Pipeline News North April 2015

Special Report: Dawson Creek gun show draws massive crowd APRIL / MAY 2015

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FID-day just around the corner?

petronas mulls final decision While B.C. awaits a decision on a proposed liquefied natural gas export project, presumed frontrunner Petronas has a new leader at the helm. And it won’t be long before he’ll be involved in making one of the biggest decisions of his career.

Wan Zulkiflee Wan Ariffin succeeded Azhar Abbas as president and CEO of Petroliam Nasional Bhd April 1. This summer, Malaysia’s state oil company is expected to decide whether or not it will go ahead with its LNG plans in B.C. Photos courtesy Petronas

The stakes are massive, for both Petronas and B.C. The energy giant has about $36 billion on the table in British Columbia’s �ledgling natural gas industry — upstream, midstream and downstream — which represents the largest direct foreign investment in Canada’s history. By David Dyck

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oilmen continue hockey tradition Byron Hackett

Alaska Highway News

Ditmarsia Holdings was the last team standing when the final buzzer went at the 12th annual Fort St. John Oilmen’s 4-on-4 Hockey Tournament on Saturday afternoon at North Peace Arena.

After three full days of hockey put on by the Fort St. John Petroleum Association, Ditmarsia took home the title with a convincing 9-2 win over Baker Hughes in the battle of the two top teams over the weekend.

Goalie for the winning squad Mike Hamre said it was team defense that ultimately lead to the victory.

“Honestly, just defense,” Hamre said.

“We were playing against an ExNHL prospect in Gerard Dicaire and it was nice not to let him get any goals on me tonight. Other than that it was just shut him down and let the rest of them shoot.”

In the third versus fourth Spectra Energy Final, TCL took down Cabre Oilfield 10-6 to wrap up a third place finish.

Tom’s Construction pulled out an 8-6 win over Fort Motors in the Scotiabank final.

The Sexsmith Financial final pitted North Vac Services against Distribution Now, with Northern Vac Services notching an 9-1 win.

The Weir Services final featured a tight 6-5 win by Complete Pumpjack over Magnum Oilfield.

Scores aside, the tournament has

always been about giving the members of the Oilmen’s an opportunity to get together in a fun environment outside of work.

“It’s great fun,” Hamre said.

“It’s nice to get together with all the guys who you work with throughout the days and nights. You have to put it out to the Oilmen’s committee, they put on a great tourney every year and I look forward to it every year.”

After a draft on Wednesday night that divided the 110 players into 10 teams, including one with Ex- NHLer Rhett Warrener, the teams played their five games and also had a stag event in which Warrener was the guest speaker.

It’s opportunities like chatting with a former NHL player, going nose-tonose with friends and colleagues on the ice that keeps players like Hamre coming back.

The camaraderie,” Hamre said after finishing up his fifth year in the tournament.

“I love it. I love being heckled, booed, cheered. I love all the fun stuff when the guys can really get on your back and attack you for being awesome.”

The next event for the Oilmen is the 6th annual FSJ Petroleum Association Couples’ Golf Tournament on Saturday, May 30.

The following weekend will feature the popular 53rd Annual Oilmen’s Golf Tournament from June 3-6.

BYRON HACKETT PHOTOS

(Above) Ditmarsia Holdings' goalie Mike Hamre makes a glove save on a Baker Hughes shooter.

(Below) A Ditmarsia Holdings forward bares down on Baker Hughes goalie Gilles MacDonald midway through the second period of the Oilmen's 4-on-4 hockey tournament final.

sports@ahnfsj.ca

The next Fort St. John Petroleum Association meeting is on May 7, 2015 – See you there!

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APRIL 17, 2015

Fort St. John, B.C.

250.785.7907 Toll Free: 1-888-830-9909

Dealer for WESTERN STAR • DOEPKER • TREMCAR • PACESETTER SALES • PARTS • SERVICE Contact: Contact: Wayne Doll • Sales Consultant Contact:Ryan DarcySaunders Hofstrand• •Sales SalesConsultant Consultant Cell: 250.261.9560 Cell:778.256.2117 250.264.7203 Cell: www.jamesws.com

PNN

NUMBERS

The following figures were taken from the stories in this issue of Pipeline News North.

$6.5 million: What Alberta’s oil and gas land tender pulled in on April 8. Chart on Page 5. $14.28: Japan LNG Import Price, up from $13.53 last month. Chart on Page 5. $58: The price of Brent in the second week of April. Chart on Page 5.

1,100: The amount of energy in megawatts the Site C dam will produce after it’s completed. Story on Page 8. $225 million: The amount of money raised

by Pembina Pipeline Corp. in a public

offering of shares. Story on Page 10. $1.14 billion: The price tag for NOVA Gas Transmission’s system expansion in Northeast Alberta. Story on Page 12.

4.7 per cent: The City of Fort St. John’s population growth rate — the secondlargest percentage basis out of any B.C. municipality. Story on Page 14.

9-2: The final score in the final game between Ditmarsia and Baker Hughes. It was the conclusion of three days of hockey put on by the Fort St. John Petroleum

Association. Story on Page 16.

310: The number of booths at the 43rd annual CKNL Trade Show in Fort St. John — the biggest ever show. Story on Page 20. $210 million: The price tag of Plateau Pipe Line’s Northeast B.C. Expansion Project, a 160 kilometre pipeline that would carry condensate and natural gas liquids to a terminal in Taylor. Story on Page 25.

5,000: The approximate number of people at the 38th Dawson Creek Sportsman’s Club gun show. Story on Page 28.

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APRIL 17, 2015

14

The Alberta-B.C. LNG 5 discount (chart) U.S. gas price 5 (chart)

PNN 16

B.C. land auction 5 (chart)

19 Dawson Creek business honoured as Job Maker

Alberta petroleum 5 land auction (chart)

05

Drilling keeps momentum 5 in Northeast B.C. Final decision expected in 5 June on LNG project

Look for PNN on Twitter @PipelineNN

23 Gas development could be an economic boon for Yukon: CERI

25 Pipeline seeks review exemption

Pembina Pipeline share 8 offering closes

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20 FORT ST. JOHN TRADE SHOW BIGGER THAN EVER

24 ALBERTA FIRM BUYS FORT ST. JOHNBASED RADIUS

‘Math error’ may mean 6 higher demand for Site C

Arctic shipping off northern coastline a possibility

14 Fort St. John No. 1 in population growth 16 Oilmen continue hockey tradition

Japan gas 5 price (chart)

Keyera, Kinder Morgan plan 10 Edmonton oil terminal

12 APPLICATION FOR NGTL $1.14 BILLION EXPANSION FILED

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28 DAWSON CREEK GUN SHOW DRAWS HUGE CROWD 29 Think tank to study fracking 30 OPINION: The folly of the anti-pipeline movement Look for PNN on Twitter @PipelineNN

Published monthly by Glacier Ventures International Corp.

Pipeline News North is politically independent and a member of the B.C. Press Council. The Pipeline News North retains sole copyright of advertising, news stories and photography produced by staff. Reproduction is prohibited without written consent of the editor.

APRIL 17, 2015

PIPELINE NEWS NORTH •

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THE CHARTS

#oilsands

alberta o&g land auction Alberta’s oil and gas land tender on April 8 pulled in $6.5 million.

The next tenders will be held April 29 and May 13. Source: Alberta

Energy Regulator December 2013 to April 2015

the alberta-b.c. lng discount

December 2013 to April 2015

The Alberta-B.C. Natural Gas Discount is the difference in price that a BTU of natural gas costs in Tokyo compared to Alberta. It has recovered from a four-year low of $9.65. (C$)

Alberta gas price The AECO “C” spot price, the Alberta gas trading price. (C$) Source: Natural Gas Exchange

December 2013 to April 2015

Northeast B.C. a bright spot in drilling licenses In the first quarter, governments across Canada approved 1,975 new wells — down 2,424 licences, or 55 per cent, from 4,399 permits issued in the first three months of 2014.

The permit count stayed fairly level in British Columbia, though, with the province approving 259 wells in the first quarter of 2015 compared to 284 well assignments in the year-prior period (off about nine per cent). During March, there were 70 new licences assigned versus 63 a year ago.

In Alberta, 1,100 new licences were issued in the first quarter, a decrease of close to 61 per cent from 2,790 permits in the first three months of 2014.

This year’s total includes 608 permits targeting oil or bitumen deposits, down from 1,427 last year, and 256 permits targeting gas compared to 428 a year ago.

Saskatchewan approved 532 wells in the quarter, down almost 56 per cent from last year’s 1,198. Manitoba approved 81 wells to the end of March compared to 125 a year ago.

Across the four western provinces, operators licensed 1,182 new wells in the quarter targeting oil and bitumen development, down from 2,629 licences last year.

Gas well permitting in Alberta, Saskatchewan and British Columbia also

declined in the quarter. A total of 566 new gas well authorizations were issued compared to 747 to the end of March last year.

A total of 117 oilsands evaluation wells were licensed during the quarter, down from 707 permits over the first three months of 2014.

Industry licensed 1,433 horizontal wells in the first three months of 2015, down from last year’s 2,657 horizontal permits. Excluding oilsands evaluation and experimental well licences, the 1,433 horizontal licences represent about 76 per cent of all wells approved for drilling, up from 73 per cent last year.

Excluding oilsands evaluation and experimental permits, the top five operators securing licences in the first quarter were: Royal Dutch Shell plc (164 permits), Crescent Point Energy Corp. (149), Canadian Natural Resources Limited (145), Progress Energy Canada Ltd. (120) and Penn West Petroleum Ltd. (119).

For the month of March, excluding experimental wells, the top two operators securing permits were Penn West (78 licences) and Progress (62).

Operators licensed 521 wells across Canada in March, down from 990 permits approved in March 2014.

— Daily Oil Bulletin

b.c. o&g land auction

japan lng price

December 2013 to April 2015

Japan LNG Import Price is at a current level of $14.28, up from $13.53 last month and down from $16.55 one year ago. This is a change of -13.73% from one year ago.

(US$). Source: World Bank

December 2013 to April 2015

Oil price brent crude price

u.s. gas price

The price of Brent crude has bounced around the $50-$60 range after halving from one year ago. Source: U.S. Energy Information Agency

Left, the Henry Hub Natural Gas Spot Price (US dollars per Million Btu). Source: U.S. Energy Information Agency December 2013 to April 2015

The BC Oil and Gas Commission’s monthly land tender pulled in only $1.69 million in March. The next sales will be held April 22 and May 20.

Source: BC Oil & Gas Commission

May 2010-April 2015

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Final decision expected in June

fid day on

New CEO will ultimately decide if the long-anticipated NorthWest LNG was expected to be announced by the end of 2014, but in December the

MATT LOFGREN SALES 250-785-5631 mlofgren at ahnfsj.ca

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PHOTOS COURTESY PETRONAS

APRIL 17, 2015

PIPELINE NEWS NORTH •

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on the massive project

horizon

will move forward or not. A �inal investment decision company delayed it to June. By David Dyck While British Columbia awaits a final investment decision on one of the proposed liquefied natural gas (LNG) export projects, presumed frontrunner Petronas has a new leader at the helm. And it won’t be long before he’ll be involved in making one of the biggest decisions of his career.

April 1 marked Wan Zulkiflee Wan Ariffin’s first day as president and chief executive officer of Petronas, which is owner of Progress Energy Canada Ltd. and Pacific NorthWest LNG. He took over from Shamsul Azhar Abbas, moving up from the position of chief operating officer.

Ariffin will ultimately decide if the long-anticipated NorthWest LNG will move forward or not. A final investment decision was expected to be announced by the end of 2014, but in December the company delayed it to June.

The stakes are massive, for both Petronas and B.C. The energy giant has about $36 billion on the table in British Columbia’s fledgling natural gas industry — the largest direct foreign investment in Canada.

But it isn’t a done deal.

The Globe and Mail reported in February that the incoming CEO was planning to meet with Premier Christy Clark and Deputy Premier Rich Coleman in March, but the ministry could not confirm that the meeting had happened, and Pacific Northwest LNG didn’t return calls for comment.

The project is still waiting on the federal environmental regulator to release its findings, also scheduled for late June.

After announcing the LNG tax regime late last year, and clearing the project through the B.C. Environmental Assessment Office, there’s little else the province can do to influence the decision.

Meanwhile, further upstream, drilling in Western Canada hasn’t been as robust as it has been in previous winters.

February and March are the busiest and most consistent times for drilling for both oil and gas, but the early months of 2015 saw active rigs plunge from over 400 in January to about 100 in April, according to Rig Locator. That’s largely due to oil prices halving in the past 10 month. (Rig Locator defines an active rig as one that is drilling, rigging up or moving.)

RELATED: Northeast B.C. a bright spot in drilling licenses—Page 5 Looking at just British Columbia last month, 51 per cent of rigs in the province were active, down from 82 per cent last March. At the start of the year, there were just over 60 wells being drilled in the province.

That now sits at just under 40.

One producer that didn’t slow as much was Progress Energy, which has holdings in the North Montney and Deep Basin.

See LNG on Page 26 R001622840

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APRIL 17, 2015

‘Math error’ may mean higer demand for Site Joint Review Panel created to review Site C made “a mathematical error” when it claimed there is no pressing demand for power from a third Peace River dam; Minister wrote that lique�ied natural gas

Jonny Wakefield

Pipeline News North

The Joint Review Panel created to review Site C made “a mathematical error” when it claimed there is no pressing demand for power from a third Peace River dam, the ministry in charge of the project says.

That’s one of the points in a Jan. 30 letter from Energy Minister Bill Bennett to the Peace River Regional District, responding to a request that the controversial project be sent to an independent regulatory agency for further review.

Bennett wrote that liquefied natural

gas (LNG) facilities would drive more electricity demand than the Joint Review Panel accounted for.

Whether B.C. actually needs power from the 1,100 megawatt Site C has been one of the biggest questions looming over $8.8 billion project.

In its report last May, the Joint Review Panel wrote it “cannot conclude that the power of Site C is needed on the schedule presented.” The dam is expected to begin generating power in 2025.

But according to Bennett, the review panel “erred” in calculating the energy demands of LNG projects.

The review panel made its calculations based on a scenario with “no LNG

load,” Bennett wrote. However, BC Hydro expects LNG will need around 3,000 gigawatt-hours of new electricity a year, according to a ministry spokesperson.

The panel settled on 800 gigawatthours a year as the likely LNG demand, but failed to include that number in calculations, the ministry said.

In an email, a ministry spokesperson said the panel “inadvertently failed to include [800 gigawatt-hours of LNG demand] in the summation column” of its calculation.

With 800 gigawatt-hours of new demand, “there would be a need for new capacity in 2019 and new energy in 2024,” Bennett wrote.

APRIL 17, 2015

PIPELINE NEWS NORTH •

C’s power (LNG) facilities would drive more electricity demand than the Joint Review Panel accounted for — meaning demand could be much higher

“When the [panel’s] mathematical error is corrected by adding the low LNG load into its analysis, it shows that Site C is in fact needed on the timetable that BC Hydro had set forth,” the ministry spokesperson wrote. “Under the expected LNG scenario there is a need for new energy resources earlier than Site C’s in-service date.”

While the panel later admitted the mistake in a followup publication, panelists wrote that its “conclusions remain as noted.”

The review panel called LNG “the biggest wild card” in forecasting the need for Site C. Nineteen companies are in the mix to export LNG from gas fields in North-

east B.C. to Asian markets, though none has made a decision to invest.

Liquifying natural gas takes tremendous amounts of power — as many as 700 megawatts in some proposals.

Each proposal differs on where it plans to get that energy.

The review panel notes that gas developers have been given a “free hand” to burn their own gas to power their operations — meaning it’s less likely projects will hook into the BC Hydro grid.

A gas-powered LNG industry “would make provincial (and national) greenhouse gas targets all but impossible to reach,” the panel concluded.

Some projects do intend to use power from BC Hydro.

According to the ministry spokesperson, three LNG projects using the B.C. grid (LNG Canada, Woodfibre LNG and an upgraded Tilbury Project in Delta) would exceed Hydro’s 3,000 gigawatt-hour projection.

Woodfibre plans to run its 1,300 gigawatt liquefaction plant on the BC Hydro grid for environmental reasons, according to a spokesperson.

However, many proponents hope to be liquifying and exporting natural gas well ahead of Site C’s in-service date.

When announcing the decision to go ahead with the project, the province delayed construction — which had been slated to begin this winter — to summer. reporter@dcdn.ca

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ALBERTA

COURTESY MEG

Keyera, Kinder Morgan Arctic shipping off northern Pembina Pipeline share plan Edmonton oil terminal coastline a possibility offering closes Keyera Corp. and Kinder Morgan, Inc. are teaming up in a 50-50 joint venture to build the $672 million Base Line Terminal, an above ground crude oil storage terminal just east of Edmonton.

Kinder Morgan will oversee construction of the project and will operate the terminal once it is in service.

The 12 tanks are completely contracted with creditworthy customers holding take-or-pay agreements of up to 10 years in length, David Smith, Keyera president and chief executive officer, said in an interview.

The customers run the gamut from producers to downstream players and Smith expects the tanks will store a variety of products, including diluted bitumen, synthetic crudes, synthetic bitumen blend and light crudes from the Western Canadian Sedimentary Basin.

Based on current capital estimates, Keyera’s estimated share of the costs to construct the terminal is approximately $330 million, excluding capitalized interest. However, the company anticipates that in the current softer economy those costs will come down. “We certainly have seen some indication that the productivity from construction crews is improving and some of the input costs are decreasing.”

Kinder Morgan’s investment in the terminal is approximately $342 million and it will invest up to an additional $69 million outside the joint venture for connecting pipelines and related infrastructure, for a total project investment of approximately $411 million.

— Daily Oil Bulletin

Is it possible to use the existing rail and barge infrastructure to get seasonal shipments of oil and gas down the Mackenzie River to the Beaufort Sea, or through the rail corridor to Churchill, Man., loading tankers for a seasonal, summer transit?

According to Chris Hill, president of Canatec Associates International Ltd., not only is it possible, but the scale of operations and shipping season could be gradually extended with ice-strengthened tankers and icebreaker support, as well as pipelines to carry the resource to Arctic ports.

“Basically, the technology is here, but it has to be applied and redefined to the specific exports and resources,” he told CI Energy Group Arctic Oil & Gas Symposium. “We have to revisit ports and refuges, search and rescue considerations, and communications.”

Along with accessing international markets for Alberta bitumen, he noted, there is also an opportunity to use the transportation corridor into either the Hudson Bay or Beaufort Sea to move product from eventual shale gas developments in Canada’s northern territories.

“The concept of Arctic transportation of resources is important to Canada, developing a global market corridor not dependant solely on our domestic or on the U.S. demand for the resource,” he said, adding there is opportunity for aboriginal and regional interests to take advantage of development and maintenance of potential transportation corridors that could move energy products via a northern sea route.

— Daily Oil Bulletin

R001919620

Pembina Pipeline Corporation says that it has closed its previously announced public offering of cumulative redeemable rate reset class A preferred shares, Series 9 for aggregate gross proceeds of $225 million.

The offering was announced on March 31, 2015 when Pembina entered into an agreement with a syndicate of underwriters co-led by Scotiabank and RBC Capital Markets. A total of nine million Series 9 preferred shares, which includes one million Series 9 preferred shares issued pursuant to the partial exercise of the underwriters’ option, were sold under the offering.

Proceeds from the offering will be used to reduce indebtedness under the company’s credit facilities, which indebtedness was incurred in connection with Pembina’s 2015 capital expenditure program.

Dividends on the Series 9 preferred shares are expected to be 29.69 cents per quarterly, or $1.19 per share on an annualized basis, payable on the first day of March, June, September and December, as and when declared by the board of directors of Pembina, for the initial fixed rate period to but excluding Dec. 1, 2020. The first dividend, if declared, will be payable Sept. 1, 2015, in the amount of 46.85 cents per share.

— Daily Oil Bulletin

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APRIL 17, 2015

ALBERTA

Application for NGTL’s $1.14 billion system expansion �iled with NEB Daily Oil Bulletin NOVA Gas Transmission Ltd. is seeking regulatory approval for a system expansion designed to receive the increasing gas supply from the west side of the system and to deliver gas to the growing oilsands markets on the east side.

“Based on the growth in unconventional supply, growing intrabasin market demands and the aggregate contractual requirements of the NGTL system, the applied-for facilities will be used and useful throughout the economic life of the project,” says the company in an application filed with the National Energy Board.

The estimated $1.14 billion cost of the project includes $986 million for the 250 kilometres of new pipeline and $181 million for added compression.

Subject to regulatory approval, pipeline construction is scheduled to start in the fourth quarter of 2016 for a scheduled in-ser-

vice date of April 1, 2017, says the company.

The proposed schedule enables construction activities to occur primarily during the winter to take advantage of frozen ground conditions for access to and along the pipeline rights of ways, says NGTL, a wholly owned subsidiary of TransCanada Corporation.

The proposed schedule also will help reduce overall environmental impact associated with caribou and migratory bird restricted activity periods as well as timing restrictions associated with watercourse crossings, it says.

The project facilities are required to meet aggregate Firm Transportation-Receipt (FT-R) and Firm Transportation-Delivery (FT-D) service contract commitments, as well as aggregate forecast requirements, for the transportation of natural gas between receipt and delivery points throughout the NGTL system, according to the application.

Supply growth The project design area includes a large geographic area of the NGTL system. Supply in the Upstream of James River Area (UJRA) is growing and requires additional capacity to move to markets outside the area.

Market demand growth in the North of Bens River area, especially within the Oil Sands Delivery Area (OSDA), requires additional capacity to move supply into the oilsands area, according to the application.

Producers in the UJRA have been active in the development of unconventional resources with receipts growing to more than 8.7 bcf per day in 2014 from approximately 5.7 bcf per day in 2010 and NGTL said it expects that growth will continue as the area contains the key unconventional plays in the Western Canada Sedimentary Basin expected to show significant supply growth.

NGTL says it has executed FT-R contracts with multiple customers and aggregate contracts, exceeding system capacity in the area.

Market growth There also has been substantial growth in intra-basin delivery markets in recent years, driven primarily by oilsands operations, gas-fired electrical generation and oilsands upgrading requirements, says the company. Deliveries in the oilsands area have more than doubled to over 2.4 bcf per day in 2014 from approximately one bcf per day in 2005 while local supply has continued to decline.

The trend of increasing deliveries is likely to continue as the area contains the majority of the industrial demand related to oilsands development, says NGTL. Market growth in the oilsands area is supported by incremental FT-D contracts with multiple customers, reaching a total of 3.5 bcf per day, exceeding system capacity into the area.

In its application, NGTL acknowledges that in late 2014 and early 2015 oil, and to a lesser extent, natural gas prices have declined. How-

APRIL 17, 2015

PIPELINE NEWS NORTH •

ALBERTA ever, the company says that at this time aggregate receipt and delivery contracts support the need for the project and it does not anticipate a change to the current scope of the facilities although it will continue to monitor market conditions.

Transportation contracts During the 2014 planning cycle, NGTL said it was determined that incremental requests for FT-R and FT-D service, combined with existing contracts, would exceed the capability of the NGTL System to meet these requests.

Facility plans were developed to address the shortfall in capacity and customers were offered FT-R or FT-D contracts for service with an in-service date of April 2017 or later.

Between April 2017 and March 2018, new FT-D contracts totalling 318 mmcf per day and new FT-R contracts totalling 221.5 mmcf per day were executed with in-service dated between April 2017 and March 2018, says the company.

The pipeline segments that comprise the oilsands delivery area (OSDA) have been fully contracted since 2014. Two of the segments, Kirby and Cold Lake, have been fully contracted since 2011 and the Liege segment became fully contracted in March 2014, it notes.

From April 2017 to March 2018, aggregate FT-D contracts in the OSDA are to increase by 318 mmcf per day to 3.5 bcf per day. There are 25 incremental FT-D contracts, signed by seven customers, with an in-service date between April 2017 and March 2018.

Delivery requirements exceed capacity from existing and other applied-for facilities in the OSDA by April 2017 and the project is required to accommodate the area forecast triggered by the incremental contract demand growth, says NGTL. The FT-R contracts supporting the project are the aggregate contract levels at the meter stations within the Upper James River Area.

Many of the pipeline segments that comprise the UJRA have been fully contracted since 2013 while others have been nearly fully contracted since 2010.

Specifically, the Gordondale and the Grande Prairie Mainline segments were fully contracted in September 2013, the Western Alberta System Exchange segment became fully contracted in March 2014 and the Central and Lodgepole segments became fully contracted in July 2014.

The Upper Peace River Mainline and Northwest Mainline Segments have been nearly fully (95 per cent) since November 2010.

Receipt requirements exceed the available capacity from existing and other applied-for facilities by April 2017 and the project is required to accommodate the area forecast triggered by the incremental contract demand growth. Between April 2017 and March 2018, the aggregate FT-R contract level in the UJRA is to increase by 221.5 mmcf per day to 10.8 bcf per day with the aggregate level of existing and incremental FT-R contracts exceeding the available capacity.

NGTL says it has 13 incremental FT-R contracts, signed by four customers with an in-service date between April 2017 and March 2018.

All incremental FT-R contracts have a minimum eight-year term.

Considering the capital cost of the proposed 2017 expansion project, additional requests for service in April 2018 and beyond, and the perceived uncertain commodity markets in late 2014, NGTL said it collaborated with customers to establish a process that would allow them to turn-back existing signed FT-R service if NGTL could either match or replace that service with a customer’s request for new FT-R service.

The company held an FT-R turn-back process and received one request for FT-R volumes to be turned back. As a result of the limited volume, identified in the process, there was no impact to the scope of the project.

WCSB supply forecast The proposed expansion project will provide transportation access to supply sources from emerging shale plays in Alberta and British Columbia as well as additional tight conventional supply sources in the Alberta Deep Basin, says NGTL. The contribution from unconventional sources is expected to continue to grow steadiR001997011

13

ly, ramping up in the 2018-2022 timeframe, according to the company.

The total gas supply is expected to increase to 18.4 bcf per day by 2025 from 14.1 bcf per day in 2015-16 and then stabilize to the end of the forecast period. Meanwhile, NGTL system supply is forecast to climb to 14.1 bcf per day in 2024-25 from 10.6 bcf per day today.

Cost of service and tolls The expected increase in NGTL’s revenue requirement as a result of rolling the facility costs into the system’s existing rate base is approximately $136 million in 2018, the first full year the facilities are in service, says the company in its application. The total toll impact in 2018 would be 2.1 cents per mcf per day (1.1 cents for average firm delivery and one cent for average firm receipt).

The abandonment cost estimate for the project is $26 million ($22 million for pipe and $4 million for the compressor stations).

The project includes the following proposed facilities: See PIPELINE on Page 26

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14

• PIPELINE NEWS NORTH

APRIL 17, 2015

NORTHEAST B.C.

Fort St. John No. 1 in population growth ‘People used to come up here for camp work, fly-in, fly-out, now they’re moving their families here’

William Stodalka

Pipeline News North

The Peace River Regional District grew the fastest in the province from 2013 to 2014, new data from B.C. Stats shows. At the high end, the City of Fort St. John grew on the second-largest percentage basis out of any B.C. municipality, at about 4.7 per cent. It went from a population of 20,553 to 21,523.

The Northern Rockies Regional District, on the other hand, showed a slight drop in its population numbers from 2013 to 2014. The municipality went from 5,460 to 5,440. The rural areas of the district stayed mostly the same, going from 593 to 592 during the same time period. Since 2011, the district's population has declined by 0.1 per cent.

Lakeland County, located near the Okanagan, grew the most at about 5.6 per cent.

On Jan. 15, B.C. Stats released its 2014 sub-provincial population estimates. Drawing upon power hook-

up and health registration information, it provided estimates for the populations of various communities within B.C. BC Stats lumped every Northeastern B.C. community into the Peace River Regional District, save for the NRRM. It grew 2.8 per cent from 2013 to 2014, going from 64,480 to 66,321.

But this growth was not evenly distributed, as some communities decreased in population, while others grew.

Fort St. John had the highest nominal growth, increasing by 970 people.

Councillor Trevor Bolin saw the news as positive. “[Newcomers are] starting to see this is the area for employment, quality of life et cetera,” he said. “People used to come up here for camp work, fly-in, fly-out, now they’re moving their families here…I think 4.7 [per cent growth] is just going to be the start of it.”

“Everybody wins when we find new people,” he added. “They’ll find

Fort St. John is the best place to live.”

Councillor Larry Evans also saw some positives, but noted that the growth comes with new challenges.

“One of the biggest things that comes into play is the infrastructure of the city, making sure that when you turn on the water you get drinkable water and when you flush the toilet it goes away,” he noted. “As more buildings come online, and more people move in, our water and sewer system has to keep up…every time they add a subdivision, like in the northwest, those roads become our responsibility for clearing.”

The city council is trying to deal with this growth “in a sustainable and orderly fashion,” he added.

Dawson Creek, the second largest municipality within the region, went from a 2013 population of 12,289 to a 2014 population of 12,653, or a growth rate of about three per cent.

Since 2011, it has averaged a 2.4 per cent annual population growth.

Councillor Terry McFadyen said the growth the city’s experiencing may be larger than these estimates.

Fort St. John has seen a surge in new home construction to keep pace with its rising population.

FILE PHOTO

“I think we have a lot of people who are still living in Kelowna, the high land, that fly in to work and fly out,” he said. “We have all this construction…at the same time, our school population is not growing.

That tells me we have a significant shadow population.”

McFadyen also noted that a growing population could have commercial benefits to the Mile 0 City.

“A lot of stores and companies, they won’t show up unless you have 15,000 20,000,” he said. “I think we’re probably close to that, but it probably doesn’t appear (in the estimates).”

Other municipalities had different rates.

Chetwynd went from a 2013 population of 2,777 to a 2014 population of 2,793, for a growth rate of about 0.6 per cent. Since 2011, it has averaged about the same amount of growth.

Over in Hudson’s Hope, the district lost three people from its population from 2013 to 2014, going from 1,040 residents to 1,037 residents.

APRIL 17, 2015

Since 2011, it has averaged a population growth of two per cent.

In Pouce Coupe, the village lost 10 people from 2013 to 2014, going from a population of 736 to 726. It is the first time since 2011 that the village has not grown.

The District of Taylor lost people as well, going from a 2013 population of 1,504 to a 2014 population of 1,490. This is a change for the district, which has averaged a two per cent annual growth rate since 2011.

In Tumbler Ridge, the district reportedly grew from a population of 2,897 in 2013 to a population of 2,983 in 2014. This data, however, was gathered in July 2014, and may not reflect current realities of the district after some mines were closed.

In terms of population, the second largest growth occurred in the rural areas not in any particular Peace River municipality. In 2013, there were about 22,684 people living in these types of homes, while in 2014, that rose to 23,116 people, which represented a growth rate of about 1.9 per cent.

On a percentage basis, many municipalities in the Peace River Regional District grew more than the province as a whole, which only grew at about 1.1 per cent from 2013 to 2014.

The region with the highest actual population growth was Greater Vancouver, which saw an increase of 31,500 people.

The municipality with the highest actual

population growth was Surrey, which saw about 9,000 more people from 2013 to 2014.

The region that had its population decline the most on a percentage basis from 2013 to 2014 was the Stikine area, which went down by about

PIPELINE NEWS NORTH •

15

two per cent.

The municipality with the biggest population decline was Prince George, which saw about 637 fewer people live there from 2013 to 2014. reporter@ahnfsj.ca

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16

• PIPELINE NEWS NORTH

APRIL 17, 2015

FORT ST. JOHN

BYRON HACKETT PHOTO

Ditmarsia Holdings took home the trophy at the 12th annual Fort St. John Oilmen's 4-on-4 Hockey Tournament on April 4 at the North Peace Arena.

oilmen continue hockey tradition Byron Hackett

Pipeline News North

Ditmarsia Holdings was the last team standing when the final buzzer went at the 12th annual Fort St. John Oilmen’s 4-on-4 Hockey Tour-

nament on April 4 afternoon at North Peace Arena.

After three full days of hockey put on by the Fort St. John Petroleum Association, Ditmarsia took home the title with a convincing 9-2 win over Baker Hughes in the battle of the two top

teams.

Goalie for the winning squad Mike Hamre said it was team defense that ultimately lead to the victory.

“Honestly, just defense,” Hamre said.

“We were playing against an Ex-NHL prospect

R001697743

APRIL 17, 2015

PIPELINE NEWS NORTH •

FORT ST. JOHN

17

BYRON HACKETT PHOTOS

Ditmarsia Holdings' goalie Mike Hamre makes a glove save on a Baker Hughes shooter. Right: A Ditmarsia Holdings forward bares down on Baker Hughes goalie Gilles MacDonald midway through the second period of the Oilmen's 4-on-4 hockey tournament final.

in Gerard Dicaire and it was nice not to let him get any goals on me tonight. Other than that it was just shut him down and let the rest of them shoot.”

In the third versus fourth Spectra Energy Final, TCL took down Cabre Oilfield 10-6 to wrap

up a third place finish.

Tom’s Construction pulled out an 8-6 win over Fort Motors in the Scotiabank final.

The Sexsmith Financial final pitted North Vac Services against Distribution Now,

with Northern Vac Services notching an 9-1 win.

The Weir Services final featured a tight 6-5 win by Complete Pumpjack over Magnum Oilfield.

See HOCKEY on Page 18

R001697755

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• PIPELINE NEWS NORTH

APRIL 17, 2015

HOCKEY from Page 17 Scores aside, the tournament has always been about giving the members of the Oilmen’s an opportunity to get together in a fun environment outside of work.

“It’s great fun,” Hamre said.

“It’s nice to get together with all the guys who you work with throughout the days and nights.

You have to put it out to the Oilmen’s committee, they put on a great tourney every year and I look

forward to it every year.”

After a draft mid-week that divided the 110 players into 10 teams, including one with ExNHLer Rhett Warrener, the teams played their five games and also had a stag event in which Warrener was the guest speaker.

It’s opportunities like chatting with a former NHL player, going nose-to-nose with friends and colleagues on the ice that keeps players like Hamre coming back.

The camaraderie,” Hamre said after finishing

up his fifth year in the tournament.

“I love it. I love being heckled, booed, cheered.

I love all the fun stuff when the guys can really get on your back and attack you for being awesome.”

The next event for the Oilmen is the 6th annual FSJ Petroleum Association Couples’ Golf Tournament on Saturday, May 30.

The following weekend will feature the popular 53rd Annual Oilmen’s Golf Tournament from June 3-6. sports@ahnfsj.ca

APRIL 17, 2015

PIPELINE NEWS NORTH •

EMPLOYMENT

19

Business honoured as Job Maker Action Health and Safety Services provides first aid, emergency care and security for the oil and gas industry Mike Carter

Pipeline News North

Action Health and Safety Services, a locally owned and operated Dawson Creek business, has been recognized by the provincial government as a “B.C. Job Maker” for the month of March.

SUBMITTED PHOTO

the natural gas industry [and] showcase how women can be successful entrepreneurs. I hope young women will look up to the Milne sisters and be inspired to start their own small business.”

The Milne sisters told the Alaska Highway News that they were thrilled to have provincial

recognition.

“It’s awesome to just have some recognition of what we’ve accomplished,” Sandra said. dcreporter@dcdn.ca

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Action Health and Safety Services (AHSS), a Dawson Creek business owned and operated by sisters Sandra and Shelley Milne, is one of four businesses being highlighted by the provincial government as a “B.C. Job Maker” for the month of March.

AHSS provides first aid, emergency care and security services to the oil and gas industry in Northeastern B.C. and Alberta.

The province names four B.C. Job Makers every month to recognize companies and individuals investing in the province and their local communities.

In honour of International Women’s Day on March 8, all the businesses highlighted this month are owned and operated by women.

“These stories demonstrate the important role women play in the B.C. economy,” a government release stated.

Sandra bought AHSS in 2008 after working there as an employee. Her sister Shelley became a more active partner in 2012 after Sandra was diagnosed with cancer.

In 2010, the company was named one of Canada’s fastest growing businesses, turning a 250 per cent profit while increasing their number of oil and gas units serviced from 12 to 40. The sisters were also named two of the top 25 entrepreneurs in Canada in 2010 and 2011.

AHSS employs 30 people and additional contract workers in the oil patch.

South Peace MLA Mike Bernier is planning to hold a reception to congratulate the Milne sisters.

“Action Health and Safety Services is a jobs creator for Dawson Creek and area,” Bernier said. “[They provide] an essential service to

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• PIPELINE NEWS NORTH

APRIL 17, 2015

NORTH PEACE TRADE SHOW

DAVID DYCK PHOTOS

Left: Madison Holt, age 7, and her sister Lillie, age 4, build structures with the help of some of the Science World BC staff. Above: Candy apples are always popular trade show fare.

TRADE SHOW BIGGER THAN EVER The 43rd annual Fort St. John Trade Show took place at the Pomeroy Sport Centre April 10-12. If you weren't able to make it out, you missed out on the biggest trade show yet, with over 300 booths and vendors from all across the country. Pipeline News North was there to document the highlights.

DAVID DYCK PHOTO

Michaud Toys from Ontario is a company that makes wooden toys and board games. They're a regular vendor at the trade show, and were there again this year.

DAVID DYCK PHOTO

Chadwick brothers Mason, age 3, and Braiden, age 5, test drive a quad on the trade show floor.

APRIL 17, 2015

Linden Evans finds a great spot to watch the Science World demonstration, sitting on top of his father Neil's shoulders.

David Dyck

Pipeline News North

Fort St. John hosted the 43rd annual CKNL Trade Show April 10-12, and this one was bigger than ever.

According to organizers, they added about 20 more booths this year, the most they’ve ever had, and the most they can actually fit in the Pomeroy Sport Centre.

The show sold out.

“I’ve said this every year, but it truly is our biggest show this year,” said organizer Christina Hogarth. Five years ago, the show consolidated from three separate locations into one at the Pomeroy Sport Centre, giving them a lot more space to work with. But this year was tight, with around 310 booths lining the walls on both levels and intersecting the open area on the main floor of the facility.

“This year we added more booths, but we’re pretty much at capacity, we can’t get any more booths in there. It’s kind of exciting,” said Hogarth.

With about a 60 per cent renewal rate from vendors, many of the same booths past attendees have seen were set up. Many of them have been coming to the show year after year for a long time, and not all of them are local.

“We have a few that come every single year and they’re from out of town, actually quite

a few that have been in for 20 years and they just come because it’s a great show and a great town — the town really supports it,” she said.

“And then we do have lots of local vendors too that have been in it year after year.”

There was also a large contingent of new vendors, there for the first time.

Of course, there was all of the typical trade show food to look forward to, like mini donuts, lemonade, cotton candy and candy apples.

“You couldn’t have a show without trade show food,” said Hogarth. Many local restaurants attend to feed the crowds.

And there were a lot of people to feed. Last year the show saw 16,000 attendees, a number that Hogarth said they matched that this year.

The show has seen growth of about a thousand people every year for the past three years.

There is always something for the kids.

Aside from face-painting and bouncy castles, there’s typically an entertainment aspect to the show. Last year it was Safari Jeff, showing live reptiles to children and adults. This year, that was provided by Science World, who had Keva plank interactive building demonstrations throughout the day – one on April 10, four on April 11, and three on April 12.

“One of the focuses is that we made it a very family-friendly show as well,” said Hogarth. peacereporter@ahnfsj.ca

PIPELINE NEWS NORTH •

21

DAVID DYCK PHOTO

DAVID DYCK PHOTO

Elizabeth Tucker-Heinrich, age 6, sports a freshly painted face.

22

• PIPELINE NEWS NORTH

APRIL 17, 2015

DRILLING

Licences plunge in Q1, but not in B.C. Permit count stayed fairly level in British Columbia, with the province approving the first quarter of 2015 compared to 284 well assignments in the year-prior

In the first quarter, governments across Canada approved 1,975 new wells — down 2,424 licences, or 55 per cent, from 4,399 permits issued in the first three months of 2014.

The permit count stayed fairly level in British Columbia, though, with the province approving 259 wells in the first quarter of 2015 compared to 284 well assignments in the year-prior period (off about nine per cent). During March, there were 70 new licences assigned versus 63 a year ago.

In Alberta, 1,100 new licences were issued in the first quarter, a decrease of close to 61 per cent from 2,790 permits in the first

three months of 2014. This year’s total includes 608 permits targeting oil or bitumen deposits, down from 1,427 last year, and 256 permits targeting gas compared to 428 a year ago.

Saskatchewan approved 532 wells in the quarter, down almost 56 per cent from last year’s 1,198.

Manitoba approved 81 wells to the end of March compared to 125 a year ago.

Across the four western provinces, operators licensed 1,182 new wells in the quarter targeting oil and bitumen development, down from 2,629 licences last year.

Gas well permitting in Alberta, Saskatchewan and British Colum-

bia also declined in the quarter. A total of 566 new gas well authorizations were issued compared to 747 to the end of March last year.

A total of 117 oilsands evaluation wells were licensed during the quarter, down from 707 permits over the first three months of 2014.

Industry licensed 1,433 horizontal wells in the first three months of 2015, down from last year’s 2,657 horizontal permits.

Excluding oilsands evaluation and experimental well licences, the 1,433 horizontal licences represent about 76 per cent of all wells approved for drilling, up from 73 per cent last year.

Excluding oilsands evaluation

259 wells in period

and experimental permits, the top five operators securing licences in the first quarter were: Royal Dutch Shell plc (164 permits), Crescent Point Energy Corp. (149), Canadian Natural Resources Limited (145), Progress Energy Canada Ltd. (120) and Penn West Petroleum Ltd. (119).

For the month of March, excluding experimental wells, the top two operators securing permits were Penn West (78 licences) and Progress (62).

Operators licensed 521 wells across Canada in March, down from 990 permits approved in March 2014.

— Daily Oil Bulletin

APRIL 17, 2015

Gas production could be an economic boon for Yukon: CERI Yukon’s considerable natural gas resources could provide significant economic growth and environmental benefits, especially if they are developed for use within the territory and displace diesel power generation, says a new Canadian Energy Research Institute (CERI) report.

The report assumes that the Eagle Plain basin has a mean gas-inplace estimate of 3.4 tcf within the area available for development and that 60 per cent of the mean gas in place is recoverable using conventional extraction methods. In addition, it assumes that each vertical well would have an initial production rate of 2.8 mmcf per day of dry gas that does not require additional processing.

“We have used a conservative initial production rate,” Peter Howard, president emeritus at CERI and one of the report’s authors, said in an interview. “We have taken a cost estimate from Northern British Columbia and inflated it to suggest that it might be more expensive to drill in the Yukon, because it is more remote than northern B.C. “The production profile of the wells themselves is based on resources that are proxy and very similar in nature to the Eagle Plain.”

According to the CERI report, Economic Impacts of Natural Gas Development within the Yukon Territory, a homegrown, conventional natural gas industry extracted in Yukon, transported wholly within Yukon, and used only in Yukon would grow the territory’s GDP by $875 million over a study period between 2017 and 2041, increase tax revenues by $101 million and provide 6,000 person years of em-

23

PUMPING SOLUTIONS

ployment.

Pipeline would provide power for mines The first scenario assumes a domestic pipeline from Eagle Plain to Stewart Crossing with a lateral line to the Casino mine sites, providing Yukon with 50 mmcf per day of natural gas for 80 years to drive initial development of the mining sector.

The total capital investment would be about $9.76 billion from across Canada and would create and preserve a total of 6,000 person years of employment within Yukon.

“In typical fashion, the resources aren’t exactly where the power generation system is,” said Howard.

“We need to drill some wells, build a pipeline, and this [brings our report] to a point where (a) you could start generating power using natural gas and (b) the potential of a small LNG facility could take LNG to some of the very remote mine sites.”

Scenario Two would require estimated total investment of $27.65 billion and would provide 50 mmcf per day of natural gas for the territory, as well as 180 mmcf per day for export to other markets via Haines, Alaska, for 24 years. This scenario would create and preserve 19,000 person years of employment within the territory.

Assuming Yukon could link its natural gas sector to the rest of North America and the world via pipeline, the CERI report says, there would be reduced financial risks in regards to infrastructure development through market diversification, although entering a broader market would also make Yukon gas susceptible to the increased risk of global pricing.

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• PIPELINE NEWS NORTH

APRIL 17, 2015

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Alberta firm buys FSJ-based Radius Buffalo Inspection Services will have ‘capability of increasing presence in N.E. British Columbia working in partnership with an experienced team’ William Stodalka

Alaska Highway News

An Alberta company has purchased Fort St. John-based Radius Inspection Services.

The announcement means that Buffalo Inspection Services will have “the capability of increasing its presence in Northeastern British Columbia working in partnership with an experienced team.”

The actual purchase was made last November and announced.

Now, Radius — operating as Silver Shadow Inspection Services, a division of Buffalo — can provide additional services, such as phased array and mainline crawler capabilities.

Buffalo purchased Silver Shadow Inspection in 2014.

Inspection services companies use technology like radiography to inspect natural gas well

integrity.

Martin Heitcoetter, Buffalo’s CEO, said that they have been able to maintain their current staff since the acquisition. reporter@ahnfsj.ca

Now, Radius — operating as Silver Shadow Inspection Services, a division of Buffalo — can provide additional services.

APRIL 17, 2015

PIPELINE NEWS NORTH •

25

Pipeline seeks review exemption $210 million project would need 400 construction workers at peak, carry up to 75,000 barrels Jonny Wakefield

Pipeline News North

A company seeking to build a pipeline between natural gas fields southeast of Pink Mountain and Taylor is asking the province to exempt the project from environmental review.

Plateau Pipe Line Ltd. has applied with the B.C.

Environmental Assessment Office (EAO) to waive the environmental assessment certificate on its Northeast B.C. Expansion Project, a 160 kilometre pipeline that would carry condensate and natural gas liquids to a terminal in Taylor.

The $210 million project would need 400 construction workers at its peak, and could carry up to 75,000 barrels a day after completion.

Plateau Pipe Line Ltd.'s proposed Northeast B.C. Expansion Project.

Plateau would still be required to consult with First Nations, residents and local governments.

In a submission to the EAO, the company argues that the pipeline's environmental footprint will be minimal because 80 per cent of the route has been cleared previously for farming, roads, transmission lines or other pipelines. Around 300 hectares of land would still be cleared—roughly 560 American football fields.

It would also be subject to separate regulations through the Oil and Gas Commission and the ministry of forests.

The project is small relative to other Northeast B.C. natural gas pipelines either under construction or seeking approval.

TransCanada's proposed $4 billion Coastal GasLink between Dawson Creek and LNG facilities in Kitimat is one of the largest at 700 kilometres, while the $1.9 billion Merrick Mainline between Dawson Creek and Summit Lake would run 260 kilometers. The larger project required an environmental assessment.

Seventy-five per cent of goods and services would be sourced locally, a filing states.

The company could be exempted from the environmental review process if it proves the pipeline "will not have significant adverse environmental, economic, social, heritage or health effects," or that those effects can be minimized.

FROM PLATEAU PIPE LINE LTD.'S PROJECT DESCRIPTION

It's unclear whether the pipeline would be affected by the Blueberry River First Nation's lawsuit over the cumulative impact of oil and gas development on treaty rights. That lawsuit, filed last month in the B.C. Supreme Court, alleges the total impact of resource development in Northeast B.C. has breached Treaty 8.

According to documents filed with the EAO, concerns around the pipeline's impact on hunting, trapping and fishing came up during early consultation with Treaty 8 Tribal Association First Nations.

The EAO will "consult with relevant government agencies and First Nations" before deciding whether to consider Plateau's exemption request, a ministry spokesperson wrote in an email. That process is expected to take around three months.

Calls to Pembina Pipeline Corp., Plateau's parent company, did not respond to requests for comment by press time. reporter@dcdn.ca

26

• PIPELINE NEWS NORTH

APRIL 17, 2015

LNG

So far 10 projects in B.C. and the Pacific Northwest United States have been approved by the NEB to export LNG out of the country, while another 10 have yet to apply or are waiting for approval.

Shamsul Abbas served as chief executive officer and president of Petronas from Feb. 4, 2010 to March 31, 2015. He is now vice president, Logistics and Maritime Business.

COURTESY PETRONAS LNG from Page 7

Progress, still the overall top drilling rig operator, had 11 active rigs as of April 6. Last month, Progress was moving at an even higher rate, with twice that number of rigs. From January to March they had 18 to 22 active rigs.

As far as other LNG projects go, the $1.7 billion Woodfibre LNG ap-

pears to be the farthest along, with Coleman announcing at an LNG event in Squamish this past January that he expected the decision to come down this year.

That project’s public comment period for its provincial environmental assessment was extended by 15 days, due to the “high level of public interest” read the B.C. EAO decision. That project is one

PIPELINE from Page 13 —Northwest Mainline Loop (Boundary Lake section): approximately 91 kilometres of 36inch outside diameter pipeline; — NWML Loop No. 2 Bear Canyon section: approximately 27 kilometres of 36-inch pipeline; — Grande Prairie Mainline Loop No. 2 McLeod River section: approximately 36 kilometres of 48-inch pipeline; — Liege Lateral Loop No. 2 Pelican Lake section: approximately 56 kilometres of 30-inch pipeline; and

of the smaller proposals, applying to the National Energy Board (NEB) to export up to 2.1 million tonnes of LNG per year, contrasted with Pacific NorthWest’s 22.2 million.

Smaller projects like Woodfibre and AltaGas’s Douglas Channel LNG are the two that are leading the pack with Pacific NorthWest, the province said last month.

— Kettle River Lateral Loop Christina River section: approximately 20 kilometres of 24inch pipeline.

The project also will include compressor station unit additions at Alces River and Otter Lake.

Economic benefits Decision Economics Consulting Group conducted an economic effects analysis for the project, estimating the economic effects of project expenditures on construction and activities in Canada (from 2016 through to commissioning in 2017) and on operational expenditures in Canada for a 40-year operating

Shell Canada has said that they expect to make a FID on their $40 billion LNG Canada Gas project by 2016.

So far 10 projects in B.C. and the Pacific Northwest United States have been approved by the NEB to export LNG out of the country, while another 10 have yet to apply or are waiting for approval. peacereporter@ahnfsj.ca

period (2017 to 2056).

According to the study, the project is expected to generate an estimated $800 million in labour income during the construction phase and generate an estimated $1.2 billion in gross domestic product in Canada.

Since July 2014, NGTL has been engaged with 54 Aboriginal communities and organizations for the project.

The Aboriginal engagement program, it said, was developed and implemented to anticipate, prevent, mitigate and manage potential project-related effects on the exercise of Aboriginal or treaty rights and interests.

— Daily Oil Bulletin

APRIL 17, 2015

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• PIPELINE NEWS NORTH

APRIL 17, 2015

SOUTH PEACE GUN SHOW

Ed Whelan (right) shows his son Scott a Mossberg Flex 500 Tactical 12 gauge shotgun at the 38th annual Dawson Creek Gun and Sportsman show at the Encana Events Centre. Ed is the owner/operator of Prince George Guns and Ammo.

PHOTOS BYMIKE CARTER, DAWSON CREEK SPORTSMAN’S CLUB

GUN SHOW DRAWS HUGE CROWD Just shy of 5,000 people bought tickets for the event; about 3,500 attended on first day and 1,400 on second Mike Carter

Pipeline News North

For the 38th year, the Dawson Creek Sportsman’s Club came in guns-a-blazing, attracting vendors, sportsmen and sportswomen throughout Western Canada.

The show drew about 5,000 people, and raised north of $30,000 for the club’s coffers, according to club president Andy Waddell.

By 10:30 a.m. on April 10 — just an hour and a half after opening — 1,000 people had already passed through the Encana Events Centre doors.

There were roughly 245 vendors at this year's event, which is about average, according to Waddell.

"I had a vendor from as far away as Manitoba. They came from all over B.C., all over Alberta, [and] one or two from Saskatchewan," he said.

"We're drawing from all of Western Canada."

Most of the money the club raised will go towards building a 50-metre indoor shooting range next to the clubhouse and an outdoor range at Riley's Crossing.

"If I get the [Fair Share] funding I just applied for, we would be break-

ing ground in June," Waddell said.

The plan is to have the new facility enclosed from the elements by fall, so that work can be completed over the winter.

Just shy of 5,000 people bought tickets for the event. Waddell says about 3,500 attended on April 10 and 1,400 on April 11.

Those numbers are down by about 500 from last year's attendance.

In addition to the $30,000 raised for the club by ticket sales and vendor fees, the club brought in $13,000 through raffles and a 50/50 draw.

The largest prize, a complete

moose hunting camp — including a tent, two-burner propane stove, tables, chairs and insulated hunting gear — sold over 700 tickets.

Next up for the club is the 18th annual Mother's Day clay shoot benefit, held each year at Riley's Crossing in support of the Dawson Creek and District Hospital Foundation.

For more information on the event, contact the foundation at 250784-7355.

"Overall, it was a huge success," Waddell said. dcreporter@dcdn.ca

The Dawson Creek Sportsman’s Club hosted its annual gun show at the Encana Events Centre April 10-11, drawing vendors, sportsmen and sportswomen from all of Western Canada. Just shy of 5,000 people and 245 vendors attended. The club raised over $30,000. PHOTOS BY DAWSON CREEK SPORTSMAN’S CLUB

APRIL 17, 2015

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NORTHEAST B.C.

Think tank to study fracking Will focus mainly on water use, water contamination and carbon emissions, as well as the technologies, practices and polices that could reduce impacts

Mike Carter

Pipeline News North

A Vancouver-based clean energy think tank wants to know what can be done to reduce the environmental impacts from fracking and other natural gas development in Northeast British Columbia.

The Pembina Institute plans to focus mainly on water use, water contamination and carbon emissions, as well as the technologies, practices and polices that could reduce impacts, said Kevin Sauve, communications lead for the Pembina.

The think-tank is reaching out to communities and First Nations for their input on the research, which focuses on future development in B.C.’s natural gas fields.

Sauve added that there has been lots of interest so far, especially from Fort Nelson

Fort Nation.

Pembina has also made contact with Fort St. John and Dawson Creek so the study can be informed by “what kind of development [communities] are actually wanting and looking for,” Sauve said.

The measuring of greenhouse gas emissions and possible water contamination will be based on various LNG development scenarios, but will be heavily informed on the province’s goal of five LNG terminals on the coast by 2021.

“So you build five terminals [that takes] maybe 200 wells, how many emissions and under what practices will they be developing these wells?” Sauve asked.

The end goal of the study will be to identify technologies to reduce emissions and water contamination, and then develop policies to

put forward to government officials, Sauve says. “[We want] to help communities in Northeast B.C. so they are better able to engage with industry and government to ensure their perspectives are reflected in decision making.

“Ultimately this project is aimed at reducing water usage, water contamination and carbon emissions from future shale gas development.”

Sauve added that the study takes into account different carbon emissions resulting from the two different shale gas extraction plays in the Northeast, the Horn River basin and the Montney shale formation.

The study will result in two reports: one on emissions and one on water usage and contamination.

The rough timeline Pembina is working with has the reports being released this fall. dcreporter@dcdn.ca

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• PIPELINE NEWS NORTH

APRIL 17, 2015

CLOSING ARGUMENT

Derailments in Canada expose folly of anti-pipeline movement Because of artificially created shortage of pipeline capacity in U.S. and Canada, more petroleum is moving by rail; while the vast majority arrives safely at its destination, there are still differences relative safety

Kenneth P. Green Fraser Institute

Four recent oil-train derailments—two in the United States and two in Canada accompanied by yet another drive-by rhetorical smear of the Keystone XL pipeline

by U.S. President Barack Obama— have re-invigorated the debate over how Canadians and Americans transport oil. The most recent spills and explosions in Illinois, West Virginia and Ontario all involved long oil trains of about 100 cars. So far as we know, they all met the most recent railcar designs and regulatory requirements in the U.S. and Canada.

The barrage of derailments continues to illuminate the folly of the anti-pipeline movement.

Because of an artificially created shortage of pipeline capacity in the U.S. and Canada, more petroleum products are moving by rail. This issue was deeply analyzed in a 2013 study I co-authored on Intermodal Safety in the Transport of Oil. Using the most comprehensive available U.S. data, we observed that while the vast majority of oil transported by any mode arrives safely at its destination, there are still discern-

able differences in relative safety.

On virtually all metrics of safety, whether environmental or occupational, it was clear that movement of oil and gas is safest via pipeline and less safe via rail.

Specifically, on an apples-toapples basis, transport one billion tons of oil over a mile by pipeline and there is a very low likelihood of leakage—less than one incident per billion ton-miles. The risk of a leak by rail is twice as high, at two likely incidents. And trucks are 10 times higher still, with 20 incidents likely in moving a billion tons of oil over a mile. On volumes spilled, it’s true that pipeline ruptures release larger quantities of oil than individual truck or train spills, but recovery rates for oil spilled from pipelines can reach 50 per cent, and they are far less likely to pose a threat to large population centres. When it comes to worker safety, pipelines also look safer. Safety data from the U.S. suggests that one would have only 0.007 injuries per billion tonmiles, while rail injury rates are 30 times as high.

That pipelines are safer than trucks or trains should come as no surprise. A pipeline is fixed infrastructure with little exposure to the elements, fewer opportunities

for operator or mechanical failure, and with greater capacity for realtime monitoring and pre-planning for remediation based on the specific and well-understood characteristics of the pipeline route. Pipeline routes are also often built away from densely populated areas.

Trains and trucks, running above ground, are on fluid routes subject to constant change.

That offers far more opportunities for breakdown, operator error, and injuries to workers as well as the general public. And, rail and roadways, by intent, pass through major population centres putting more people at risk when an accident happens.

Environmentalists and antifossil-fuel allies have successfully stalled the development of safer pipeline capacity for years now. As a result, more oil is transported by railways, increasing health and environmental impacts rather than reducing them.

Anti-pipeliners would undoubtedly say that the solution to these problems is just to “stop using oil,” but that idea is essentially the mother of all denial: developed economies are essentially fossilfuel economies from top to bottom, with a helping of hydro and

nuclear power on the side—87 per cent of all the energy used around the world is generated from fossil fuels, and 80 per cent of all transportation is powered by oil and its derivatives. Renewables such as wind and solar power are akin to the skin of an apple—pretty, but not terribly filling in and of itself.

Opposition to pipelines flies in the face of safety data, which shows that pipelines are safer modes of transport than railways. This is not the pipeline engineering equivalent of rocket science. And despite the current downturn in world oil prices, energy agencies and companies expect future demand to rebound, and create the incentives to develop oil in both the U.S. and Canada.

Environmentalists who engage in anti-pipeline crusades risk causing more harm than good. Their pipeline-stalling actions are diverting oil to rail; oil that would otherwise be transported more safely by pipeline.)

Kenneth P. Green is Senior Director, Centre for Natural Resources at the Fraser Institute. His opinions do not necessarily represent those of Pipeline News North. —Ed.

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