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PIPELINE NEWS SASKATCHEWAN’S PETROLEUM MONTHLY Canada Post Publication No. 40069240

November 2019

www.pipelinenews.ca

Vol. 12/8

Get your OILFIELD NEWS on the go at: PIPELINENEWS.CA

SIMSA OIL AND GAS SUPPLY CHAIN FORUM

Crescent Point Energy Corp. was drilling a well near Glen Ewen on Oct. 19 with Ensign Drilling Rig 360. Crescent Point was one of the companies which made presentations to the Saskatchewan Industrial & Mining Suppliers Association (SIMSA) Oil and Gas Supply Chain Forum in Regina on Oct. 3. Nearly 300 people attended. There is coverage of the event throughout this edition. Photo by Brian Zinchuk

Vivian Krause documentary released A2

Election impact on the oilpatch A3

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PIPELINE NEWS November 2019

CAPP responds to federal election. By Brian Zinchuk Calgary – Canadian Association of Petroleum Producers president and CEO Tim McMillan watched the federal election on Oct. 21 with great interest. In addition to heading up the oil industry’s key industry association, he is also formerly Saskatchewan’s minister responsible for Energy and Resources, so he knows a thing or two about the political world. He spoke to Pipeline News late on election night, once it was clear there would be a minority Liberal government led by Prime Minister Justin Trudeau. Asked what this means for the oilpatch, McMillan said, “I think it means we have a lot of work to do. We knew that, before the election, that we are in one of the most difficult economic situations our industry has seen in a couple generations. And regardless of the outcome of this election, we were going to have a lot of work to do. “Being a minority gov-

ernment, what I think that says to global investors is that there is no clear, North Star direction or ship that our industry or country is on. There’s a lot more work that needs to be done by our industry and the newly re-elected government to attract that capital.” Regarding construction and completion of the Trans Mountain Expansion pipeline (TMX), he said, “On TMX, my thoughts are it is well-positioned. The minority government should not affect it. It’s got its National Energy Board approval. It’s got its cabinet approval. It’s under construction, today, and in operation of the existing line. There’s no decision point that will require a minority government tradeoff. It would be inappropriate, if not illegal, for another party to try to disrupt that project. “I can’t envision a circumstance where a vote would be needed on it.” And what does a Liberal government mean for

By Brian Zinchuk North Vancouver, B.C. – Writer and researcher Vivian Krause’ documentary, Over a Barrel, was released on Oct. 8 on Vimeo, after showings in Calgary and Edmonton in the days before. The 32-minute long documentary distills what Krause has been saying for years – that foreign-funded groups have been trying to landlock Canadian oil. It’s a message that she presented at the Saskatchewan Oil and Gas Show in Weyburn in June. Krause basically followed the money. The video is not free to view. There’s a $4.99 cost to it, but as $174,945 was raised on GoFundMe towards a $160,000 goal to support the project, that’s not likely to be much of an impediment for viewers interested in its topic. On Oct. 16, they released Over a Barrel on YouTube and Facebook for free viewing, but only until Oct. 31. This was in response to numerous requests that the documentary be made available on a free platform. Vivian Krause and her film-

maker, Shane Fennessey, did just that, but only until the end of that month. “There’s a global movement to go off fossil fuels. Even the oil industry is onboard,” Krause notes in the video. “But not in the United States.” The video cuts from N. Murray Edwards of CNRL speaking about climate change and protecting jobs, to a news broadcast about the grown of Permian Basin in West Texas. “Here in Canada, we can’t build pipelines. We can’t even build a natural gas pipeline to help China get off coal,” Krause says. “Without pipelines, Canada can only sell oil and natural gas to the United States. So the U.S. has a monopoly on Canada, and no incentive to pay world prices. Last fall, it got so bad, that Canadian oil producers were losing $50 on every barrel of oil.” “Building pipelines is about breaking the American monopoly that has Canada over a barrel,” she said, as the video’s title is shown. The reason pipelines are now in the news is the “Tar Sands Campaign,” Krause

Tim McMillan future pipeline projects? McMillan replied, “An election is an opportunity to reset. This is a time I

think we need to reset. I expect all parties will be reflecting on the results of this election, on the out-

comes and the regional distributions which look to be quite stark tonight. That would be an area where I

think there would be an opportunity to connect Canada. The electoral map tonight looks like there’s a line between Manitoba and Ontario which has a fairly big difference. A project like the one you’re speaking of (Canadian Prosperity Pipeline) would connect Canadians with their own resource and be a truly nation-building project.” CAPP will continue to work on the clean fuel standard, which McMillan likens to a duplicate of the carbon tax, another cost on industry. The methane file has very tight timelines and would “be very damaging to our industry,” he said. That is a reference to a methane reduction plan agreed to between the Obama and Trudeau administrations, but saw the U.S., under Donald Trump, pull out. McMillan referred to it as “a head-fake.” Finally, CAPP wants the federal government to make it very clear Canada is open for investment.

Vivian Krause’ documentary, Over a Barrel, released

Vivian Krause spoke at the Saskatchewan Oil and Gas Show in Weyburn in June. Photo by Brian Zinchuk says, noting she stumbled across it in June 2010 when she was looking into the “fish farm fuss,” as she put it. She traces links from opposition to fish farming

to similar opposition to the oil sands. The documentary includes several Indigenous people and their perspectives. Karen Ogen-Toews,

CEO, First Nations LNG Alliance and former chief of the Wet’suwet’en First Nation is one. Ellis Ross, MLA for Skeena and former chief councillor, Haisla Nation is

Proud to support our communities

another. Ross spoke about giving his people a purpose in life through economic development through oil and gas. Wilson Brown, former chief councillor, Haida Nation, also contributed. Krause speaks of how the net effect of this is the subsidization of energy in the U.S. She explains how hundreds of millions of dollars were provided by American foundations to groups in Canada to oppose the export of Canadian oil and gas by tankers. She points out that the B.C. coast is targeted, but not Alaska, Oregon, or California, where you can see offshore drilling rigs from the beach. Krause links Justin Trudeau confidant and former senior advisor Gerald Butts to the campaign, including a $297,000 severance package when he left the World Wildlife Fund, where he had been president and CEO. The video can be found at https://vimeo.com/ondemand/overabarrel. Until Oct. 31, it can be found on YouTube at https://youtu. be/NPax7r7Kv2c.


PIPELINE NEWS November 2019

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Four oilpatch voices, reacting to Justin Trudeau’s election win By Brian Zinchuk Weyburn, Lloydminster, Wawota – Election night, 2019. Pipeline News asked four people from the oilpatch across the province what the results of this election mean for the oilpatch. Those results, of course, were a Justin Trudeau-led Liberal minority government. The reaction was universally negative, and harsh. And most followed up with a good dose of support for western separation as a result. Dextor Mondor is owner of Dirty Bird Oilfield Services, based in Carlyle. He lives in Wawota. Earlier in the day, he said, “I can see the Conservatives getting a minority government.” By 9:30 that night, it was clear there would be a Liberal minority, led by Prime Minister Justin Trudeau. Asked what this means for the oilpatch, Mondor replied, “A lot of uncertainty. “Some old boys are going to be close to panic mode. Younger guys will look to do other things.” Age 37 himself, Mondor employs 13 people, from ages 19 to mid-50s. He thinks the Liberal win will eventually have an impact on his bottom line as part of

a trickle-down effect from larger companies. He felt at the time the resurgence of the Bloc Quebecois was having an impact. “I can see us being back to the polls next spring, 2020,” Mondor said. Asked if western separatism is now an issue, he agreed. “How can we stay? Nobody out east cares about the West, but the West drives the economy – oil, ag and mining.” In Lloydminster, Marc Ouellette owns Olaco, Inc, a small trucking firm. He was active in the protests and convoy held in Lloydminster last winter. His co-organizer was Drew Lake, interviewed below. Ouellette’s outfit used to employ five to six people. Now it’s down to two, and he ascribes some of that with the federal government. “Definitely it had to do with government policies affecting everything with regards to the business. “I’m going to get up every day, and keep my head high. This will be difficult to visualize, the next three to four months.” While others we spoke to that night spoke of western separation, Ouellette said he’s not sold on that is-

sue, yet. “But definitely, the sentiment will be 10-fold tomorrow morning.” Ouellette alluded to more activism in the near future. Drew Lake is a lifelong oil and gas worker and former owner of Engage Energy Services in Lloydminster, a combo vac, vac and steamer outfit he sold last fall. The policies of the NDP government in Alberta and the Liberal government in Ottawa were a factor that drove that sale, making it hard to make a go of the business. He found that in three years under the Alberta NDP, his business shifted from 50/50 Saskatchewan/Alberta to 80/20. Similarly, while he said the federal government normally shouldn’t be a factor for the oil and gas industry, it has been. “It shouldn’t be a big player. Overall, it should have little net effect, but they’ve made it so,” he said earlier on election day. Regarding the possibility of a left-wing coalition forming government, Lake said, “I’m terrified. I’m not going to lie to you. “National unity hangs in the balance of this election today. Educated, reasonable individuals without hesitation

would support separation. To me, it’s unbelievable that we’ve gotten to this point.” That evening, Lake said, “She’s not a good day. Unfortunately, I kinda suspected this was going to happen. “You’ve got to consider what the oilpatch really is. The fact of the matter is it’s spurred by investment. I don’t think there’s too many investors out there, that are going to be very comfortable investing in Canada’s oilpatch right now,” Lake said. “If you were representing a group of investors, would Canada’s oil industry be a place you’d invest? I think the answer to that is a pretty solid ‘No’ when you can compare it to other jurisdictions where investment is available. Look at Texas, the Permian Basin. Those are pretty safe investments, on a government policy perspective,” he said. “When you look at it from a fundamental perspective, why on earth would you invest in production growth with no surplus export capacity? No surplus, whatsoever. We’re at the point where we have to curtail production to accommodate our existing export capacity. Investors are telling oil company CEOs that they’re

Justin Trudeau was the victor on election night, but the oilpatch in Saskatchewan wasn’t clapping. File photo not interested in production growth. They just want cashflow and returning it to the shareholders. That’s not good for a sustained economy. Basically, you’re stripping the guts out of the oilpatch for profits right now. It’s a sad state of affairs.” Western separation has been all over his social media news feed. Lake said, “For years, there’s always been what you could call an extremist fringe. There’s been rumblings of western separation. “Now you can go see your family doctor, your accountant, your grandmother’s friend at the coffee shop. These are very reasonable, educated, normal individu-

als who are saying there’s no longer a place for Alberta, or the west in general. “People can forgive the rest of Canada for putting Trudeau in power. You have to admit, his message was fairly refreshing, it was inspiring, in 2015, when he was elected. There’s a lot of us who weren’t happy about it then. “But you could understand how people would vote for that sort of person and movement. But given the track record, and what we’ve seen out of this government, it’s appalling the rest of Canada could actually give him another term, even though it’s a minority. ► Page A6

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PIPELINE NEWS November 2019

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Western alienation? We’re hearing separatism, from all over “Western alienation will only grow.” That’s what former Saskatchewan premier Brad Wall said in a panel during Global’s election coverage on Oct. 21. “Mr. Trudeau’s brand is toxic, in Alberta, and in Saskatchewan, and in Ontario, and British Columbia and much of Manitoba. And if it’s followed up by policies by some new minority government, led by Mr. Trudeau, then we’ve got issues.” Earlier in the night, another former Saskatchewan premier, Roy Romanow, also spoke of western alienation. And he’s got some experience with separatists, having led this province during the 1995 near-death experience that was the second Quebec referendum. Lisa LaFlamme asked him about separatism in Quebec, with the rise of the Bloc Quebecois. Romanow countered by saying, “I do see it rising from the western part of the nation. It isn’t quite as open and dynamic as it was in the days of René Lévesque, during those periods, but it clearly is evident now, and being present. “Out here in the West, there’s a concern they’re being blocked. People are being blocked, for example, in the pipeline development and in the oil and natural gas area. That our votes don’t really count for much. We don’t really have much strength. And to me, the biggest concern from this election, apart from individuals, very important individuals, of course, are these big issues. The issues of national unity, and whether or not we’ve got the leadership or the mechanisms to be able to resolve, or work to resolution… in a way that says we are committed to a united Canada. I think it’s a little bit underground, but I’m getting sense of that in my constituency of friends.” To have Wall and Romanow essentially spouting the same thing, that’s saying something. In his victory speech, newly re-elected Prime Minister Justin Trudeau made the usual sop to Quebec separatist sentiments, as has pretty much every prime minister going back forever and a day. But then he said something quite different. “To Canadians in Alberta and Saskatchewan, know that you are an essential part of our great country. I’ve I heard your frustration, and I want to be there, to support you. Let us all work hard to bring our country together.” Why would he say that, unless there was a recognition that the tenous threads that hold Canada together are being torn asunder? Why not mention the other provinces? That’s because there is an issue alright, and he’s the primary one pulling the threads apart. He might have said, “There is so much more that unites us, than divides us,” later on in that speech, but that’s not what we heard on the phones that night. On election night we called several people in the oilpatch across Saskatchewan. Most now think western separatism is

an issue. A very serious issue. More on that in a minute. Danielle Smith tweeted, “I wasn’t joking when I said @ JustinTrudeau launched a separatist movement in Alberta tonight. Here’s a petition that signed up 2200 people in the first two hours.” Indeed, various separatism-themed social media pages, like VoteWexit.com and Alberta Separatism, gained tens of thousands of followers in hours. But as we learned from the Yellow Vest page about 10 months ago, that doesn’t necessarily translate into a lot of action. Drew Lake was one of the people we called. He put it this way: “They say that there’s three types of Alberta separatists, or western separatists, coming up to this election. There are the ones that are willing to separate, regardless of the election results. There were the ones who had no interest in separating, regardless of the election results. And there was a big group who were sitting back to see what happened. If it was a Conservative majority, that movement would have died off to quite a degree. But that third group, they say, is an absolute monster that’s laying in the shadows. If you add up the two groups in favour of separation, that’s in the 60-65 per cent range, far in excess of what Quebec was ever able to muster up.” Lake made a Facebook post on election night saying, “Let’s start having these talks,” was shared nearly 100 times in an hour. In it, he said, “I say we hold a non-partisan emergency meeting in Lloydminster this Saturday, October 26th. We need to gauge support for this movement and discuss some ideas on how we proceed.” That’s not latent resentment. That’s people willing to start taking action. This is a very real crisis, folks. One of the primary reasons behind the current federal equalization payment structure is because it essentially bribes Quebec to stay in Canada. And those bribes are paid for by western oil, pure and simple. We are hearing it loud and clear: if that’s the way its going to be, we, in the west, are just about done. What could the federal government do to solve this? First, restructure equalization dramatically, and include hydroelectric power generation in the equation. Second, build the Energy East pipeline, right now. The plans are all there. Just dust them off and do it, immediately. Start surveying and get shovels in the ground next summer. Get EVRAZ to put on another shift if need be. Those two actions would nip this entire separation concept in the bud, probably for good. But will this re-elected Liberal government do either of those things? Not a chance. Building a $23 billion pipeline might be the cheapest option, compared to what we could lose otherwise. That would be our united country.


PIPELINE NEWS November 2019

Shale oil now means you don’t have to send your kid over there to get killed As I type this, it’s been exactly three weeks since “drones,” more like cruise missiles, attacked the largest oil processing facility in the world, Saudi Arabia’s Abqaiq processing facility. A lot of fingers are pointing at Iran at this point, but so far, cruise missiles are not. That could change tomorrow, but right now, things have been quiet. When I look up the price of West Texas Intermediate on this day, astonishingly, it is just US$52.81. That’s more than $2 lower than it was the day before the attack. What sort of crazy world is this? An attack temporarily puts out of commission 5.7 million barrels per day of oil production, which equates to roughly the same percentage of oil production on a global scale, and the price drops three weeks later? This is precisely what Harold Hamm, CEO and majority owner of North Dakota’s largest oil company, Continental Resources, predicted in 2010 at the

Williston Basin Petroleum Conference which I attended. I’ve quoted his speech numerous times, because it was so significant. It’s even moreso today. Hamm said, “A reporter asked me the other day what’s the big deal about energy independence. It means you don’t have to send your kid over there to get killed!” Over there is the Middle East, where the U.S. was heavily involved in the Iraq War at the time. Remember, that was 2010. Now, the United States has essentially achieved just what Hamm spoke of – energy independence. In 2020, it will export more oil than it imports. The U.S. Energy Information Administration (EIA) reported on Oct. 3, “U.S. exports of crude oil rose to average 2.9 million barrels per day (bpd) in the first half of 2019, an increase of 966,000 bpd from the first half of 2018. U.S. crude oil exports also set a record-high monthly average in June 2019 at 3.2 million bpd.” In one year, their imports fell 1.9 million barrels

per day – in just one year, from 2018 to 2019, to 4.2 million barrels per day. Just to put that in perspective, in 2018, Canada exported 3.5 million barrels per day to the U.S. They take pretty much all of our crude oil exports, according to Natural Resources Canada. Our total production in 2018 was 4.6 million barrels per day, including condensates and pentanes plus. The EIA expects the U.S to be a net energy exporter in 2020. That, folks, is essentially energy independence. In recent weeks I’ve taken to watching numerous videos on YouTube featuring Peter Zeihan. He’s an American geopolitical strategist who gets invited to do speeches all over the place, talking about demographics and geopolitics. Look him up. His presentations, and I’ve watched at least 10, are about an hour long, and about 85 per cent the same. The rest is structured for his audience, be they farmers in the U.S. Midwest or, in one case, folks in Alberta. I went

OPINION

FROM THE TOP OF THE PILE

By Brian Zinchuk

back several years into these video archives to see if what he spoke about several years ago has borne fruit. It has. Zeihan has written the books The Accidental Superpower: The Next Generation of American Preeminence and the Coming Global Disorder, The Absent Superpower: The Shale Revolution and a World Without America, and on Nov. 19 will release, Disunited Nations: The Scramble for Power in an Ungoverned World. A key focus in his presentations has been the importance of shale oil production in the United States, and how it will mean, in 2020, the U.S. really doesn’t need oil from the rest of the world. And he said this before the Saudi oil processing centre for the largest oilfield in the world went up in flames. So now, today, the U.S. has essentially shrugged. While Trump has talked tough, the reality it there is not a massive mobilization like we saw in 1990. That’s when Iraq invaded Kuwait, and was threatening to then conquer the very same Ghawar oilfield targeted in the

Sept. 14 attacks. Don’t forget, Canada sent CF-18s, naval ships and a field hospital to take part in what became Desert Storm in early 1991. Zeihan speaks at length about the global order established post-World War II at Bretton Woods, an order which allowed for the unrestricted global trade of goods, with the oceans kept free by the U.S. Navy. But now, only country which has the ability to hold up the global order, is no longer interested in doing so, Zeihan says. “The Americans really don’t care. It’s not their trade. And for the most part, it’s not even their allies. It’s nothing less than the end of the world that we know,” he said this past March. The Canadian oilpatch has, for five years now, prayed for something to bring oil prices back up. While US$100 per barrel would be stellar, we’d be quite happy with US$75. And in hushed tones, many wouldn’t feel too bad about a Middle Eastern war if it brought those prices back up. Yet here we are – the

opening strike has already taken place three weeks ago, and still no war. And no real impact on world prices save for a two-week blip. The Brent price, which is fundamentally the world oil price for tanker-based oil, is US$58.37, almost two full dollars below what it was before the attack on Sept. 14. Brent only spiked to US$69.02 after the attacks, and fell since then. A lot of this calm in the markets can be attributed to the release of strategic petroleum reserves, and the fact the Saudis have been able to recover fairly quickly from it. But more importantly, the drumbeats of Americans going to war are almost deafeningly silent. They simply don’t need to. The shale oil revolution has surely changed the world. And as a result, Americans, and to a lesser extent, Canadians, no longer need to send their kids “over there to get killed.” Brian Zinchuk is editor of Pipeline News. He can be reached at brian.zinchuk@ sasktel.net.

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PIPELINE NEWS November 2019

A Trudeau win was unfathumable to the West ◄ Page A3 “It’s unfathomable, to most people in the West, that this could even be an option. “And I think it’s starting to make people realize that our fundamental differences across the geography of this land may be becoming more than we can sustain,” Lake said. John Prette spent most of his career working in the oilpatch, but for the last five years has worked in the auto

industry. He works in Estevan and lives in Weyburn. “I don’t know if I would go so far as to call it a death nell, but it’s a terrible result. A Liberal minority propped up by the NDP, I don’t see a path to getting a pipeline completed,” Prette said. Construction of the Trans Mountain Expansion pipeline is under way. “If we can get it completed within the next 18 months, that still doesn’t address to me the investment that’s

already left the country, and how difficult it would be to attract that investment back, in the presence of taxation policies that aren’t competitive with other oil producing regions.” Prette was referring the the U.S.’ clear advantage in corporate taxation. “If I had to invest my money in the current regulatory climate, I’m going to invest my money in the U.S. where there’s a lot more certainty that I’m going to be able to

complete that project and get my product to market. “I don’t think transporting our product ends with Trans Mountain. I don’t think one pipeline is all we need. I think we have to go east. It’s difficult for me to fathom the hypocrisy of not using Canadian oil while we’re using Saudi oil and all kinds of regimes that have less favourable environmental and human rights records. We should be striving towards energy

self-sufficiency, just like our neighbours to the south did, and achieved it,” he said. With regards to western separation, Prette said, “My social media has blown up with it.” “Separation, without a coastline… I guess we could go to Hudson Bay. Manitoba could build a pipeline from Cromer to Churchill,” he said. “I’ve recently changed my opinion. Western separatism doesn’t mean form-

ing a separate country. I have the view the coastline exists to the south. I think we’d be joining the U.S. I think that’s what separation really means,” Prette said. He thinks western separatism will be a real issue. “I think people rightfully realize the country can’t survive another four years. Division within the country is unprecedented. Even Pierre Trudeau didn’t alienate the West as badly as Junior has.”

Regina – Crown land sales continue to bring in the low-single digit millions, with the Oct. 1, 2019, public offering of Crown petroleum and natural gas dispositions in Saskatchewan generating $2,253,706, an average of $309.50/hectare. This compares to $1,546,514, an average of $281.62/hectare received at the last offering held on August 13, 2019. The top bidder in the province was Midale Petroleums Ltd., who spent $470,425 to acquire five leases consisting of 532.7 hectares. The highest bonus bid received on a parcel in this offering was $240,480 for

129.3 hectares in the Estevan area. This lease was purchased by Midale Petroleums Ltd. and is located near the Benson Midale Beds Oil Pool and within the Bakken Viewfield Oil Pool, 18 kilometres northwest of Lampman. The top dollars per hectare received in this offering was on a parcel in the Estevan Area. This 32.2 hectare lease was purchased by Highrock Resources Ltd. for $4,111/hectare or a total of $132,576. This parcel is situated near the Minard Midale Beds Oil Pool and the Benson East Midale Beds Oil Pool, 12 kilometres northwest of Lampman.

The total bonus received in the Lloydminster area was $207,418, an average of $580.22/hectare. This compares to $337,571, an average of $409.08/hectare at the last offering. The highest bonus bid and the top dollars per hectare received in the Lloydminster area was for a parcel located in the Neilburg North Mannville Sands Pool, 5 kilometre southeast of Lashburn. This 243.4 hectare lease was purchased by Cougar Creek Land Ltd. for $745.15/hectare or a total of $181,374.73. Husky Oil Operations Limited was the most active bidder in this area picking up 6 leases totalling 97.9 hect-

ares for $24,920. These parcels are situated in the Edam West Mannville Sand Pool, eight kilometres southwest of Edam. The total bonus received in the Kindersley-Kerrobert area was $431,525, an average of $238.22/hectare. This compares to $789,961, an average of $287.16/hectare at the last offering. The top bidder in this area was Synergy Land Services Ltd. who spent

$291,491 to acquire four leases totalling 1,032.3 hectares. The highest bonus bid and the top dollars per hectare received in this area was for a parcel situated 6 kilometres northwest of Kerrobert, near the Kerrobert Viking Sand Pool. This 257 hectare lease was purchased by Synergy Land Services Ltd. for $503.89/hectare or a total of $129,497. The total bonus re-

ceived in the Swift Current area was $6,519, an average of $33.46/hectare. A parcel situated 16 kilometres west of Swift Current, adjacent to the Seward Cantuar Sand Pool and the Java Cantuar Sand Pool, received the highest bonus bid and the top dollars per hectare in this area of the province. This 130.1 hectare lease was purchased by Whitecap Resources Inc. for $37.80/hectare or a total of $4,919.

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Now there’s a third compliance service provider: Avetta By Brian Zinchuk Regina – Arguably the most impactful announcement at the 2019 SIMSA Oil and Gas Supply Chain Forum in Regina on Oct. 3 was Crescent Point Energy Corp.’s adoption of a new compliance service provider, Avetta. Most of the company’s vendors are likely already aware of the changeover in recent weeks, but for those who may not be in the loop, it’s a significant change that will impact them. Over the past decade most oil companies in Saskatchewan have required their vendors to register with a supply chain risk management services companies, generally the duopoly of ISNetworld or Complyworks. Depending on the oil company’s requirements, it could mean submitting everything from safety programs to individuals’ training certifications online. By landing the Crescent Point work, Avetta becomes the third significant compliance registry company to onboard oil-

field service companies in southern Saskatchewan. Brennan Littlefield and Stephanie Watt of Avetta spoke to Pipeline News during the event on Oct. 3. Littlefield said they were formerly known as PICS Auditing (Pacific Industrial Contractor Screening). “We rebranded about three years ago. The company was founded to help create safer workplace environments through contractor/suppler prequalification, certification and training. We are a global company doing business in the U.S., Canada, Europe, Middle East, Asia Pacific and Latin America. “Avetta has the largest contractor/ supplier network in the space,” he said. “In February of 2019, Avetta and BROWZ combined to form a market leading organization focused on delivering the best in supply chain risk management services to companies worldwide. The transaction further solidifies Avetta’s position as a world-class organization, innovator and thought leader, expanding

the company’s global network to over 90,000 customers in over 100 countries in the fast growing $14 billion global marketplace for supply chain risk management solutions. The combined 90,000 customers/supplier placed us in the Number 1 position from a supplier perspective,” Littlefield said. He explained it is a cloud-based platform. “We do pre-qualification of contractors and suppliers. We have partnered with over 500 active clients, right now. We have just over 90,000 active suppliers, contractors and vendors in our network. “We’ve really shifted the whole model to be more supplier-focused. For suppliers, we make it easy to provide the necessary documentation and certifications to qualify and connect with clients. Suppliers have access to online as well as live support in over 18 languages to help them get up and running quickly. “The Canadian market has become a real growth market for us as we have landed clients in oil, construction materi-

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membership fee based on the risk level. It’s not based on company size, but level of risk. Risk can mean different things to people. From a health and safety perspective, it can mean working at height, enclosed spaces, or with dangerous goods and materials.” So, what does a supplier/contractor get for your fee, beyond the privi-

lege of applying for work? “With most companies, signing up or registering seems like a burden or a tax. With Avetta, we have focused on providing value. Qualified contractors can become discovered by our other clients, they get world-class support, and they have access to our recently launched Marketplace where they ► Page A9

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National energy corridor would have to include TC Energy TC ENERGY HAS ZERO RESOURCES DEDICATED TO ENERGY EAST RIGHT NOW

By Brian Zinchuk Regina – A “national energy corridor” has grown to be an issue of national significance, from numerous premiers from Alberta to New Brunswick, to federal Conservative leader Andrew Scheer’s campaign platform. In reality, any conversation of a national energy corridor would need to include the major pipeline companies, their rightsof-way and their infrastructure. And much of the discussion has alluded to restarting the defunct Energy East project TransCanada, now TC Energy, had proposed. Pipeline News spoke to B.J. Arnold of TC Energy at the SIMSA Oil and Gas

Any national energy corridor would assuredly need to include TC Energy, but that company is currently focused on other projects. This pipe was stockpiled for them near Shaunavon in 2011, for the Keystone XL pipeline that is yet to start construction. Photo by Brian Zinchuk Supply Chain Forum in Regina on Oct. 3. He’s TC Energy’s manager, public affairs – Central Canada, and he had worked heavily on Energy East as manager of community relations,

working with communities across Canada. Asked where TC Energy is on Energy East, today, and is it dead, he replied, “We aren’t focusing on that right now.

We’re focusing on $32 billion of secured, near-term projects, and $20 billion on projects under development like Bruce Power and Keystone XL. Energy East isn’t something we’re

focusing on. We don’t have any resources on that project at this point in time.” Zero? “Zero,” he replied. Asked if a national alignment, politically,

could lead to reopening it, Arnold said, “We engage with all levels of government, but at this point in time, we haven’t been officially engaged with anything regarding a corridor.”

Avetta says, some suppliers pick up new clients ◄ Page A8 can get access to discounted products and services they use everyday. The savings they gain help them grow their business. In fact, some suppliers are saving over $10,000 a year on insurance premiums through Marketplace. That’s signifi-

cant,” he said. He said 37 per cent of suppliers in the system, within their first year, are connected to a new client. Avetta is based in Orem, Utah. It is a global company with locations worldwide including an office in Calgary. The compa-

ny is currently establishing a presence in Eastern Canada in Toronto and Montreal. The company has 381 fulltime employees worldwide. When asked what typical requirements for a vendor would be, Watt said, “Depends on the client. We’re completely con-

figurable for what the client is looking for. That can be company certifications or even individual certifications, or both. It’s what the client wants.” The Avetta platform is highly configurable—its not a “one size fits all,” he noted. Each client configu-

ration is different which is the beauty of the platform—it can work for any industry that needs to do vetting and prequalification of contractors, suppliers and vendors. Littlefield said some companies want only highlevel information, whereas

others want to see the drug and alcohol testing for each of the thousand individuals working for them. Most contractors are invited to join the system, but companies can proactively join the Avetta platform, he said. Initially they will only have a basic set of questions.

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TC Energy is still working on Keystone XL By Brian Zinchuk Regina – TC Energy, formerly TransCanada, has projects in the works – tens of billions of dollars worth. And therein lies opportunity for companies looking for work with one of Canada’s largest pipeline companies. B.J. Arnold, manager, public affairs – central Canada, spoke to the SIMSA Oil and Gas Supply Chain Forum in Regina on Oct. 3. He explained TC Energy has three main business units, oil and liquids, natural gas, power and storage. The liquids system includes the first Keystone pipeline. “We do have $32 billion of projects that are unpinned, that we’re currently working on, moving forward. So, when you hear there’s absolutely nothing happening in the world of pipelines, that we’re not getting anything built, that’s not necessarily true. But there are some challenges that we have. An additional $20 billion of that is under development, like Keystone XL and Bruce Power,” he said. The company changed its name from TransCanada on May 3, something he gets a lot of questions about. “We truly are North American,” he said. “Are you guys embarrassed about being from Canada, originating from Canada?” he said is a common question. “I’ll tell you right now, I wouldn’t be up here, talking right now, if I worked for a

company embarrassed to be from Canada. That’s definitely not the case. I’m a proud Canadian. “TC obviously still does stand for TransCanada. We put the ‘Energy’ because we are more than just pipelines now. With the recent purchase in 2016 of Columbia Gas, as well as assets down in the U.S., 52 per cent of our business is in the U.S. now. Forty per cent of our operations are in Canada, and we do have eight per cent of our operations currently in Mexico, strictly gas pipelines there.” He said the energy mix, globally, is expected to remain unchanged until 2040. “As much as some of the individuals, environmental groups, the opponents to a lot of this stuff think we can stop fossil fuels tomorrow, as we can see here, and I’m pretty sure this is based in science and fact, over the next 20 years, oil is still the Number 1 form of energy across the globe.” While hydro and other renewables have increased, it’s not going to happen tomorrow, he noted. He pointed out that Canada’s oil sands produce approximately 0.15 per cent of global greenhouse gas emissions as of 2016. He spoke of TC Energy’s Coastal Gaslink project, which would allow northeast British Columbia-produced natural gas to Kitimat. While there is some concern about emissions related

to it, he said, “When we’re talking about this topic, we have to think globally. We’re doing our part in Canada. But if we’re not going to produce it, someone else is going to do it. Someone else who doesn’t have the same environmental record or human rights policies in place. We have to think about that at the end of the day. Our industry has to do a better job, telling that story. If it’s not here, it’s going to be somewhere else, and it’s going to be more carbon intensive,” Arnold said. He pointed out that in 2014, there was approximately $81 billion invested in Canada’s oil and gas industry, but by 2018, that number had fallen to $41 billion, a 49 per cent decrease. He spoke of Bill C-69 and C-48 and the numbing effect that has had. “We’re doing all that we can,” Arnold said, in that environment. “Seeing foreign investment leave, seeing companies like Petronas basically leave $6 billion on the table, that’s tough. Every single one of us here has been affected by this,” he said. But the United States has seen a 54 per cent increase in its pipeline construction, from 2017 to 2018. “They are building pipelines and energy infrastructure to get to international markets,” he said. He referenced foreign money coming into Canada to fight

B.J. Arnold of TC Energy spoke to the SIMSA Oil and Gas Supply Chain Forum in Regina on Oct. 3. Photo by Brian Zinchuk against oil and gas development, and asked the crowd if they felt it was for strictly environmental reasons, or for business reasons. “Climate change, we can all agree, is real. We need a more sustainable future. Right. But Vivian Krause, and now we’ve seen Premier Kenney in Alberta set up a task for to look into all this money coming into Canada to hurt our energy industry,” he said. Keystone XL On the long-delayed Keystone XL pipeline project, which would run from Hardisty, Alberta to Steele City, Nebraska, he said, “We finally have all of our major permits in Canada and the U.S. for the Keystone XL pipeline. The National Energy Board

gave its approval in March 2010. The Presidential Permit was granted three days after President Trump got into office in January 2017. The Nebraska Public Service Commission gave us an approval of the mainline alternate route in November 2017. “That one we got sued on left, right and centre. We are continuing getting sued on a lot of these as well, but that was the big one. But on Aug. 23 of this year, the Supreme Court of Nebraska came back to us and said, ‘You guys are good to go.’ He went on, “We still are monitoring a lot of regulatory issues. ► Page A12

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PIPELINE NEWS November 2019

Climate change, we can all agree, is real, says speaker ◄ Page A11 There are a few other lawsuits that’s happening down in the U.S. Right now, everything is fine in Canada. The U.S. is the challenge. With the U.S. presidential race coming up next year, there’s a lot of political ques-

tions. A lot of the Democratic presidential hopefuls are saying they’re going to veto the project, like President Obama did. Bernie Sanders said he is going to arrest every oil and gas executive on the planet, so I don’t know how feasible that’s go-

ing to be. “We are now currently working the scope for 2020. All the stakeholders out there, we chatted a little bit. Stay tuned,” Arnold said. “Some of you might have seen a bunch of pipe going back and forth from

Regina to the Shaunavon area over the last year-anda-half. When we got approval in 2010, we procured all the pipe. And that pipe has been sitting in pipe yards at Piapot, Shaunavon, Camrose, for ten years. As we are going through the

process of looking through that pipe, Shawcor in Regina got a really big work order there, and has inspected pipe for the last year-and-ahalf. We just completed that two weeks ago. So that pipe is coming back to Shaunavon and Piapot, and I really

hope we don’t have to bring it back this way in five or ten years,” he said. For companies interested in working with TC Energy, he pointed them to their vendor web portal, https://www.tcenergy.com/ operations/vendors/ .

Regina – Ryan Foss of Falcon Equipment was staffing one of the booths at the SIMSA Oil and Gas Supply Chain Forum, pro-

moting his company’s rail equipment. “I specialize with the rail car mover segment of our market. We provide rail

car movers to any customers that are going to have a large fleet of rail cars they need to shuffle around their sites,” he said on Oct. 3, list-

ing off a number of potash, grain and refinery companies. “They’re all going to use rail car movers on their site, and we provide those,” he said. Before the oil downturn hit five years ago, there was a substantial build out of crude-by-rail facilities in Saskatchewan. Crude-byrail is making a comeback in Canada. Asked if that’s what they are targeting, he said, “Absolutely. Anyone whose got any number of rail cars they need to move

and fill, we do try to have a solution to fill all those voids so if it does pick up again and those sites start producing, absolutely, that’s a market we’ll be tackling.” Falcon is the dealer for two brands, Boss rail car movers and Tractive Power switching rail car locomotives. They also provide some maintenanceof-way equipment, boom trucks, and related items. In Western Canada, they are an outfitter and dealer for Palfinger cranes. They have a high con-

centration of customers in the Edmonton area, Foss said. “Saskatchewan’s sitting on a virtual nestegg of natural resources, including oil and gas. It’s a huge market potential for us to just keep growing and providing equipment in this marketplace. “We’re just very proud to be included in the show. We’re proud to do business in Saskatchewan. We have a location right here in Regina and provide mobile service all over the province.”

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Ryan Foss, left, of Falcon Equipment speak to a man at his booth during the SIMSA Oil and Gas Supply Chain Forum. Photo by Brian Zinchuk

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A13

PSAC is focusing on getting the message out to Ontario By Brian Zinchuk Regina – Gary Mar, president and CEO of the Petroleum Services Association of Canada (PSAC), echoed an increasingly common sentiment, that the world needs more Canadian energy, when he spoke at the SIMSA Oil and Gas Supply Chain Forum in Regina on Oct. 3. “We represent the upstream energy services sector and manufacturing,” Mar said. “I spend a lot of time, particularly in the province of Ontario, talking about how the energy sector is not an Alberta business, it is not a Western Canadian business, it is a Canadian business. So. when you go to a place like Sault Ste. Marie, and you go to the steel factory there, the Tenaris plant – Tenaris hires about 800 people to work in Canada. They produce about a billion dollars worth of steel. Zero per cent of that steel goes into the automotive sector. One hundred per cent of it goes into making tubulars for oil and gas. “So, I’ve made presentations to the Chambers of Commerce of Ontario – all of them. All 90 chambers of commerce in Ontario. And I’ve tracked down the supply chain. I’ve asked our members to show me their invoices, and then we’ve looked at those invoices, in Ontario, particularly in the 905 region, and we tracked down who is actually manufacturing, not just the distributor of something made

somewhere else. And those are the chambers of commerce we really focused one, because we want the people of Ontario to be just as concerned about the 65,000 jobs we create in Ontario as they are about a GM plant,” Mar said. “We asked people in Ontario, ‘What’s the Number 1 export of Canada?’ They always say, ‘automotive and auto sector.’ “It’s significant. You’ll see motor vehicles are about 13 per cent, but oil and gas are about double that. About a quarter of Canada’s exports are in the form of crude oil or bitumen.” He picked up on a point Saskatchewan Minister of Energy and Resources Bronwyn Eyre had just made, namely that capital investment in the Canadian oilpatch has dropped by half. Mar added that Canadian investment abroad has gone up over the same period of time. “It’s a staggering, staggering set of figures,” he said. He said 99.9 per cent of Canadian oil exports goes to the United States. He noted one company did take Canadian oil via tanker from Port Arthur, Texas, to China. Infrastructure, the ability to get Canadian oil to somewhere other than the United States, is the key issue. He said the federal government had completely dropped the ball on the Trans Mountain Expansion pipeline project. Global energy demand is ex-

pected to grow by 27 per cent by 2040, despite some saying we will soon see peak oil consumption. Hundreds of millions of people in places like China, and India are being lifted out of poverty and into the middle class. They are demanding automobiles and affordable, reliable energy. “My thesis is this: Canadian energy is the most responsibly produced energy on the face of the earth. It benefits the quality of life of every single Canadian. This is the message I take when I’m on the road to places like Ontario and Quebec and Atlantic Canada.” While places like the 905 area code area get that message, but Toronto itself and Vancouver, “are a little bit different,” Mar said. In Vancouver, they think a lot about ethically-sourced coffee beans, he noted, “But shouldn’t you care about where your tank of gas comes from as well?” Environmental, occupational health and safety, or labour standards all see Canada at the highest levels in the entire world, he said. There are 450,000 jobs, coastto-coast, in the upstream sector. The taxes and royalties raised are important to our standard of living. “Across Canada, there isn’t a single Canadian that isn’t affected by what we do,” Mar said. “When I feel particularly snotty, I will say there are no bits of a chopped up journalist in a Canadian barrel of oil,” he added,

Gary Mar has been talking to a lot of chambers of commerce in Ontario about the importance of the oilpatch to that province. Photo by Brian Zinchuk referring obliquely to the 2018 killing of Jamal Ahmad Khashoggi by Saudi government operatives. India and China’s imports are rising. Oil and gas production in the U.S. is at record levels. “There will come a time when the United States will continue to buy our oil cheap, process it and sell it to someone else,” he said. Mar spoke of changing the narrative, raising awareness of the national supply chain for oil and gas that benefits all Canadians, and highlighting manufacturing jobs. He touched on PSAC’s revised forecasts. The average expected oil price is now US$57 per barrel, as opposed November 2018

expectations of US$69 per barrel. The AECO gas price has gone up a bit, with the July 2019 forecast of C$1.60 per mcf, versus C$1.45 per mcf. Cash flow for 2019 is forecast to drop C$25 billion compared to 2014. “The number of wells drilled in 2019 has dropped rather precipitously, even from the previous year of 2018. But here’s the one good news in all this: we’re drilling fewer wells, but we’re drilling longer wells. Now we have wells that are much, much longer in terms of meterage,” he said. The number of wells off ► Page A14

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PIPELINE NEWS November 2019

Talking to every chamber of commerce in Ontario ◄ Page A13 the coast of Newfoundland is also going up. Saskatchewan’s well forecast for 2019 has dropped, from 2,562 in 2018 to a forecast of 2,035. That’s broken down as a reduction from 516 to 450 wells in northwest Saskatchewan, from 1,287 to 945 wells in west central and southwest Saskatchewan, and from 759 to 640 wells in southeast Saskatchewan.

In Alberta there are 89,217 inactive wells, while Saskatchewan has 25,857 and British Columbia has 7,382, as of November 2018, he said. “This represents an enormous opportunity for work to be done in this area, except that there are a number of companies that have responsibility for the closure of these wells, and they don’t have the cashflow in order to do it. “The worst case scenario is for us that these

122,000 wells become orphan wells, where nobody is responsible for the closure of them. It represents a huge environmental liability. What we’ve argued for, federal and provincially, is a super flow-through fund that would allow people to put third party money in to discharge these liabilities.” Saskatchewan and Alberta governments support the idea, but they didn’t get far with Ottawa. “Activity is down in

Canada despite the projections for strong demand over the course of course of the next half a century,” he said. “The energy demands for the world, the overall majority is still going to be in the form of fossil fuels.” “Access to tidewater is putting the ceiling on our ability to produce more.” Certainty from government is a negative form of certainty he noted with Bills C-69 and C-48 providing barriers for develop-

ment. “We, as an industry, should be leading the charge to say we create important jobs. We have important economic activity associated with this sector,” Mar said. “You cannot develop any kind of economy without access to affordable, reliable energy. You cannot develop any kind of energy without having some sort of impact on the environment. So, we think the Canadian

energy sector, the manufacturing sector, need to tell the story of how we overlap those three areas. We’ve got a sweet spot. We are producing energy. We are promoting our economy. And we are doing it in an environmentally friendly way, that is responsible. “I would propose to you that we need to have more Canadian energy, for Canada, and more than ever, the world needs more Canada,” he concluded.

Let’s start with being proud of our energy industry: Eyre By Brian Zinchuk Regina – Saskatchewan’s energy and resource sector is important to the province. That’s the message Minister of Energy and Resources Bronwyn Eyre delivered as the opening speaker for the SIMSA Oil and Gas Supply Chain Forum on Oct. 3. “We’re grateful, and we’re very fortunate to have so many dynamic, innovative and competitive people in this room, and driving our economic growth,” she said. “This forum is designed to bring buyers and sellers together, to make more connections happen,” she said.

Her ministry, as well as the Ministry of Trade and Export Development are partners in organizing and supporting the forum. After her speech, she, Minister of Trade and Export Development Jeremy Harrison and Minister of Environment Dustin Duncan met with SIMSA’s board. “Make no mistake. The energy and resource sector is a vital industry in Saskatchewan,” Eyre said. “Certainly, I get that message out, every chance I get. And I get out there, every chance I get. Last week I was invited to attend a climate change protest on the steps of the

legislature. Couldn’t make it! Because I was touring heavy oil sites in and around Lloydminster,” she said to applause. “Of course, the energy sector continues to face headwinds in this country. This year, you know, we lost two key fights, Bill C-69 and Bill C-48. But the fight has to go on, for the energy and resource sector in this country, and against what is clearly a federal anti-energy agenda.” She went on, “On that federal attitude to energy, a number of things come to mind. For one, there was the federal energy minister tak-

ing to Twitter a few weeks ago to complain about being held up at a railway stop, by a train transporting oil. I’m sure most of you saw it,” pointing out the irony. “This is the federal department that is responsible for the stewardship of the natural resources in this country. They recently put out a tender for ‘technologies that reduce or eliminate fossil fuels.’ “Eliminate,” Eyre repeated. “And of course, there’s the announcement, and reannouncement, and re-reannouncement of the TMX ► Page A15

Minister of Energy and Resources Bronwyn Eyre spoke of attending an energy ministers conference this past summer where oil and gas wasn’t even on the agenda. She wasn’t impressed. Photo by Brian Zinchuk

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NLS Welding & Contracting focuses on larger pipeline work Regina – Greg Singer, operations manager with Regina-based NLS Welding & Contracting manned one of the booths at the SIMSA Oil and Gas Supply Chain Forum on Oct. 3. They have a welding shop on the north end of Regina that does structural and mechanical work. He listed several of the larger pipeline companies in Saskatchewan as clients. “Right now, we’re doing a lot of integrity work with one of our clients. We’re sleeving. The pipe’s allowed to run. We put a protective sleeve on it, from end to end. Our welders are specially qualified for that,” Singer said. “We work out at K+S. We have a maintenance contract out there.

We have some exotic welders, again, doing maintenance work.” At peak they have about 25 workers, but during the winter slowdown, it drops to nine. “We have mobile trucks, welding trucks. We have mobile cranes. We have journeyman welders, journeyman pipefitters. We have our own CWB (Canadian Welding Bureau) procedures. We’re CWBcertified, as a company,” Singer said. NLS was bought out three years ago. The original owner was around from the late 1990s, he said. “We actually have welders in our shop that are qualified to weld for Enbridge with Enbridge procedures. So, they spend two weeks

every second year, getting qualified. So, when Enbridge calls for an emergency or work, and they don’t have welders, they call us, and we send them out.” The work can be jumping a T in, replacing a piece, welding for a hot tap, as examples. Business has been a challenge in recent years, Singer said. “We’ve had to diversify. It’s slower. We do a little more structural than we originally intended. We just did a bigger job for a client, about 98,000 pounds of steel this past winter. So, we got new procedures, got the flux core procedures, and just kept the guys busy instead of laying them off.” That project went up to Fort McMurray, as a subcontract.

Greg Singer is the operations manager with NLS Welding & Contracting. Photo by Brian Zinchuk

Did you hear Norway is starting up a field that will produce as much as Saskatchewan? ◄ Page A14 She pointed out that if every oil and gas jurisdiction around the world extracted it like we do, in Canada, GHG emissions would fall by a quarter. Oil and gas is responsible for about 15 per cent of Saskatchewan’s gross domestic product, she said. Saskatchewan produced 178.4 million barrels in 2018. “Over $100 billion in combined value in oil and gas production is forecast for 2019, up nine per cent from the previous

year,” she said. “This kind of economic output leads to overall economic prosperity and quality of life. And I wonder, do they recognize that more in a country such as Norway?” She posed, pointing out the recent startup of the Johan Sverdrup oilfield off the Norwegian coast. Eyre pointed out the first phase of the Johan Sverdrup project was started when the federal Liberal government was elected in 2015. “Think about that,”

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she said. “While every pipeline project here as either been cancelled or delayed, there, in Norway, it’s full steam ahead.” She said the 283 kilometre pipeline from sea to shore will be Norway’s longest. Production from the project will reach 440,000 barrels per day, eventually peaking at 660,000. “And just for context, Saskatchewan produced just under 490,000 barrels a day last year. Kinda leaves you green, when you read all this, that protests appear

to be next to nonexistent, except for Greta next door in Sweden.” She said this project will produce over $130 billion in Canadian dollar equivalent. Last year, Saskatchewan producers lost $3.7 billion due to a lack of access to tidewater, and the province lost $250 million in lost taxes and royalties. Eyre said things can change on a dime. Five or six years ago, the United States was facing all the regulation and red tape, and Canada was approving

pipelines. “As the sector makes its way back, one of our greatest advantages, here in Saskatchewan, is you. Such an innovative and versatile supply chain is an immeasurable asset to our economic growth overall, and to our activity. Your success attracts and encourages more success. And it’s the economic enabler that provides the legs for our oil and gas industry,” she said. The provincial government has worked on “best

value procurement,” she noted under the “Priority Saskatchewan” branch of SaskBuilds that is responsible for provincial procurement. “The Government of Saskatchewan, the Ministry of Energy and Resources, will continue to leave no stone unturned when it comes to improving efficiencies, increasing investment, and fostering competitiveness in our province,” she said. “Thank you, for everything you do.”

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PIPELINE NEWS November 2019

Drilling begins on second DEEP geothermal well By Brian Zinchuk Regina – Drilling on the second Deep Earth Energy Production (DEEP) geothermal power production well was expected to begin in late October, after press time. DEEP president and CEO Kirsten Marcia was one of the presenters at the SIMSA Oil and Gas Supply Chain Forum on Oct. 3. She was the final speaker of the day, and when the speed networking session took place immediately afterward, she had the longest line of people interested in speaking to her. DEEP is working on developing baseload electrical power generation, with geothermal heat derived for very deep wells south of Torquay. Marcia said, “Now that we’ve done our flow and build up test, we are back in the field. The rig is moving on Monday (Oct. 7). We are using Panther Drilling of Weyburn. The first thing we are doing is recompleting the first well into an injection well, and then taking all that fluid

on the site and injecting it down into the injection well. We’ll be monitoring it with gauges to see how well it responds to reinjection. “As soon as that’s complete, we’re drilling our second well.” This will not be a typical horizontal well like most directional wells in the region. In fact, it’s not a horizontal well at all. Those are drilled straight down, then turning horizontally and running essentially flat for hundreds of meters. The second DEEP well will be drilled adjacent to the first hole, but instead of going straight down all the way like the first, it will be directionally drilled at an angle to the southwest, kicking off the build section around 1,300 metres. The toe of the well will end up about 1,500 metres laterally away from the bottom of the initial well. The resulting configuration of the two wells will approximate the shape of a right triangle, with the base of the triangle being the

The longest lineup for the speed networking portion of the SIMSA Oil and Gas Supply Chain Forum was formed by those wishing to speed to Kirsten Marcia, right, of Deep Earth Energy Production. Photo by Brian Zinchuk Deadwood and PreCambrian formations where the system will draw very hot brine from, and then reinject it into via the first well. The second well will be the hypotenuse of that triangle. The initial well will

become an injector, and the new, second well will be the producer. It will be larger in diameter than the first well. Once complete, a 60day production and injection test will commence on the project’s first com-

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bined geothermal well pair. This is required for the final engineering design. Marcia said, “Things can move quite quickly at this standpoint. We need that second well in place so we can do the long term loop and refine our engineering and construction plans. But after that, things can move very quickly. The longest lead item is ordering the

Organic Rankine Cycle power generating facility, which can take 12 to 16 months. The rest is infill drilling.” “At this point, we believe we can have power to the grid at the end of 2021 or the beginning of 2022.” Marcia spoke of the recent flow test. She explained that the brine from the initial well is 10 ► Page A17

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Opportunities for excess heat, salts ◄ Page A16 times saltier than sea water. “The joke is this is the water you can actually walk on,” she said. Understanding how that brine behaves when you cool it, at what point the salts precipitate out when cooled, what are those salts, what kind of bacteria is in this old, ancient fluid are all pertinent questions. To that end they had a water expert working on the science end of the project. Those salts may be a key side benefit, as she alluded to the possibility of mineral extraction. “We’ve also acquired the mineral rights. We know from our brines that we have a lot of interesting elements that end in ‘ium.’ We’re looking at the potential processing to acquire those to this project.” “We’re looking at additional revenue streams and opportunities to maximize the heat that we’re going to recover out of the ground,” Marcia said. After the brine had gone through the plant, it will still be 65 C. “We’re looking at what we can do with 65 C heat. The most obvious one is greenhouses. If we take half of our fluid and direct it to

a greenhouse, we could heat a 50-acre greenhouse. That’s massive. “We would never be the greenhouse developers ourselves. Whether its kale or marijuana or tomatoes, it doesn’t matter to us. She added the possibility of using local flare gas to power some of the parasitic loads like running the pumps. “If we can take flare gas off the market and use it to power a renewable energy project, that’s pretty cool,” she said. The first facility is planned to be five megawatts, net, but the future is hopefully much larger. “Think of a wind farm, 100, 200 megawatts. That’s our vision for this first field in Saskatchewan. We believe its not overselling it, but a reasonable starting point,” Marcia said. Depending on drilling spacing, she noted they can add additional wells to scale up. “Not only is it repeatable, but it’s scalable,” she said. Marcia noted they have received not only private funding, but also from the federal government via Natural Resources Canada under the Emerging Renewable Power Program. The first project was a tidal

power project for the Bay of Fundy, and the second project is DEEP’s. There’s also been fund-

ing from the province. After her presentation, Marcia expressed gratitude for local community sup-

port and enthusiasm, saying, “It’s one of the things we don’t see in other places of the world. We sometimes

don’t realize how important that support is for any type of resource project, going forward.”

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PIPELINE NEWS November 2019

CO2 interest may help accelerate decision somewhat on Shand: minister responsible for SaskPower By Brian Zinchuk Regina – Whitecap Resources Inc. has recently approached the government, saying it’s interested in additional carbon dioxide for usage in its enhanced oil recovery scheme at the Weyburn Unit. What does this mean for SaskPower? Dustin Duncan, Minister responsible for SaskPower, said on Oct. 3, “That says there is interest in seeing an expanded market for CO2. We had a really good discussion with (Whitecap CEO) Grant Fagerheim, and his team. They came down to Regina to meet with us. “I would say they’re not the only company interested, which is actually a pretty positive sign,” Duncan said. He was briefly attending the SIMSA Oil and Gas Supply Chain Forum in Regina. “We’ve had some early interest from other companies, what’s our timeframe in terms of making a decision on the Shand project. But obviously, Whitecap is, by far, the biggest player that’s looking at this. And I think they’re just trying to see whether or not their timing on making decisions for future CO2 contracts lines up with our decisionmaking timelines on the Shand Power Station. “So we had a really good discussion. They’ve just recently sent us some information this week. We’ve asked for a little bit more firm numbers in terms of how much CO2 they’d actually be look-

ing for. We’re going to put that as part of the decisionmaking process on whether or not to go forward with Shand,” Duncan said. Asked if having a ready customer takes pressure off the decision-making process, Duncan replied, “It certainly takes some of the pressure off. Keep in mind, BD3 (Boundary Dam Unit 3), the price of natural gas was probably three to four times, then, what it is today. I think having a ready off-taker for the CO2 was probably less of a factor. It’s going to be more of a factor this time, just because the price of natural gas is so low. We need to help make that business case, to say that the byproduct, the CO2, we actually have a market for. We have somebody willing to take it. “Now, we have to do a lot of work to see what the comparables are. As Whitecap knows, and they’ve told us, they’re currently getting supplies from Beulah, and some of the incentives in the United States, it looks like there’s going to be more, not less, CO2 coming onto the market over the coming years. What is their price point look like, compared to what they can buy from the States, compared to what we can produce it for and sell it to them. The price of CO2 is obviously going to be an important part of this. But knowing there is active interest, that’s going to help build the business case on whether

From left, Minister of Trade and Export Development Jeremy Harrison, Minister of Environment Dustin Duncan, ministerial assistant David Keogan and SIMSA executive director Eric Anderson check out the opening of SIMSA Oil and Gas Supply Chain Forum in Regina on Oct. 3. Minister of Energy and Resources Bronwyn Eyre was speaking. Afterwards, the three ministers joined SIMSA’s board for a meeting. SIMSA is the Saskatchewan Industrial and Mining Suppliers Association. Photo by Brian Zinchuk or not we move ahead with Shand,” Duncan said. He said other CO2 sources might come online which will be able to supply carbon dioxide into the Souris Valley Pipeline which supplies the Weyburn and Midale Units with CO2. Montana, Wyoming are possible sources. “I think they’re just looking at their options to see what sources are going to be coming online in the States,” he said, adding this includes whether they have to sign long-term contracts in the U.S. that would prohibit them from buying

additional CO2 from SaskPower. “I think Grant was very upfront, in saying if they’re going to buy additional CO2, they’d like to buy it from Saskatchewan sources rather than the U.S. That will be a business decision that they need to make.” Asked if this accelerates SaskPower’s decisionmaking process to go ahead with further CO2 capture, Duncan replied, “I think it helps. I think a couple of things are going to help to accelerate. I’m going to say not by years, by a number of years, but we might be

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closer to making a decision. In the past, if it was maybe a 2025-type of timeframe, maybe we’re making it earlier in the decade, but certainly not making it this year. Certainly by the end of this year is off the table at this point. But things like the new natural gas regulations, and the cost that’s going to put on SaskPower for the new Moose Jaw plant, having a company come forward, saying they’d like to buy additional CO2… “At the end of the day, we need as much information as possible to make the business case of whether to go forward or not. And the more information we have,

earlier in the process, rather than later, certainly helps,” he said. If a new federal government comes in and decides to axe the carbon tax, does that make a difference? Duncan said there’s two parts to it – the consumer carbon tax and the output-based performance system on large emitters. “Even with a change in government, there may still be a cost, an additional operation cost, because of the fuel source. It might be lower, though, compared to what is now proposed by the federal government on Moose Jaw,” he said, preferring it simply be exempted.

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Rangeview Thru Tubing now carrying Baker Hughes tools By Brian Zinchuk Calgary, Carnduff – Rangeview Thru Tubing Tools and Services Inc. announced on Sept. 27 that the company has entered into an agreement with Baker Hughes, a GE company (BHGE), providing Rangeview with access to state-of-the-art equipment in the provinces of Saskatchewan and Manitoba,

the company said in a release. This includes what they referred to as best-inclass permanent, inflatable, straddle and retrievable packers; permanent, drillable and retrievable bridge plugs; as well as other completions, workover and remediation equipment. Mike Cullen, vice president of sales and marketing, said on Oct. 1,

“They’re providing us with their tools.” “They’ll be our supply chain for those tools.” The Baker Hughes tools will be complimentary to Rangeview’s existing suite of tools, as they will continue to provide their full thru tubing line of tools and services. The company’s specific area of expertise is “thru

tubing” services, which allow downhole procedures, operations and repairs to be conducted within the production casing of the well. “We can work in a cased wellbore,” Cullen said. That includes working with jointed pipe on a service rig, or on a coil tubing unit. Most of their work is in cased hole. Cullen said they’re

fairly closely tied to the drill bit, as much of their work is related to completions. But They also do a lot of remedial work, like sand cleanouts, dewaxing and descaling as examples. “The more wells are drilled, the more work there is,” he said. Rangeview was founded in 2008 in Carnduff, Saskatchewan, is an

independently owned Canadian service provider. It is now headquartered in Calgary, with operations in Carnduff, Red Deer and Grand Prairie. They have three people working in southeast Saskatchewan/southwest Manitoba. The company has about 20 people overall, but also hired contractors as needed.

By Brian Zinchuk Calgary –Crescent Point Energy Corp. announced on Oct. 18 it had successfully closed the previously announced sale of its Uinta Basin asset and certain noncore conventional assets in southeast Saskatchewan. These accretive dispositions are in-line with the company’s strategy to focus its asset base and strengthen its balance sheet, it said in a release. When reached by phone on that day, a company spokesperson said they would not be releasing any further details at this time, however, some detail may come forward on Oct. 31 when the company releases its quarterly financials. On Sept. 3, the company announced that it had sold approximately 7,000 barrels of oil equivalent per day production of its conventional assets in southeast Saskatchewan, and more significantly, its entire Utah-based Uinta basin as-

sets totalling 20,000 boepd. On May 20, Pipeline News reported details of the asset sale in southeast Saskatchewan, which listed approximately 21,625 barrels of oil equivalent per day (boepd) of predominantly Mississippian light oil for sale, with over 100 mmboe

of 2P reserves across approximately 800 net sections of land. The Sept. 3 announcement appears to account for approximately one-third of the southeast Saskatchewan and southwest Manitoba assets that were detailed in the company’s “Southeast

Saskatchewan Light Oil Portfolio Offering” of early 2019. That offering broke down the portfolio into six parcels, five in southeast Saskatchewan, and one in the extreme southwest corner of Manitoba, referred to as “Pierson.” Basically,

almost everything east of Highway 47, except for part of the Viewfield Bakken around Forget and Kisbey, was for sale. There was also a portion south of Weyburn.

The maps included in the documents showed that pretty much everything in southeast Saskatchewan that is not part of the Viewfield Bakken of Flat Lake plays up for grabs.

Crescent Point closes on sales, but no further details released ONGOING SALES PROCESS CONTINUES

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We need to do a better job telling the story When B.J. Arnold was working in communications on the Energy East project, he recounted one encounter he had with an opponent to the energy industry. He noted a lot of people understand the benefits of the industry, and the opponents aren’t going to change their mind. “I recall several conversations that I had with several opponents who said, ‘What does the energy industry actually do? How does it benefit me? I don’t think it benefits anyone but your companies and makes the rich richer.’ “I looked at this young lady and said, ‘Do you go to school?’ “She said, ‘Yeah.’ “Do you ever have to use social programs or hospitals every once in a while? “She said, ‘Yeah.’ “Do you travel on roads? “She said, ‘Yeah.’ “Do you use laptops? iPhones? Any other technology? “She said, ‘Yeah.’ “Then nothing comes to mind. “She just didn’t understand everything I had just mentioned derives from the energy industry, whether it was from the product, or the benefits of these types of companies working and living in those communities,” he concluded.

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PIPELINE NEWS November 2019

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