads and drilling pads in the province. He held up a sample, noting you can put chipseal, gravel, pavement over it, and it will not penetrate it. “We can deal with muskeg and challenging types of soil. We retrieve samples and send it to our in-house lab. It’s all tested for compressive strength, so that when we arrive on site we have the exact blend that is ideal for that client.” “It compliments the business that we do. We see a lot of new areas where all they do is strip off the soil, and you’re expected to drive into that area, spring, summer, fall, and winter. This process provides the foundation performance that eliminates potential hazards of damaging equipment and getting stuck in the mud.” Batteries and new drill sites, pipe yards and truck lots are some possible examples of applications, he noted.

David Kenney holds up a sample of soil that has been stabilized with their special cementing process. Photo by Brian Zinchuk

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Trojan Safety displays mobile air quality monitoring system Weyburn – Zach Eastman, air quality specialist with Trojan Safety, had a different sort of rig at the oil show compared to what you would normally expect from a safety company. Instead of a mobile treatment centre, he had a van packed full of sensors and computers. “This is our mobile, downwind air quality monitoring unit,” Eastman said. “It’s outfitted with a suite of different gas monitoring sensors to ensure compliance with ambient air quality guidelines, as well as public health and safety and occupational health and safety. “Typically the unit is used by a client or by us to maintain a downwind direction from a facility, in a normal flaring conditions,

or maybe emergency response, to ensure the emissions are safe for people in the public and the general area. The gasses include H2S, SO2, total reduced sulphurs and total hydrocarbons. During certain jobs, they will swap out for NOX. It’s similar to the airpointer systems used by airshed authorities to monitor gases, but this is mobile, and those are not. The van is always parked so that the inlet, at the front of the van, is upwind and the van’s exhaust is downwind, so it doesn’t cross contaminate its sampling. “This van is fitted with a lithium-ion battery bank to supply up to 24-hours of power, so we can shut the unit off anytime, and there’s enough

power to run it 24 hours, on its own,” Eastman said. It charges from the engine. The unit is manned in 12-hour shifts, moving whenever the wind direction changes to be downwind. They’ll park on road approaches or lease roads, typically. This unit is a few years old, built in 2017. Trojan has a fleet of three. They’ve seen usage in Saskatchewan around Lloydminster. “Who knows? Maybe in the future, we’ll be down in Weyburn. We would love the opportunity to work down here,” he said. “We’ve had some interest, for sure. We’ve had some local public interest, as well as some clients. Hopefully that will turn into some phone calls and

By Brian Zinchuk Regina – No longer premier, Brad Wall is now freer to speak his mind on controversial issues. And to that end, he was engaged by Dan MacLean, president and CEO of the Petro-

leum Technology Research Centre, in a conversational format on stage at the Williston Basin Petroleum Conference on May 28. Among the areas tackled were the Saskatchewan advantage, pipelines, mis-

information and protests. Regarding the “Saskatchewan advantage,” Wall said the province basically starting using a marketing term Alberta used to use. To back that up, early in his term the ministry of

Zach Eastman showed off the innards of Trojan Safety’s downwind air quality monitoring unit during the Saskatchewan Oil and Gas Show on June 6. Photo by Brian Zinchuk some actual work down here.” He said the oil show went well for them, and a lot of connections were

made. A group of schoolchildren were interested, he noted, as well as a few clients. If there’s enough work

locally, he said they would locate one in southeast Saskatchewan. Right now, they need a day’s notice to mobilize.

Energy and Resources addressed the time to permit wells. “Taxes are always going to be important,” he said, and credited the previous NDP government for its work on royalties. Recently there have been changes on waterflooding. “There’s a wide spectrum that goes to this question of how do you create the environment that’s attractive to folks that want to make major investments.” Having a government that wants to hear from industry, on advantages and disadvantages, is also important. “I would encourage the industry that is here, whether individual companies or associations,

take full advantage of that fact, of the fact that, in Saskatchewan, you have a government that unequivocally supports the oil and gas industry, that understands its contribution to this province, to this dominion of Canada. One that wants to do better, if it can, to make it easier to do investments,” Wall said. Wall said that Jason Kenney’s election as premier of Alberta was partially on a platform of improving that province’s competitiveness. Saskatchewan will want to make sure there’s as level a playing field as possible, he noted. MacLean asked about important technologies

going forward, which Wall used as a chance to talk about pipelines. “We need to be much more vigilant and much more diligent about seeking support, building support for the industry. That’s upstream and downstream. “There’s two areas that lend themselves to building support. One is pipelines,” he said. In Calgary, there’s globally leading research on pipeline monitoring to ensure integrity, he noted. Referring to the Husky North Saskatchewan River spill, he said if those technologies had been implemented here, “The spill would have ► Page A21

We probably need to keep doing that, Brad Wall says regarding protests in the oilpatch

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Minister of Environment Dustin Duncan, left, and oil show chair Del Mondor, right, presented Lane McKay, centre, with the statue for 2019 Oilman of the Year.





Federal Liberals don’t like oil and gas, but bought a pipeline nonetheless ◄ Page A20 been much, much smaller, if not completely mitigated. There would have been at least a chance that would happen.” His second point was carbon mitigation technology, which is a broad area. On misinformation and disinformation, Wall said, “In both cases, we have to be very diligent about correcting the record, and making sure our story is told, not just to ourselves, but to other Canadians in other parts of the country. “In the case of disinformation, a much more willful and purposeful thing, we need to hold those purveyors of disinformation to account. So correct the record, and point out, perhaps, where there might be accountability deficiencies in the source of the information.” He referred to the work of Vivian Krause in unveiling the financial backing a lot of those sources, and that Alberta Premier Jason Kenney campaigned on holding those people to account. “Canadians across the

country, whether they like the oil and gas industry or not, are not particularly patient with the thought that American foundations, supported by U.S. billionaires, are trying to influence, or as they say in their mission statements, to landlock Canadian oil. “I think someone in Toronto is as frustrated as someone in Swift Current.” It’s important to clear the record on conventional and social media, he noted. Wall said positive engagement with First Nations is also important. The Indigenous Resource Council, made up of about 133 First Nations, supports direct involvement in the energy sector, he pointed out. “There’s an opportunity for us to have a very strong ally there,” he said. He feels it is very important First Nations be involved when the Trans Mountain pipeline is eventually privatized, but it has be “on commercial terms.” Wall fielded a question from Pipeline News regarding protests supporting the energy sector. “We probably

we need to keep doing that. I think it shocked a lot of our fellow Canadians to see the trucks on the highways, and the convoys. It puts a face to the industry that isn’t behind a big sheet of glass in some office tower in Calgary. It’s Canadian families who, in many cases are out of work or worried about losing their job if things don’t change. “So we need to be mindful, from the 50,000 foot level on environmental issues and Aboriginal engagement, but we need to be focused on letting the rest of the country know about really what this industry is, and who is represented by this industry. The families that depend on it, and why Canada should be proud of the resource in the first place. We are global leaders. We are responsible developers of the sector. “I think we have reason for hope. Why else would a government that really doesn’t like pipelines and the oil and gas business – I don’t think the federal government does, by the way – they bought a pipeline. They were prepared to go full Venezue-

Brad Wall, left, spoke with Dan MacLean at the Williston Basin Petroleum Conference. Photo by Brian Zinchuk la and nationalize a pipeline, a government for whom I think the industry’s been antithetical,” he said. Wall thinks it is the current Liberal government which has a problem with this sector. “The Chretien government had excellent energy policies. The Martin government supported energy development. They had a serious approach to

Small nuclear reactors? SaskPower CEO provides some direction By Brian Zinchuk Regina – On the last day of the spring legislative session, Premier Scott Moe brought up the ideal of small modular nuclear reactors (SMRs) as a possible electrical power generation source for the province. On May 28, Pipeline News asked SaskPower president and CEO Mike Marsh about this after his presentation to the Williston Basin Petroleum Conference in Regina. “On that particular issue, we are in a group with other utilities across Canada, looking at small modular technology. “It’s certainly something we’re keenly interested in. It’s not part of our supply plan, today, but as this technology develops we see it as a very real potential in the years around 2030 and beyond 2030,” Marsh said. The module size will depend on the manufacture and technology chosen. “It could be anywhere from 40, 50 to 100 megawatt modules that could be put together to make a unit of generation that could be up to 1,000 or 1,200 megawatts,” he said. The United States Navy has been using small nuclear reactors in their

submarines and aircraft carriers since the 1950s and 1960s. Asked if this is where the technology is coming from, Marsh said, “Depending on the size, you could make them small enough to fit on a flatbed trailer truck, I’ve been told. I haven’t seen any of those designs myself, yet. “It’s really early days for this. It’s work that we will continue to do Ontario Power Generation, Bruce Power and New Brunswick Power on, and NRCan, because we’re on

the SMR roadmap task group. We’ve been working with that task group

for a number of years. “Until it becomes a ► Page A23

trade, a serious approach to transportation infrastructure projects and tax policies,” he said. “I advise a firm that had been on that pipeline project since Day 1. Up until that last ruling that shut the project down again, we

were 23-0. Never lost a decision. Not an injunction, not a challenge. So I asked my colleagues down at the firm, is the federal government serious about the pipeline now? That’s the client now. And the answer is always, consistently, yes,” Wall said.

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Energy projects have become a battle of the Hatfields and the McCoys, says former Manitoba premier EFFICIENCY, RENEWABLES, NATURAL GAS AND ENERGY INDEPENDENCE

By Brian Zinchuk Regina – Gary Doer was premier of Manitoba from 1999 to 2009, and then Canada’s ambassador to the United States from 2009 to 2016. It was a time punctuated by Canada’s urging the United Stated government to approve the Keystone XL pipeline. Instead, the Obama administration denied the Presidential Permit, only to have President Donald Trump later approve it in early 2017. As Canada’s front man on the file, he had an interesting perspective. Doer talked about that and other key issues in the relationship between Canada and the United States while speaking at the Williston Basin Petroleum Conference in Regina on May 29. In 2009, he took part in discussions to create a western energy corridor for the western provinces and states, something Dan MacLean said was perhaps ahead of his time. MacLean and Doer go back a ways, as MacLean was the president and CEO of Tundra Oil and Gas, Manitoba’s larges oil producer, while he was premier. “I was very privileged to represent Canada in Washington,” Doer said. He found it very rewarding because he found a lot of friends and partners working in Washington. “We had great relationships between the premiers

and governors,” he said. One of those governors, Rick Perry, is now Secretary of Energy, and that Perry supported the Keystone XL pipeline. To that end he said, “Today’s governor is tomorrow’s cabinet secretary, and could be tomorrow’s president. So the relationships you build up are very very valuable,” he said. He explained that the Canadian military’s close collaboration with the U.S.’s military in Afghanistan made it easier to deal with Americans. “That is why it was very awkward for us, to say the least, when the tariffs were introduced in the United States on aluminum and steel, because Canada, under the section of law in the United States, was proclaimed a security risk to the United States. So we are delighted, I say to our American friends, that those tariffs have been lifted. We have been together, through World War I, World War II, the Korean War, in Afghanistan, with ISIS, in Syrian and outside of Syria. We have worked together all over the world,” Doer said. “Energy projects in both our countries, regrettably have become a battle of the Hatfields and the McCoys,” Doer said. “I felt that in Manitoba, as premier. I felt that working on an energy corridor. My co-chair on that, by the way, was the

Terminator, the governor of California. He was the cochair of that group.” He spoke of improving the predictability, accessibility and affordability of energy. “And that’s why I believe we have to have a plan, in North America, to have energy independence from the Middle East, in our continent, in our neighbourhood, as part of an overall action plan on energy, so we can get away from a debate on one hand or the other hand that does not serve the public interest on affordability, predictability, and cleaner air and water,” Doer said. “I believe everywhere I went in the United States there was strong support for this. It had to have four elements,” he said. “One, of course, is energy efficiency. It’s the number one way of keeping energy affordable, using innovation to have efficiencies, and work together across our two borders, if not three borders.” Tailpipe emissions is one example he said. Another is air conditioners made to different standards in different countries. “What we tried to do was align them, so we can maintain that supply chain and innovate on energy efficiency across our countries. I believe energy efficiency is good for the environment, good for consumers, good for energy producers and good for all of us.”

“Number two is energy renewables,” he said. Doer noted how it had been difficult to get a transmission line approved from northern Manitoba to Minnesota. The hangup was in Canada. He noted how he once caught flak for saying, “There was one lawyer per megawatt to get any transmission line approved.” “We need to get energy renewables to market.” He noted it took five years to get approval for transmission lines from one state to another. “You can’t have renewables if you don’t have transmission lines to carry it,” he said. His third point was on natural gas. He said the question of selling electricity on the open market instead of fixed prices came up. He was told, as premier at the time, that it was a good idea to go for the open market, because the United States only had a 10 year supply of natural gas left. “Little did I know, that about five years later, there was a 100-year supply, and today, it’s 300 years, at least, supply of gas in the United States.” He said that natural gas is useful for reducing emissions. Ten years ago, liquified natural gas plants were all facing inward to North America, and now they are facing outward in terms of export instead of import. “It goes to show you how fast things go, in terms of innovations.”

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Finally, he believes Canadians, Mexicans and Americans want to maintain energy independence of oil. “I know when I was ambassador, we got some pipelines approved – the Clipper project, expansion of South Flanagan, I believe Line 3 will be approved shortly. “We obviously had Keystone, with the State Department Approval in 2011, delayed in Nebraska, and now still waiting a court decision, notwithstanding presidential approval for the Keystone pipeline. “I believe strongly, the people in the United States, and the people of Canada, approve of these projects.” He noted as premier, he approved two pipeline projects within Manitoba, despite criticism from environmentalists. “It was my view that it was environmental malpractice to put oil on rail than in a pipeline. And the scientific reports say that on both sides of the border. And I believe we should have independences of oil in North America,” he said. “Canada, in the period of time I was ambassador, exceeded OPEC as the most foreign oil supplier to the United States. At some time we were about 17 per cent, but now we’re around 42 per cent. But that’s on a much smaller basis, because the United States is developing a lot more of their domestic oil, both in the Bakken, and dramatically in Texas. But I believe if you ask Canadians or Americans if you want your oil to come from the Middle East or do you want it to be produced and distributed in North America, they would choose the United States, Canada and Mexico, as part of the North American neighbourhood, as opposed to the Middle East, given the trauma of the last 30 years of price and supply that has taken place.” Innovation and infrastructure are part of that. “I believe the people of

this country want to have a can-do attitude to getting pipelines and transmission lines built. I believe anywhere I went in the United States, people had a can-do attitude. They wanted it instead of can’t do. Even with Keystone under tremendous opposition by some, the overwhelming public support in Washington Post polls, that would come out three or four times a year, with 62, 64, 65 per cent, overwhelmingly in favour,” he said it. Similar polls have come out in Canada. “The public gets it. If we have a plan that has cleaner air, cleaner water, energy reliability, affordability and independence, I believe we can develop a plan with energy efficiency, energy renewables, development of gas, and development of oil in our neighbourhood, and be energy independent with a plan of action, of deeds, not words.” Asked by MacLean what he saw would be the most important technology that would lead to success for the industry, Doer said spoke about policies instead – a predictable tax structure, predictable land use policy, “And a predictable belief that common sense infrastructure is going to be approved in a reasonable period of time. Due diligence is due diligence, not dithering. I believe that is what you should expect from government entities, both federal and provincial.” He gave an example where former federal minister Allan Rock wanted a review for an expansion of the Winnipeg floodway. “You don’t have to review this federally. Either the fish go through your basement because they don’t expand the floodway, and they die, or they go around the city in an expanded floodway,” Doer said. “I think sometimes we’re missing common sense.”

Supporting oil and We valuethe and gas industries and appreciate the work those who work ofallour enforcement within it. Standing with agencies who dedicate you againstinthe policies themselves protecting thatcommunities will diminish and your our keeping the peace. ability to prosper. Phone: 306-634-3000 306-634-3000 Phone:

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Michigan wants to shut down Enbridge Line 5


By Brian Zinchuk Lansing, Michigan – In what the State called a “one-two legal punch,” Michigan Attorney General Dana Nessel not only responded to the Enbridge lawsuit filed against the state earlier this month, but simultaneously took the first step to decommission the 66-year-old dual pipelines that run through the Straits of Mackinac by filing a lawsuit in Ingham County Circuit Court, according to a press release from the attorney general. The Attorney General filed her lawsuit the same day she filed a motion to dismiss Enbridge’s lawsuit filed in the Court of Claims on June 6 seeking to enforce agreements made in the last months of the Snyder administration that purported to authorize Enbridge to build a tunnel and continue operating Line 5. Significance to Saskatchewan The 30-inch Line 5 runs from Superior, Wisconsin, through the upper peninsula of Michigan to the Straits of Makinac, where Lake Michigan meets Lake Huron. It then passes through Michigan

and crosses the St. Claire River, terminating at the refinery complex in Sarnia, Ontario. The 1,038 kilometre pipeline carries light crude and natural gas liquids (NGLs). Shutting down the pipeline would result in cutting off the feedstock for one of Canada’s critical refining centres. Enbridge has sought to construct a new tunnel under the strait as a conduit for new, replacement pipelines deep under the strait, as opposed to the current pipeline lying on the lake bottom. The current state government of Michigan is against that proposal, too, despite an agreement with the previous state administration to build the tunnel. A 2010 spill from that pipeline into the Kalamazoo River had a direct impact on Saskatchewan oil producers while that line was out of operation. After that, Crescent Point Energy Corp. made sure that each and every one of their significant operating areas had the ability to ship crude by rail. They emphasized that point in their quarterly news releases for years.

Small nukes could power Saskatchewan ◄ Page A20 reality, and there’s actually a site, somewhere in Canada, to prove out this technology, we will not pencil it into our supply plan. But we see it as very promising.” He alluded to molten salt technology, which is considered far safer than pressurized water used in submarines. “It’s a whole different beast, altogether.” Canada’s power-generating nuclear reactors

have been AECL’s Candu design, using heavy water in their systems. This would be a departure from that pattern. “It’s a different design, altogether. There’s many, many technologies being looked at,” he said. The power utilities are trying to determine which technology would be suitable for Canada, and what kind of industry could support that technology going forward.


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These days, they aren’t doing that, nor are they using rail. The Stoughton rail loading facility is currently mothballed. Shut down as soon as possible “I have consistently stated that Enbridge’s pipelines in the Straits need to be shut down as soon as possible because they present an unacceptable risk to the Great Lakes,” said Nessel. “Governor Whitmer tried her best to reach an agreement that would remove the pipelines from the Straits on an expedited basis, but Enbridge walked away from negotiations and instead filed a lawsuit against the state. Once that occurred, there was no need for further delay.” Nessel’s lawsuit asks the Ingham County Circuit Court to find that Enbridge’s continued operation of the Straits Pipelines under the easement granted by the State in 1953 violates the public trust doctrine, is a common law public nuisance, and violates the Michigan Environmental Protection Act because it is likely to cause pollution impairment and destruction of water and other natural resources, the release said. The Attorney Gen-

eral’s lawsuit identifies a potential anchor strike as the most significant risk to Line 5. In 2017, the State’s contractor, Dynamic Risk Assessment Systems, Inc., identified an anchor strike as the most “dominant threat” to Line 5. “The location of the pipelines – which carry millions of gallons of oil each day and lie exposed in open water at the bottom of the Straits – combines great ecological sensitivity with exceptional vulnerability to anchor strikes,” said Nessel. “This situation with Line 5 differs from other bodies of water where pipelines exist because the currents in the Straits of Mackinac are complex, variable, and remarkably fast and strong.” Nessel also said: “The continued operation of Line 5 presents an extraordinary, unreasonable threat to the public because of the very real risk of further anchor strikes, the inherent risks of pipeline operations, and the foreseeable, catastrophic effects if an oil spill occurs at the Straits. We were extraordinarily lucky that we did not experience a complete rupture of Line 5 because, if we did, we would

be cleaning up the Great Lakes and our shorelines for the rest of our lives, and the lives of our children as well.” The State noted that an April 2018 anchor dragging incident – which ripped through several inches-thick steel cables – brought that threat home in a very real way. “Although Line 5 was damaged – not ruptured – in that incident because the anchor hit a section lying directly on the bottomlands, if the anchor had dragged across the bottom of the Straits in an area where Line 5 is elevated, the likely result would have been a complete rupture of Line 5,” the release said. Nessel’s lawsuit seeks an order from the court to shut down and decommission the Straits pipelines as soon as possible after a reasonable notice period to allow orderly adjustments by affected parties. Enbridge responds Enbridge replied in a statement posted on their website, saying, “We are disappointed the State chose not to accept our offer to advance talks on the Straits tunnel, a project that would make a safe pipeline even safer. The State also ignored our of-

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fer to suspend litigation and jointly appoint an independent, Michiganbased moderator to help facilitate the discussions. We also committed to making additional safety enhancements to the current line. “We remain open to discussions with the Governor, and we hope we can reach an agreement outside of court. The lawsuit will take time to work through the court system, and in the meantime we will continue to safely operate Line 5. Enbridge is deeply committed to being part of Michigan’s future. We believe the Straits tunnel is the best way to protect the community and the Great Lakes while safely meeting Michigan’s energy needs. “Line 5 is a critical source of 540,000 barrels per day of propane and crude oil supply for Michigan and surrounding areas, and shutting it down would lead to a serious disruption of the energy market. Line 5 serves an estimated 55 per cent of the state’s propane needs, including approximately 65 per cent of the propane used in the Upper Peninsula and northern Michigan, for which no viable alternatives exist.




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