pipeline news north

R001424250

Northern British Columbia and Alberta's Oil and Gas Industry

Vol. 3 Issue 2 • dIst: 18,000 februArY/MArCH • 2013 • freeNorth

in this issue:• PAtHWAY to ProsPerItY - ClArK WANts

lNG to beNefIt All brItIsH ColuMbIANs• blACK Gold turNING GreeN - oIl ANd GAs

INVests IN reNeWAbles• leAdING tHe CHArGe - eNCANA drIVING

tHe lNG fuel busINess

stars rECEIVED OVEr $1 MILLION FrOM aNNUaL OIL aND Gas INDUstrY FUNDraIsEr - stars PHOtO

2 • PIPELINE NEWS NORTH FEBRUARY 15, 2013

PETROLEUM ASSOCIATION - HAPPENINGS

FEBRUARY 15, 2013 PIPELINE NEWS NORTH • 3

R001424264

14 Bitumen bubble - beating the oil price differential28 Beefing up for the boom - Fort Nelson gets ready for the LNG business

industry news

community

environment

special feature

4 Steady as she goes - the year ahead in the patch5 Back to normal - OGC lifts water suspensions6 Pathway to prosperity - LNG to benefit all of B.C.11 Riding the rails - shipping Alberta oil by train16 A lesson in liability26 LNG Canada earns export license

10 STARS & Spurs Gala breaks fundraising record22 Spectra donates to Northern Lights College

18 Black gold turning green - oil and gas industry driving the renewable energy sector

industry newsGettING IN tHe GAMeAltaGas takes logical

step into LNG businessjames watermanPipeline News North

Debbie stein would suggest that it only makes sense for altaGas to en-ter the fray of the emerging liquefied natural gas (LNG) export industry in British Columbia.

“We are in the energy business,” said the vice president of finance and CFO of the diverse natural gas, power and utilities company.

that business includes the only existing natural gas pipeline to the Pacific Coast, the Pacific Northern Gas (PNG) system, which is the sort of in-frastructure that would be an es-sential piece of any plan to move fuel from the resource plays of northeast B.C. and beyond to liquefaction and export hubs in communities such as Kitimat and Prince rupert.

However, securing a market for the product is also a critical compo-nent of any LNG export enterprise, and stein believes that altaGas is in good shape in that regard as well, thanks to their relationship with their equal partner in their

plan to export LNG and liquefied petroleum gas (LPG) from Canada to asia that was announced at the end of January.

that partner is Idemitsu Kosan.“they’re the second largest

petroleum company in Japan,” stein said of the other half of the alta-Gas Idemitsu Joint Venture Limited Partnership.

“they have a 50 per cent owner-ship in one of the largest LPG sup-pliers in the world,” she continued. “they don’t have natural gas. they

don’t have LNG. But they have big infra-structure … that they own and operate.”

altaGas does have natural gas in addition to infrastructure in Canada.

“We have organization-

al capability to build and operate these assets,” stein explained. “We know the natural gas market. We know the basin. We know the pro-ducers. so, we believe that there’s an opportunity here.

“We’re not looking to export 2.0 bcf (billion cubic feet) of gas,” she added, noting that that volume is considerably less than other LNG export proposals.

stein said that Japan has a petro-chemical industry hungry for natural gas as well as a high demand for propane, and LPG that hasn’t been mentioned in other LNG export proj-ects in B.C.

“What’s developing in North america is an oversupply of pro-pane.,” said stein.

“so,” she continued, “to the extent that we can find a way to get the propane over there, we believe that there’s an opportunity here to export propane. We’re going to spend some time looking at how we develop that business opportunity, because there is supply in Canada and there’s demand over there. so, we’re going to try and find a way to put those two together.”

the joint venture partnership will soon be starting discussions to find natural gas suppliers and custom-ers as they launch their feasibility study.

“the feasibility studies will evalu-ate and develop the commercial arrangements, the capital require-ments, the construction plans – all of those things to make this into a business that is profitable for our shareholders and adds value to the Canadians and the Japanese,” said stein.

AltaGas appears confident that the partnership will bear fruit.

“We have the boots on the ground in Canada,” said stein. “they have the boots on the ground over there.”

“We know the natural gas market. We know

the basin. We know the producers.”

– Debbie Stein, AltraGas


North

William JulianRegional Manager

250-785-5631wjulian@

pipelinenewsnorth.ca

Alison McMeansManaging [email protected]

Dan PrzybylskiSales250-782-4888 ext 101cell: [email protected]

Ryan WallaceSales

250-785-5631cell:250-261-1143

[email protected]

Published Monthlyby Glacier Ventures International Corp.

The 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.

James WatermanReporter

250-785-5631cell:250-263-1878

[email protected]

Janis KmetBC Sales250-782-4888 cell: [email protected]

Cheryl LeeSales250-782-4888 [email protected]

CONTACT US:Phone: (250) 785-5631

Fax: (250) 785-3522www.pipelinenewsnorth.ca

bIllING:lisa Smith

Accounting Manager250-562-2441 ext 352

Fax:250-960-2762accounting@



industry newssteAdY As sHe Goes

PSAC predicts a good year for the oil patchjames watermanPipeline News North

steady is the word Petroleum services association of Canada (PsaC) president and CEO Mark salkeld uses again and again when talking about the year ahead in the Canadian oil patch.

PsaC updated their drilling activity forecast for 2013 on Jan. 24, now suggesting it will be a slightly busier year they than originally anticipated when they released their earlier forecast in November.

“Last year, we were down. Last year, we dropped significantly,” said salkeld, adding that 2013 is expect-ed to see a three per cent increase in activity over 2012.

a big part of that increased activity as projected by PsaC is a bit of a surprise to salkeld, simply because it is taking place in the natural gas fields of northeast British Columbia, where producers have been suffer-ing from low commodity prices and market access issues stemming from the remote nature of the plays, the growing shale gas glut in the tra-ditional export market of the United states and the slow development of a liquefied natural gas (LNG) export business that is still years away from becoming a reality.

“there’s just a really good interest in developing the gas there,” said salkeld, explaining the 13 per cent increase in projected activity since the November forecast.

PsaC originally forecast 385 wells for the province, but they are now predicting 435 wells in B.C. this year.

“We’re talking the bigger play-ers, the guys that can afford to play longer-term games,” he continued, citing shell Canada and the money that company is investing in their B.C. operations and LNG export plans as an example.

salkeld suggested activity is start-ing to pick up in northeast B.C. in preparation for LNG projects that are on the way.

“Not huge, but steady,” he said. “Because it’s still a tough area to play in. Expensive to operate.”

PsaC expects 7,165 wells in alberta this year, which is a two per cent increase over the November forecast, but a good portion of that is being attributed to exploration activ-ity in the Fort McMurray area.

“the producers in the area are still just identifying the scope of their assets,” said salkeld.

“these wells are exploratory,” he added. “and not saying they can’t become producers.”

the forecast for saskatchewan is staying the same at 3,199 wells, but Manitoba is down 13 per cent from the original forecast with 100 fewer wells than the 750 predicted in November.

salkeld said that activity in Mani-toba has been picking up in recent years because new technologies such as hydraulic fracturing and directional drilling have allowed producers to tap into unconventional reservoirs that the industry has known about for over 50 years.

“they’re having success,” said salkeld.

However, Manitoba suffers from a lack of transportation infrastructure.

“a lot of these wells, the oil’s got to get trucked out. so, that limits your capacity to deliver,” he continued.

“Definitely lots of resource there. and lots of good initiatives. But until the infrastructure gets developed and we can get our products to mar-ket – to other markets – it’s going to be a little bit tight.”

that is a problem that doesn’t just plague Manitoba, but also causes trouble for oil producers in alberta and natural gas producers in B.C.

PsaC said that their forecast for 2013 is tied to the fact that the Ca-nadian dollar should close to par with the U.s. dollar throughout the year and the fact that natural gas and oil prices should stay fairly low, averaging $2.95 CDN per thousand cubic feet (mcf) and $90 UsD per barrel, respectively.

Combined with market access constraints, the strong Canadian dollar and low commodity prices rep-resent a real challenge for Canadian producers.

“We have across North america now an abundance of natural gas,” said salkeld.

“the U.s. is working hard to

become energy self-sufficient and an energy exporter,” he continued. “so, the gas prices are down just because of the supply side. and the demand has got to grow. On the oil side, it’s the same thing.

“It’s still demanding a higher price, but Canada’s at the bottom rung on the ladder when it comes to pricing because of our situation.”

that situation is that Canada is a landlocked basin far from producing heavier oil than other oil plays that are also closer to refineries.

“It costs more to produce here,” said salkeld. “and you have to truck it out versus pipeline. so, it costs more to get our product to surface and … to refineries. and [there is] competition against fields that are closer to the refining capacity.

“We’re hurting in Canada overall because our oil is not priced as well as lighter oils closer to refineries.”

salkeld said that situation high-lights the value of developing new markets for Canadian oil and natural gas.

“Like getting our product down east to the refineries on the east coast and getting our product … down into the U.s. to the mega-refineries in Texas City.”

there is also the foreign market opportunity off the Pacific Coast.

“Just the amount of cus-tomers out there that we can sell to if we can just get it there,” said salkeld.

still, salkeld is expecting a good year.

“Part of the nature of the

Canadian oil patch in that if isn’t season, it’s political or it’s pricing,” he said. “We’ve been facing those kinds of situations for years. and we rise to the challenge in the boom times and we struggle through in the bust times. and right now we’re in between. We’re steady.

“We got a steady price for oil,” he continued. “We’d prefer gas to be up, but we still have to use it. Gas is still in demand. so, we still need to produce it.

“It’s steady as she goes. It’s going to be a good year.”

“We have across North America now

an abundance of natural gas.”

– Mark Salkeld, PSAC


9932 121 Ave., Grande Prairie, AB 780-532-1094 www.edwardsfactory.ca

• Heavy duty, two way brass zipper • Pleated bi-swing back

• Two patch breast pockets with fl ap and pencil slot on left pocket

• Two hip pockets with a snap closure on the left hip pocket

• Sewn throughout wit NOMEX® thread• Chest: 38, 40, 42, 44, 46, 48,

50, 54 & 56• Sizes: Regular 5’ 7 1/2” - 5’ 11”

Sizes: Tall 5 ’11 1/2” - 6’ 3”

Flame Resistant FabricsUltra Soft®

• Heavy duty, two way brass zipper • Pleated bi-swing back

Coveralls

Navy, Red, GreyNavy, Red, Grey

$9995

BC CUSTOMERS SAVE PST EVERYDAY

bACK to NorMAlOGC lifts water suspensions thanks to

big snow and warm weather

james watermanPipeline News North

It is finally back to business as usual for natural gas producers in northeast British Columbia after almost six full months of water use restrictions.

the BC Oil and Gas Commission (OGC) announced that water with-drawal suspensions for the region have been brought to an end, again allowing companies to access their customary sources of water used for practices ranging from building ice roads to hy-draulic fracturing.

“this was due the development of a strong summer drought that continued into late fall,” OGC hydrologist allan Chapman said of the water withdrawal suspensions that began on aug. 2, which included all waterways in northeast B.C. apart from some larger bodies along the lines of the Peace and Fort Nelson rivers and the Williston reservoir.

Chapman explained that the Commission kept a careful eye on weather conditions and water levels throughout the following weeks.

“rain occurred in late October and early November and river levels im-

proved,” he said.Consequently, the OGC lifted water

withdrawal suspensions for the Peace river watershed on Nov. 14.

“For more northern areas – the Fort Nelson and Liard river drainages – we partially ended the suspension, but kept a requirement for operators to provide field-based measurements of river flow to support an application to withdraw water,” Chapman continued.

“this was because of a lesser amount of regional stream flow data in that area to provide an understanding of what the general flow conditions were, as well as indications from a couple of gauges that low flows were persisting.

“We continued to monitor river conditions.”

Periods of warm weather in December and January caused sufficient snowmelt

for river levels to rise significantly.

In fact, data col-lected by the Water survey of Canada had shown that northeast B.C. rivers were at levels rang-ing from 200 per cent to over 500 per cent of their normal levels for the middle of January.

“Given these flow conditions,” said Chapman, “we ended the partial sus-pension that still remained and returned

to a ‘normal operating practice’ with respect to our short-term water applica-tion process.

“For industry, it means a return to normal practice.”

Chapman explained that the OGC tried hard to help natural gas producers ac-cess water required for their operations between the beginning of august and the end of October, subsequently working with producers to evaluate river flow information to determine if and when the water withdrawal suspension could come to an end.

“I believe oil and gas operators will learn from the 2012 drought and water suspension and will bring into practice

measures to ensure continuity of water supply and water conservation,” said Chapman.

Chapman is anticipating a better sum-mer in 2013 as well.

“although we’re only halfway through the winter, things are off to a good start in the northeast with respect to water sup-ply (for the) next year,” he said.

“Mountain snowpacks are near nor-mal,” he continued. “and the low eleva-tion and valley bottom snowpack are well above normal.

“should these conditions persist through to april,” Chapman concluded, “groundwater recharge and river flows will likely be good.”

Extreme dry conditions throughout northeast British Columbia last summer forced the Oil and Gas Commission to institute water withdrawal suspensions for many water bodies throughout the region. Suspensions remained in place for some lakes and rivers until snowfall and warm weather finally brought water levels back to normal in January.

JaMEs WatErMaN PHOtO

“For industry, it means a return to normal practice.”

– Allan Chapman,Oil and Gas Commission


Making time work for you: the magic of compoundingPatti and Eric recently got married, and both have started to invest $100 a month in a Registered Retirement Savings Plan (RRSP). They often worry that they’re not investing enough for a comfortable retirement, but they have just bought a house and have found that $100 a month is all they can realistically afford.Time is working for Patti and Eric through the magic of compoundingOne of the best ways to make your money grow is through the magic of compounding. Compounding means that you earn money on your capital, or initial investment, as well as on accumulated interest. For example, if you hold investments that generate dividends or interest in your RRSP, that money is reinvested. The value of your investments increases, so you are now actually generating income on dividend and interest income you have already earned. As a rule, the more time you have to let your money compound, the faster your savings grow and the sooner you can retire. Plus, the earlier you start, the more you may have when you retire.Check out the numbersHere’s an example of how much you could save with a $100 per month contribution, at 8% return per year.

$48,000 can yield $322,108 - thanks to the effects of compounding and investing over a longer period of time.Can you get your hard earned money to work even harder?There is even more you can do to get the most out of compounding:* Don’t delay - The earlier you start investing, the bigger your return may be and the sooner you may be able to retire. For example, if you contributed $100 a month to your RRSP for ten years until you were 32, and then stopped - you would have invested a total of $12,000. If that money earned an 8% return, by the time you turned 65 it would have grown to $229,791. If instead you didn’t start investing until you were 32, you would have to invest $49,896 to have $230,128 by age 65. In this example, by delaying ten years you must contribute over $37,000 more to earn the equivalent amount of savings at age 65.

* Contribute early - By making your investment in January of the current tax year, instead of at the last moment in February of the next year, you’ll have an extra 14 months worth of compounding working to your advantage. * Monthly contributions - If you can’t make a lump sum contribution early, you can still gain additional income by making monthly contributions. And to make it even easier to contribute regularly, you can choose to have your monthly contribution automatically transferred from your savings/chequing account into your RRSP. * Consider an RRSP loan - If you can’t maximize your RRSP contribution, consider borrowing the money. You can use the tax refund to help pay down the loan, and take advantage of the power of compounding. * Pay yourself first - Think of your RRSP investment as a regular bill you pay to yourself. But remember to set realistic, attainable contribution goals.Even if there are times in your life when you can’t make a contribution, you can feel good knowing the money you have already invested is continuing to work for you through the magic of compounding.Talk to your Sun Life Financial advisor to find out how to make the most of your savings to reach your goals.

Submitted by: First Choice Insurance & Investment Services Inc. © Sun Life Assurance Company of Canada, 2011

Making time work for you

R001181042

TODAY IS A GOOD DAYTO MAKE THINGS SIMPLER

Reaching your financial goals is easier with a plan. Know your options.

First Choice Insurance & Investment Services Inc. Tel250-785-7575Fax250-785-1677fci@sunlife.com9519-100thAvenueFortSt.John,BCV1J1Y1

Life’sbrighterunderthesun

The advisors at First Choice Insurance & Investment Services Inc. are contracted with Sun Life Financial Distributers (Canada) Inc. a member of the Sun Life Financial group of companies. © Sun Life Assurance Company of Canada, 2011.

R001424274

Group Benefits Made Easy

Contact us for a FREE QUOTE:

[email protected]

1-866-408-4999 R001

4242

97

industry newsPAtHWAY to ProsPerItYAll British Columbians to benefit from LNGjames watermanPipeline News North

the British Columbia government got a jump on Valentine’s Day on Feb. 12 by expressing their love for the burgeoning liquefied natural gas (LNG) industry and the associated economic benefits it is expected to bring to the province.

Premier Christy Clark and her crew also sent a love letter to the people of B.C. in the form of a Prosper-ity Fund that will use LNG revenues to eliminate the provincial debt, as well as allow the government to cut personal income taxes and invest in health care, educa-tion and infrastructure improvements.

“the safe recovery and export of our abundant supply of natural gas presents an opportunity for prosperity un-like anything we have ever seen before,” said Clark.

anticipating $1 trillion in cumulative GDP stemming from LNG projects over the next 30 years, the govern-ment is expecting the Prosperity Fund to top $100 billion after it starts accruing revenue in 2017.

It is thought the fund could erase the provincial $56 billion debt by about 2027.

“British Columbians can secure tens of thousands of

new jobs for decades to come by developing this clean energy resource, and protect this new wealth for the benefit of all of us today, as well as our children and their families, tomorrow,” Clark added.

“Our LNG industry is quickly developing,” said rich Coleman, minister of energy, mines and natural gas.

“Large industry players are investing millions of dol-lars now to prepare for the opportunity ahead. We owe it to British Columbians to create the greatest economic return possible, so we can ensure this opportunity deliv-ers benefits to our citizens for generations.”

“I look at something like the Prosperity Fund as a great idea when we look forward to the growth of LNG,” said Mike Bernier, mayor of Dawson Creek – a com-munity that is central to the LNG industry as a hub for oil and gas activity in the Montney shale gas play surround-ing the city.

“Instead of just having that money just roll over into general revenues, to be able to put it into a specific fund to look at paying down the debt or lowering the taxes in the province,” he continued, “I think that’s a great approach.”

It will be interesting to see how cities such as Dawson Creek and their alaska Highway neighbours Fort st.

John and Fort Nelson are able to share in the Prosperity Fund dollars.

all three communities are home to service sector outfits and branch offices of oil companies working in the Montney, the Horn river Basin, the Liard Basin and the Cordova Embayment, the primary sources of natural gas for the LNG industry. Consequently, all three com-munities could experience an influx of new people and an additional strain on their local health care, education and recreation systems, not to mention their road, water and sewer infrastructure, as exploration and production activity ramps up along with the LNG business.

“One of the big things for me is, as the industry grows and as the area grows, so does our percentage that we receive through Fair share funding,” said Bernier, suggesting that financial support from the government for local infrastructure could exist regardless of how the Prosperity Fund is spent, depending on the fate of the Fair share program.

“One of my big pushes,” Bernier continued, speaking as Liberal candidate for the Peace river south riding in the upcoming spring election, “is to make sure that, as

continued pg 24


brING oN A brANd NeW reNAIssANCe

Shale gas inspiring a new industrial age in western Canada


the shale gas revolution could spark an industrial renaissance for British Columbia.

speaking during a Fort st. John and District Chamber of Commerce luncheon on Jan. 22 as part of a natural gas education program, Garth Johnson, vice president of the pipeline division with spectra Energy transmis-sion West, and Doug stout, vice president of energy solutions and external relations with FortisBC, both said the opportunities arising from the substantial natural gas supply in B.C. should go beyond the much discussed liquefied natural gas (LNG) export business to other ap-plications such as power generation, transportation fuel and production of petrochemicals ranging from methanol to fertilizers.

“I want to emphasize the word potential,” said John-son, discussing the benefits in terms of economic activity and provincial and federal government revenues that could stem from the natural gas industry in B.C.

“B.C. stands to benefit substantially.”Johnson explained that as natural gas production in

the province is increasing due to shale development and advances in pad drilling and hydraulic fracturing, exports to our traditional market in the United states are set to decline significantly.

the obvious solution appears to be LNG.“LNG gets B.C. gas to hungry asian markets,” said

Johnson, noting that the natural gas price in asia can be as much as five times the North American price, simply because it is more closely tied to the price of oil.

However, B.C. isn’t alone in that pursuit.australia, just a hop, skip and a jump from asian ports,

has as many as seven LNG export projects in the works, while the U.s. is busy converting LNG import terminals into export facilities to take advantage of the asian mar-ket as well.

Canada needs other options.Johnson said that power generation is near the top of

that list, particularly where natural gas is a replacement for coal. Burning natural gas to generate electricity can produce up to 60 per cent less carbon dioxide than burn-ing coal. Natural gas doesn’t produce mercury emissions and almost eliminates the production of particulate mat-ter that causes smog.

stout noted that remote communities not connected to the electrical grid are looking at LNG, as well as its cousin, compressed natural gas (CNG), as replacements for diesel fuel presently used for power generation.

One example of that is Haida Gwaii.transportation is also a high priority when it comes to

growing the natural gas market.stout said that FortisBC is focusing on promoting

LNG and CNG as transportation fuels for return-to-base operations such as public transit, waste collection, ferries and railroads.

One success story in that vein has been the conver-

sion to LNG of a truck fleet operating in Abbotsford.Fort st. John mayor Lori ackerman was curious

about the use of LNG and CNG for transportation in the northeast corner of the province, where tempera-tures can drop well below zero degrees Celsius in the winter.

Canadian natural gas producer Encana knows that is a viable option.

“We have a number of CNG trucks that we use in our operations in northeast B.C.,” said Encana spokesper-son Doug McIntyre, discussing the light truck fleet that Encana has converted to that fuel.

“We have found them to be very reliable in terms of running in the cold weather that is experienced in north-east B.C.,” he continued, adding that the CNG trucks have also performed quite well in Encana’s operating ar-eas in southern Alberta, where there has been significant cold snaps over the past few months.

“since CNG is still in a gas state,” McIntyre explained, “CNG-fueled vehicles do not have the problems associ-ated with starting up in cold weather that can be associ-ated with a liquid fuel such as propane, which can freeze when temperatures drop to low levels.”

Encana is also participating in the CN pilot project discussed by Johnson during the session that involves testing LNG locomotives on a rail line between Fort Mc-Murray and Edmonton, alberta.

Johnson said that using LNG for rail transport can reduce CO2 emissions by 30 per cent and reduce nitrous oxide emissions by as much as 70 per cent.

the heart of the industrial renaissance mentioned by Johnson could be the production of methanol, fertilizers and other petrochemicals from natural gas, as well as utilizing the fuel as a power source for metal and glass manufacturing.

Johnson and stout said the role of spectra and For-tisBC is only to transport the fuel and promote its use, but it is up to companies operating in those industries to launch those projects.

One company, Blue Fuel Energy is interested in build-ing a pair of methanol plants in Fort st. John, one that would convert natural gas into methanol and one that would turn CO2 from waste streams such as natural gas processing into methanol.

Johnson added, “Multiple opportunities for natural gas.”

Spectra Energy and FortisBC stopped by the Fort St. John and District Chamber of Commerce luncheon on Jan. 22 as part of a province-wide natural gas education program. The companies discussed the variety of applications for British Columbia’s abundant natural gas supply, which range from exporting liquefied natural gas to producing methanol and fertilizers. Pictured are Garth Johnson, vice president, pipeline division, Spectra Energy Transmission West, and Doug Stout, vice president of energy solutions and external relations, FortisBC.



Wood Stoves & Fireplaces

780-538-1987 Monday - Friday: 9am-6pm • Sat: 9am-5pmPark in rear; 9813-116 Ave., Grande Prairie

Kingman, Blaze King, RSF Energy,

Ardent Energy, Valley Comfort,

Jotul, Hearthstone• Up to 20 Hrs Burn Time• Heats up to 1500 sq.ft.• 86.4% Effi cient

INTRODUCTORY PRICE

only $2,395

R001424261

R001424294

For information on Membership

contact Art Jarvis, Executive Directorfor contact information seewww.energyservicesbc.org

R00

1424

280

buIldING CAPACItYSpectra launches second phase of Dawson Processing Plant

industry news


Montney natural gas producers are about to enjoy greater processing capacity with Phase 2 of spectra Energy’s Dawson Processing Plant coming online at the end of January.

the plant, located approximately 16 kilometres west of Dawson Creek, began processing natural gas from operations in the south Peace in the spring of 2012 at a Phase 1 capacity of 100 million cubic feet (mmcf) per day. Phase 2 adds another 100 mmcf per day of processing capacity to the facility, bringing the total processing capacity in the area to 1.6 billion cubic feet (bcf) per day.

“they’re introducing some product onto the system today,” said spectra’s Jay Morrison during a Jan. 25 interview.

“and then it will be up and running early next week.”Natural gas is delivered to the plant via spectra’s

Bisette Pipeline, which was brought into service in 2011, where carbon dioxide (CO2), hydrogen sulphide (H2s)

and natural gas liquids (NGLs) are removed. the result-ing sales gas is subsequently moved to the NOVa Gas transmission Groundbirch Pipeline via the Bessborough Pipeline.

the removed CO2, H2s and NGLs travel through the south Peace Pipeline to spectra’s McMahon Gas Plant in nearby taylor along with unprocessed natural gas.

Morrison explained that the process of preparing Phase 2 to receive natural gas didn’t end with the completion of construction.

“The final commissioning, which they’re doing this week, required that they depressurize Phase 1,” said Morrison.

“the depressurization allows them to actually tie-in mechanically and physically all of the Phase 2 into the Phase 1.”

the shutdown valves within both Phase 1 and Phase 2 are also tested while the plant is depressurized, since depressurization rarely happens, but is necessary for that work to occur.

Depressurization took about ten hours starting on the

morning of Monday, Jan. 21.“about a week it will be depressurized and then

they’ll be bringing stuff back online shortly,” said Morrison.

Phase 1 was operating at capacity at the time of depressurization; so, the expectation is that Phase 2 will run at capacity as well.

still, the future demand for processing services at the site isn’t exactly certain.

the plant is connected to a pipeline system that allows for transportation to alberta, where oil sands operations are a major source of natural gas demand, or foreign markets, which are the focus of liquefied natural gas (LNG) discussion in British Columbia.

However, oil sands demand is partially tied to em-battled plans to bitumen to the Gulf Coast and asia via pipelines such as transCanada’s Keystone XL and Enbridge’s Northern Gateway, while LNG exports from the B.C. coast are at least five years away.

“If there’s future demand either domestically or inter-nationally,” said Morrison, “that’s what will drive more growth in that area.”

The second phase of Spectra Energy’s Dawson Processing Plant was up and running at the end of January. That increases the processing capacity of the plant, which opened its doors in the spring of 2012, to 200 million cubic feet of natural gas per day.

sPECtra ENErGY PHOtO


GAuGING GAteWAYEnbridge taking latest public opinion poll in stridejames watermanPipeline News North

another day, another poll.that appears to be the life of the proponent of a

new heavy oil pipeline, particularly when that project is Enbridge’s Northern Gateway plan to move alberta oil sands bitumen from a point near Edmonton, alberta to an export hub at Kitimat, British Columbia.

“We are aware of the numerous polls that have reported on Northern Gateway – some showing more support than others,” said Ivan Geisbrecht, Enbridge spokesperson.

the latest is a poll conducted by Insights West, the results of which were released on Feb. 4, showing that the majority of albertans continue to support the project, while most British Columbians still stand in opposition to the controversial plan.

“at the end of the day, we are driven by our intent and objective of earning the trust of British Columbians and albertans. that is our focus,” Geisbrecht continued.

“We recognize we have more work to do and we are committed to doing it. the regulatory process is a long one, with a regulatory decision on our application not expected until the end of 2013. We will use this time to continue to gather input through the hearing process as well as our many community relations activities along the proposed route and beyond.”

Insights West president steve Mossop doesn’t think the poll held very many big surprises, but he is still intrigued by some of the numbers.

“We knew that albertans would be less opposed to the pipeline and what we found was quite an overwhelming level of support,” said Mossop.

the poll, which considered responses from 562 al-bertans, indicates that 75 per cent of albertans support Northern Gateway while only 18 per cent oppose the project and 7 per cent remain undecided.

the poll also shows that 30 per cent of albertans strongly support Northern Gateway, which stands in stark contrast to the 61 per cent of British Columbians who oppose the plan.

the portion of the B.C. population that strongly op-poses Northern Gateway is larger than the alberta contingent that strongly supports the project in terms of a percentage of the population at 38 per cent.

Insights West surveyed 512 British Columbians, revealing that 35 per cent of the provincial population supports Northern Gateway, which is a smaller group than those strongly opposed to the project. Only 11 per cent of British Columbi-ans strongly support Northern Gateway and just 4 per cent are undecided.

support was higher among males than females in both provinces. the highest support in alberta came from those 55 years old or older. Mossop said both of those trends are fairly common when it comes to these sorts of projects.

“the other thing that jumps out at me is that, with the level of public debate on this topic area over the past twelve months, we’re surprised that we haven’t seen more people turn in favour [or seen] the opposition de-clining,” said Mossop.

the poll indicated that 96 per cent of British Columbi-

ans are familiar with Northern Gateway, a number that hasn’t changed since a July, 2012 poll, but only 20 per cent are very familiar the project.

awareness is actually lower in alberta where 87 per-cent are familiar with the pipeline proposal and just 10 per cent are very familiar with the plan.

“the strength of the opposition appears to be grow-ing,” Mossop continued, noting that the opposite is usually true when there is such a large amount of public discussion.

“and with all the public debate,” he added. “From the advertising that Enbridge is doing to the daily press

coverage about the plans for the pipeline, we haven’t seen any move-ment in the positive direction.

“In fact, it’s been mostly negative for Enbridge, unfortunately.”

Mossop compares the Northern Gateway situation to public debates on hot button topics such as the Hst situation in B.C. where the momen-tum starts to favour the opposition side early in the discussion.

“and it almost snowballs,” he explained. “And it’s difficult to reverse that snowball effect once that mo-mentum is going. and that’s what we

have happening here. No matter what is thrown at the issue, the opinions are not changing.”

Interestingly, the poll suggests that many albertans understand British Columbians’ reasons for oppos-ing Northern Gateway, just as a significant number of British Columbians understand why albertans would be supporters.

“We have a series of agree-disagree statements on positives and negatives to do with the pipeline development,” said Mossop. “and what we found was people on both sides acknowledged each other’s arguments. In other words, the folks who are opposed acknowledge that there are economic benefits that will create jobs, that will create tax revenue that we won’t see otherwise.

“On the flipside, the folks who are in favour also see the downsides as well.”

almost all albertans surveyed agreed that Northern Gateway would create jobs and new capital investment and support economic growth, but over three-quarters of British Columbians surveyed also agreed with those statements.

additionally, an overwhelming majority of British Columbians are concerned about increased oil tanker traffic near Kitimat and environmental impacts of associ-ated with pipeline construction, while over 70 per cent of albertans also share those concerns.

Considering the similarity of their views, the question that remains is why the overall attitude toward Northern Gateway is so different between those provinces.

Mossop believes it is a cultural difference between a province where the oil and gas industry is prevalent and a province where the oil and gas industry is tucked away in the far northeast corner.

“We often lump ourselves together as western Ca-nadians,” he said, adding that issues such as Northern Gateway prove that B.C. and alberta don’t always share the same views.

“It does say that we have a long way to go in the prov-ince of B.C. … taking debates like this and rationalizing them a bit better.”

The latest Northern Gateway poll conducted by Insights West shows that Albertans and British Columbians remain divided when it comes to the pipeline. It also reveals that both sides understand the economic benefits and environmental risks associated with the project.

ENBrIDGE MaP

“We recognize we have work to do and we are committed to

doing it.”

– Ivan Geisbrecht,Enbridge


R001294124

communityCoWboYs for A CAuseSTARS & Spurs fundraiser enjoys record-breaking success


the 2013 stars & spurs Gala is going to be tough act to follow next year.the annual Petroleum services association of Canada (PsaC) fundraiser in support

of the shock trauma air rescue society (stars) raised a record $1.1 million on Jan. 19. stars & spurs has now raised over $9 million throughout its 19 years working with the air ambulance service.

“a fantastic event that highlights the generosity of PsaC member companies and … this particular industry as a whole,” said Mark salkeld, president and CEO of PsaC.

“It was an incredible amount raised that evening and there’s no way to properly express our appreciation for the support from PsaC,” said stars spokesperson Cam Heke.

“Last year,” he continued, “we were completely blown away by the amount of sup-port that we saw. and the fact that they raised an even a larger amount this year – again, we just don’t know how to properly express our appreciation.”

Highlights of the night included a toast to Ken King, who became the first STARS paramedic to fly 1,000 missions in June.

“I enjoy the opportunity to make a difference,” said King. “It’s thrill-of-a-lifetime work.”the gala crowd also heard the story of stars Very Important Patient Michelle salt,

a young woman who lost her leg, but held onto her life thanks to a stars helicopter crew that rushed her to the Foothills Medical Centre in Calgary after a near fatal mo-torcycle crash in 2011.

“I am grateful every day to stars for saving my life,” said salt.“Beautiful young lady,” said salkeld, adding that salt now competes as a

Paralympic snowboarder.“Everybody seems to know a stars situation,” he continued, telling the tale of his

brother-in-law who also narrowly escaped death after a car accident thanks to stars.“there’s just 1,000 stories out there like that.”Many of those stories concern the oil patch in one way or another.Salkeld explained that a significant number of PSAC member companies inform

stars of the location of their drilling and service rigs when their crews are working in remote locations.

“If there’s an incident out there, then the stars helicopter can GPs right into it,” he said.

“We work with industry to try and make sure that the people working in industry are as safe as possible,” added Heke. “On any given day, the stars Emergency Link Centre has approximately 4,000 worksites registered with our centre. and what that does is it allows us to have a direct link right at some of these remote work areas so that we can help employees when they may experience a medical emergency or there’s an incident that occurs at the site whereby there’s a traumatic injury and we need to get there quickly and help out. Or provide direction over the phone by using our doctors or connecting with other emergency services in the area.”

salkeld said that connection between stars and industry can also help other indi-viduals such as hunters who are often out in remote areas.

“they’ve got stories they can tell where … a hunter was injured and he was bleeding out in the bush and he managed to call in,” said salkeld.

“It’s not just about flying the helicopter. There’s a lot more to them than people realize.

“that’s what the PsaC membership sees and that’s what they support.”

The 2013 STARS & Spurs Gala raised $1.1 million for the air ambulance service that is so important to the oil and gas industry in western Canada.stars PHOtO

industry news


industry newsrIdING tHe rAIlsAlberta oil could be hopping a train to Alaska

Trains carrying oil could be moving through the Peace Region on their way to Alaska if a plan to ship Alberta oil sands bitumen by rail succeeds.JaMEs WatErMaN PHOtO


alberta oil sands bitumen could be flowing through the Peace Region by the end of the decade, but the mode of transportation might not be pipeline and its destination might not be the British Columbia coast.

Calling it a “nation changing” project, a consortium known as Generating for seven Generations – or G7G – is propos-ing to construct a 2,400 kilometre rail line capable of moving five million barrels per day of alberta crude from Fort McMurray, alberta to Delta Junction, alaska, where it will hitch a ride on the trans-alaska Pipeline to the port of Valdez, alaska on its way to oil-hungry asian markets.

the railway – known as Unifying Nations railway Com-pany or UN-railCo – would turn northwest near Peace river, alberta and pass through the communities of Fort Nelson, B.C. and Watson Lake, Yukon as it heads toward alaska.

“studies have already demonstrated that a rail link to alaska is a viable alter-native to the oil pipelines currently being planned through British Columbia,” said G7G CEO Matt Vickers when the plan

was officially announced on Nov. 14, 2012.

Vickers was referring to Enbridge’s pro-posed Northern Gateway pipeline from Bruderheim, alberta to Kitimat, B.C. and Kinder Morgan’s plan to twin their trans Mountain pipeline to Burnaby, B.C.

Both of those projects have seen con-siderable opposition from First Nations and environmental groups such as the Dogwood Initiative.

“the greatest strength of our alberta-alaska railway concept is the support it has received from First Nations along the route,” said Vickers.

Now G7G is trying to gain the support of the alberta government as well.

the group is set to launch a feasibil-ity study at a cost of approximately $40

million with the hope that the alberta govern-ment will pay about a quarter of that bill.

Vickers has said that G7G will not be discussing the project with the media as long as that decision is still up in the air.

a Jan. 3 press release indicates

that G7G was scheduled to meet with alberta Energy in January to discuss the matter, but a statement from ministry spokesperson Mike Deising said that “there will not be a decision in January

and there is no time on if or when a deci-sion will be made.”

There is definitely interest in shipping oil by rail.

“the focus on rail is telling as far as market demand and shippers look-ing for creative ways to move product to market,” said Canadian asso-ciation of Petroleum Producers (CaPP) spokesperson travis Davies, adding that the industry is also going to need new pipeline capacity to the west coast, eastern Canada and the Gulf Coast in the United states.

“as pipeline capacity grows tight, creative options such as rail become more attractive and economic,” he continued. “rail will grow, but remain a small percentage of crude transport.”

“this plan goes back a long, long ways,” Bill streeper said of the oil-by-rail idea.

“and it kind of died a natural death.”streeper is the mayor of the Northern

rockies regional Municipality, a jurisdic-tion that includes the community of Fort Nelson and the shale gas play known as the Horn river Basin, where natural gas producers are facing similar issues as those facing operators in the alberta oil sands – access to markets beyond North america is minimal and the North ameri-can price for the commodity is too low.

“the tar sands, of course, is being forced … to find a route to the Pacific,” said streeper, suggesting that Canada is guilty of an economic sin by relying too heavily on one customer when it comes to selling its natural resources.

“Not everybody investing in the stock market buys one stock,” he added.

Jean-Francois arsenault, an econo-mist with transporta-tion sector consulting firm CPCS Trans-com, noted that rail can be an attractive alternative to pipe-lines from an eco-nomic development standpoint because railroads offer the

ability to ship other products as well.However, arsenault also remarked

that transporting oil by pipeline is less expensive than rail because of the ongo-ing costs of operation and maintenance associated with railroads.

transporting oil by rail might make sense at the present time considering that there is insufficient pipeline capacity for the large volumes of oil being pro-duced in North america, not to mention that many small markets don’t have pipeline access, but arsenault has doubts about the feasibility of this alberta-to-alaska project.

“You give a pen and a paper to an engi-neer and he will make it work,” he said.

“Rail will grow, but remain a small

percentage of crude transport.”

– Travis Davies, CAPP

“Studies have already demonstrated that a rail link to Alaska is a viable

alternative.”

– Matt Vickers,Generating for Seven Generations

continued pg 25

12 • PIPELINE NEWS NORTH FEBRUARY 15, 2013R0

01441130

SAFETY SERVICESDan WilsonCell: 250.263.8786

Safety AuditsSafety Consulting

Safety Training CoursesMobile Treatment Centres

The Heartbeat of the North

Phone: 250.782.5559 • Toll Free: 877.782.5558Fax: 250.782-5509 • [email protected]

801 - 102 Avenue • Dawson Creek, BC • V1G 2B4

Specialists in H2S and noxious odour control solutions

Grande Prairie, AB Ft. St. John, BCProvost, AB Carlyle, SK

www.almontinc.com 24 hr: 1-855-396-2950

Mobile Scrubbers operate without electricity

Tanker & Vac Truck Mounted Scrubbers

Liquid scavenger chemicals proven to reduce costs by reducing usage

Calgary, AB

R001425636

industry newsleAdING tHe CHArGeEncana opens first LNG fuel plant in Alberta


Encana is building a reputation.Obviously, they are already well known as a Canadian

natural gas heavyweight with operations throughout North america, but the reputation they are building now is all about how they use that resource.

the company announced at the end of January that their Cavalier LNG facility near strathmore, alberta was up and running, the plant being the first of its kind in Alberta to convert ordinary natural gas into liquefied natural gas (LNG) fuel for transportation and high horse-power applications.

at the time of the commissioning of that plant, it had recently been announced that Encana would be building a second LNG plant with Ferus near Grande Prairie.

all of this came after Encana started converting their own light truck fleet to compressed natural gas (CNG) and building CNG fueling facilities to service those

trucks, after Encana converted the transport fleet of one of their service providers in Louisiana to LNG with the help of mobile LNG fueling stations and even after En-cana began working with CN to test LNG locomotives on a short run between Edmonton and Fort McMurray.

the Encana name is quickly becoming synonymous with domestic uses for natural gas that go beyond heat-ing homes, generating electricity and coaxing bitumen from the oil sands of northern alberta.

“We’re proud to have a plant there in alberta,” said David Hill, vice president of Encana’s natural gas economy group, noting that the plant isn’t far from their corporate headquarters in nearby Calgary.

“It’s very meaningful for us to be able to open our first of several LNG facilities,” he continued. “this is a big deal for Encana. … We’re really excited about it. and I think we’re going to see great things happening.”

the location wasn’t only chosen for its proximity to Calgary, but also because it is adjacent to their Cavalier gas plant that processes methane from their coalbed

methane (CBM) assets in the area.“We’re using coalbed methane gas, which is very pure

methane,” said Hill. “so, we have a very minimal pre-treatment required to remove impurities and water.”

the plant will be able to produce 15,000 to 17,000 litres of LNG per day when fully operational.

The first customers for fuel produced at the site will be Ferus, who is working on converting their truck fleets to LNG as part of their partnership with Encana to build the second alberta LNG plant near Grande Prairie, and CN, who is using LNG provided by Encana for their alberta pilot project.

“One of the things I like to stress is Ferus and CN are first movers in this space,” said Hill.

“It’s important to really team up with like-minded companies that see the benefits of using natural gas beyond price,” he continued, referring to the record low natural gas prices that are so enticing to consumers at the present time.

“Obviously, natural gas as a fuel is a lower cost than diesel or gasoline today. So, that’s a benefit. But both of these companies … see it beyond that.”

Hill believes their interest in natural gas goes past the fact that it can be up to 40 per cent less expensive than gasoline or diesel to include the environmental benefits, which feature a 30 per cent reduction in carbon dioxide (CO2) emissions and a 90 per cent reduction in particu-late matter that causes smog.

additionally, natural gas is a domestic fuel.“they see it as part of their sustainability program.”Hill seems particularly excited about the rail market be-

cause of the large volumes of fuel that industry can consume“And CN is definitely a leader in this space on innova-

tion,” he said.Interestingly, the ties between CN and the oil and gas

industry are growing as the oil sands industry struggles to get their product to market and cope with the uncer-tain futures of transCanada’s proposed Keystone XL pipeline to ship Alberta bitumen to Gulf Coast refineries and Enbridge’s proposed Northern Gateway pipeline to transport that fuel to an export hub at Kitimat, British Columbia.

speaking during the Insight Canadian Oil sands summit on Feb. 6, CN’s vice president of petroleum and chemicals James Cairns said that railways and pipelines are both good options – and both necessary – when it comes to moving oil to market.

“Before the first pipeline is full, you better have the second pipeline built,” said Cairns. “Because if you don’t, full means full.”

rail can offer temporary transportation when pipeline

Encana’s Cavalier LNG plant is the first facility of its kind in Alberta to produce liquefied natural gas for transportation and high horsepower applications.

ENCaNa PHOtO


capacity isn’t available.actually, a lot of the recent talk about

transporting oil by rail began with light oil discoveries in the Bakken play of sas-katchewan and North Dakota where pipe-line capacity couldn’t match production.

“rail had to be part of the supply chain,” said Cairns, noting that it was never a question of logistic or economic viability.

“It had to happen.”the oil sands producers are facing a

similar dilemma as they attempt to ac-cess foreign markets in the absence of Keystone XL and Northern Gateway at a time when the price differential between Western Canadian select and Brent or West texas Intermediate is growing to a debilitating level.

“shipping by rail allows you to connect new production with markets that are not pipeline served,” said Cairns.

It can also be economical because it doesn’t include the cost of diluent neces-sary to ship heavy oil by pipeline.

suncor Energy is one oil sands pro-ducer seriously examining the possibility of shipping oil by rail as they attempt to move their oil sands output to their Mon-treal refinery.

“It gives you a great deal of flexibility, particularly around some of the poorer quality streams from western Canada where you could get those in sooner than pipelines could be reversed,” said sun-cor’s president and CEO steve Williams.

“Even if pipelines are reversed, you have an opportunity to make a good margin.”

It is possible that Canada could soon see large volumes of heavy oil transport-ed by trains powered by natural gas.

Ferus, however, is already closely tied to the oil and gas industry as a supplier of cryogenic fluids such as liquid nitrogen and liquid CO2 that are used in enhanced oil recovery and hydraulic fracturing.

“It’s not easy,” Hill said of the conver-sion to natural gas.

“Changing your fueling pattern, chang-ing the fuel, driver behavior – it’s difficult,” he continued. “We’re experiencing the same problems and challenges in our

own fleet of light duty vehicles with CNG. so, we’re able to really communicate with them at the right level that we understand the frustrations and the challenges. Be-cause we’re doing it ourselves, too.

“It makes a good partnership.”Hill is encouraged by the way vehicle

manufacturers are starting to embrace the natural gas option.

“Just in the last … three years we’ve seen a significant shift in the market,” said Hill, noting the emergence of natural gas fuelled trucks manufactured by Chrysler and General Motors after a de-cade during which the Honda Civic was the only natural gas vehicle available.

the heavy duty truck manufacturers are also coming onboard.

Until this year, the only engine options have been a small 8.9 litre engine and a large 14.9 litre engine, but an intermedi-ate 11.9 litre engine will soon be available from Cummins Westport

“Kind of filling the gap in my view,” said Hill, “which is re-ally important to provide trucking firms a choice on the kind of horsepower they need. and torque. that’s going to be a big move for the market.

“We anticipate that really accelerating the market in the on-road.”

Hill noted that Encana has been using natural gas for off-road, high horsepower applications in their drilling operations since 2007, but that hasn’t been an area where there has been a lot of movement outside of the company.

“We began to expand that here in the last three to four years,” said Hill. “and also move into our pressure pumping services and using natural gas there on our large engines.”

Now manufacturers such as Caterpillar

are actively bringing natural gas into the high horsepower market with products such as natural gas locomotives and mine haul trucks.

“One of which would be fully capable of serving the oil sands up in Fort McMur-ray,” Hill said of those mine haul trucks, further describing the synergies between oil and gas industry operations and un-conventional uses of natural gas.

“and now we’re seeing the marine mar-ket moving in this direction as well,” Hill continued. “a lot of the ferries on the west coast of Canada and the west coast of the [United states], as well as the east coast in Manhattan, looking at natural gas.”

Marine transportation outfit TOTE shipholdings announced on Dec. 4, 2012 that they had contracted General Dynam-ics NASSCO to build the first two LNG

containerships on the ocean.

“these are pretty significant movements that were not even on the radar three years ago,” said Hill. “and really attesting to the abundant natural gas story that En-cana and others have developed

in North america.”Hill said that approximately one-third of

the LNG produced at Cavalier will go to the on-road market, while the remaining two-thirds will go to the off-road market.

“We hope the market continues to ex-pand and we expand the facility with the market,” he added.

“today, we just got an approval on a con-tract for another customer to fuel their trucks off the LNG from the Cavalier facility.”

However, interest in the fuel produced at the plan is still difficult to gauge at this point.

“the interest was high, but it was just talk – tell me more, tell me when, come back when you have something,” Hill said of the year and half leading up to com-

missioning of the plant.“Now we have our production and

dispensing facilities,” he continued. “Now there’s something tangible that they can come out and see, touch, feel – and talk to a customer or talk to somebody that’s already using it.”

Encana will be working hard throughout 2013 to ensure that the alberta market is aware of the availability of LNG at the Cavalier plant and the abundance of natural gas feedstock.

Hill admits that it is a risky venture.“a lot of uncertainty. a lot of very legiti-

mate concerns” he said.“What about this? What about that?

Will this work? Will the price be here two or three years from now? Will I still have the same price? What about the cost of these trucks or these engines? are they going to come down?

“that’s why I said you really have to work with the first movers. … You want to find those companies and work with them to develop a win-win solution for them and the fuel.”

still, there are rewards for leading the charge.

“Being a first mover, they get to take advantage of any pricing power they might have by being a lower cost fuel,” Hill said of their first LNG customers.

“and also they can talk to their cus-tomers and say, ‘I’m taking this step. I’m using natural gas. It’s a better fuel. a lower greenhouse gas emissions. Lower criteria pollutants.’ they can talk to their customers now before everybody else and say they’re taking advantage of this and they can provide a better service to their customers. that begins to resonate with some of their customers.

“We’re asking our supply chain to do the same thing,” he continued. “Join us on this transformation. We’re doing our bit. We’re building CNG stations. and LNG. and join us. We should be using the fuel that we’re drilling for. there’s absolutely no reason it won’t work. We’re trying to demonstrate that.

“We’re just excited to be part of it.”

The first customers for fuel produced at the Cavalier LNG plant are CN and Ferus. Ferus already has a strong relationship with the oil and gas industry as a supplier of cryogenic fluids used in enhanced oil recovery and hydraulic fracturing. CN’s relationship with that sector is growing as they work with Encana to test LNG-powered locomotives and consider expanding transportation of Alberta oil by rail.

CN PHOtO

“We hope the market continues to expand and

we expand the facility with the market.”

– David Hill, Encana


34077

R001424183

special featureburstING tHe

bItuMeN bubbleWhy Alberta has to beat the oil price differential


Keystone XL and Northern Gateway could offer a solution to the “bitumen bubble” problem facing alberta, but the fates of those projects are beyond the control of government.

as Premier alison redford has said during television addresses in recent weeks, her government is looking at a $6

billion shortfall in provincial revenues be-cause of the differential between alberta oil prices and the West texas Intermedi-ate (WtI) or Brent Crude prices.

“It’s been a reference that’s been used to talk about the differential that a lot of alberta producers are getting for bitu-men up in northern alberta,” said Chris Bordeau of the alberta treasury Board and Finance.

“It’s the Western Canada select (WCs)

price that a lot of producers get per barrel of oil compared to what the North ameri-can price is, like WtI price, and then certainly compared to the global Brent price,” Bordeau explained.

“We’ve seen a certain drop in the West-ern Canada select price,” he continued. “and the spread between WCs and WtI has certainly grown significantly over those last couple of months. and it’s re-ally become sort of disassociated from the WtI price.”

Historically, said Bordeau, WCs has followed a similar trajectory to WtI.

“In the last couple months, we’ve seen a disconnect where WCs price has come down, whereas the WtI price has main-tained its upper level.”

the obvious way that price differential is felt by the provincial government is through royalty revenues.

“the lower the price that our produc-ers get, the less royalty they pay to the province,” said Bordeau. “We’re defi-nitely seeing an impact on our bottom line for royalties. It also has an offshoot impact, too, on things like corporate taxes that are paid to the province. … When the profit margins decrease for companies it affects how much they pay in taxes. so, it’s got a bit of a side impact to some of our other revenue sources.

“some would even say that a lower WCs price [is] impacting how much we’ve been able to get when we do these Crown lease sales,” he added.

“But the direct correlation is definitely the royalty that the companies pay to the province is lower when the price of WCs is lower.”

the land sales do present some inter-esting numbers.

For example, the first land sale of 2013 attracted $85.05 million compared to $63.43 million for the first day of 2012, but the first 2013 sale averaged $239.94 per hectare for a total of 354,476 hect-ares and the first 2012 sale averaged an impressive $403.88 per hectare for just 157,063 hectares.

The first 2013 sale also revolved around the liquids-rich Montney shale gas play, not oil resources.

“We brought in $3.3 billion in sales of Crown leases,” Bordeau said of 2011-2012 fiscal year.

at the halfway point of the 2012-2013 fiscal year, land sales had only brought in just under $600 million.

“We were projecting to bring in basically $2.0 billion,” said Bordeau. “We’re already

projecting to be $1.3 billion under what we brought in [last fiscal year] for Crown leases. But, right now, for six months we’re below that even.”

Consequently, the alberta government is looking at being shy $6 billion in rev-enue for the 2013-2014 fiscal year.

“We’ve been working on a plan for a while to improve market access even before this current fiscal situation came up,” said Bordeau. “the premier’s talked

Alberta oil producers are struggling from an oil price differential between Western Canada Select and West Texas Intermediate that could be solved by new pipelines connecting Alberta with world markets.


“The lower the price that our producers get, the less

the royalty they pay.”

– Chris Bordeau, Alberta Finance


R001424237

a lot about a Canadian energy strategy and the importance of that and how that will help us work with other provinces and increase the number of customers we have that can buy our oil.”

However, if growing the customer base requires the successful completion of pipe-line projects such as transCanada’s Key-stone XL and Enbridge’s Northern Gateway, which would move alberta oil to texas and the British Columbia coast, respectively, it is somewhat out of alberta’s hands.

“Out of all the major oil producing jurisdictions in the world, alberta’s the only jurisdiction that’s landlocked,” said Bordeau. “We don’t have direct access to a coast where we can then get a higher price for our oil. that’s why we’re doing what we can. that’s why the premier is advocating the Canadian energy strate-gy. We’ve put a focus on asia and having an Asia office. We’ve got our Washington office as well [and] we’re working through them and working with the federal gov-ernment on those issues.

“But, ultimately, if you’re looking at Keystone, for example, that’s a deci-sion that the [United states] government needs to make. and they’ll make the decision based on their best interest.

“In that sense, it is out of our control.”the alberta Enterprise Group (aEG),

an organization of business leaders de-voted to the prosperity of alberta, clearly believes that too much of that control is being given to individuals or organiza-tions that want to block major projects like Keystone XL and Northern Gateway.

aEG feels that they do so regardless – or ignorant – of the economic benefits.

“Economic illiteracy has long been a problem,” said aEG’s vice president Da-vid MacLean, adding that Canadians are easy to convince of the environmental ramifications, but it is far more difficult to teach them the economic consequences of oil price differentials.

“We’re behind the eight ball to start with because what we’re trying to com-municate is endlessly more complicated,” he added.

aEG went public with their concerns in late January after a luncheon with Enbridge CEO al Monaco.

“It is becoming increasingly difficult to develop the Canadian economy,” said aEG president tim shipton following Monaco’s speech.

“Whether its pipelines, power lines,

mines or hydroelectric projects, the debate focuses on why we shouldn’t build instead of why we should. Canada is paralyzed by special interests and complacency.”

“It’s never been like that, historically,” said MacLean, adding that Canada was built on calculated risks such as the decision to construct a railroad across the nation.

“Every day we take risks,” MacLean continued.

“If we all decided to stay home, we’d all make no money and we’d all be poor. and I’m afraid that Canadians en masse are deciding to just stay at home.”

“What is at stake is the balance sheet of the entire country,” said ship-

ton. “It’s not just about jobs and profits, but also vital government revenues needed to finance growing govern-ment pension liabilities and expanding services.

“the lower price Canadian energy exporters receive is costing the Canadian

and albertan governments billions each year – paid in turn by tax-payers across Canada.”

MacLean admitted that aEG fully supports Northern

Gateway, but also noted that the embat-tled pipeline project isn’t the only issue at hand when it almost impossible to build new power transition lines in alberta and when it took ten years of regulatory wrangling to approve a uranium mine in

saskatchewan when the same project would have been approved in just a year and a half in Europe.

still, Northern Gateway was the exam-ple MacLean used when discussing why Canada has to stop being so “cautious” and favouring a “not in my backyard” atti-tude when considering projects that could prove vital to the national economy.

“It’s $2.3 billion in government revenue to all levels of government,” MacLean said of Northern Gateway.

“that’s a huge number,” he continued. “that’s enough to employ 1,000 doctors, nurses and teachers for 25 years.”

However, MacLean suggested that that message from B.C. government has been that $2.3 billion and 300 jobs in Kiti-mat isn’t sufficient to support the project.

“If that’s not enough, how much is?” he continued. “How much is it going to cost as a nation, how much will it take in terms of revenue, for government to make a project like this worthwhile?

“Meanwhile, there’s tankers going in and out of the port of Vancouver every week. there’s 100,000 barrels a day that goes down that trans Mountain line into the port of Vancouver – some of it heavy – every damn day.

“We can’t have tankers, but you certainly have tankers coming into the port of Vancouver with cheap products to service Walmart. It comes the other way. We can’t ship stuff back to asia. I don’t think people really think deeply on it.”

MacLean said that the consequences of rejecting pipelines that would move alberta oil to foreign markets, thereby bursting the bitumen bubble, would be either higher taxes or reduced govern-ment services for Canadians.

Benefits of approving those pipelines would include becoming a net exporter of energy.

“and being a player in the global mar-ketplace,” he added.

“We’ve got to keep talking. We’ve got to raise the discussion,” he said.

“We take responsibility as an organi-zation for doing whatever we can, what-ever small part we can play, in injecting some economic literacy into the debate. and making sure that people know that we’ve got to put a price tag on taking an energy development approach in this country.

“I don’t think we’ve done a good enough job of that in the past.”

Alberta, home to oil sands operations belonging to companies like Suncor, is the only major oil resource in the world that is landlocked. That lack of marine access to foreign markets is a big part of the “bitumen bubble” problem.

sUNCOr PHOtO

“It is becoming increasingly difficult to develop the

Canadian economy.”

– Tip Shipton, Alberta Enterprise Group


industry newsA Good lessoN

IN lIAbIIltYFort St. John Petroleum Association learns

the ins and outs of Bill C-45james watermanPipeline News North

terry Betts of advantage Fleet services paid a visit to the Fort st. John Petroleum association on Feb. 7 to offer a warning to managers and business owners about what it can mean if they fail to create a culture of safety in their workplace.

the reason was that the recently introduced Bill C-45 – also known as the Westray act – holds supervisors, managers and owners criminally responsible for the ac-tions of their employees and contractors.

“We never think anything bad is going to happen to us,” Betts said of the common mentality that can lead to workplace incidents.

It is an issue of particular concern to the oil and gas industry, considering the inherent risk involved in working in remote locations on well pads and pipeline construc-tion sites, the homes of some of the most dangerous jobs in Canada.

additionally, workers involved in that sector frequently drive considerable distances in everything from pick-up trucks to dump trucks, pickers and transport trucks.

Betts had that same mentality during his 25-year ca-reer as an RCMP officer, until a shootout with an armed man cost him three fingers on one hand.

“It wasn’t going to happen to me,” he added.the problem is that incidents do occur, often involving

businesses where somebody along the chain of com-mand was negligent, occasionally resulting in the deaths of innocent bystanders.

Betts cited a motor vehicle accident involving a driver who was working for C & J Construction in alberta.

“It’s just another tool,” he said of the attitude many workers have towards their trucks, but adding that motor vehicle accidents are probably the most violent way to die judging by his experience in the rCMP.

“a lot of drivers take a different attitude when they drive a company vehicle,” he continued, suggesting that was the case when the C & J construction driver, who was ignoring traffic laws and impaired by drug or alcohol, killed five people who had been sitting in a car stopped at a red light in Calgary.

It was determined under Bill C-45 that the company was aware of that driver’s habits and attitude and that management should have known that such an incident was a definite possibility.

It was tantamount to willful blindness.Betts also told the story of a construction company in

Ontario that was fined three times its net earnings – a total of $200,000 – after the deaths of four employees at one of their job sites.

“that’s precedent,” said Betts.the Crown is appealing that sentence in an attempt to

increase the fine to $1 million.the owner of the company, who had no previous

criminal record, was personally fined $90,000, while the project manager was charged with criminal negligence.

that is how Bill C-45 is changing the landscape of oc-cupational health and safety.

Under Bill C-45, the au-thorities don’t need to prove criminal intent for an action that causes death or injury. they only need to prove negligence.

Betts explained that police officers are currently being

trained with respect to the Westray act and there is a push to have a prosecuting attorney in every province who is an expert on that law.

the Canadian steelworkers Union, said Betts, is very aggressive in their attempts to have charges laid under Bill C-45 when worksite incidents occur.

a long-term problem for a company convicted under Bill C-45 is that they may no longer be able to

get insurance.“If they don’t have insurance, they can’t operate,” said

Betts.Betts noted that ICBC can cancel an insurance policy

if the policyholder is convicted of a criminal offence while driving.

“It happens,” he said.“ICBC is very zealous.”additionally, insurance companies can ask if an ap-

plicant has ever had their insurance canceled.“If you ever get cancelled, you may have yourself a

problem.”However, Betts stressed that it is possible to avoid the

problems that could arise from violating Bill C-45.the answer can be as easy as using seatbelts and

turning off cell phones or as complex as conducting a road safety Performance audit to determine National Safety Code profiles.

“We look at the low hanging fruit,” said Betts.Betts also emphasized the importance of practic-

ing safe behaviour “for the right reasons” and not just because it is the law or company policy.

“Most of those policies or procedures are all best practices.”

Terry Betts of Advantage Fleet Services gave the Fort St. John Petroleum Association a lesson in Bill C-45 during their monthly meeting on Feb. 7. Bill C-45 holds supervisors, managers and company owners criminally responsible for the actions of their employees or contractors. Betts told stories of incidents where individuals in management roles and companies have been charged with criminal negligence for incidents involving their employees.


“A lot of drivers take a different attitude when they drive a company vehicle.”

– Terry Betts,Advantage Fleet Services


R001451728


environmentblACK Gold

turNING GreeNOil and gas industry driving the renewable energy sector


renewable isn’t a dirty word never to be spoken in the hallways of companies that toil in the oil and gas industry of west-ern Canada. actually, as the Canadian energy landscape changes to include technologies such as wind, solar and geo-thermal on an increasingly large scale, companies ranging from oils sands giant Suncor Energy to pipeline outfit Enbridge are diversifying their portfolios with green energy projects popping up across the country.

suncor and Enbridge even grew up together as modern wind power pioneers after they decided to join forces on build-ing the sunBridge Wind Power Project in saskatchewan in 2001.

“After about four or five years of trying to find a project that would fit for us, our first project basically came along in 2001,” said Don thompson, vice president of Enbridge’s Green Energy department.

that was the 11-megawatt wind farm in saskatchewan.

“they basically were looking for a part-ner and we were looking for a project,” thompson said of the partnership with suncor.

“and, of course, suncor is a very large shipper on the Enbridge system. so, it was a really good fit.”

additionally, Enbridge felt a responsi-

bility to contribute to the electricity grid in saskatchewan as one of the largest consumers of power in the province.

“that was a start,” thompson added.It is now twelve years later and En-

bridge has just launched the first phase of their thirteenth wind project, the Lac alfred Wind Project in Quebec, bringing their total wind power generation up to 1,250 megawatts.

suncor has been busy, too.the oil company now has three addi-

tional wind projects in alberta and another two wind projects in Ontario.

“We believe that wind power, a clean, safe and renewable energy source, is an important part of Canada’s future energy mix,” said Nicole Fisher, suncor spokesperson.

“suncor is committed to developing and supplying energy options that meet the needs of both today and tomorrow,” she added. “as a Canadian pioneer in wind energy, we currently operate six power developments with other projects in the planning stages.”

“For all of our operating projects, we are the investor,” said thompson, noting that Enbridge has not always been the proponent of those projects.

“We essentially bought the late-stage or near-ready-to-construct projects,” he explained. “We have typically not gone … into the development side. and when I say development, that’s the guy who basi-

cally goes out, takes the wind measure-ments or negotiates the land access or works with the [utility] to get the access to the transmission.

“We basically buy it after those pieces have already been developed. and then we basically take it to the next step, which is the construction and then eventually the operations.”

thompson said that Enbridge has grown increasingly comfortable with their role in the wind energy sector.

“Our ability to actually invest in those development projects earlier is much greater,” he said. “and our appetite, frankly, for those early stage projects is getting much larger.”

Enbridge believes that they are en-couraging those visionary individuals who develop renewable energy technologies and projects through their investments in that area.

“For them, this is about recycling their investment,” said thompson.

“they’re quite an interesting group,” he added. “they don’t all just take it and put it in the bank and go home. they plough it back into new development.”

However, building a wind farm isn’t just about power supply and demand issues, tackling the financial hurdles or ensuring that the project is profitable for companies like Enbridge.

they must also consider safety and environmental impacts.

“We bring a tremendous amount of expertise,” said thompson.

“the construction of utility-scale proj-ects is not at all easy, all the way through permitting, as well as making sure that we have labour organized, subcontrac-tors organized, materials organized,” he continued.

“that’s what I think we bring to the equation.”

thompson cites the Lac alfred wind farm in Quebec as an example of En-bridge’s ability to manage the logistics of such a project.

“It’s a 300 megawatts project,” he explained. “there’s 150 turbines. the road servicing this is 180 kilometres of road. there are very few companies that can actually execute that project well. and, frankly, that’s what we really pride ourselves on. and then the long-term operation of projects.”

the responsibilities that come with operating a wind farm aren’t only about satisfying minimum code requirements, but ensuring that there are no incidents that cause harm to people or the environment.

“these are all high voltage systems,” said thompson.

another Canadian company with roots in the oil and gas industry that is also gaining experience and exper-tise in the renewable energy sector is altaGas.

Well known as an oil and natural gas transmission company, Enbridge is also involved in numerous renewable energy projects, including the Massif du Sud Windfarm in Quebec. ENBrIDGE PHOtO

continued pg 27 FIND US ONFACEBOOK

FOLLOWUS

Tel: (250) 782-915512109 - 8th St., Dawson Creek

CHEVROLETBUICK GMC

Dealer #7406

ALL TRADES ARE

WELCOME

Tel: (250) 782-9155Tel: (250) 782-9155Tel: (250) 782-9155Tel: (250) 782-9155

(800) 663-8080Neil GrantTerryMarkWayne Jack Ed SteveRusty Gary

CHEVROLETBUICK GMC

Good credit?Bad Credit?No Credit?Everyone’s approved!

ALL TRADES ALL TRADES

WELCOMEWELCOMEWELCOMEWELCOME

Free 3 month/

5,000 warrantyon select

pre-owned

vehicles

$37,71037,71037,710NOW

2013 Camaro 2SS CoupRally yellow. Last one!Stk C12-7402. MSRP $45,510.

$39,88839,88839,888NOW

2009 Ford Shelby GT 500Supercharged, 9954kms, mint.Stk T13-7730A.

$57,98757,98757,987NOW

2013 Sierra Denali Crew CabShort box, gas.Stk T13-7821. MSRP $67,465

$55,88855,88855,888NOW

$70,99270,99270,992NOW

2013 Silverado LTZ 25008Crew cab S/B, diesel with $9,248 in accessories.16” inch tires/rims. MSRP $81,748

Call For Price

$66,9692013 Sierra Denali Crew CabCrew cab, S/B, diesel.Stk T13-7862. MSRP $78,465.

$21,88821,88821,888NOW

$70,02870,02870,028NOW

2013 Silverado LTZ 2500Crew cab S/B diesel. Ultimate GFXpakage. Stk T13-7739. MSRP $81,350.

$50,88850,88850,888NOW

$72,58572,58572,585NOW

2013 Yukon Denali AWDWhite diamond.Stk T13-7798. MSRP $79,360.

$64,88864,88864,888NOW

$51,73751,73751,737NOW

2013 Silverado 2T Reg CabCab & chassis, diesel.Stk T13-7827. MSRP $61,170.

$59,88859,88859,888NOW

$58,92958,92958,929NOW

2013 Enclave AWD PremiumStk T13-7738.MSRP $60,555.

$42,88842,88842,888NOW

NEW

PRE-OWNED

www.brownschev.com

2013 Chev Camaro ZL1Supercharged, 3 to choose from!

2012 Chev Suburban4WD, leather, sunroof, dual DVD,22” wheels. Stk 3461A.

2012 Chev 2500 Silverado4X4, NAV, sunroof, leather.Stk 3485A

2011 Cadillac Escalade ESVNAV, dual DVD, sunroofStk 3422A

2007 Dodge Ram 15004X4, to many ads to list!Stk T13-7723AA.

2013 Ford F150 RaptorNAV, sunroof, basically new with under 100 kms! Stk 3465A.

2011 Ford F250Crew cab Diesel 4x4, lift, rims, tires.Stk # T13-7852A.

Stk T13-7623

66,96966,969NOW


FIND US ONFACEBOOK

FOLLOWUS


CHEVROLETBUICK GMC

Dealer #7406

ALL TRADES ARE

WELCOME

Tel: (250) 782-9155Tel: (250) 782-9155Tel: (250) 782-9155Tel: (250) 782-9155


CHEVROLETBUICK GMC




Free 3 month/


pre-owned

vehicles

$37,71037,71037,710NOW


$39,88839,88839,888NOW


$57,98757,98757,987NOW


$55,88855,88855,888NOW

$70,99270,99270,992NOW


Call For Price


$21,88821,88821,888NOW

$70,02870,02870,028NOW


$50,88850,88850,888NOW

$72,58572,58572,585NOW


$64,88864,88864,888NOW

$51,73751,73751,737NOW


$59,88859,88859,888NOW

$58,92958,92958,929NOW


$42,88842,88842,888NOW

NEW

PRE-OWNED

www.brownschev.com








Stk T13-7623

66,96966,969NOW


careers PeoPle for tHe PAtCHCCIS training a new crop of power engineersjames watermanPipeline News North

a small group of new Canadians are on their way to becoming new power engineers thanks to the Calgary Catholic Immigration society’s Oil and Gas train-ing Programs (CCIs OGtP).

CCIs is working with saIt Polytechnic, Enform and the alberta Boilers safety as-sociation (aBsa) to deliver the 37-week program that began on Monday, Jan. 28 with a group of 16 students selected from hundreds of applicants. all the students are either new Canadians or unemployed and underemployed immigrants with previous science and technology training suitable to the trade.

“What makes this program unique is the fact that we’re able to provide the training in only 37 weeks,” said CCIs spokesperson ana Hoepfner.

“We’re able to do this in such a short period of time,” she continued, “because these individuals already have strong backgrounds in mechanical, science, physics, abstract reasoning, chemistry and so forth. so, they’re able to take up a lot of that knowledge and retool it and become certified as power engineers in a short period of time.”

Financial support for the program has come from the federal government and provincial government in alberta, but a great deal of in-kind support has also come from an oil and gas industry that recognizes a considerable need for power engineers now and in the future.

“They participate with us on final selec-tion, as guest speakers, mentoring the clients and guiding field trips, providing orientation,” said Hoepfner.

“and, at the end of the day, providing job opportunities.”

Hoepfner explained that this first session of the program is a pilot project driven by that de-mand for power engineers.

“We feel that this will be a very significant step forward for the in-dustry,” she said.

“this is a very in-demand occupation. In the oil sands, it’s the most in-demand occupation. and we think that this is a unique avenue to access people who are already here, who are unemployed or underemployed or marginally employed, who might have backgrounds as me-chanical engineers or as physicists or as science teachers, and who are being un-derutilized skill-wise. and retooling those skills to become certified in a profession that is lucrative, that will provide good revenue for the government.

“One company mentioned to me a

couple of days ago over the phone that they were going to post twenty power en-gineering positions in the next couple of weeks,” Hoepfner continued. “and that’s just one company in the next two weeks. so, you can imagine the scope.

“they’re not just needed in the oil sands. they’re needed in hospitals. they’re needed in schools. anywhere there’s boilers and pressurized equip-ment. In waste treatment plants. they’re needed in the city of Calgary. they’re needed in the city of Edmonton. they’re needed in different kinds of facilities. so, there’s a huge scope for growth in this profession.”

In fact, the opportuni-ties range from oil refineries to breweries.

“there’s certainly a huge market for power engineers,” said Hoepfner. “so, we do feel that this model and this industry-driven approach could be applied on a much wider scale.”

Hoepfner noted that government fund-ing for such programs is limited, but CCIs is hopeful that industry will play a greater role in training power engineers.

“If industry were to step in and we could collaborate to train greater numbers of people, this will be a great opportunity,” she said.

“Because the need is already here,” she added. “It’s not looming. the shortage is already here. and we need those people trained as soon as possible. and the best way is to access [people] who are already here, who already have the skills and who can very quickly become certified.

“and as they are a diverse group, they have other skills and other perspectives that they can also bring to the workplace.”

the project began with the initial pro-gram proposal that was written in 2009.

“It’s been a few years in coming to fruition,” said Hoepfner. “We have been talking about this for quite some time and building up the support that would be required to make it successful.”

The first group of students was chosen from a shortlist of 40 only about a week prior to the start date of the program.

“Every single person that came to help us out with the interviews said the same thing – they were astounded by the caliber of tal-ent,” said Hoepfner, adding that the oil company repre-sentatives on the selection committee remarked that any of the candidates would be make a good addition to their staff with the proper certification.

Hoepfner remarked that a number of the candidates had known that the pro-gram was in the works for some time.

“and so they periodically kept knock-ing on our doors, saying, ‘Have you heard anything about the power engineering program?’” she said, adding that those selected are very appreciative of being cho-sen by industry to take part in the training.

“they really are seizing this very strongly,” Hoepfner continued, noting that students were arriving as early as 8:00 during the first week, even though class begins at 9:00.

“this is a very motivated team.,” she said.“this will be an excellent way for

them to get started in an important sector of the economy, whether they choose to go into oil and gas or whether they choose to go into build-

ing management or they wish to go to petrochemical plants or breweries or plastic plants.

“It will mean an important change in their lives because they have struggled, in many cases, for years to find sustain-able employment.

“In only nine months, their lives

will turn around, and they will be making in the vicinity of $100,000.”

Calgary Catholic Immigration Society has launched their first power engineering program for new Canadians with past education or experience relevant to the trade. The pilot project is training new power engineers in just 37 weeks.

CaLGarY CatHOLIC IMMIGratION sOCIEtY PHOtO

“We feel that this will be a very significant step forward for the

industry.”

– Ana Hoepfner, CCIS

“This will be an excellent way for

them to get started in an important sector.”

– Ana Hoepfner, CCIS

industry news


industry newsBlack to know this spring if refinery will go aheadDaily Oil Bulletin

British Columbia businessman David Black says he should know by the end of March whether his proposed $13-billion Kitimat oil refinery will proceed.

“a lot of the pieces I’m working on will let us know where they’re going to be. there are a lot of potential stakeholders here and I’ve been talking to them all,” he told reporters following a presentation at the Insight Canadian Oil sands summit on Feb. 5.

In august 2012, the owner of the Black Press newspaper chain an-nounced that privately-held Kitimat Clean, of which he is president, had submitted an environmental assess-ment application for a world-class oil refinery north of Kitimat. The plan is to construct a 550,000 bbl-per-day refinery to process heavy crude oil transported on Enbridge Inc’s proposed Northern Gateway pipeline.

He believes a modern West Coast refinery would be incredibly important to the alberta oilsands. It would produce 240,000 bbls per day of diesel, 100,000 bbls per day of gasoline and 50,000 bbls per day of aviation fuel.

Once Black knows whether the project can proceed - and he told the Bulletin he is 95 per cent certain it will - it will take a couple of years to obtain all the neces-sary permits and environmental assess-ments followed by five years of construc-tion for a 2020 start-up.

“so it’s going to take a while.”Black, whose media chain runs 150

newspapers in Canada and the United states, told those attending the gala din-ner that a majority of British Columbians, even those who lean towards the political right, simply are not in favour of pipelines in their province that would move alberta

bitumen to the West Coast for shipment abroad.

“I can pretty much tell you British Columbia is not in favour of [Northern Gateway] pipeline - 70 per cent against it,” he said, adding that a pipeline doesn’t make sense for the province, as it offers only temporary construction jobs and then little else, aside from the potential for damage to pristine environ-ment. With such widespread disapproval of a pipeline, Black said, the province’s Liberal government has little choice but to oppose it.

“What are you going to do when 70 per cent are against it? Of course the solution is the refinery, because that turns the population of B.C. around. so that’s what we have to do, and that’s what we’re try-ing to do.”

according to Black, a world-class refinery provides economic stimulation and a multitude of permanent jobs for his province - 3,000 precisely and gives B.C. an oilsands buy-in and delivers the social licence necessary for that project to occur.

A large-scale refinery also requires a lot of natural gas to operate, which means the Kitimat project would boost B.C.’s natural gas industry as well.

“It would be a fairly sizable consumer of B.C. gas, and God knows we need some consumers of our natural gas.”

For alberta’s industry, Black said, a refinery that legitimizes pipeline construc-tion gives oilsands products access to foreign markets, helping to resolve the current discount for alberta crude due to its inaccessibility to markets beyond the U.s.

Because of Kitimat’s access to tide-water and proximity to natural gas, Black said a large refinery project would be able to offer good-paying jobs and environ-

mental standards not found in a lot of similar facilities around the world, yet at the same time turn a tidy profit and out-compete pretty much any other refinery along the Pacific Rim.

On the Kitimat Clean website, Black says the refinery would generate $2 bil-lion of exports every month and create hundreds of millions of new tax dollars to government every year.

For producers, Black said, accessing Pacific markets for Alberta crude with a Kitimat refinery would save $22 per bbl compared to all the costs associated with piping product to the Gulf Coast, and then shipping it a much longer distance, through the Panama Canal to East asia.

“Everybody says you can’t compete with those big Gulf complex refineries, because they’re already built and their not fully utilized. But they’re on the wrong ocean, and people aren’t paying attention to that.”

He said the project would appeal to East asian markets as it would offer a “guaranteed, long-term, refined fuel sup-ply with a safe shipping route from a new, diversified sale source.”

For China, he said, the refinery would give the country an opportunity to ship back home products refined from the bitumen that some of its companies are harvesting in the oilsands. A refinery in Canada also reduces China’s need to build refineries in its own country, which helps that country reduce the amount of pollution from refineries that would not be up to the same environmental standards as the Kitimat project, according to Black.

as to whether China would prefer to receive crude from Canada and refine the petroleum itself, Black suggested that the few thousand jobs that would otherwise be created in China are not as important to the nation as having access to the en-ergy products necessary to facilitate rapid economic expansion.

Once he knows if the potential stake-holders say “yes or no” and assuming the answer is “yes,” it should be a fairly simple task to raise the necessary funds to build the multibillion-dollar project, Black told reporters.

“It’s just not a problem. there are huge pools of money looking for infrastructure investments that are safe, and this is safe.”

Apache and Chevron close Kitimat LNG deal

Daily Oil Bulletin

apache Corporation has announced that its subsidiary, apache Canada, has com-pleted the transaction with Chevron Canada Limited to build and operate the Kitimat LNG project and develop natural gas resources in the Liard and Horn river basins in northeast British Columbia.

Chevron Canada, a subsidiary of Chevron Corporation, and apache Canada each have become a 50 per cent owner of the Kitimat LNG plant, the Pacific Trail Pipelines and 644,000 gross undeveloped acres in the Horn river and Liard basins. after a brief transition period, Chevron Canada will assume operatorship of the LNG plant and the pipeline.

apache Canada increased its ownership in the LNG plant and pipeline from 40 per cent and will operate the upstream assets. Its net proceeds from the transaction were $405 million.

“With Chevron’s LNG experience and apache’s upstream track record, this team is ideally suited to move this project forward toward delivering the tremendous resources at Liard and Horn river to meet asia’s growing demand for LNG,” steven Farris, Apache’s chairman and chief executive officer, said in a news release.

While some LNG buyers are trying to push away from oil-linked prices, the head of Chevron said recently that this type of pricing will be key to making projects like Kitimat LNG work.

In late December, Encana Corporation and EOG resources Inc. announced they were selling their positions in Kitimat LNG to Chevron. the planned Kitimat LNG project has until now struggled to secure a long-term off-take agreement with an asian buyer.

R00

1424

301


communityWINd IN tHeIr sAIlsSpectra energizes Wind Turbine Maintenance program with donation

staFF rePOrterPipeline News North

spectra Energy is lending a helping hand to their energy sector cousins in the wind industry by donating $7,500 to the Wind turbine Maintenance technician program at Northern Lights College (NLC).

the funding will help cover exam fees or students enrolled in the pro-gram, the only one of its kind in British Columbia.

“spectra Energy endeavors to be the partner of choice and actively supports communities we work in and around,” said spectra’s Jay Morrison, who pre-sented the cheque to NLC on behalf of the company.

“Education and workforce develop-ment are key areas to develop, as they contribute greatly to the overall long-term health and well being of the community,” Morrison added. “spectra Energy is excited to contribute to North-ern Lights College and the important trades programs they offer.”

NLC announced that they had received the donation on Feb. 1, the same day the college announced they would be holding a public information session on Feb. 6 to

discuss plans to build a training tower to be used by Wind turbine Maintenance technician students at their Dawson Creek campus.

“access to a training tower is impera-tive for Wind turbine students to qualify for BZEE certification, the international standard required by most companies around the world,” said Brent Deinstadt, vice president of corporate services at NLC.

“the training tower will be designed to replicate conditions faced by wind turbine technicians when repairing, maintaining, installing or otherwise working on a wind turbine system,” he added.

the training tower was included in the original plan for the Energy House that has already been built at the Dawson Creek Campus, but has been delayed by the two year process of obtaining the required permits.

It will not include any mechanical com-ponents such as an actual wind turbine.

“Northern Lights College is commit-ted to the communities it serves,” said Deinstadt.

“and we want to ensure that area resi-dents have an opportunity to ask ques-tions about the project.”

Hal Hobenshield of NLC accepts a $7,500 donation from Spectra Energy, which was delivered by Jay Morrison. The donation will help students in the Wind Turbine Maintenance Technician program.

NOrtHErN LIGHts COLLEGE PHOtO

industry news

NEB recommends federal government deny NGTL Komie North projectDaily Oil Bulletin

Concluding that rolled-in tolling is inap-propriate for NOVa Gas transmission’s proposed Komie North extension, the Na-tional Energy Board has recommended against federal cabinet approval for the northeastern British Columbia segment of the Northwest Mainline.

“the proposed rate design [for Komie North] would unreasonably subsidize the extension of the NGtL alberta system into an area where it would compete with infrastructure already in place,” said the NEB in a report released Wednesday.

“NGtL’s proposal to roll in all costs of the project to the rate base shifts the cost or risk of unused capacity to other NGtL shippers in the short and long term,” it said. the company provided little evi-dence to indicate the willingness of those shippers to carry those costs, which was especially apparent for the Komie North section where some alberta shippers op-posed the project, according to the board.

“Basing pricing for transportation on cost causation (user-pay) promotes economic efficiency through proper price signals to the market,” it said. “In this context, the board is of the view that the tolls for NGtL’s transmission service must have an appropriate allocation of cost and risks.”

However, the NEB recommended that a Certificate of Public Convenience and Ne-cessity be issued for the Chinchaga section of the Northwest mainline, finding that its

toll treatment is appropriate. the 33-kilo-metre pipeline loop would run between the Chinchaga meter station and the Meikle river compressor station about 76 kilome-tres northwest of Manning, alberta.

the 97-kilometre Komie North project, an extension to the Horn river mainline, would be built 110 kilometres north of Fort Nelson at an estimated cost of $229.8 million for the pipeline and the required Fortune Creek meter station.

In its application, NGtL proposed that its rates for service for the pipeline be de-termined in accordance with the alberta system rate design. It also proposed to add the capital costs of the project to its rate base, which means that all shippers on the system would bear the cost.

the current rate design includes a ceiling and floor for FT-R (firm transporta-tion -receipt) rates that are eight cents per mcf above and below the average receipt rate. NGtL stated that under this rate design, the new volumes received at the Fortune Creek meter station would pay the ceiling rate of 25.3 cents per mcf compared to 34 cents per mcf if the ceil-ing was not in place.

at a hearing on the facilities applica-tion, Westcoast Energy Inc. argued that under that toll design with the ceiling in place a shipper on the Komie North sec-tion would effectively pay no incremental toll and receive free transportation ser-vice from Fortune Creek, despite the fact that the pipeline has an estimated annual cost of service of about $24 million.

the use of rolled-in tolling, it suggest-ed, puts the utilization risk on alberta sys-tem shippers and not NGtL. the board in its report also pointed out that when NGtL was asked about a situation under which it would be expressly at risk for the costs of Komie North it responded that in this instance, it would probably suspend the project and not proceed.

the ceiling on receipt rates limits the cost causation reflected in the rate design, said the board, noting that the evidence showed that that any shipper on the Komie North section would be receiv-ing a significant subsidy. NGTL’s pro-posed toll treatment for the section would not produce just and reasonable tolls as the cross-subsidization exceeds the NEB’s tolerance for departures from the user-pay principle, the board determined.

It also agreed that there would be no additional revenue from contracts at Fortune Creek relative to comparable contracts at points downstream on the system, despite the extra costs required to build the project facilities. as a result, it concluded the ceiling rate is not appropri-ate for use on Komie North.

at the hearing, Westcoast also argued that NGtL’s investment policy of building pipelines based on its own assessment of supply potential, rather than producer contracts, gives it an unfair advantage in competition for gas supplies.

NGtL suggested that subsidization from the rate design and building for the 2030 forecast flow of 1.56 bcf per day is

justified as a basin opening toll. It said that a modest level of cross-subsidization reduces the hurdles to develop the basin and is a short-term catalyst to help pro-ducers overcome a potentially uneco-nomic circumstance.

However, the board said that while it acknowledges NGtL’s view that there is some inherent cross-subsidization in many rate designs, it considers the extent and impact of the cross-subsidization as important factors in its decision making. “For example, the higher the cross-sub-sidization, the further tolls are from cost causation (user-pay) and the more the risk of underutilization is borne by other shippers,” said the report.

the NEB also said that in the case of Komie North it found “unpersuasive” NGtL’s assertion that the toll ceiling is justified because it affects only three per cent of the entire alberta system revenue.

“Differences in rates or prices that are small relative to NGtL’s large system and large revenue can still have a significantly disruptive impact on choices made in specific locations,” said the board.

Given its conclusion with respect to the toll treatment for the Komie North section, the board said it was not persuaded that the Komie North section was economi-cally feasible. It also concluded that ap-proval of the Komie North section, as proposed, would have negative commer-cial impacts on other parties.

continued pg 23


R001424176

industry newsRedford and Alward promoting west-east pipelineDaily Oil Bulletin

Partnership between alberta and New Brunswick is becoming a natural fit and a proposed pipeline between the two provinces is making fast progress, says alberta Premier alison redford, even though no project has been filed with regulators.

she noted New Brunswick Premier David alward and other officials had travelled to Alberta to discuss with her and industry leaders the prospect of moving alberta oil to the East Coast.

“they have come to let us know that New Brunswick is open for business, which means that Canada is open for business, and I’m here to let you know that our government, my government, intends to make the most of that opportunity to reach markets not only abroad but also here at home.”

New Brunswick is home to the Irving Oil Ltd. refinery, Canada’s largest with capacity of 300,000 bbls per day as well as atlantic tidewater access.

speaking to reporters in Calgary tuesday, alward reiterated his province’s support of a west-east pipeline, saying it would benefit not only Alberta and New Bruns-wick, but Canada as a whole.

“We’re open for business. We have a world class refinery in Saint John. Certainly we believe the Saint John refinery can act as an anchor [for a pipeline], but certainly allowing alberta to access the world and diversify [its] markets, that’s great for alberta, it’s great for producers and, most importantly, it’s great for every Canadian,” alward said during a press conference at Calgary’s McDougall Centre.

“We have a tremendous resource that right now it’s clear

we’re not getting the value that we should be getting. and by diversifying markets, that will allow that to take place.”

alward said he had no qualms about alberta bitumen being refined in, and exported from, his province.

“What we are here for really is to send a message to the producers.... ‘Look, there’s a province that fully embraces the opportunities that exist,’” he said.

“The more we can refine in Canada ... the greater value we can get for our resources and that’s in every-body’s best interest. We’re certainly supportive of export because, again, that opens up new markets to the world and creates the opportunity for better prices.”

alberta must reach the global marketplace so it can obtain a fair price for its energy, redford earlier told Insight’s annual Oil sands summit.

she has been discussing the idea of a pipeline run-ning west to east with people in alberta, saskatchewan, Manitoba, Ontario and Quebec and has found a great deal of support, she said.

the premiers of those provinces have found a lot of common ground on what that pipeline is about: jobs, economic development and maintaining an outstanding quality of life for current and future Canadians, she added.

the world’s energy demand is expected to grow by one-third or more in the next two decades as the devel-oping world’s economies improve and the rise of their middle classes push energy needs even higher, she told the conference.

redford said that as these shifts occur, energy “haves and have-nots” will come to distinguish the new global economy, and with its resources, educated people, stable governments and effective regulations, Canada is poised to prosper.

“But we need to act on those advantages now and we

must focus on market access,” she said.Oil production in the United states, traditionally

Canada’s main market for energy, is at an all-time high so “it isn’t such a reliable customer these days.”

Canada suffers a double discount from the world oil price because West texas Intermediate, North america’s benchmark, is itself discounted about $20 from the world price and Canada’s oil is now selling for $30 or $40 less than that, she said.

While alberta will miss out on around $6 billion in revenue as a result, Canada will forego about $27 billion, she said.

redford believes a Canadian energy strategy is the answer. “the fact that we’ve been able to build real, meaningfully informative and informed conversations with partners across the country is going to allow us to work through these challenging times because the Ca-nadian energy strategy is about real, practical and effec-tive solutions to problems that are keeping our country from reaching its full potential.”

In addition to a west-east pipeline, routes to the north and the Pacific Ocean are also proposed, and neces-sary, said the premier.

On Monday, Alward, whose son Ben is a pipefitter working in the oilsands, toured the Fort McMurray region and was pleased with what he saw.

“For me it was incredibly moving -- just the enormity of the development that is there but also the focus, ultimately, on certainly economic sustainability, but very importantly environmental sustainability,” he said.

“the new projects we were able to see south of Fort McMurray that take a smaller footprint sent a very strong message to me, which I believe New Brunswickers will be very interested in as well.”

the primary driver behind the Komie North section is a binding commitment NGtL negotiated with Quicksilver re-sources Canada Inc. for Ft-r service at the proposed Fortune Creek meter station. The first contract, which was delayed at Quicksilver’s request, is to begin in august 2015 for 10 years, with a seven-year con-tract starting in August 2018 and a five-year contract in august 2020. Each of the three contracts is for 100 mmcf per day and is not eligible to expire prior to July 31, 2025.

at the hearing, FortisBC Energy Inc. said that the lack of contractual support for the Komie North section demonstrates significant long-term risk relating to utilization of the pipeline over its lifetime and that the contractual support for the

proposed new pipeline is less than for new facilities of other pipeline companies.

It further suggested that there is no prop-er matching of risk and reward between new and existing shippers and NGtL.

The board also found significant risk associated with the contractual support. “the three contracts for the Komie North section are with only one shipper, which increases the risk compared to having multiple shippers,” it said.

Based on the significant uncertainty, the board said it was not satisfied that the Komie North section is likely to be used at a reasonable level over its economic life.

as for the issue of competition, West-coast argued that the Komie North sec-tion as proposed would virtually eliminate any competition for incremental gas sup-

ply. While its gathering and processing assets are long life facilities, its service agreements with producers are shorter term in nature, which gives producers the option to leave the system to pur-sue other options when the agreements expire, said the company.

NGtL, though, said it does not believe there is any duplication of facilities, not-ing that existing gas plants and those currently under construction in the Horn river Basin are either fully or substan-tially contracted, and that Westcoast’s t-North system is fully contracted at the outlet of the Fort Nelson gas plant.

It also contended that all NGtL shippers would benefit as the project would bring new volumes to the alberta system, and increase the liquidity and transparency of

the NIt (NOVa Inventory transfer) hub.However, the board found that the

construction and operation of the Komie North section on the basis proposed by NGtL would entice volumes away from Westcoast by offering an alternative path to market with service priced well below costs. Issuance of a certificate would negatively affect Westcoast transmission (t-North and t-south) and gathering and processing facilities, as well as West-coast shippers, it said.

In its report, the board said it typi-cally favours competitive outcomes. In the board’s view, “healthy competition in northeast B.C. would be promoted by pricing consistent with user-pay, eco-nomic efficiency and proper price signals to the market.”

NEB had concerns about Komie North rate structurecont’d from pg 22


industry newsProsperity Fund could eliminate B.C. debt by 2027

a government, we recognize the impor-tance of that Fair share continuing on and try to either put it in legislation or get rid of the 2020 deadline date.

“Because if we’re going to continue growing with the LNG, we need to have the spin-offs coming back into our area where the bulk of that strain is going to be felt.”

sean thomas agrees.as president of the Fort st. John Petro-

leum association and HsE coordinator for local service provider trans Carrier Ltd. (tCL), thomas has a good view of the local impacts of the natural gas industry in B.C. and what could be coming down the pipe with LNG.

One of his concerns is how the region benefits from the work being done when not all of the workers actually live in the area.

“We’ve got people working here that aren’t from here. they’re sending their paychecks down to Kelowna, Williams Lake, Vancouver Island,” he said.

“they’re taking that money and those tax dollars down south with them.”

thomas suggests that has to be taken into account when the government decides how they will use those Prosperity Fund dollars because those individuals could be using local infrastructure without contribut-ing to maintenance and improvement.

“If it got to the point where people couldn’t work out of here or couldn’t be here, they won’t work out of here,” he said.

the story is similar in the Northern rockies regional Municipality (NrrM), the jurisdiction that includes Fort Nelson, apart from the fact that the community has never received Fair share grants.

Mayor and council is currently negotiat-ing with the Province to find a way to fund a community development plan that will allow Fort Nelson to meet the needs of the oil and gas industry and its workers now and in the future.

Laurie Dolan is a member of that council.also, as a former executive director of

Energy services BC (EsBC) and a cur-rent employee of Northern Lights College (NLC), not to mention a lifetime north-erner, she has a unique perspective on the issues surrounding LNG.

“anything that happens in the province, I like to see the whole province win,” said Dolan, discussing the Prosperity Fund, which is designed to allow the entire prov-ince to benefit from the work that will largely be done in the northeast and the northwest.

“But at the same time, the infrastruc-ture that’s needed to produce all this at the LNG facility starts long before [that],” she continued.

that has been something of a mantra in Fort Nelson.

“the work that’s being done takes thousands of people, lots of flights land-ing on our tarmac and [lots of trucks on] our roads,” said Dolan. “and a lot of people still don’t understand that the LNG can’t happen without the development up here. … It still has to be respected that these things are happening in our small community. and it’s left to our taxpay-

ers to build infrastructure. and so that’s always a concern to us. always.”

Lori ackerman, mayor of Fort st. John, is uncertain what the Prosperity Fund could bring to her community simply be-cause it is still unclear what the program will actually be when it is up and running.

It has been reported that the fund will consist of royalties, corporate taxes and a new LNG tax that is still under construc-tion, but ackerman said that hasn’t been made clear at this point.

“to be fair, I would like a lot more detail on this,” she said.

“all things being equal and the Fair share agreement continues, there are needs within this province that need to be addressed,” she added, noting that the drop in natural gas prices has consider-ably reduced provincial revenues and the ability of the government to implement new programs.

One potential benefit of the emerging LNG industry that is fairly easy to quantify is the impact on employment.

While Clark was announcing the Pros-perity Fund plan, her government was also releasing a fact sheet stating that the construction of two large LNG plants, three small LNG plants and associated pipelines would create 39,000 annual jobs over a nine-year construction period, plus an additional 75,000 jobs when the facilities are finally operational.

Employment due to construction is expected to include 11,400 direct jobs, 22,1000 indirect jobs and 5,900 induced jobs, mostly in communities where construction staff will be enjoying local hotels, restaurants and entertainment.

residential home construction and renovation in those communities is also expected to translate into new employ-ment as people gravitate toward job opportunities related to LNG.

It is expected that LNG will account for 2,400 direct jobs, 61,700 indirect jobs and 11,100 induced jobs when the plants are up and running.

“the service sector around here should see an increase in their business to try to get more wells drilled, get facilities built, to be able to fill that line,” said Thomas, discussing the employment benefits for the Fort st. John area.

that opportunity is coupled with the labour shortage that is confronting the oil and gas industry across western Canada.

thomas admits that the local service sector is stretched thin.

“But, at the same time, when you look around town, there are a lot of companies that aren’t working to full capacity right now either. so, kind of spreading the workload is a good idea,” he said.

“I know a lot of business owners don’t want to hear that. But there’s no reason that we’re run off our feet here and the next guy’s sitting with [idle] trucks. and so that’s usually our first option, is to explore and partner up with other companies and local companies, make sure that we’re all running on the same program and confident and familiar with their equipment and their staff. Use their staff. and then, if we do come up with a labour shortage, that’s something that we’ve talked about in the past.”

thomas noted that some companies are tackling the problem by renting or buying “crew houses” that can accom-modate workers from other communities who come to Fort st. John for two weeks stays before returning home for a week.

“We’ve already exhausted our local work pool,” he said.

“the only downside to that is people that make that money, they take that money and those tax dollars down to where they live. so, the city itself doesn’t get the benefit.”

“Why people live where they live is a personal decision,” said ackerman.

the upshot is that many British Colum-bians – or Canadians overall – may not choose to move to northern B.C. where employment opportunities are plentiful, although they may not have those op-portunities in their hometowns. a perfect example is the fact that northeast B.C. has a shortage of welders, but there is an unemployment rate of about 30 per cent among welders in the Lower Mainland.

“Where the jobs are is well known,” said ackerman.

“Government can create policies and programs that be the incentives for those people to move. as our community grows and the knowledge of the lifestyle op-portunities that go along with the career opportunities become better known, we will continue to see growth.”

training local talent is the other part of satisfying the labour demand.

“the biggest part of that is trying to anticipate the need for more skilled work-ers,” said Bernier. “as we go forward, the government needs to continue investing in the local trades, the local education system, to make sure that we’re building people for tomorrow’s jobs.

“If the LNG systems are going to go through, we have to anticipate what the demands on the workforce are going to be. and we can’t wait until those jobs are being offered and people aren’t trained for them. We have to start training now. and to do that we need investment to take place.”

Bernier remarked that some of that in-vestment should go toward trades program at NLC, which has campuses in Dawson Creek, Fort st. John and Fort Nelson.

“I think everybody’s talking about it,” Dolan said of the labour issue.

“It affects everybody. It’s not only the service sector. It’s the support sector,” she continued, adding that bringing work-ers to Fort Nelson also means building new houses and recruiting new doctors.

“they’re going to need grocery stores,” she added.

that is also true if local youth choose to stay and raise families in Fort Nelson, which is obviously something Dolan would like to see.

“Being a northern girl, we need to start in the North,” she said, noting that there are initiatives such as funding for trades training through the BC Jobs Plan that can help born and bred northerners live and work in the North.

“We want accessible training,” Dolan continued. “We want training to happen here. It’s a long ways south. and if people

in the south don’t understand that, then they need to take a drive up here just to find out how that happens.”

accessible training could even mean a University of Northern British Columbia (UNBC) presence in the Northern rockies.

“anything’s possible,” said Dolan.“When the activity starts back up here,

players and partners come from every-where. and for the good of it.”

Increasingly, those players and partners include asian-based companies that are in-vesting heavily in B.C.’s natural gas industry.

another fact sheet released by the government on Feb. 12 noted that over the past year Mitsubishi Corporation has invested $2.9 billion for a 40 per cent stake in Encana’s Cutbank ridge assets, Nexen has signed a joint venture deal with Inpex Corporation worth $700 mil-lion, China National Petroleum Corpora-tion (CNPC) has invested about $1 billion in shell Canada’s Groundbirch operation and Petronas put over $1 billion into Progress Energy’s Montney assets.

Petronas has since acquired Progress, after announcing plans for their Pacific Northwest LNG facility.

the Nexen-Inpex deal also includes an LNG component, as the two companies are working together in the Horn river Basin, Liard Basin and Cordova Embay-ment with the possibility of exporting that resource in liquid form.

additionally, shell is working with Canadian subsidiaries of Mitsubishi, PetroChina Company and Korea Gas Corporation (KOGas) on the LNG Canada project.

Encana is no longer involved in LNG export projects since selling their share of Kitimat LNG to Chevron Canada at the end of December, but their partnership with Mitsubishi still offers economic and social benefits to the province and the Peace Region specifically.

“We estimate that investments over the first 20 years of the partnership will create about 14,000 ongoing jobs across Canada,” said Doug McIntyre, Encana spokesperson, adding that 10,000 of those jobs would exist in B.C.

“With the amount of jobs created in some of these communities,” he contin-ued, “it certainly gives folks living there the option to stay in the communities that they grew up in and raise their families.

“So, there’s that social benefit as well.”“What it’s showing us is that we really

need to start turning our heads to the fact that this is a world economy, this is a world issue,” Bernier said of the level of foreign investment.

“that’s pretty obvious when you have hundreds of millions of dollars being spent here in the area by these overseas companies.”

“Investment, wherever it comes from, shows confidence in the business envi-ronment,” said ackerman.

“Our job as a community will be to stay focused on our official community plan and continue to build an attractive community within a financially sustainable framework,” she added.

“As local government, that is a fine line we must walk.”

cont’d from pg 6


“I have a hard time seeing how it will make economic sense.”

G7G is suggesting the railway could move five million barrels of oil per day and also transport other products such as grain, lumber and potash, as well as the products of mining operations in B.C. and Yukon.

arsenault said that moving that volume of oil alone would require 33 long trains every 45 minutes.

“the scale of the oil movements they want to put on that railway means it would have to be a purpose-built railway. as soon as you start putting other products on it, its capacity is reduced,” he added.

“You can’t say you’re going to build a purpose-built railway and then start putting a bunch of other products on it without affecting its capacity.”

additionally, the alberta Energy web-site indicates that oil sands production is only expected to reach 3.5 million barrels per day by 2020, which is 1.5 million barrels per day less than the proposed capacity of G7G’s railway.

the proposed capacity of Northern Gateway and trans Mountain are both less than one million barrels of oil per day.

arsenault doesn’t understand the logic behind the rail plan.

“If you’re going to go through all the trouble of securing a right-of-way, why are you going to design your pipeline to handle 600 to 800 thousand barrels if the demand is three million or five million?” he said.

“Part of the problem with the railway is, if you’re going to build it, you need to use it to make it financially viable.”

streeper has trouble with the numbers as well.

“The figures don’t add up,” he said.Part of the difficulty Streeper has with

the plan stems from the volume of train traffic, which he believes would require separate northbound and southbound tracks, an unprecedented idea to the best of his knowledge.

“You’ve pretty well got one train sitting all the time on the siding while the other one goes by.”

streeper has concerns about the cost as well. It has been reported that a single-track line would cost $8.4 billion to construct and a double-track line would cost $10.4 billion.

Northern Gateway is only expected to cost $5.5 billion, but would also move just a fraction of the proposed volumes to be transported by the UNrailCo line at 525,000 barrels per day.

“the cost is just horrendous,” said streeper, even suggesting that the propo-nents might not yet appreciate what the full cost could be.

“You have a vast amount of mountain ranges,” he continued, discussing his numerous trips between Fort Nelson and destinations in both Yukon and alaska

during which he has seen the rough ter-rain the new railway would have to cross.

“and to get trains up through that is going to be horrendous.”

snowfall in western Yukon and alaska is another problem.

“the removal of snow off that line is going to be horrendous,” said streeper.

“Do I think it’s going to materialize? I would be surprised. We are looking at some massive funding.”

the project overview on G7G’s website suggests that the five million barrels of oil per day number might simply be to demonstrate the growth potential of the rail option compared to the limited capac-ity of a pipeline.

The overview also notes benefits to smaller producers and shippers that likely wouldn’t secure contracts with pipeline operators, but could utilize a railroad on an as-needed basis.

richard Durocher, the mayor of Wat-son Lake, is focusing on the potential economic benefits that the railway could bring as far as moving products other than oil, particularly lead and zinc from a selwyn resources mining project on the border of Yukon and the Northwest ter-ritories, just north of Watson Lake.

“It’s probably one of the largest lead-zinc deposits every found,” Durocher said of the mine, adding that a lack of transportation infrastructure has meant delays for that project.

“southeast Yukon is wealthy with resource deposits,” he continued. “and one of the big key reasons that a lot of it hasn’t been developed is because of the transportation costs.”

Durocher believes that a new rail line

through Watson Lake would be a benefit for that project and an economic benefit for his community, even if the main objec-tive of G7G is shipping oil.

However, he hasn’t yet had any con-versations with G7G about the idea.

“But I would love to,” he said.“I’d love to invite them here to talk

to us.”Environmentally, UNrailCo is being

touted as a better option than the pro-posed heavy oil pipelines because much of the opposition to Northern Gateway often involves concerns about oil tankers off the coast of Kitimat, a port that doesn’t have the same history of tanker traffic as Valdez.

“Valdez has seen oil tanker traffic since the 1970s,” said Chief ronald Kreutzer of Fort McMurray First Nation.

The volume of traffic has been de-creasing along with the volume of oil from alaska’s North slope.

“this proposal would simply mean replacing the declining supply of alaska crude with a new supply of alberta crude,” added Kreutzer.

“We believe this approach has a great-er chance of obtaining social license from local communities than other competing scenarios.”

streeper doesn’t think a railway is safer than a pipeline.

“Way more dangerous. there’s no doubt about it,” he said.

“Pipelines are the safest transportation mode there is.”

streeper spent 35 years in the fuel transportation business, a period during which he saw numerous incidents of train cars leaving a railway siding with hoses

still attached to the bottom because the fuel was still flowing.

“Fuel spewing out the bottom because they pulled the hose apart,” he said.

according to streeper, that is just an indication of the potential for human error causing accidents when people have to physically handle the product as much as they would with a railway compared to a pipeline.

streeper believes that a pipeline is the best way to move alberta oil to the coast for export to asia.

However, he lacks confidence in En-bridge and their Northern Gateway plan.

“Enbridge did it wrong,” said streeper, suggesting that Enbridge made mistakes by failing to discuss specific concerns with opponents of Northern Gateway and actually reducing confidence in the proj-ect by adding millions of dollars worth of safety measures in response to a recent oil spill in the United states.

“saying, ‘We did cut our safety short by $500 million. Now we’re going to put it in.’ and you say, ‘Well, what else did you cut short?’ this is where they’ve done wrong,” streeper continued.

“In their consultation [with] the public, they should be coming forward and saying, ‘What don’t you like about it? Don’t say you don’t like the pipeline. What don’t you like? Let’s see if we can sit down and negotiate and engineer everything that you people don’t like.’ and there’s one main thing people don’t like. and that’s a spill.”

streeper isn’t particularly enthusiastic about Kinder Morgan’s trans Mountain expansion either.

“I would prefer the northern run a little bit more.”

Oil-by-rail plan could solve market access dilemma

cont’d from pg 11

Northern Lights College’s Simulated Wellsite Training Facility in Fort St. John sits next to the railroad that winds its way through the city. It is symbolic of the growing connection between the oil and gas industry and the rail transport sector, especially if plans to ship Alberta bitumen by trains are successful.


26 • PIPELINE NEWS NORTH FEBRUARY 15, 2013R001424272

LNG Canada receives export license


LNG Canada is one important step closer to coming to fruition after the National Energy Board (NEB) approved the export license for the liquefied natural gas (LNG) project on Feb. 4.

“a key milestone in the project for LNG Canada and a step in the right direction for getting abundant North american gas to the growing economies of asia,” said David Williams, shell Canada spokesperson.

shell is leading the charge on the project as managing partner of a group that also includes Canadian affiliates of Asian companies Mitsubishi Corporation, Korea Gas Corporation (KOGas) and PetroChina.

LNG Canada has been approved to export almost 33 trillion cubic feet (tcf) of natural gas from British Columbia to Pacific Rim markets over 25 years, the maximum annual export volume being just over 1.0 tcf per or 3.23 bcf per day.

the NEB approved the application because it was determined that the export project would not cause an issue for domestic natural gas consumption.

Williams noted that the project is moving along as planned with this latest announce-ment from the NEB.

“the project was announced in May last year,” he said, adding that it was an-nounced in June that transCanada had been contracted to build the Coastal GasLink pipeline to link shell’s assets in northeast B.C. with the proposed liquefaction and export facility at Kitimat.

the export license application was submitted in July.“Next we’re looking to file a project description,” Williams continued. “And that’s what really

kicks off the regulatory process, the environmental assessments, all those sort of things.“then you move towards investment decisions.


environmentcont’d from pg 18

Fossil fuels and renewables important parts of Canada’s energy mix

“Our business really does have three legs to it,” said vice president of finance and CFO Debbie stein.

“We have the power side,” she contin-ued. “We have the gas processing. and then we have the utilities.”

stein explained that altaGas began its life in the natural gas business when founder David Cornhill put his $37,000 to work building a network of small process-ing plants.

“We’ve been in the power business since 2001,” she said.

that was when the oil and gas industry thought the Western Canadian sedimen-tary Basin (WCsB) was all but dead and domestic sources of natural gas were a thing of the past, prior to the discovery of massive shale gas deposits throughout North america and the rise of horizontal drilling and hydraulic fracturing.

“We decided that we needed to diver-sify away from the WCsB,” said stein.

so, altaGas ventured into the power business with the acquisition of coal-fired power generation in alberta.

“We had such a significant carbon footprint,” said stein.

“We like the power business. We understand the power business,” she continued, adding that their power business in alberta had been closely tied to the natural gas business until recently.

“We looked at where the long-term trend was for power generation in North america and … thought that moving into renewables would give us a foot in the door in terms of greening our world, as well as reducing our own carbon footprint because of the [coal-fired generation] that we owned,” said stein.

“Everyone was on the bandwagon around developing wind farms.”

stein recalled that a lot of people were starting to set up meteorological towers to take wind measurements and sell wind projects, while BC Hydro was develop-ing a new power plan and looking for opportunities with Independent Power Producers (IPPs).

“We partnered with a couple of small developers that had put up [meteorologi-cal] towers and had done wind studies,” said stein. “We partnered up with a de-veloper that brought us the Bear Moun-tain project.”

altaGas saw the project as a great op-portunity to gain experience and exper-tise operating a wind farm, one that just happened to be located in the heart of natural gas country near Dawson Creek, British Columbia.

It was the first wind farm in B.C.“really did put us on the map in Brit-

ish Columbia,” said stein, adding that it allowed the company to develop good relationships with BC Hydro and the B.C. government.

“Prior to that, we’d had very little busi-ness activity in British Columbia.”

that was the beginning of their renew-able energy business, which continued to grow in 2008 with the acquisition of run-of-river hydroelectric projects under

development simply known as the North-west Projects.

“those were actually owned by Nova Gold,” said stein. “and Nova Gold got into some trouble. and we bought those projects from them. We took them from being in development phase to where they are now, which is almost ready to deliver power to the B.C. grid.

“Back in 2008, we were talking about renewable energy and we saw that the world would be looking for clean energy. and saw a way to reduce our own carbon footprint. and thought these run of river projects were ideal.”

stein explained that research and de-velopment in the renewable energy space isn’t the role of companies like altaGas.

“the role for a compa-ny like ours is really putting the pieces together,” she said. “Un-derstanding the various elements that impact energy mar-kets overall, be it oil, natural gas, propane, renewable power, coal power, any form of energy. they’re all connected. and our ability to understand how these markets work, understand what drives the supply and demand. and be nimble enough to take advantage of opportunities as they arise and weigh in with our expertise in running assets and building assets.”

suncor, Enbridge and altaGas all un-

derstand the role that renewable energy are becoming an increasingly important part of Canada’s energy mix, but they also stress that the age of fossil fuels is far from over.

“Investment in renewable power is a key component of suncor’s climate change action plan,” said Fisher.

“We are committed to the safe and re-sponsible development of renewable en-ergy generation by investing some of our revenues in bringing along new sources of energy for the future,” she added, sug-gesting that the success of the renewable energy sector can actually be driven by success in the oil and gas industry when revenues are invested in that manner.

thompson also sees the synergies between fos-sil fuels and renewable energy.

“I think any-one that has in their minds that we’re all going to be powered by wind or solar are appar-ently willing to

not drive their cars when it’s not sunny or use their toaster when it’s not windy,” he said.

“Wind doesn’t always blow and water doesn’t always flow,” added Stein.

“If you want clean, that’s all well and good, but if you only want pure wind and solar and water, you’re going to give up reliability,” she continued. “so, what systems or what technology or what fuel

do we use to support the reliability factor? Because I don’t think anyone who turns on their light is willing to say, ‘Oh, well, the wind isn’t blowing today. I’ll do without electricity.’”

thompson believes there has to be a combination of renewable energy and reliable baseload energy.

“We come by this opinion honestly,” he said. “Because we’re a 24/7 load, which basically means our pipelines have to be able to run 24/7. so, we need a reliable energy mix to be able to do what we do.

“the downside with the renewable energy is it’s not 100 per cent available 100 per cent of the time.”

the other half of the energy equation appears to be natural gas.

“Where we see a role for natural gas-fired generation is really filling that gap in terms of back-up and backstopping renewable energy,” said stein.

“and we have several examples of that in our portfolio,” she added, pointing to 35 megawatts of generating capacity in alberta as an example.

Interestingly, wind energy is becoming competitive with natural gas in terms of lowest cost power generating options.

“Wind is competitive with natural gas, which, probably, five years ago, would have sounded like heresy,” said thompson.

“We need a stable mix,” he continued, “but we also need to realize that the cost of power is a critical input into our competi-tiveness. so, it’s a great happening that we have renewable pricing coming down, being competitive with the natural gas.

“Because I think that is the measure of a sustainable energy industry.”

AltaGas is commonly known for processing, storing and transmitting natural gas, but it is also involved in the renewable energy sector. The company got its start in that industry with the Bear Mountain Wind Park near Dawson Creek, British Columbia, choosing to move that direction to offset carbon emissions from their coal-fired power generation station in Alberta.

aLtaGas PHOtO

“The downside with the renewable energy is it’s not 100 per cent available 100

per cent of the time.”

– Don Thompson, Enbridge


special featurebeefING uP for tHe booM

Fort Nelson getting ready for LNG


Bill streeper is taking the Fort Nelson story to Vancouver this February.

as mayor of the Northern rockies re-gional Municipality, the home of Fort Nel-son and the prolific shale gas resources known as the Horn river Basin, the Liard Basin and the Cordova Embayment, he is traveling to the big city at the end of the month to attend the first international con-ference solely devoted to the business of producing and selling a fuel known as liquefied natural gas (LNG).

“there will be other communities there and there will be the producers there,” streeper said as he began to explain his reasons for attending the event.

It is obvious that streeper has felt some frustration over the fact that so much of the conversation around the emerging LNG export business in B.C. in the pro-vincial media and provincial government publications has been focusing on the northwest, the area where the natural gas will be liquefied before leaving B.C.

Forgotten in that conversation is the geographical source of the natural gas and the small town at the centre of it all.

“You can do whatever you want on the coast,” said streeper. “You can build all the plants you want. If you don’t have the source of gas, the rest of it is not going to work.

“the Northern rockies is probably the most dominant area for supply of LNG gas.”

streeper backs up his claims that the Horn river Basin, the Liard Basin and the Cordova Embayment together rival any other natural gas resource in the world with numbers straight from reputable sources such as the National Energy Board (NEB).

“and this can be a very big key to what

is happening as far as LNG and what is happening for the province of British Columbia,” he said.

Fort Nelson is the gateway to that rich resource, a growing hub for the produc-ers and service sector companies that are already extracting natural gas from the Horn river and exploring the Liard and the Cordova, but it hasn’t been an easy road for the northern community.

Its difficult story dates back to the early seventies when the incorporation of Fort Nelson by the provincial government left the major industries beyond the municipal boundaries and beyond the right of taxa-tion by Fort Nelson.

Consequently, tax revenues were insuf-ficient for the community.

When Fair share was introduced to help municipalities in the Peace river regional District (PrrD) pay for infra-structure improvements, Fort Nelson didn’t receive any of that funding despite experiencing similar circumstances where oil and gas industry activity takes place in rural areas beyond taxation by the municipality, but also puts a strain on municipal infrastructure that is felt in the form of dollars and cents.

streeper discussed the situation at the local airport as an example of why this has been a problem for Fort Nelson.

“The quickest increase in airport traffic of any tier two airport in Canada,” he said.

that has been a result of oil and gas industry activity in the region.

“the maintenance and the upgrade on the airport is borne by the citizens of Fort Nelson, not by industry,” he continued.

the federal airport Capital assistance Program (aCaP) only provides funding based on regular airline traffic.

“they give us money for that runway,” said streeper. “and they give us a grant for where that airplane parks. they don’t

give us anything for any other traffic.”streeper explained that that funding

would be adequate if the only traffic was the usual small passenger airplanes, but oil and gas industry companies are now using the airport for much larger aircraft that cause a greater amount of wear and tear on the runways.

“Now that that has come about, the air-port terminal isn’t big enough, the runway isn’t big enough, the parking lots aren’t big enough,” he continued.

“they’re using the airport. and it was funded by the regional municipality. so, the first thing we did is we introduced the landing fee for these charters … and that is the only income we have for the increased traffic.”

Industry response to that move has been favourable.

“this is something that other towns have done,” said streeper. “and they re-alized that they increased the traffic and they’re going to have to pay something for it. But the fee we get is actually too little, too late right now. If we had have started this four or five years ago, we would have been a lot better.”

Fort Nelson has been spending that money on improvements such as runway repairs and adding bathrooms to the airport.

“We’re not making nothing off it,” streeper said of the fees. “We’re just try-ing to get the airport up to an acceptable standard.”

Fort Nelson attempted to solve the problem by pursuing the creation of a regional municipality, which took place in 2009 with the incorporation of the NrrM, but there was still no resolution to the infrastructure cost issue.

“that forced us to go to the provincial government and say, ‘Look. With these three major gas deposits coming on and the [number of] people that are coming in for it, we need help,’” said streeper.

street maintenance is a big issue, as is housing, particularly considering the fact that Fort Nelson is unable to expand at the present time.

“all the land that we can expand into is owned by the provincial government,” said streeper. “In order for us to access that land, we have to buy it from the pro-vincial government.”

If that were to happen, there would also be the cost of expanding the water and sewer systems, installing new streetlights and paving new streets in order to create a subdivision.

“It is not my [intent] to go to the tax-payer to increase their taxes to pay for subdivisions for new people to move in to,” said streeper. “Once the people move there, they will be paying taxes on the property. But it’s a chicken and egg thing.

“We’ve gone to the provincial govern-ment and want them to do some old land development like they used to do. and

they said, ‘Oh, well, it’s too risky.’ Well, you want us to do it? It’s too risky for us. so, we’re in that situation right now trying to get that all done.”

NrrM took a hard look at all the areas that need improvement within Fort Nelson, problems that range from inad-equate recreation and fire hall facilities to the state of the alaska Highway where it runs through town, and determined that the community requires millions of dollars worth of upgrades.

“then we went to the government and said, ‘Look. We’ve got to get this community up to a standard to attract employees.’”

the problem according to streeper is that the oil companies are encouraging their employees to live in Fort Nelson, but the accommodations simply aren’t available.

“there’s nowhere for the people to move,” he said. “We don’t have a com-plete recreation system here. We don’t have facilities that are attracting the new workers.”

streeper feels it is the responsibility of the provincial government to help NrrM address those issues since they receive the revenues from land sales and natural gas royalties and Fort Nelson is so important to the future of the oil and gas industry in the province.

“and the government agrees with us,” he said. “they said, ‘Yes, something’s got to be done up there.’”

NrrM and the Province are now work-ing toward completing a Memorandum of Understanding (MOU) on a community development plan.

“It’s just a matter of how do we get the money to do this,” said streeper.

the Province has told NrrM to get creative.

“We’ve got some creative plans,” said Streeper, who is confident that NRRM will be able to work with the provincial gov-ernment to achieve their goals now.

“Hopefully, we’re going to have more final stuff in place by the end of [Febru-ary],” he added.

“the negotiations are quite open. the ministers are quite receptive to us. … and the way it’s progressing, I think we’re going to see a very bright future for the Northern rockies in the years ahead.”

When streeper arrives in Vancouver for the LNG conference, he will be talk-ing about how municipalities, provincial governments and the oil and gas industry can work together to achieve a common goal, which includes building the LNG industry in the province.

“Our goal,” said streeper, “is to build a community no better than any other com-munity in B.C., but par with the communi-ties of B.C., where you can come, you can have a very good job, a community that you can raise a family in.

“to supply a quality of life that people expect in today’s age.”

Northern Rockies Regional Municipality mayor Bill Streeper (left) discusses the oil and gas industry in the Fort Nelson area with Enbridge representatives during the Fort Nelson Energy Expo last September. Streeper is hoping to find a way to upgrade the local infrastructure in anticipation of the liquefied natural gas industry boom.



all too aware of the looming labour shortage and growing demand for skilled tradespersons facing British Columbia, the Industry training authority (Ita) has been running a series of events in key communities throughout the province in an attempt to address the issue.

the Ita has already held a “community dialogue” session in Nanaimo on Jan. 15 with another to follow in Kamloops on March 12.

“the community dialogues are intended for the Ita senior management and our board of directors to increase our sensitiv-ity to the particular nuances of need when it comes to training,” said Kevin Evans, CEO at Ita.

“they’re all quite different,” he contin-ued, referring to the various communities that make up the province.

“the northeast is very different from the northwest, and even the central interior and so forth. this is a large province where a cookie cutter approach to things like skills training is not very advisable.”

Ita is also hosting four events to rec-ognize and celebrate employers who hire apprentices, which began with an event in terrace on Jan. 24. similar events are scheduled for Fort st. John on Feb. 12, Kelowna on March 16 and Victoria on april 8.

“they really are the lifeblood of the industry training system,” Evans said of businesses that work with apprentices.

“We hope to also raise the fact that we need more employers to be hiring appren-tices,” he added.

Evans noted that research has shown that only one out of every five employers hires the journeyperson who is neces-sary for that business to also take on an apprentice.

“that’s not sustainable,” he said. “We’re simply not going to have the number of journeyper-sons that we’re going to require in future years with that kind of ratio.

“We’re hoping that by celebrating the people that are doing it and showcas-ing why they’re doing it … we can encour-age more employers to step up.”

Evans explained that the apprentice-ship program has also taken a hit from the recent recession because appren-tices are the first to lose their jobs and the last to return to work under those circumstances.

“We were running at about 11,000

employers prior to the recession,” said Evans. “and we’re currently running at about 9,000 employers.”

the research also indicates that it has historically taken approximately ten years for the number of working apprentices to return to pre-recession numbers in similar situations.

“But the problem is we don’t have ten years,” Evans added. “We’re really ex-pecting the labour shortages to be biting down hard [in] 2015-2016. so, we really need to have a full court press in terms of encouraging employers to step up and do some training.”

that is why Ita is also conducting a pair of webinars to teach employers about the apprenticeship process on Feb. 19 and Feb. 27.

However, Evans suggested that aspir-ing tradespersons have to take respon-sibility for finding their apprenticeship opportunities.

“Young people who are looking to start a career in the trades, the first thing they need to do is get out on the street and start knocking on doors,” he said.

“The first step is to find an employer who’s prepared to sponsor you and take you on. We need to see more of that.”

Still, ITA is trying to find new ways to help apprentices, including looking into where gaps in support for apprentices may exist and developing solutions to those problems.

One idea they are considering is launching a job board specifically for apprentices and employers considering hiring apprentices.

“But I think that, in the long run, we’re going to get more results by convincing employers that it’s good business to hire apprentices and by encouraging those apprentices to get out there and do what you did when you got a job. and that’s knock on doors,” said Evans.

Evans explained that the labour short-age facing B.C. is due to a combination of demograph-ics and activity in the natural resources and energy sectors.

“We’re not getting any younger,” he said. “You take a look

at the average age of your construction worker today – or your miner or your oil and gas worker – and they’re getting up there.”

a lot of those workers will soon be retiring.

“We’re seeing a lot of economic activity that’s on the horizon, particularly in the North,” he added.

That activity includes liquefied natu-

ral gas (LNG) export projects that will require the construction of pipelines from the northeast to the northwest and liquefaction facilities on the coast, not to mention exploration and production in shale gas plays of the Montney, Horn river Basin, Liard Basin and Cordova Embayment.

along with the natural gas activity has come the recent resurgence in forestry and mining, as well as the potential for major projects such as BC Hydro’s site C and Enbridge’s Northern Gateway pipe-line to move alberta oil sands bitumen to an export hub in Kitimat, B.C.

“We’re going to have some shortages and we’re already seeing it in some ar-eas,” said Evans.

“that great sucking sound that we heard was the oil sands taking a lot of skilled tradespersons out of British Columbia’s forestry sector,” he continued.

“Now that forestry is starting to come back and mining is certainly bustling along, and further expansion in oil and gas and energy, it’s a perfect storm.”

Evans suggested that encouraging homegrown talent to enter the trades is important to building a province where community comes first.

“are we building pipelines and LNG plants? Or are we using them to also build community?” he asked.

“I think most British Columbians would say that’s been our history – let’s use our economic development to build sustain-able communities. For that to happen, we’ve got to be training people who are in the north to be able to work and live in the north, for example.”

that applies for any region of the province.


R001424349

careers Good CoNVersAtIoNIndustry Training Authority talking trades this winter

continued pg 30

“We’re seeing a lot of economic activity that’s on the horizon, particularly in

the North.”

– Kevin Evans, ITA


SaleS aSSociateDeadline: February 28, 2013

The Pipeline News North is seeking an energetic, driven and team-oriented person to join its award winning advertising sales team.

As part of our team, you will be accountable for revenue growth gained through delivering advertising solutions to clients within Fort St. John, Dawson Creek and Grande Prairie trading area. Working very closely with your sales and production teams, you will be responsible for coordinating all aspects of after sales support including proofing of advertisements, ensuring proper booking dates and ensuring overall client satisfaction.

You must have a valid driver’s license and your own reliable vehicle.

If you are motivated and results driven we want to hear from you! This position comes with salary, car allowance, commission and excellent benefit plan.

Due to the very low turnover rate in this department, even if you are considering this position you should drop off a resume today – Please email, drop off in person or mail your resume, complete with cover letter to:

William Julian, Regional Manageralaska Highway News/Dawson creek Daily News9916 98th Street, Fort St. John Bc [email protected]

Thank you to all who apply, but only those chosen for an interview will be contacted. No phone calls please!

R001

4394

30

Email [email protected] Fort St. John 250.785.6009 Toll-free 1.800.667.5557www.enformbc.ca

Working with industry to help eliminate work-related incidents and injuries Enform is the safety association for Canada’s upstream oil and gas industry. Established by industry for industry, Enform helps companies achieve their safety goals by promoting shared safety practices and by providing:

» Effective training, including courses on general and operational safety programs and petroleum fundamentals

» Expert audit services

» Professional advice

Our vision is no work-related incidents or injuries in the upstream oil and gas industry. Contact Enform today for more information.

R001424278

Email [email protected] Fort St. John 250.785.6009 Toll-free 1.855.436.3676 (855.4ENFORM)www.enformbc.ca

careers “Somehow or other, we will find work-

ers,” Evans continued, adding that the question is whether those workers will be born and bred British Columbians, new Canadians or temporary foreign workers.

“there is a global mobility now of la-bour force, particularly for some of these mega-projects like LNG,” he said. “right now, there’s a lot of LNG construction activity in australia, but that’s starting to level off. and some of those LNG work-ers, with their specialized skills, are going to come to where the next LNG activity is. and it appears that might be in north-western B.C.

“there will be some international mobility,” he added, remarking that the preference of Ita and the provincial gov-ernment is that British Columbians get the first crack at those jobs.

although labour mobility has become easier on a global scale, labour mobility

within B.C. is still a problem, particularly when it comes to convincing young peo-ple from the Lower Mainland to relocate to the north.

“skills training is part of it, but we also have to have a workforce that’s prepared to go where the work is,” said Evans.

One example of this problem is that there is a shortage of welders in the northeast, but unemploy-ment among welders in the Lower Main-land is almost 30 per cent.

“so, why aren’t they going to where the work is?” said Evans.

the public dialogues taking place this

winter were preceded by a similar ses-sion in Dawson Creek in september. Ita was encouraged by the “standing room only” attendance at that event in Daw-son Creek and the first winter session in Nanaimo.

“that shows there’s a great deal of community interest,” said Evans.

“and some of the mes-saging that was coming out loud and clear was we’ve got to get to our children at a younger age and acquaint them with the opportunities

that exist in the trades.“as a result of that, actually, we are

stepping up our efforts to provide training opportunities in high schools so that they can get a step up on their apprenticeship before they actually even graduate from

high school.”Attendees also discussed financial is-

sues associated with apprenticeships.“For example,” said Evans, “there’s a

delay in getting unemployment insurance if you’re taking your technical training. that has come up quite frequently.

“It’s become apparent to us that there’s a lack of general understanding about the trades and about apprenticeship training. so, it’s really a great opportunity to provide some education. and it’s really heartening to see that so many people are interested and want to learn more about it.”

However, Evans admits that it is going to be a tough fight trying to attract young people to the trades.

“I think you’re going to find with the demographics that there’s going to be in-creasing competition between the trades and the technologies and the professions to try and win over the hearts and minds of young people, because there’s a smaller pool to choose from,” he said.

“the fact is we need highly skilled people in all of those areas.”

ITA focusing on attracting youth to tradescont’d from pg 29

“We are stepping up our efforts to provide training

opportunities in high schools.”

– Kevin Evans, ITA


North

PUBLICATIONdATe

BOOkINg deAdLINe

Ad COPYdeAdLINe

IssUe#

16 AUg 2013

12 JULY 2013

13 deC 2013

15 NOV 2013

11 OCT 2013

13 seP 2013

8 AUg 2013

4 JULY 2013

5 deC 2013

7 NOV 2013

3 OCT 2013

5 seP 2013

9 AUg 2013

5 JULY 2013

6 deC 2013

8 NOV 2013

4 OCT 2013

6 seP 2013

11

10

9

8

7

12

14 JUNe 2013 6 JUNe 2013 7 JUNe 20136

18 JAN 2013

17 MAY 2013

19 APR 2013

15 MAR 2013

15 FeB 2013

7 JAN 2013

9 MAY 2013

4 APR 2013

7 MAR 2013

7 FeB 2013

8 JAN 2013

10 MAY 2013

5 APR 2013

8 MAR 2013

8 FeB 2013

1

5

4

3

2

2013 SCHEDULE

R001424355

NorthNorthern British Columbia and Alberta’s Oil and Gas Industry

locations that suit your business needs• Distributed to the community in general through these fine publications, Alaska Highway News, Dawson Creek Daily and Fort Nelson News.• Distribution by mail and direct drop-off to Oil & Gas companies,and related businesses and organizations, in the following communities:British ColumBia – Arras, Baldonnel, Cecil Lake, Charlie Lake, CHETWYND, Clayhurst, DAWSON CREEK, Farmington, FORT NELSON, FORT ST. JOHN, Goodlow, Groundbirch, HUDSON’S HOPE, Moberley Lake, Pink Mountain, Pouce Coupe, Progress, Rolla, Rose Prairie, Sunset Prairie, Taylor, Tomslake, TUMBLER RIDGE, and Wonowon.alBerta – Baytree, Bear Canyon, BEAVERLODGE, Berwyn, Bezanson, Bonanza, CLAIRMONT, Eaglesham, FAIRVIEW, Falher, Girouxville, GRANDE PRAIRIE, Grimshaw, Grovedale, HIGH PRAIRIE, Hines Creek, Hythe, LaGlace, MANNING, McLennan, PEACE RIVER, Rycroft, SEXSMITH, Silver Valley, Spirit River, VALLEYVIEW, Wembley, and Worsley, Zama City.

ADVERTISINGrates 2013

(colour included)

Back Page - $1800Inside Back - $1300Inside Front - $1300

Centre Spread - $2700Full Page - $1100Half Page - $700

Quarter Page - $450Front Banner - $600Banner - $450Half Banner - $300

Pipeliner - $150

Full Page6 col x 185 ag

(9.88” x 13.25”)

Banner 6 col x 42 ag(9.88” x 3”)

–1/2 Banner (---)3 col x 42 ag(4.86” x 3”)

Quarter Pagevertical only

3 col x 102 ag(4.86” x 7.28”)

“Pipeliner”2 col x 32 ag

(3.18” x 2.28”)

half Pagevertical

3 col x 185 ag(4.86” x 13.25”)

DISCOUNTS: 1 year - 15%, 6 months - 10%

(limited number)

Northern British Columbia and Alberta's Oil and Gas Industry

Vol. 1 Issue 7 • dIst: 20,325

july 29 • 2011

• FreeNorth

The Petroleum Services Association of Canada is sponsoring four new awards for students at Northern Lights College, including those in the welding

program at the Dawson Creek campus. Photo by James Waterman.

in this issue:

• the latest scoop - InnoVatIVe randy galbreath

• shapIng alberta - premIer’s councIl

• VIsIt From the sea - aquaVan comes to b.c.

www.inland-group-fsj.com

print & onlineexposure

half Pagehorizontal

6 col x 92 ag(9.88” x 6.5”)

R001424352


FIND US ONFACEBOOK

FOLLOWUS


CHEVROLETBUICK GMC

Dealer #7406

ALL TRADES ARE

WELCOME

Tel: (250) 782-9155Tel: (250) 782-9155Tel: (250) 782-9155Tel: (250) 782-9155


CHEVROLETBUICK GMC




Free 3 month/


pre-owned

vehicles

$37,71037,71037,710NOW


$39,88839,88839,888NOW


$57,98757,98757,987NOW


$55,88855,88855,888NOW

$70,99270,99270,992NOW


Call For Price


$21,88821,88821,888NOW

$70,02870,02870,028NOW


$50,88850,88850,888NOW

$72,58572,58572,585NOW


$64,88864,88864,888NOW

$51,73751,73751,737NOW


$59,88859,88859,888NOW

$58,92958,92958,929NOW


$42,88842,88842,888NOW

NEW

PRE-OWNED

www.brownschev.com








Stk T13-7623

66,96966,969NOW

pipeline news north

Documents

gas industryvol

natural gas market

diverse natural gas

prosperity lng

existing natural gas

lng export enterprise

lng export proposals

liquefied petroleum