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4 North American Pipelines | MAY/JUNE 2011 napipelines.com

ON THE COVER: Waschuk Pipe Line Construction Ltd., led by (from left) Wesley Waschuk, William Waschuk and Kevin Waschuk, has grown to become one of the largest private companies in Canada.

22 A Model of Growth Waschuk Pipe Line Construction takes advantage of opportunities.

By Bradley Kramer

FEATURES

30 Pipeline Coatings — An Integrity Question? Setting the record straight on pipeline protection.

By Bob Buchanan and Scott Smith

34 Reduced Impact Hardwood mats help protect the environment during pipeline construction.

By Brian von Schulz

37 A Balancing Act Maintaining pipeline efficiency with ultrasonic flowmeters. By Peter Espina

40 Marcellus Shale Play HDD Challenges and Triumphs

Gabe’s Construction Co. emphasizes planning for success. By Nicholas Atkin and Nathan Eastway

DEPARTMENTS8 News 18 Project Roundup 43 Product Showcase: Drilling and Boring Rigs48 Events CalendarCOLUMNS6 Editor’s Message50 Pipeline Perspectives: Todd Porter and Ron BrushMARKETPLACE48 Index of Advertisers49 Business Cards

May/June 2011Volume 4 Issue 3

North American Pipelines is published six times per year. Copyright 2011, Benjamin Media Inc., P.O. Box 190, Peninsula, OH 44264. USA All rights reserved. No part of this publication may be reproduced or transmitted by any means without written permission from the publisher. One year subscription rates: complimentary in the United States, Canada and Mexico. Single copy rate: $10. Subscriptions and classified advertising should be addressed to the Peninsula office. POSTMASTER: send Changes of Address to North American Pipelines, P.O. Box 190, Peninsula OH 44264 USA.

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Publisher Bernard P. Krzys

Associate Publisher Robert D. Krzys

Editor James W. Rush

Associate Editor Bradley Kramer

Contributing Staff Editors Sharon M. Bueno

Keith Gribbins Pam Kleineke Kelly Pickerel

Creative Director W. M. Conley

Graphic Designers Sarah Hayes Chris Slogar

Elizabeth C. Stull

Marketing Director Kelly Dadich

Regional Sales Managers Ryan Sneltzer

Dan Sisko

Circulation Manager Alexis R. White

Web & Interactive Manager Mark Gorman

Conference Manager Michelle Hill

Editorial Advisory Board

Cortez Perotte Pipeline Product Engineer/Industry Representative,

Caterpillar Inc.

Todd Porter Vice President of Business Development,

New Century Software Inc.

Eric Skonberg Principal Engineer, Trenchless Engineering Corp.

Bob Westphal Senior Vice President, Michels Corp.

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Make Shale Drilling Progress Safely

Shale natural gas prospects continue to raise debate among the public, government officials and the pipeline industry. While many people agree that there is great promise in the hydraulic fracturing process used to extract natural gas depos-its from shale formations, there is fear that the technique is unsafe and could potentially pollute drinking water.

The last thing the oil and gas industry needs is another scan-dal. Events in the last year, such as the San Bruno pipeline explosion and the Gulf of Mexico oil well leak, have made the public wary of the potential dangers sometimes involved in delivering energy.

However, everyone in the oil and gas pipeline industry knows that safety is key, and increased scrutiny from government officials and the public has placed an even higher importance on safe practices and reliable infrastructure.

U.S. Energy Secretary Steven Chu on May 5 announced the formation of a group of environmental, industry and state regulatory experts who will make recommendations on how to improve the safety and environmental performance of hydraulic fracturing. While shale gas offers a vital domestic energy resource, maintaining the safety of local drinking water and the health of the environment is just as important. At least one environmental advocacy group, Earthworks, has blasted Chu’s exclusion of local citizens whom natural gas drilling directly affects.

More recently, a trio of congressional Democrats sent a letter on May 26 to the U.S. House of Representatives Energy and Commerce Committee to consider holding hearings about hydraulic fracturing. Citing recent studies from Cornell and Duke universities, Henry Waxman (D-Calif.), Edward Markey (D-Mass.) and Diana DeGette (D-Colo.) expressed concern about “serious questions about the environmental and human health impacts of shale gas production.”

Ben Grumbles, President of the Clean Water America Alliance, says the Marcellus shale alone could include as much as 500 trillion cu ft of natural gas, while potentially providing more than $10 billion in revenue, 100,000 jobs and nearly $1 billion in state and local tax revenues in Pennsylvania for 2011. Although Grumbles says the Clean Water America Alliance is neither pro- nor anti-fracturing, he predicts the gas drillers will be required to disclose what chemicals are in the fluids used in the process, in-creased onsite recycling of fracturing water and more detailed monitoring by drinking water and wastewater officials. “These are all good steps in my view,” he adds.

However, once the natural gas is out of the ground, it provides cleaner-burning fuel than coal or oil, according to the U.S. Energy Information Administration (EIA). The combustion of natural gas emits significantly lower levels of carbon dioxide, nitro-gen oxides and sulfur dioxide than coal or oil. When used in efficient combined-cycle power plants, natural gas combustion can emit less than half as much carbon dioxide as coal combustion, per unit of electricity output, the EIA reports.

A recent survey by the KPMG Global Energy Institute shows 44 percent of energy executives believe shale will receive the most investment among so-called “alternative energy sources.” The survey also reported that 62 percent of the energy executives said shale gas will have a “transformative” effect on meeting global energy needs. (See page 16 for more on the KPMG survey.)

It’s no doubt that shale gas production will continue, but drillers must ensure that the practice of hydraulic fracturing is done safely to ensure a healthy public and a successful industry.

Brad KramerAssociate [email protected]

Editor’s Message


North America News

The Enbridge pipeline system that leaked last year in Marshall, Mich., is slated for additional capital improve-ments, which are scheduled to be finished by 2012. The company has already replaced portions of Line 6B of the Lakehead system, and the new segments are sched-uled to be online by late June.

Enbridge Energy Partners LP (EEP) an-nounced its plan to replace additional por-tions of its Line 6B pipeline, which spans from Griffith, Ind., through Michigan to the international bor-der at the St. Clair Riv-er. This program will include replacement of approximately 75 miles of the pipeline in various locations in Indiana and Michigan, at an estimated cost of $286 million. These costs will be recovered through the Facilities Surcharge Mechanism (FSM) that is part of the system-wide rates of the Lakehead system.

Earlier this year, EEP completed the replace-ment of 14 segments, totaling 9,000 ft, of Line 6B in southeast-ern Michigan and in-stalled a new segment of pipeline under the St. Clair River, which will be operational by late June. This latest investment includes the replacement of five miles of pipeline immediately downstream of two pump stations in Indiana and three pump stations in Michi-gan, as well as replacement of 50 miles of pipeline down-stream of the Stockbridge station and delivery terminal northwest of the Detroit metro area. Subject to regulatory approvals, the new segments of pipeline will be installed in 2012 and will be staged to be placed in service in con-sultation with and to minimize impact to refiners and shippers served by Line 6B crude oil deliveries.

The $286 million expenditures are in addition to the $210 million integrity expenditures on Line 6B recently announced by EEP for this year, of which $175 million will be recovered through the FSM.

Gateway Under ReviewIn Canada, Enbridge’s Northern Gateway Project is un-

der review by the Canadian National Energy Board (NEB). A Joint Review Panel is conducting the review of the pro-posed project and invites the public to attend informa-tion sessions.

The Northern Gateway Project, if approved, will involve the construction of two 1,170-km long pipelines running from Bruderheim, Alberta, to Kitimat, British Columbia, and the construction and operation of the Kitimat Ma-rine Terminal.

The purpose of the public sessions is to share informa-tion on the joint review process and how to participate. The Joint Review Panel members will not be attending the information sessions as they are designed to provide procedural information including participation options. These sessions are not designed to receive or discuss the merits of the proposed project.

Additional information about these sessions, including venues and times, can be found on the panel’s website, www.gatewaypanel.review.gc.ca.

Replacement Plans in Place for Enbridge’s Lakehead System

Enbridge Energy Partners has already replaced 14 segments of Line 6B of the Lakehead system, but it plans further improvements to be finished by 2012.

Denali Cancels Alaska Gas Pipeline Denali — the Alaska Gas Pipeline is no more. The joint

venture project between BP PLC and ConocoPhillips that would have delivered 4.5 billion cu ft of gas per day from Alaska’s North Slope was canceled after failing to gain enough support from shippers.

BP and ConocoPhillips had estimated the project would have cost $35 billion. Both Denali and TransCanada had proposed plans to be in service by about 2020 and featured large pipelines that would deliver natural gas to North American markets through Canada.

Denali announced that its open season efforts did not result in the customer commitments necessary to con-tinue work on the pipeline project. Over the next few months, Denali will withdraw its Federal Energy Regu-latory Commission pre-file application and close out its operations.

“Denali is ending its efforts because of a lack of customer support,” says Bud Fackrell, Denali President. “Denali is a market-driven company. As such, we cannot spend the bil-lions of dollars necessary to advance the project unless we have binding agreements with shippers. Although we have been in discussions with potential shippers for nearly a year and half, we have been unable to secure the financial com-mitments necessary to advance the project.”

Work to date has been substantial. Denali has conduct-ed extensive stakeholder consultations, set up multiple data rooms with detailed information, submitted com-prehensive public filings and provided access to Denali’s experts to help potential customers evaluate the project.

Denali has spent more than $165 million and invested more than 760,000 man-hours in its work effort.

Since Denali began its efforts in 2008, the North Amer-ican gas market has changed significantly, primarily as a result of the development of shale gas resources. This has created a very difficult environment in which to secure financial commitments from potential customers.

“Although we are disappointed that Denali was not able to secure customer support, we are proud of our achieve-ments,” Fackrell says. “Denali’s work has advanced the project further than at any point in the past and has pro-vided potential shippers an opportunity to evaluate the competitiveness of North Slope natural gas in the North American marketplace.”

APCA Convention a Success in San DiegoThe annual American Pipeline Contractors Association (APCA)

Convention, March 2-6, at the Grand Del Mar in San Diego was a tremendous success. The event boasted strong attendance, beautiful weather and the association’s usual blend of business and social activities — all of which resulted in this year’s convention being one of the group’s best.

While enjoying the serene locale, APCA members had two full mornings of business with formal presentations by regular mem-ber Greg Guidry of Onebane Law Firm, who spoke on the status of various labor and employment issues, and a joint meet-ing with regular and associate members.

napipelines.com MAY/JUNE 2011 | North American Pipelines 9


Dick Morris, featured speaker

Once again, the APCA’s associate members did a fantas-tic job hosting events such as the annual golf tournament, an enjoyable tour and dinner at Miramar and a lunch and tour at the San Diego Zoo. The associate members were also responsible for the ladies’ gifts and spa treatments, Wednes-day evening cocktails, as well as the wine and entertain-ment Saturday night.

In addition, several of the spouses won breakfast cash prizes, with Kelli Chisum winning the Saturday night $600 drawing. The annual convention concluded with an excel-lent presentation by FoxNews Correspondent Dick Morris.

The APCA got a boost in attendance to the convention from its new online registration system, which accounted for nearly two-thirds of the registrants.

Next up for the association is its 2011 Mid-Year Meeting, scheduled for Sept. 8-10, at the Carmel Valley Ranch in Carmel, Calif.

PLCA Convention Hangs Loose in MauiThe Pipe Line Contractors Association (PLCA) held its

63rd annual convention, Feb. 22-26, at the Ritz-Carlton Kapalua in Maui, Hawaii. Participation at the convention was strong with 665 attendees, and PLCA 2010 President Brian Ganske, Snelson Cos. Inc., hosted the event.

The agenda was full of business, social and networking activities. A raffle was held one evening and raised more than $300,000 with Butch Graham, Ritchie Bros. Auction-eers, and Bob Johnston, Henkels & McCoy, emceeing the event. They employed an entertaining and novel idea that had the 21 winning raffle tickets identified with 21 brief-cases. In the briefcases were descriptions of what was won. Included in the raffle were three vehicles — a Ford pickup, a Mustang and a Cadillac Escalade.

General business sessions included Ganske giving a re-port on 2010 pipeline construction and projections for 2011. One of the business sessions included a fascinating presentation by “The 3 Painters,” employing music while painting dramatic murals. There were numerous regular contractor member meetings, a meeting of the PLCA schol-arship fund and a meeting of the World Federation of Pipe Line Industry Associations. Caterpillar, as it has done for many years with Pipeline Machinery International, hosted cocktails and dinner on Thursday evening.

The annual banquet and floor show featured entertainer Sawyer Brown. At the banquet, the 2011 board of directors was introduced. Chris Leines, Minnesota Ltd. Inc., was in-troduced as the 2011 President. Other officers for 2011 in-clude First Vice President, Dan Murphy, Precision Pipeline; Second Vice President, John Allen, Pipeline Constructors; and Treasurer, Ronnie Wise, Price Gregory International. The 2012 convention will be held Feb. 21-25 at the Park Hyatt Aviara, Carlsbad, Calif.

Overseas: Habau and KHE Group Sell Pipeline Contractor Nacap

KHE Group BV (Koop Group) from the Netherlands and Habau GmbH from Austria have reached an agreement on a sale of 100 percent of the shares in the Nacap group of com-panies, whereby all the activities of Nacap will be combined with similar activities within the Habau Group. Financial details of the transaction will not be announced.

The existing business plans of Nacap will serve as the basis for the further expansion of the pipeline business in the Habau Group, and the combination will create a world leading pipeline business.

In view of the strong reputation and brand value, the ac-tivities of Nacap (3,000 people) will be continued under the Nacap name operating out of the current head office in Eelde, Netherlands. The pipeline activities of Habau in Europe (PPS) and South America (Conduto) will, together with Nacap, be integrated into one energy cluster, thereby creating the best positioned global leader in the pipeline contracting arena.

The other businesses of the Habau Group, like Engineer-ing, EPC and Tunneling, will expand to the worldwide mar-kets. The HDD and RAS activities of Nacap becoming part of Habau Group will create synergies in the area of horizon-tal directional drilling and hydro testing.

“I am very enthusiastic about this acquisition. Combining our companies creates a worldwide leading pipeline contrac-tor,” says Karl Trauner, CEO of Habau and President of the International Pipeline and Offshore Contractors Association (IPLOCA). “The acquisition fits excellently with our strat-egy aimed at expanding our pipeline contracting services.


At the final banquet (from left), 2011 PLCA President Chris Leines, Minnesota Ltd., Joanie Ganske, 2010 PLCA President Brian Ganske,

Snelson Companies, and Wendy Leines.(photo courtesy of Ben Arnold)

2011 PLCA board of directors. Bottom row (from left): Gregory S. V. Curran, M. Dan Murphy (2011 First Vice President), Christopher T. Leines (2011 President), Brian L. Ganske (2010 President), John Allen (2011 Second Vice President), Ronnie Wise (2011 Treasurer).

Top row (from left): Robert H. Westphal, Scott E. Summers, Robert A. Riess Sr., Robert I. Johnston, Don W. Thorn, Bernie Bermack.

(photo courtesy of Ben Arnold)

I see significant opportunities for synergies between our com-panies complemented with a close competence and cultural fit. Moreover, Nacap offers an excellent platform for future growth leveraging on leading positions in key markets.”

The Habau Group will employ more than 6,500 people with more than 1.4 billion euros in annual sales and have an extensive equipment fleet serving a range of reputable clients with whom it has built long-term relationships.

“We are very thrilled with the support from Habau for the Nacap strategy,” says Okke Koo, CEO of Koop Group. “This is a good basis for further development of the com-bined pipeline activities in Europe, the Middle East, Austra-lia and South America. There is a clear agreement regarding the continuity of Nacap’s identity and its strategy thereby providing substantial growth potential for Nacap’s activi-ties. This acquisition offers an excellent opportunity for Nacap and its employees.”

El Paso May Split Into Two Publicly Traded Companies

One pipeline company may soon become two. El Paso Corp. has received initial approval from its board of direc-tors to explore a plan to separate the company into two publicly traded businesses by the end of 2011.

Following the completion of the proposed spin off, El Paso will be comprised of El Paso’s Pipeline Group, its Midstream Group and its general and limited partner in-terests in El Paso Pipeline Partners LP. It will be the premier pipeline company in North America, uniquely integrated in the major U.S. supply and market regions. With a planned

2012 annual dividend of $0.60 per share and a targeted low double-digit dividend growth rate, it is positioned to be a very attractive corporate yield investment.

As a separate publicly traded company, El Paso’s exploration and production business is well positioned to compete with the industry’s leading independent producers. It has more than 10 years of low-risk, repeatable drilling inventory to fuel its future growth. Current positions in the Eagle Ford and Wolfcamp shales and the Altamont field are expected to pro-vide a profitable and rapidly growing oil production profile.

“We believe that the creation of these two stand-alone public companies will result in significant and sustainable value creation,” says Doug Foshee, Chairman, President and CEO. “With the completion of what was an $8 billion pipeline backlog, the elevation of our E&P business to one of the top independent producers, outstanding leadership and employees in each of our businesses, and the accelerat-ed improvement of our balance sheet, we are ready to take this important step.”

El Paso plans to complete a separation by year’s end with a tax-free spin off of its E&P company. The planned separation is subject to market, regulatory, tax, final approval by the com-pany’s board of directors and other customary conditions.

DCA Celebrates Golden Anniversary in Puerto Rico

The Distribution Contractors Association (DCA) celebrated its 50th annual convention March 1-6 at the beautiful El Conquistador Resort on the island of Puerto Rico. Kevin Miller, Miller Pipeline, was DCA’s 2010 President and



he directed the convention activities. The turnout was e xcellent with more than 300 attendees.

DCA stated before the convention the objective was to “educate and entertain members.” This was certainly the case with an agenda loaded with activities. Business sessions

included a keynote breakfast presentation by Brian Bowen, professor at the Georgia Institute of Technology; another keynote breakfast presentation by Michael Rogers, “The Prac-tical Futurist,” a business session presented by Wally Adam-

chik with FireStarter Speaking and Consulting, and a highly charged GPS panel that covered fleet management.

Social activities were highlighted by a walking tour of the El Yunque rainforest and a kayaking tour though a nearby bay. The annual auction was a record setter with Butch Gra-

ham, Ritchie Bros. Auctioneers, directing the activities and raising more than $400,000.

The week-long activities concluded Saturday evening with the annual President’s Reception and Dinner. At the dinner, Miller turned over the president’s gavel to Greg Dahl, ARB Inc. For 2011, Kevin Michels, Michels Corp., will serve as Vice President and Timothy Bell, Midwestern Contractors, will be the Treasurer.

DCA will meet again at its 23rd annual mid-year meeting, July 20-24, at the Woodstock Inn & Resort in Woodstock, Vt. The 51st annual convention will be held Feb. 3-8, 2012, at the Fairmont Orchard, Kohala Coast on the Big Island of Hawaii.

Altela Meets Regulations to Treat Water Now With all the concern about water safety surrounding the

process of hydraulic fracturing, Altela Inc. shows it can treat “frac” wastewater to comply with Pennsylvania state regu-lations now.

“We have the technology in place and we’re ready to use it to keep the natural gas industry running,” says Ned God-shall, CEO of Altela. “Our technology can remove the salts, bromide, benzene and radioactive material in the water, so it can then be reused for the next frac job or returned to the river with absolutely no human health risk. Our technology is the solution to the May 19th deadline.”

On April 19, the Pennsylvania Department of Environ-mental Protection (PA DEP) asked for a voluntary stoppage of ineffectual wastewater treatment from hydraulic fracturing operations from natural gas drilling in the Marcellus Shale area. Most of the facilities have indicated they will comply.

However, some have questioned if the technology exists to properly treat the natural gas flowback wastewater at the present time.

“The PA DEP has verified that the water treated by Altela meets the new stricter Chapter 95 regs,” says Matt Bruff, Chief Development Officer.

The U.S. Department of Energy (DOE) agrees. A study by its own National Energy Technology Laboratory (NETL) stated that an Altela demonstration project completed last year turned drilling frac water into usable water with TDS levels well below 500 mg/liter, the state standard for drinking water safety.

Altela’s new technology, the AltelaRain 600, has been installed at a plant in Williamsport, Pa., to successfully treat over 100,000 gallons per day of frac wastewater. Other plants around the state are planned.

“Altela provides the solution now to the frac wastewater treatment,” Godshall says. “We’re set up and ready to provide the treatment options this industry needs. We’re excited about providing a solution to help keep natural gas flowing.”

Dirty Jobs Host Mike Rowe Supports Manufacturing Jobs

Showing that the host of the Discovery Channel’s Dirty Jobs can get cleaned up, Mike Rowe testified before the U.S. Senate Commerce, Science and Transportation Committee’s hearing on “Manufacturing Our Way to a Stronger Economy” in sup-port of U.S. manufacturing jobs and the Association of Equip-ment Manufacturers’ (AEM) “I Make America” campaign.

In his May 12 testimony, Rowe described his experienc-es working with manufacturers and skilled laborers across America, his personal initiatives in support of jobs creation and the importance of infrastructure to society at large.

“I am ready, able and eager to partner with the fed-eral government to help reconnect our country to the importance of manufacturing and skilled labor,” Rowe


Enjoying the President’s Dinner (from left) Phillip Michels, Michels Corp.; Molly Giles; Adam Helleberg, Pipe Line Machinery International;

Eddie Ramos, Southeast Directional Drilling; Krystal Ramos; Dawn Larson; and Mel Olson, Southeast Directional Drilling.

Social events included a hike through the El Yunque Rain Forest.

2011 DCA board of directors. Front row (from left): Kenneth Gabri-else, Grady Bell, Kevin Miller, Gregory Dahl, Kevin Michels and Timo-thy Bell. Back row (from left): Robert Darden, Jay Osborn, Thomas

Clapper, Larry Ernst, John Weaver, Ben Nelson, Jim Brotherton, Gary Lawson and Frank Patterson.



says in his written testimony. He also showed support for the I Make Amer-ica campaign, stating he was proud to join forces with AEM “for the launch of I Make America, a national grassroots campaign to promote U.S. manufacturing jobs through infrastructure investment and the passage of export agreements.”

AEM President Dennis Slater shared Rowe’s enthusiasm for the campaign and commended Senators Rockefeller and Hutchison for holding the hearing and for their commitment to “support poli-cies that promote infrastructure invest-ment and job creation in the manufac-turing sector across the U.S.”

Rowe’s and other testimonies from the “Manufacturing Our Way to a Stron-ger Economy” hearing are available at the U.S. Senate Commerce, Science and Transportation Committee’s website, www.commerce.senate.gov.

API to Congress: Focus on American Job Creation and Energy Development

American Petroleum Institute (API) Executive Vice President Marty Durbin showed support for the U.S. House of Rep-resentatives Natural Resources Commit-tee’s efforts to focus on the need to pro-duce more of America’s oil and natural gas resources, which would create more jobs and more revenue for the government.

“This effort is the first to directly focus on America’s vast resources, which will go a long way to supporting our government and American jobs,” Durbin says. “The pres-ident has encouraged more oil and natural gas development in Brazil and Saudi Arabia. We need the focus to be on what we can do here at home, and greater access is critical.”

Durbin denounced proposals to in-crease taxes on the oil and gas industry, calling the measures “a bad idea” during the last Congress and a bad idea today.

“More taxes are a sure way to lower American investments, hurt American jobs and eventually reduce federal revenue,” he says. “The legislation turns the focus on what we can do in America for America by Americans.”

Dirty Jobs host Mike Rowe voices support for manufacturing jobs to the U.S. Senate.


A tax hike similar to what the administration and some in Congress have pro-posed would diminish revenue to the government by billions of dollars while also costing jobs and energy production, according to a recent study by the interna-tional consulting group Wood Mackenzie.

“Raising taxes on oil and natural gas companies would do nothing to lower gasoline prices,” Durbin adds. “It would, however, punish mil-lions of American retirees invested in state pension funds and the tens of millions of Americans who hold stock through mutual funds, IRAs and individual investments.

“We have the opportunity to create over a million new American jobs and deliver trillions more to the federal treasury,” he says. “But, we need to keep investing in America’s companies and its people. H.R. 1230, the Restarting American Offshore Leasing Now Act, is a big step in the right direction.”

INGAA Applauds U.S. Senate Pipeline Safety Bill

The U.S. Senate’s Pipeline Transporta-tion Safety Improvement Act received commendations from the Interstate Natu-ral Gas Association of America (INGAA).

The association’s Don Santa, President and CEO, applauded the actions of the Senate Committee on Commerce, Sci-ence and Transportation in renewing a law that ensures the safety of the in-terstate natural gas pipeline system that delivers almost one-quarter of the energy consumed by Americans. He expressed hope that the House of Representatives would follow suit to approve the act.

“INGAA recognizes the importance of continuous improvement to pipeline safe-ty regulations, standards and procedures,” Santa says. “This legislation updates and im-proves pipeline safety policy in several areas, including integrity management and dam-age prevention. Combined with regulatory initiatives that the Pipeline and Hazardous Materials Safety Administration is expected to launch and the initiatives INGAA is un-dertaking through our board-level pipeline safety task force efforts, we believe the result will be a safer pipeline system nationwide.”

Santa also responded to U.S. Transpor-tation Secretary Ray LaHood’s recent call for enhanced pipeline safety.

“INGAA’s members are committed to pipeline safety,” Santa says, “and we want to continue to work with the Trans-portation Department and its agencies to ensure the safest, most reliable pipeline network possible.

Earlier this year, Santa notes, INGAA members formally adopted a set of five guiding principles for pipeline safety, in-cluding a goal of zero incidents — a per-fect record of safety and reliability for the national pipeline system.

“Today, we are working to generate a comprehensive plan, with specific, per-formance-based measures to achieve our zero incidents goal,” Santa says. “We in-tend to work every day toward a perfect safety record, and we are glad to have the Transportation Department and Secre-tary LaHood as a strong and committed partner in this effort.”

INGAA is the North American associa-tion representing the interstate and inter-provincial natural gas pipeline industry.

ExxonMobil Receives Safety Leadership Award

The Gas Processors Association (GPA) bestowed its 2010 Company Safety Award to ExxonMobil Production Co. for its U.S. operations. The efforts of about 500 employees working more than a mil-lion work hours at the company’s gas


processing facilities led to first place honors for outstanding midstream safety performance.

“ExxonMobil is committed to safety leadership,” says Exxon-Mobil U.S. Production Manager Kok-Yew See. “This award recog-nizes the outstanding performance of our employees in putting safety first and our shared vision that nobody gets hurt.”

This marks the fourth time in six years ExxonMobil Production Co.’s U.S. operations have earned the Company Safety Award from GPA.

“Operating safely, whether in an office setting or in the field, is critical to the success of our companies and our industry,” says GPA President Alan Armstrong. “GPA

takes great pride in the safety accomplishments of our mem-ber companies, and I would like everyone to recognize and congratulate those companies that we’re honoring today.”

ExxonMobil is one of the largest oil and gas producers and reserves holders in the U.S. The U.S. portfolio is geo-graphically diverse with significant positions in all major producing regions including the Gulf Coast, the Gulf of Mexico, the mid-continent, the Rockies, Alaska and on-shore and offshore California.

57th PLCA-Canada Convention Held in HawaiiThe annual Pipe Line Contractors Association of Canada

(PLCAC) Convention was held this year, April 11-15, on



Gas Processors Association presented ExxonMobil Production Co.’s U.S. operations the 2010 Company Safety Award at the GPA Convention in San Antonio, with (from left) ExxonMobil Colorado Operations Super-intendent Matt Briney, GPA President Alan Armstrong and ExxonMobil

U.S. Production Safety Supervisor Jorge Morell in attendance.

The 2011-2012 PLCAC board of directors. Back row (from left): David Douglas, Bernie Lailey, Michael Prior, Nick de Koning, David Kavanaugh,

Donald Cusack and Neil Lane. Front row (from left): David Johnstone, Mark Scherer, Kevin Waschuk, Ted Shipka and Neil Waugh.


the island of Maui in Hawaii at the Hyatt Regency Maui Resort and Spa. There were more than 300 attendees. The delegates were treated to a blend of business and social activities, including the annual golf tournament at the Kaanapali Golf Resort.

Kevin Waschuk, Vice President of Waschuk Pipe Line Construction Ltd. and 2010-2011 PLCAC President, reported at the opening general meeting on the state of the Canadian pipeline market. Waschuk noted that 2010 was an off year for mainline work, but distribution construction was steady. He indicated that smaller mainline projects would be coming out in 2011, and the distribu-tion side would stay steady.

Jim Crawford, Director of Engineering for Enbridge, presented a compre-hensive look at Canadian pipeline work for the future. Major Enbridge proj-ects with construction proposed to start in the last quarter of 2011 included

the Norealis Pipeline, 112 km at 24 in., and the Woodland Pipeline, pegged at 140 km at 36 in. These sizable projects will be accompanied by the TransCanada Keystone XL project, at 526 km at 36 in., also proposed to start later in 2011, and the Enhanced Energy CO2 Pipeline, at 240 km at 16 in., also to start in 2011.

A rousing presentation on Canada’s oil sands was made by Ezra Levant, a best-selling Canadian author of “Ethical Oil: The Moral Case for Canada’s Oil Sands” — a must-read for any pipeliner.

PLCAC is noted for its networking and social events and this year was no excep-tion. Attendees had the option of going on a snorkel and whale watch, participating in a surfing school, trail riding and even off-road dune buggy riding. There was Cirque Polynesia one evening and this year’s theme party was “Hollywood Hawaii.”

The Gala Banquet was special for Barry Brown, the recently retired Executive Director of PLCAC. He was inducted as an honorary member of the association. Brown had more than 25 years of service with PLCAC. Also at the banquet the 2011-2012 board of directors was intro-duced, and Nick de Koning, President of Robert B. Somerville Co., was introduced as the 2011-2012 PLCAC President.

The 2012 convention will be held June 3-7 at the Fairmont Chateau Whistler in Whistler, British Columbia, just north of Vancouver.

Survey Shows Volatile Oil Prices and Big Impacts From Shale

Energy executives expect continued volatility in the price-per-barrel of oil for the remainder of the year, with most (64 percent) predicting crude prices to exceed $121 per barrel, according to the results of the ninth annual Energy Survey con-ducted by the KPMG Global Energy Insti-tute. The executives also foresee shale oil and gas having a “transformative” effect on helping to meet the world’s energy needs, the survey shows.


New PLCAC President Nick de Koning, of Robert B. Somerville Co. Ltd., and his wife, April.



percent project an increase between five and 10 percent; and an additional 17 percent forecast an increase of up to five percent. Sixty-nine percent anticipate operating costs will go up over the next 12 months as well.

A significant portion of the additional capital spending could be allocated to increasing human resources, as many of the executives (49 percent) expect their company’s workforce to expand over the next 12 months — up two per-centage points from KPMG’s 2010 survey.

“Executive expectations for capital spending and hiring are very positive indicators for the energy industry,” says Regina Mayor, oil and gas sector leader for KPMG in the United States. “After several years of lower investment, companies appear focused on transformation and innovation, despite the significant regulatory and economic risk factors they are confronting.”

In this year’s KPMG energy survey, which polled 550 financial executives from global energy companies in April 2011, 32 percent think 2011 U.S. crude oil prices will peak between $121 and $130 per barrel. One-third of executives see even higher prices, with 17 percent of those predicting between $131 and $140 per barrel; 9 percent between $141 and $150; and 6 percent expecting crude pric-es to exceed $151 per barrel before the end of the year. Only 35 percent think current crude prices are near the high they expect for oil in 2011, predicting the peak will be between $111 and $120 per barrel.

“While we have seen some very recent declines due to selloffs, these variations reflect persistent instability, and our sur-vey findings confirm that we may have not seen peak levels on crude,” says John Kunasek, national leader of the KPMG U.S. energy practice and Executive Direc-tor for the KPMG Global Energy Institute. “Energy leaders tell us continued volatil-ity will be driven by underlying issues such as regulation, geopolitical concerns and supply disruptions, as well as escalat-ing energy demand. But the good news is that energy executives tell us they are significantly increasing investment in a range of alternative energy sources and see shale factoring strongly into meeting the world’s future energy needs.”

In fact, 35 percent of the executives surveyed say their company would in-crease research and development invest-ment in alternative energy projects in 2011, up considerably from 15 percent in KPMG’s 2010 survey.

Shale oil and gas (44 percent) was most frequently cited by executives as the alternative energy source that will win the most significant investment, with nearly two-thirds (62 percent) expecting shale oil and/or gas to continue to have a transformative impact on meeting the world’s energy needs.

“What is exciting about these find-ings is that it demonstrates the industry’s intent to explore all options,” Kunasek says. “Previously, the executives have pointed to wind and solar as the main investment choices, but this year we have seen a shift. Increased production of shale gas in North America could have profound implications on the global energy sector.”

In addition to investment in alternative energy, executives surveyed by KPMG say their companies will increase investment in their businesses, predicting capital spending to increase in 2011 compared to 2010. In fact, 33 percent of executives expect capital spending to rise by more than 10 percent over last year’s levels; 17

The following oil and gas pipeline projects have been announced. Projects are in order of approximate starting date.

R.L. Coolsaet Construction Co. was awarded a contract by Panhandle Eastern Pipeline Co. to hydro-test approximately 7.6 miles of 16-in. pipeline in Wayne County, Mich. Headquarters is Romulus, Mich. The superintendent is Joe Elliott. Approximate start date: July 5.

R.L. Coolsaet Construction Co. was awarded contracts by Panhandle Eastern Pipeline Co. for the following: 1) take-up and relay of 1,800 ft of 20-in. pipeline in Livingston County, Mich. Headquarters is unknown. The superintendent is Joe Elliott. And 2) remove and install field drips in Livingston, Mich. Headquarters is Howell, Mich. The superintendent is Joe Elliott. Approximate start date: June 6.

Schmid Pipeline Construction Inc. was awarded a contract by Williams Transcontinental Pipe Line Co. LLC to take up 2,076 ft of 30-in. pipeline in Mercer County, N.J.; hydro-test approximately 280 ft of 24-in. pipeline and 2,700 ft of 30-in. pipeline in Luzerne County, Pa., and Hunterdon County, N.J., respectively; and conduct anomaly digs in various areas. Headquarters is Belle Meade, N.J. The superintendent is Wes McIntyre. Approximate start date: June 2.

Sheehan Pipe Line Construction Co. was awarded a contract by Kinder Morgan to hydro-test 16.3 miles of 30-in. pipeline in Miller County, Ark. Headquarters is Texarkana, Ark. The superintendent is Bryant “Tubby” Long. Approximate start date: June 1.

Snelson Cos. Inc. was awarded a contract by PG&E to install 11.6 miles of 16-in. pipeline in Stanislaus County, Calif. Headquarters is unknown. The superintendent is Lou McMullen. Approximate start date: June 1.

Dun Transportation & Stringing Inc. was awarded a contract by U.S. Pipeline for stringing approximately 28 miles of 24-in. pipe in various counties in Tennessee and Virginia. Headquarters is the pipe yard. The superintendent is Mike Bruce. Approximate start date: May 23.

Henkels & McCoy Inc. was awarded a contract by Columbia Gas/NiSource to take up and relay 16 miles of 20-in. pipeline in Pike County, Pa., and Orange County, N.Y. Headquarters is Milford, Pa. The superintendent is Jeff Adams. Approximate start date: May 19.

InterCon Construction Inc. was awarded a contract by Willbros Construction to install 6,000 ft of 26-in. steel pipeline

via directional drilling in Jackson County, Miss. Headquarters is Moss Point, Miss. The superintendent is Don Masters. Approximate start date: May 19.

Northern Clearing Inc. was awarded a contract by Henkels & McCoy Inc. for right-of-way clearing of approximately 16 miles of 20-in. pipeline in Pike County, Pa., and Orange County, N.Y. Headquarters is unknown. The superintendent is Jim Putnam. Approximate start date: May 19.

Snelson Cos. Inc. was awarded a contract by PG&E to hydro-test 34-in. pipelines in San Bernadine, San Benito, Kings, Santa Clara, Kern and Fresno counties, Calif. Headquarters is unknown. The superintendent is Jeff Elliott. Approximate start date: May 19.

Price Gregory International Inc. was awarded a contract by Bison Pipeline LLC to complete cleanup activities on the right of way in Fallon and Carter counties, Mont. Headquarters is unknown. The superintendent is Chuck Roy. Approximate start date: May 18.

H.D. Griffin Co. was awarded a contract by Panhandle Eastern Pipeline to relay 1,250 ft of 30-in. pipeline in Harvey County, Kan. Headquarters is Haven, Kan. The superintendent is Joe Pennington. Approximate start date: May 17.

Letourneau Products Mfg. Corp. was awarded a contract by Otis Eastern Service Inc. for clearing, grubbing and matting for various mileage of the Chesapeake Midstream Gathering System in Bradford and Susquehanna counties, Pa. Headquarters is unknown. The superintendent is Mark Letourneau. Approximate start date: May 17.

Price Gregory International Inc. was awarded a contract by Anadarko Petroleum Corp. to install 14,071 ft of 12-in. pipeline in Lycoming County, Pa. Headquarters is Williamsport, Pa. The superintendent is Jack Burch. Approximate start date: May 16.

Q3 Contracting was awarded a contract by Northern Natural Gas Co. to install and remove 3,000 ft of 4-in. steel pipe in Nobles County, Minn. Headquarters is Worthington, Minn. The superintendent is David Odneal. Approximate start date: May 16.

Pe Ben USA Inc. was awarded a contract by Denbury Resources Inc. to offload and stockpile 120 miles of 20-in. pipe in Weston County, Wyo. Headquarters is Upton, Wyo. The superintendent is Eric Gregory. Approximate start date: May 13.

North American Pipelines Project Roundup

Listings Contributed by


Henkels & McCoy Inc. was awarded a contract by Algonquin Gas Transmission to replace 8- to 36-in. launchers and receivers and perform facility modifications in New Haven, Hartford, Tolland, New London and Middlesex counties, Conn. Headquarters is Cheshire, Conn. The superintendent is Dennis Houston. Approximate start date: May 11.

Welded Construction LP was awarded a contract by Williams/Transcontinental Gas Pipeline Co. for the following: 1) recoat multiple segments and perform investigative work for 30- and 36-in. pipelines in Rockingham County, N.C., and Pittsylvania, Campbell and Appomattox counties, Va. And 2) hydro-testing on 30- and 42-in. pipeline in Fairfax, Prince William and Fauquier counties, Va., and Montgomery County, Md. Headquarters is Blairs, Va. The superintendent is Joe Carter. Approximate start date: May 10.

Henkels & McCoy Inc. was awarded a contract by Williams-Transco to take up and relay 1,500 ft of 24-in. pipeline; perform anomaly investigations and repairs in Lycoming, Luzerne and Columbia counties, Pa. Headquarters is Benton, Pa. The superintendent is Kevin Pedigo. Approximate start date: May 9.

Midwest Underground Inc. was awarded a contract by Panhandle Eastern to take up and relay 0.84 miles of 30-in. in Hendricks County, Ind. Headquarters is Brownsburg, Ind. The superintendent is Ed Kelly. Approximate start date: May 9.

Miller Pipeline Corp. was awarded a contract by Williams Midstream to install 9,100 ft of 6-in. pipeline in Greene County, Pa. Headquarters is unknown. The superintendent is William Burleson. Approximate start date: May 9.

Letourneau Products Mfg. Corp. was awarded a contract by Otis Eastern Service Inc. for clearing and grubbing approximately 2.55 miles in Madison County, N.Y. Headquarters unknown. The superintendent is Claude R. St. Pierre. Approximate start date: May 7.

InterCon Construction Inc. was awarded a contract by Henkels & McCoy Inc. to install 1,100 ft of 12-in. pipeline via directional drilling in Atlantic County, N.J. Headquarters is unknown. The superintendent is Don Masters. Approximate start date: May 5.

Laney Inc. was awarded a contract by Willbros Construction for road boring 15.5 miles of 26-in. pipeline in Jackson County, Miss. Headquarters is Moss Point, Miss. The superintendent is Mike Dobbs. Approximate start date: May 4.

Laney Inc. was awarded a contract by Bluescape Resources to install 5,880 ft of 20-in. pipeline via directional drilling in Braxton County, W.Va. Headquarters is on the jobsite. The superintendent is T.J. Strickland. Approximate start date: May 3.



BigInch Fabricators and Construction Inc. was awarded a contract by Panhandle Eastern to upgrade five miles of 22-in. pipeline and install new valves in Wayne County, Mich. Headquarters is Allen Park, Mich. The superintendent is Frank Ayers. Approximate start date: May 2.

Blackwell Enterprises Inc. was awarded a contract by Kinder Morgan for right-of-way restoration for the Mid-Continent Express pipeline in Texas and Louisiana. Headquarters is Wayne, Okla. The superintendent is Bob Blackwell. Approximate start date: May 2.

Miller Pipeline Corp. was awarded a contract by NiSource Gas Transmission & Storage for remediation, wire line verification, hydro-testing and pipe replacement of various pipe sizes in various counties in West Virginia, Pennsylvania and Maryland. Headquarters is unknown. The superintendent is Wes Bogard. Approximate start date: May 2.

Price Gregory International Inc. was awarded a contract by Dominion Transmission Inc. for pipeline replacement of 16,246 ft of 16- and 20-in. pipe in Tompkins, Cortland, Madison, Oneida, Herkimer and Schenectady counties, N.Y. Headquarters is Cortland, N.Y. The superintendent is Doug Gregory. Approximate start date: May 2.

Miller Pipeline Corp. was awarded a contract by Panhandle Eastern to take up and relay 200 ft of 22-in. natural gas pipeline in Scott County, Ill. Headquarters is unknown. The superintendent is Jay Barker. Approximate start date: April 30.

Price Gregory International Inc. was awarded a contract by Bison Pipeline LLC for complete cleanup activities on the right of way in Bowman County, N.D. Headquarters is Baker, Mont. The superintendent is Chuck Roy. Approximate start date: April 29.

Northern Clearing Inc. was awarded a contract by Henkels & McCoy Inc. for right-of-way clearing of approximately 51 miles of 30-in. pipeline in Potter, Tioga and Bradford counties, Pa. Headquarters is unknown. The superintendent is Dennis Bergman. Approximate start date: April 28.

Price Gregory International Inc. was awarded a contract by XTO Energy to unload 3,200 ft of 4-in. pipe; 7,430 ft of 12-in. pipe; and 14,300 ft of 16-in. pipe in Indiana County, Pa. Headquarters is Williamsport, Pa. The superintendent is Jack Burch. Approximate start date: April 27.

Want to see your project here? Send submissions to Asso-ciate Editor Brad Kramer at [email protected] with the subject heading “Project Roundup.”



T he seeds of Waschuk Pipe Line Construction Ltd. were sewn in 1952 when CEO and founder William Waschuk began working as a pipeline welder. The rest of the company’s history is an example of an organiza-tion that takes advantage of its opportunities to grow into one of the biggest privately held companies in Canada.

You know it’s a good story when a bottle of whiskey is involved, but that’s getting ahead of ourselves. Waschuk Pipe Line Construction, which is based in Red Deer, Alberta, began in 1965, incorporating the next year and building progressively larger petroleum pipelines. William’s two sons, Wesley and Kevin Waschuk, grew up in the pipe-line industry and have since continued the family business, Wesley as President and Kevin as Vice President.

“As a welder, he would go off to work on different projects, and my mom would pack us all up and we would go along,” Kevin remembers of his father’s earlier career in pipelines.

William took a welding class when he was just 16 and in 1952 left the family farm, north of Edmonton, and headed south to a town that is a little more than an hour’s drive east of Red Deer.

“I heard there was some drilling in Stettler, Alberta, so I went there and got a job,” William says. “I did small jobs for a while, but in 1960 I got in with the big-inch [pipeline] companies. After that, I branched out on my own. I just decided to see if I could make it.”

William started his company with $4,000 (CAD) of his own money and a $10,000 loan from the Royal Bank of Canada, because “I couldn’t get any more,” he says, laugh-ing at the recollection. His first job in 1965 was a 4-in. pipe-

line at 34 cents a foot, which William says probably earned him the same wage as he would have received as a welder.

Then, in about 1967, a new bank branch opened near-by, and the new manager came by the Waschuk house. He carried with him a bottle of whiskey and proposition.

“He said, ‘I’d like your business,’” William recalls. After some stiff negotiation and a couple stiff drinks, Waschuk Pipe Line Construction was granted a $40,000 loan, and the company really began to grow, buying newer equipment and finally entering the big-inch pipeline sector. “We’re still growing,” he says, “but I don’t need the banks anymore.”

That’s because Waschuk Pipe Line Construction has been successful in growing its business prudently, reacting to de-mand and becoming a leader in the pipeline industry com-munity.

“Being in this business since 1965, we’ve seen a lot of changes,” Wesley says. “We have always kept abreast of the trends in the industry, stayed on top of things like welding changes and equipment changes. Being as experienced as we are, we’re among the industry’s leaders and considered one of best contractors in Canada. You can’t argue with our success over the last 40-plus years. To stay in business that long, we must be doing something right. We pride ourselves on doing a good job, being safe, environmentally conscious and completing projects on budget and on time.”

Leading the WayAs a leader in the pipeline industry, Waschuk Pipe Line

Construction has participated in the trade associations, particularly the Pipe Line Contractors Association of Can-ada (PLCAC). Kevin is the Immediate Past President of the


A Model of GrowthWaschuk Pipe Line Construction Takes Advantage of Opportunities

By Bradley Kramer

Waschuk Pipe Line Construction is led by (from left) President Wesley Waschuk, CEO and founder William Waschuk and Vice President Kevin Waschuk.

association, having wrapped up his one-year presidency term in April.

This was his second term lead-ing the PLCAC, having also served as President in 2002-2003. He has served on the association’s board of directors for 13 years, but Waschuk Pipe Line Construction had been a member for many years before, the company having been certified as a union contractor in 1987.

Kevin says belonging to the trade associations helps competitors in the pipeline industry find common ground and improve overall business.

“All the companies that belong to the PLCAC are our direct competi-tion,” Kevin says. “They deal with the same day-to-day tasks and issues as we do. Even though we are competi-tors, you can get outside opinions of how to solve challenges. And it’s also about having a voice in the industry. It’s a great way to network.”

Waschuk Pipe Line Construction is coming off a strong four-year stretch. When the industry slowed over the winter, the company took advan-tage of the rental market to keep the revenues growing.



Waschuk Pipe Line Construction has been in business 1965, when founder and CEO William Waschuk left his job as a pipeline welder to begin building large-scale transmission

lines in western Canada. The company is headquartered in Red Deer, Alberta.

“Last fall, we completed some major projects,” Kevin says. “We had a great four-year run. This winter, when the work cycle slowed down, we were in the rental business. When our equipment’s not working, it’s nice to have it out there for others to use and generating some income. One takes care of the other.”

Among the projects that Waschuk Pipe Line Construction finished were a portion of the Enbridge Alberta Clipper pipeline, a 1.5-year job that involved building 338 km of 36-in. mainline in Saskatchewan, and a contract with Inter Pipeline Fund, a 340-km long and 42-in. diameter pipeline from Fort McMurray, Alberta, to Edmonton. The two projects were the largest in company history.

Now the company is setting its sights on the projects coming out of Alberta’s oil sands near Fort McMurray, even as the industry may face some changes.

“The future looks promising, with lots of projects on the horizon,” Kevin says. “We certainly want to be part of those when they hit the table.”

Recipe for SuccessWaschuk Pipe Line Construc-

tion works all over western Canada. During peak times, the company retains about 750 employees, which is gen-erally enough to crew 25 projects. However, the workforce flexes to fit the work cycle.

“Having said that, we like to retain as many people as we can, because we want to keep good people work-ing for us,” Kevin says. “Having those key people is very important to being successful in this business.”

Wesley agrees, adding that having dedicated employees is important, but so is treating those employees right. Good relationships with its employees helps Waschuk Pipe Line Construction hold onto those valu-able personnel assets.

“We have a dedicated group of people,” Wesley says. “Some have been with us since high school. We’re more like one big family. We have minimal turnover of key employees. As anybody will say, success comes from having the right employees and management team.”

Another important factor to suc-cess in pipeline construction is safety. The industry has faced significant challenges over the past year, especial-ly in the United States, with incidents such as the deadly pipeline explosion in San Bruno, Calif., and the oil leak in Marshall, Mich.

Safety is receiving emphasized atten-tion from the media, governments and

the public at large. However, safety has been an emphasis for contractors for much longer.

“Something you can never stop preparing for is safety,” Kevin says. “It is something that has to be ingrained.


Wesley Waschuk joined the family business full time in 1984, after graduating from the University of Calgary with a commerce degree. In 1985, he helped develop the first safety

manual for Waschuke Pipe Line Construction.

Working in the snow is just one of the challenges involved with working in western Canada. Waschuk Pipe Line Construction has a strong track record of completing projects safely, on

time and on budget.

As far as any new regulations, pipeline owners have their own departments that make sure they are in compliance. We’re flexible. If there are any changes, we adapt to them. We have to stay current.”

Among contractors, safety is an issue that PLCAC mem-bers are always talking about.

“It’s a great issue,” Kevin says. “Safety is something that we as con-tractors take very seriously. Even in the PLCAC, the various committees get to-gether to talk about how to improve. Safety is paramount. Drug testing comes into account. It’s a big concern, not just for the contractors, but the owners as well. We’re taking the right steps to deal with those concerns.”

Dealing with safety concerns means making a commitment to ensure a safe worksite. That com-mitment must come from the con-tractor and permeate the entire com-pany, from top to bottom and back up again.

“In 1985, we had our first safety manual,” Wesley says. “I helped write it, and it was two pages. Now we have a full-time safety manager along with a staff. We’ve had a full-time safety man-ager for over 20 years. Now the safety manual exceeds 400 pages.”

Safety and environment are the two biggest things that Wesley says were not a big deal in the pipeline indus-try 30 years ago. Today, a clean safety record is a measurement of success.

“We have to ensure safe worksites by making a commitment in our safety manual and safety objective,” Wesley says. “I can personally attest to our safety as a company. It goes all the way to the top and all the way to the bot-tom. It goes all the way through this organization. You couldn’t be in any kind of construction without a good safety record. We’ve logged 4 million man hours and had only one lost time accident (LTA), which is very rare in this industry.”

The oil and gas industry in Cana-da is more regulated and restrictive than in the United States, Wesley says. Canadian government regula-tions have led to the larger oil and gas companies doing “their own due diligence.” In the event of a pipe-line or facility leak, the companies begin to upgrade infrastructure and increase budgets for maintenance work, he adds.

A Future So BrightDespite any public scrutiny toward

the pipeline industry, the future appears strong in the market with the strength of energy prices.

“It’s been off a bit recently, but starting in 2012 and for the next six or seven years, the industry looks very promising,” Wesley says. “The price of oil is high, and that’s driving a lot of projects in Alberta. Just from the feel of it, the next seven years look very good.”


Kevin Waschuk has represented the family business in the Pipe Line Contractors Association of Canada, having just completed a one-year term as association President,

his second such stint.

William Waschuk started his pipeline construction business in 1965, after spending the previous 13 years as a welder on oil and gas projects.



For now, Wesley sees many smaller, mid-size jobs in the range of 10 to 30 km, but not too many larger two-year jobs that the company is used to working on. However, the production from the Fort McMurray region could drive bigger projects to take off in the next few years.

“In western Canada, oil has been the big thing for us over the last five to six years,” Wesley says. “All of Fort McMur-ray is driving that. There are more oil plants being built and more pipelines being built to get that oil down to the States and to the Pacific.”

The Fort McMurray trend is produc-ing billions of dollars in oil process-ing and transportation construction, Kevin says. These projects are providing access to markets in North America, as well as overseas, especially China, where oil demand is growing fast.

“Politics aside, it’s going to be interest-ing to see how demand influences con-struction,” Kevin says. “We’ve got the product right in our backyard. It will be interesting to see how it all works out. Fort McMurray seems to be providing a lot of large projects for the future, espe-cially for companies like Enbridge and TransCanada.”

A number of pipeline projects are on the horizon that Waschuk Pipe Line Construction is watching, Kevin says. The Mackenzie Valley Pipeline, for in-

The pipeline industry in western Canada is driven by projects originating in the oil sands near Fort McMurray, Alberta. Waschuk Pipe Line Construction is primed to take on jobs in its own back yard.

stance, is a gas pipeline project in the Northwest Territories, directly north of Alberta. The project has been proposed for years and comprises rug-ged and isolated terrain. Though it’s been on the table since the 1970s, recent developments make this project’s rollout just a matter of time.

Additionally, the Alaska Pipeline, a project that will transport natural gas from the Prud-hoe Bay to the United States through Alberta, and the Enbridge Northern Gateway Pipeline project, which will transport oil from Fort McMurray to the West Coast in British Colum-bia, provide the industry with plenty of oppor-tunities to latch onto.

“This is exciting work,” Kevin says. “All three of those projects are slated for the next three to five years. If just one or two of those go, it will be very exciting. The future looks pretty shiny, but there are a few hurdles that cause a bit of concern, like the labor force. Some of our work-ers are getting older, and the young people just don’t seem to be as interested in pipeline work. Maybe it’s because of cycles in the industry. If a young person wants to make a quick buck, you can work six months and then take a few months off. That can still happen.”

Bradley Kramer is Associate Editor of North American Pipelines. Contact him at bkramer@ benjaminmedia.com.



Waschuk Pipe Line Construction has taken advantage of its opportunities and grown into one of the largest private companies in Canada.

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Pipeline integrity is a hot topic these days, and there are obviously a number of factors that impact integrity. There are also a number of viewpoints, with some being louder than others, so it’s often difficult to make the dis-tinction between fact and fiction. As the famous physics professor Dr. Feynman once said, “For a successful technol-ogy, reality must take precedence over public relations, for Nature cannot be fooled.”

One aspect of the above is “cathodic shielding” of pipe-line coatings and some misconceptions being propagated regarding the use of high dielectric strength coatings in relationship to cathodic shielding, NACE Standards and U.S. Department of Transportation (DOT) regulations.

The purpose of this article is to set the record straight on how pipeline coatings and cathodic protection work together, and what the industry truly requires for pipeline corrosion protective coatings.

Coatings are passive systems providing primary corrosion protection while cathodic protection is an active system providing supplemental protection. An analogy is a firewall in a structure providing a barrier to fire (a passive system) teamed with a fire sprinkler providing suppression. If the electricity fails and the pumps won’t work, the barrier still stands if it is designed properly.

The combination of coatings and cathodic protection (CP) is a good team toward protecting a pipeline against corrosion, but be careful when CP is designed such that failure of the coating is assumed, thus requiring the active component to be absolute for the corrosion protective sys-tem to perform. CP systems require maintenance and con-tinuous power, along with proper distribution and levels of cathodic protection current. This is often a challenge, especially for remote pipelines.

A statement made by Alan Kehr is a fundamental in the pipeline corrosion protection industry. Kehr is a leading American expert on pipeline coatings and stated that exter-nal pipe coatings are “intended to form a continuous film of electrical insulating material over the metallic surface to be protected. The function of such a coating is to isolate the metal from direct contact with the electrolyte, interposing

a high electrical resistance so that electrochemical reactions cannot occur.”

There are industry standards that clearly define how coat-ings are intended to perform and what the role of CP is in the corrosion protection system. The bottom line is that coatings provide primary corrosion protection and CP pro-vides supplementary corrosion protection.

Coatings and Cathodic Protection Facts:• Industry standards stipulate that coatings are to pro-

vide primary corrosion protection.• The standards are specific about what attributes are

desirable in coatings.• CP is used to protect against damage (holidays) in coatings.

If a pipeline corrosion protection design is considering CP as being active in the equation, then the life cycle cost can become prohibitive, but, more importantly, a failure in the CP system can result in catastrophic failure of the cor-rosion protection system.

In pipeline system design, the standard NACE SP0169 clearly states that coatings are the primary corrosion pro-tective system and that cathodic protection is used as sup-plemental protection. Furthermore, the standard states that desirable attributes of a good coating are high electrical resistance and low moisture absorption. This is what Kehr referred to in his statement.

The standard also addresses coating adhesion and makes the comment that “unbonded coating could shield electri-cal current,” thus making the case that coatings with good adhesion quality should be used.

By definition, shielding is caused by some external mate-rial that prevents current from getting to the steel. It is not the intent to bring highly electrically resistive and properly applied coatings into this list. Various materials can result in shielding. These can be plastic sheets with no adhesive, tree roots, rocks, soil, improper backfill or compaction, casings and any other high resistance materials.

Although disbonded coatings are often blamed, any di-electric barrier can have the same result. All materials have

Pipeline Coatings — An Integrity Question?Setting the Record Straight on Pipeline ProtectionBy Bob Buchanan and Scott Smith

napipelines.com MAY/JUNE 2011 | North American Pipelines 31For more information go to napipelines.com/info For more information go to napipelines.com/info

electrical resistance, thus no pipeline coatings can claim 100 percent effectiveness against shielding, nor can they be “non-shielding” under all conditions.

In comparing a high electrically resistive coating like polyethylene with some “fiber-backed coatings” that mar-ket themselves as non-shielding coatings, it is interesting to see how the coatings stack up against the requirements of SP0169.

The U.S. DOT has regulations relating to pipelines. Code of Federal Regulations (CFR) 192 relates to natural or other gas pipelines and CFR 195 relates to hazardous liquids pipelines. Both make statements relative to corro-sion protection and coatings.

Relative to these codes, it is clear that CFR 192 views attributes such as good adhesion, resistance to

migration of moisture, low moisture absorption and high electrical resistance as stringent requirements. Likewise, CFR 195 views adhesion, moisture resistance and electrical resistance as principal to an effective anti-corrosion coating.

Summarizing the two codes’ requirements vs. the vari-ous coating types, it is clear that a coating that is designed to absorb or wick water, such as fiber-backed tape-type coatings, lack in key areas such as migration of moisture and low moisture absorption.

Heat-shrinkable sleeves comply with the intent of NACE SP0169 relative to the use of electrically resistive coatings. They also meet the requirements of the DOT’s CFR 192 (Section 192.461) and CFR 195 (Section 195.559) for exter-nal protective coatings.

Properly selected and applied heat-shrinkable sleeves provide the following requirements as outlined in these standards and codes:

• Sufficient adhesion to the metal surface to effectively resist under-film migration of moisture.

• Be sufficiently ductile to resist cracking.• Have sufficient strength to resist damage due to

handling and soil stress.• Have properties compatible with supplemental

cathodic protection.• Have low moisture absorption and high electrical

resistance.

Based on the above facts, the general pipeline industry does not believe that cathodic shielding due to disbond-

Property NACE SP0169

Polyethylene-backed coatings

Fiber-backed coatings

Effective electrical insulator

Yes Yes

Effective moisture barrier

Yes No

Reduces CP current requirements

Yes No

Improves current distribution

Yes No

Damage resistant Yes Only with added protection

Good adhesion Yes Yes



ment of properly installed, high dielectric strength coat-ings is becoming an increasing problem as suggested by some coating manufacturers. Evidence of this position is supported by the Michael Baker Jr. Inc. report “Pipeline Corrosion — Final Report” submitted to the DOT Pipeline and Hazardous Materials Safety Administration (PHMSA) in November 2008.

According to the report:• The average number of pipeline related corrosion

leaks was 52 per year over a 20-year study period. In 2007 this average would amount to only one corro-sion leak per every 31,903 miles of pipelines based on approximately 1,659,000 miles of pipelines in service. Also, most of the leaks did not occur at the field joint.

• The corrosion rate has been relatively consistent over time, has not been influenced by the aging of the infrastructure, and the fact the rate had not increased significantly attests to the effectiveness of the indus-try efforts at corrosion control.

• Some of these corrosion failures can be attributable to the fact that DOT regulations requiring cathodic protection and dielectric coatings were not imple-mented until the early 1970s.

• Corrosion failures can be attributable to a num-ber of factors such as inadequate levels or lack of cathodic protection, cathodic interference, MIC corrosion and stress corrosion cracking. As such, most of the incidents are not related to disbonded pipeline coatings at all.

• High dielectric strength and low water permeability or absorption are favorable traits of pipeline coat-ings for buried and submerged use because coat-ings are considered to be the first line of defense in preventing oxygen and water migration to the substrate. They insulate the substrate from the elec-trolyte, and reduce future unpredictable cathodic protection requirements.

On a worldwide basis, there have been a significant number of technological advancements over the last 40 years to provide better long term performance of plant applied and field joint coatings. These newer coatings provide for reduced water permeability, increased elec-trical resistance, improved adhesion-to-steel and better mechanical protection.

There is no such thing as a perfect coating. Coatings that have disbonded from the substrate may allow some degree of cathodic polarization beneath the coating and/or provide some degree of protection due to an in-crease in pH, but there are no pipeline coatings that can guarantee either of these conditions will be met in all cases. Factors such as soil and electrolyte conductivity, presence of a continuous electrolyte beneath the dis-bonded coating, structure potential at the crevice open-ing of the disbonded coating and conductivity of the trapped electrolyte beneath the disbonded coating all have an impact on the level of protection. Rocks and debris, expansive and contractive soils and improper bedding/backfilling of the pipe during construction can also cause cathodic shielding.

In 2002, the Gas Technology Institute embarked upon a major study of pipeline field joint coatings applied to cathodically protected fusion-bonded Epoxy (FBE) coat-ed pipe and three-layer polyethylene (3LPE) coated pipe. The study was sponsored by the industry members and recently the full confidential report after five- and seven-year studies was released to the sponsors. Abbreviated re-ports were issued to the participating companies who applied their field joint systems on the test pipe such that they could see the performance of their specific systems. A public report is expected in the near future but an interim report was issued in 2005 “GRI-05/0180.”

As a participating company, Canusa-CPS was able to see the results of their proprietary heat-shrinkable sleeve prod-ucts and were not surprised that “heat-shrink sleeves” were consistently ranked first (best performing) or tied for first with FBE coatings. Tapes and composites (in which fiber-backed tapes are grouped) were consistently ranked fourth or fifth (last). Performance was measured relative to holi-days, rust and wrinkling.

Heat-shrinkable sleeves that have been properly selected and applied will provide a sufficient bond to the substrate to resist disbonding due to soil stress, pipe movement and cathodic protection, thus they will not cause cathodic shielding problems.

At a basic level, the fundamentals of pipeline corrosion protection design is simple common sense; these being adhesion, fit-for-purpose performance, electrical resis-tance and low water absorption all providing a quality corrosion coating with minimal reliance on CP for over-all performance.

Bob Buchanan and Scott Smith are employed by Canusa-CPS, a manufacturer of pipeline coatings for more than 45 years.


Petroleum is everywhere these days. It is an absolutely vital component to life as we know it — the lifeblood, so to speak, of our nation. The vast majority of petroleum products are transported throughout the country via a vast and complex circulatory system of pipelines.

To get a handle on the actual extent of these pipelines, and to better gauge the vascular dynamics of our country, let’s look at some figures. We’ll start with the crude and move from there. There are two types of pipelines we’ll be looking at so here’s a quick run down. Gathering lines are usually smaller in diameter (maxing out at less than a foot) and do just as their name implies, they gather oil from drill sites and transport it to larger trunk lines. Trunk lines can get up to 24 in. in diameter and are the heavy lifters in the pipeline system. These lines are like the main arteries in a body, pumping massive amounts of petroleum to re-fineries and other destinations all across the country and continent. There are approximately 40,000 miles of smaller crude gathering lines and around 55,000 miles of crude oil trunk lines running through the United States.

What about gasoline and other refined petroleum products? Good question. With pipelines ranging from small 8-in. pipe to massive 42-in. pipe, refined petrol is piped around the country through roughly 95,000 miles of pipeline. If that sounds like a lot of pipe, it is… but it is also a small figure in comparison to the number of miles of natural gas lines that weave throughout the continent. There are more than 1.8 million miles of natural gas pipe-line in the Untied States alone. This brings the grand total of pipelines in the United States to more than 2 million miles.

And this figure is growing every day. It is estimated that construction of new pipelines in the beginning of the new millennium will exceed any other period since the 1950s — and all this in an increasingly environmentally conscious society.

Pipeline construction, although cutting a relatively narrow swath as it transects state and country, can be damaging to certain elements of the environment, specifically root systems and vegetation surrounding the pipeline and its construction zone. Depending on soil conditions and vegetation, the heavy machinery used in the construction process can take a toll. Because much of the land that pipelines must cross is private, vegetation and land protection is often a primary concern. Since their integration into the construction process, DixieMat hardwood mats have helped to dramatically reduce the nega-tive impact of pipeline construction on vegetation.

What’s in a Mat? So, what’s a hardwood mat? Well, it’s simple really; it is

a heavy-duty movable surface, constructed of bolted hard-wood timbers for the purposes of supporting the weight of machinery over bog, marsh, stream and field. These mats protect valuable land and vegetation, offsetting reclama-tion costs and time. By more evenly distributing the weight of machinery over a larger surface area, fragile root systems sensitive to weight can be preserved. They also provide trac-tion where needed and prevent stuck machinery. The ex-tent of hardwood mat usage on the pipeline construction site doesn’t stop at ground cover either. In each stage of the process, hardwood mats and crane mats serve a valuable

Reduced Impact

Hardwood Mats Help Protect the Environment During Pipeline ConstructionBy Brian von Schulz


function. Whether in the pipeline production yard serving as dunnage or on the front lines serving as pipeline skids or crane mats, hardwood mats are a crucial part of the energy distribution construction industry.

A first look at this industry reveals that it would be im-possible to complete any kind of industrial pipeline con-struction without the support of many unnoticed and often invisible elements. DixieMat hardwood mats play a vital behind-the-scenes role. And when you consider the scope of planning and organization required to complete a pipeline construction project, the importance of avail-able and the reliable resources like mats becomes incred-ibly clear. In nearly every step of this carefully coordinated and intensive process, you’ll find mats being used in one capacity or another to bring about that final product — a functioning pipeline.

Even at the drawing board, before the project is ever put into motion, there is a fundamental understanding around which the whole project operates and hinges. This is the premise that if even one segment of the pipeline is dam-aged, the consequences could be costly. Full sawn skids are the answer to the call for undamaged pipe. Hardwood mats serve as cribbing for the pipeline from the moment the pipe is created in the factory to the final second of onsite construction. From its birth onward, there are countless opportunities for the pipeline to be damaged. In the hard knock world of industrial construction, this is an ever-pres-ent risk, a risk minimized by hardwood mats.

Now, a good question here might be, “Aren’t pipes made of steel and designed to withstand some natural wear and tear?” Yes, they are. But, while it is true that pipe is made of high-quality steel and designed to withstand the stresses of the real world, when working with the immense amounts of pressure required to push natural gas through an exten-sive system of pipes, even a small flaw in the pipeline can, over time, result in a very serious problem with expensive repairs. This reality is the reason for the care taken with pipelines. Hardwood mats, crane mats, pipe cribbing and pipe skids are put to work every day protecting the valuable materials used during industrial construction. In every step of the process, DixieMat crane mats and hardwood mats help ensure that the job gets done right and that the pipe-line stays strong.

Climate and TerrainLet’s shift gears for a moment. This might seem like a

moot point, but there are a lot of oil rigs in Texas. By the same token, there are a lot of oil rigs in Louisiana. There is also a lot of swamp in Louisiana. It is important to recog-nize the role that climate plays in the pipeline construc-tion industry. Climate and even seasonal weather changes can have a significant impact on the construction of pipe-line and transmission lines. While the rigs in Texas usu-ally have dry and relatively easy access, the wet months can mean trouble for construction. With hardwood mats, this burden is eased and machinery can much more easily access any rig or pipeline construction site. In the dryer months, while solid ground is a reality in some parts of the country, other parts are not so fortunate. Oil is ancient organic matter that has been under intense pressure for ages, and there is no room for being picky about location. Drill sites must go in wherever the fossil fuel is found. Sometimes it’s in the middle of the desert; sometimes it’s in the middle of a swamp. This is where hardwood mats become incredibly important.

This precious resource has to be extracted wherever it is found, and that can mean planning nightmares. How do you get all the components necessary for a massive oil rig into the middle of a swamp? How do you construct a pipe-line to get all that oil out? Well, hardwood mats are a big part of the solution. In muddy and unstable soil, timber mats are perfect for creating roads that defy the wet and un-stable conditions. DixieMat swamp mats and bridge mats create a stable crossing over streams and swampy areas. Crane mats and laminated mats create a solid staging plat-form and solid decking around a drill site. DixieMat hard-wood mats in all their many forms help to allow access for the heavy equipment necessary to successfully extract pe-troleum from difficult to reach places without the problem of unstable traction and land degradation. As the industry begins to fully realize the benefits of using matting systems, productivity can increase. There is little doubt that the use of these hardwood mats has vastly improved the ability of the industry to operate with efficiency. For many pipeline construction sites, accessibility has always been a major ob-stacle. Running lines through dry ground and open space is one thing, but cutting line through swampy regions and wetlands is a different proposition altogether.

In any given pipeline or transmission line construction project, there are numerous heavy pieces of machinery and

DixieMat Celebrates 35 Years

DixieMat has been pioneering the way in the hardwood mat industry for the past 35 years; and 35 years in the hardwood mats industry is ancient. DixieMat has been at it from the beginning and has seen the industry change a lot. As more companies enter the field and the dynamics of policy, economy and environment change, one thing has stayed the same, and that is the stability of a quality hardwood mat.

With sawmills located natio

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