Manitoba Oil & Gas Review 2016

MANITOBAOil & Gas Review

SERVING MANITOBA’S OIL & GAS INDUSTRY

PUBL

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ION

MA

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GRE

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Training for New Trends in the Industry

2016

Making the Case for New Pipelines Support continues for Energy East, Keystone XL and other projects

Managing Tough Economic Times

In thIs Issue...6 Manitoba Oil Statistics 2015

10 Energy East Deserves Support: A message from Larry Maguire, MP for Brandon-Souris

12 Message from Brandon Mayor Rick Chrest

14 Message from Virden Mayor Jeff McConnell

16 A Time of Opportunity: A message from the Honourable Jim Carr, Minister of Natural Resources

18 Message from Brad Wall, Premier of Saskatchewan

20 Making the Case for Pipelines

22 Manitoba Still Highly Regarded for Petroleum Exploration and Development Investment

26 Hope Thrives Despite a Slow Economy

30 Coping Mechanisms in Troubling Economic Times

32 Williston Basin Petroleum Conference Focuses on Moving the Bakken Forward

36 The 2016 Redvers & District Oil Show is Fast Approaching

38 Brandon: the Perfect Balance

42 The Breakup from Hell 2.0

44 Oil Respect: Let’s Stick to the Facts

45 New Pipelines Can Support Action on Climate Change

46 Enhanced Oil Recovery Can Extend a Reservoir’s Life by Decades

48 Why This Oil Price Collapse Is Different From the 1980s

50 Recent Poll Unveils Canadians’ Anxieties

52 Arguments Remain Heated on Both Sides of the Energy East Debate

54 Reducing Costs and Improving Quality in Heritage Management

56 Field-Portable XRF in Oil and Gas Exploration and Production

60 Oil & Gas HR Report Identifies New Trends and Requirements in Workforce Development

62 Keystone XL Controversy Enters U.S. Court System

64 Gearing up: Keeping Safe, Dry and Warm in the Oilfield

66 How CAPPA Supports Production Accountants and Industry

68 Training Opportunities Prepare Workforce for New Trends

71 Transportation of Dangerous Goods by Ground

72 Pro-Drill Industries Ltd. Moves Forward with Vision and Innovation

74 Livingstone Landscaping: Manitoba-Grown

76 Presidential Election Year 2016 Likely To Be Filled With Surprising Developments

79 Index to Advertisers

80 DRIVING FORCE Delivers new Vehicle Options for Manitobans

82 ABCO is Your One-Stop Shop for Quality Products and Installations

4 Manitoba Oil & Gas Review 2016

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PRIntED In CanaDa05 | 2016

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Geophysical Licenses Issued ..............................................................................14

Geophysical Expenditures ($) .........................................................120,541.12

Drilling Licenses Issued .......................................................................................235

New Wells Drilled ....................................................................................................205

New Wells on Production ..................................................................................181

New Wells Abandoned ..........................................................................................12

Horizontal Wells Drilled .......................................................................................152

Metres Drilled .................................................................................................. 364 300

Wells Capable of Production (Dec) .......................................................... 5374

Wells Producing (December) ....................................................................... 4056

Abandoned Producers ...........................................................................................79

Other Wells Abandoned ...........................................................................................9

Certificates of Abandonment Issued ............................................................49

Crude Oil Production (m3) ....................................................................2,640,069

Water Production (m3) ........................................................................13,447,356

% Water Cut ...............................................................................................................83.6

Avg. Oil Production (m3 per day) ............................................................... 7233

Remaining Reserves (at Dec. 31)000 m3 ................. Not yet evaluated

Value Oil Sold ($)...................................................................................927,482,640

Crown Oil Royalty ($ received) ................................................12,280,285.82

Freehold Oil Tax ($ received) ........................................................7,424,314.63

Average Oil Price per m3 ($) ................................................................... $351.31

Reservation Sale Bonuses ($).................................................................................0

Lease Sale Bonuses ($) ..................................................................$2,258,298.92

Reservation & Lease Rentals & Fees($) ...................................$354,881.22

Crown Reservation Area (ha).................................................................................0

Crown Lease Area (ha) .........................................................................92,836.230

Total Crown Area Under Disposition (ha) ...............................92,836.230

ManItoba’s oIl statIstIcs 2015

OVERVIEW

2015 ...................................................................................................... $/M3 ................... $/BBLJanuary................................................................................................................................................$297.13 ............................ $47.22

February .............................................................................................................................................$334.39 ............................. $53.14

March ...................................................................................................................................................$325.81 ............................. $51.77

April .......................................................................................................................................................$370.73 ............................. $58.91

May ........................................................................................................................................................$414.00 ............................. $65.79

June ......................................................................................................................................................$444.47 ............................. $70.63

July .........................................................................................................................................................$392.29 ............................. $62.34

August .................................................................................................................................................$313.59 ............................. $49.83

September........................................................................................................................................$316.11 ............................. $50.23

October ..............................................................................................................................................$353.30 ............................. $56.14

November .........................................................................................................................................$355.82 ............................. $56.54

December .........................................................................................................................................$298.11 ............................. $47.37

Avg. 2015 ....................................................................................... $351.31 ..................$55.83

2016 ...................................................................................................... $/M3 ................... $/BBLJanuary................................................................................................................................................$227.44 ............................. $36.14

February .............................................................................................................................................$227.07 ............................. $33.38

COuRtESy Of thE ManItOBa PEtROLEuM BRanCh

oil prices (manitoba light sour blend)


Manitoba Oil & Gas Review 2016 7

branddesignone




At the beginning of this session of Par-

liament, I urged my fellow MPs to sup-

port the Conservative Caucus’ motion

in the House of Commons calling on

the government to back the Energy East pipeline.

The Energy East project would strengthen Can-

ada’s energy security by decreasing our depen-

dence on authoritarian regimes with poor human

rights records, rampant corruption and deficient

environmental controls.

Approximately 700,000 barrels of oil are im-

ported every day to refineries in Eastern Canada,

coming from countries such as Saudi Arabia, Ven-

ezuela and Nigeria, while at the same time, most

of Western Canada’s oil production is exported to

the United States. In 2013, 97 per cent of our oil

exports went to that country. Energy East will cre-

ate access to higher value international markets

which will further support the Canadian economy.

The project is supported by the governments

of Alberta, Saskatchewan, Ontario and New Bruns-

wick, would dramatically cut the amount of oil

traveling by rail each day, and would scale back

our dependence on foreign oil from authoritarian

regimes.

It makes no sense to import foreign oil while

Canada is blessed with an abundance of natural

resources here at home. Canada ranks third in the

world for proven crude oil reserves, and whether

the Liberals like it or not, the oil and gas sector is

a critical part of our economy. It directly and indi-

rectly employs over 360,000 people in Canada, ac-

counting for almost eight per cent of GDP in 2013.

Energy East alone is expected to generate $10 bil-

lion in taxes for all levels of government.

What’s more, pipelines are by far the safest and

most environmentally responsible way to trans-

port oil, and Energy East will displace the equiva-

lent of over 1,500 rail cars traveling the same route

each day. The reality is that from 2008 to 2013,

more than 99.99 per cent of oil transported by fed-

erally regulated pipelines was done so safely, and

thanks to the previous Conservative government,

companies are liable for up to $1 billion of costs

and damages, irrespective of fault.

I am extremely proud of the thousands of Ca-

nadians who contribute to our economy through

the natural resource sector, particularly right here

in Westman. At a time when our economy is strug-

gling, the Liberal government needs to stand up

for these Canadians and take a clear position in

favour of Energy East. v

energy east Deserves supportLaRRy n. MaGuIRE, MEMBER Of PaRLIaMEnt, BRanDOn-SOuRIS

MESSAGE

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I’m pleased to bring greetings to Manitoba’s oil

& gas sector on behalf of Brandon City Coun-

cil and all of our citizens. The oil industry on a

worldwide basis has certainly been experienc-

ing a significant downturn providing a period of

uncertainty and rationalization of projects and in-

vestments. Despite the tumble in world oil prices,

we know the oil & gas industry to be resilient and

somewhat accustomed to dealing with these

market fluctuations. As one individual long associ-

ated with the business told me, “This isn’t our first

rodeo…we’ve been here before and the industry

will forge on.”

As the industry may progress and rebound over

time, Brandon is pleased to offer itself as a com-

munity keen to host companies, organizations

and employees who are active in the oil indus-

try. As the largest urban and commercial centre

in close proximity to Manitoba’s oil fields, we are

ideally situated and equipped to be home base

for enterprises associated with the oil & gas sec-

tor. Brandon is “open for business” and several oil

industry firms have chosen our great city as the

centrepiece for their operations in the region.

With an urban population of 50,000-plus, Bran-

don is rich with amenities and services that en-

hance any business enterprise. Consider our large

regional health centre and outstanding education-

al facilities, including a strong public school sys-

tem, as well as Brandon University and Assiniboine

Community College. A large and diverse retail

sector coupled with an abundance of restaurants

and hotels make Brandon a significant regional

commercial hub. Clustering with other industrial

enterprises and business services from legal to

engineering to financial make Brandon an attrac-

tive setting. Rounding out our amenities, Brandon

boasts a vast array of sporting activities to partici-

pate in or to enjoy from the stands plus a diverse

offering in recreation, arts and culture as well.

Brandon’s development community is active

and skilled in our busy housing sector and com-

mercial and industrial development as well. Sev-

eral areas for industrial and business expansion

are available in our city, which may make start-up

quick and expedient. Our Economic Development

Department would be pleased to assist in provid-

ing information and assistance to any prospective

enterprise wishing to consider Brandon.

Let me close by extending best wishes to all

companies, organizations and employees who

are engaged in the oil & gas industry and hope

that market conditions soon brighten and your

renowned resiliency and entrepreneurship makes

you stronger moving forward.

Best regards,

Rick Chrest, Mayor of Brandon v

branDon Is open for busInessBRanDOn MayOR RICk ChRESt

MESSAGE

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Hello from Virden, the Oil Capital of

Manitoba!

In preparing this greeting for the

Manitoba Oil & Gas Review, I read over

last year’s version of this message. I think last year’s

message said it best when I shared that “Even

though this past year has provided some signifi-

cant challenges to our region, the southwest cor-

ner of Manitoba still has a strong future with lots

of growth.”

We are still strategically located at the intersec-

tion of two major highways and within the heart of

Manitoba’s petroleum-producing region. We have

over 3,100 people who call Virden home.

We did not have the same flood concerns in

2015 that were present in both prior years, but we

did have the significant tornado event which pre-

sented lots of challenges for the region.

As well, last year I shared that “the current price

of oil has caused some concerns for many but the

strength of community has not wavered. When I

talk with businesses in the area, I learn that they

are continuing to invest in their futures in our com-

munity.” This is still true today. The price is a greater

concern but the businesses still want to be here.

We are the Oil Capital but we have so much

more than oil. Virden is well known for its cultural

activities and recreational facilities. Tundra Oil & Gas

Place, multi-purpose facility, is home to large ban-

quet functions, our famous indoor rodeo, concerts

and regional/provincial sporting events. The Vird-

en Oil Capitals, a Manitoba Junior Hockey League

team, have a large fan base and have made an-

other trip to the playoffs. The CP Station Art Gallery

is home to Arts Mosaic, which hosts an art gallery

and offers many shows in the 500 seat Aud Theater,

Western Canada’s Oldest Opera House.

Our airport offers a paved runway and tarmac, as

well as Jet Fuel and Avgas. It is a surprisingly busy

facility. Industrial development continues to pop

up in our industrial park next to the airport. The

agriculture and oil sectors contribute to the need

for our many retail and service businesses. We wel-

come the opportunity to discuss your commercial

or industrial concepts for our community, whether

it’s in Virden or in the surrounding communities.

On behalf of the council, staff and people of Vird-

en and area, we hope you find exactly what you

are looking for in Virden, where we have a proud

heritage and strong future! v

hello froM vIrDenJEff MCCOnnELL, MayOR Of vIRDEn

MESSAGE

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On behalf of the Government of Cana-

da, I would like to thank the Manitoba

Oil & Gas Review for the opportunity to

discuss the Canadian energy industry.

Despite the current global downturn in com-

modity prices, the long-term prospects for Cana-

da’s energy industry remain strong. In fact, accord-

ing to the International Energy Agency, the world

will need nearly one third more energy by 2040

than we have now – and almost three-quarters of

that energy will come from fossil fuels.

Key to that future is restoring public trust in the

way Canada reviews and assesses major resource

projects. If we’re going to attract the investments

we need to sustainably develop our resources and

get these to markets, we have to better engage

Canadians, conduct deeper consultations with In-

digenous peoples and base decisions on science,

facts and evidence.

To ensure greater certainty for projects already

in the queue, we introduced an interim approach

based on five key principles:

1. No project proponent will have to start over;

2. The views of the public and affected communi-

ties will be sought and considered;

3. Indigenous peoples will be meaningfully con-

sulted;

4. Direct and upstream greenhouse gas emissions

will be part of the environmental assessment;

and,

5. Decisions will be based on science and tradi-

tional knowledge of Indigenous peoples.

In Budget 2016, we committed $16.5 million

to implement this interim approach. We also pro-

vided $50 million for technologies that will reduce

greenhouse gas emissions in the oil & gas sector.

While this is a challenging time for the energy

industry, it is also a time of opportunity. Canada’s

oil & gas sector has immense potential to achieve

great prosperity, and our government is commit-

ted to ensuring that the conditions are right for this

to occur. Together, we will demonstrate that eco-

nomic growth and environmental protection can

go hand in hand. v

a tIMe of opportunItythE hOnOuRaBLE JIM CaRR, MInIStER Of natuRaL RESOuRCES

MESSAGE

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Saskatchewan is among many resource-

based jurisdictions around the world

dealing with the impact of dramatically

lower oil prices.

It’s a time of great uncertainty for the energy in-

dustry and the governments that depend upon it

for employment and revenue. I believe Saskatch-

ewan’s economy is better placed than most to re-

main strong through the downturn, thanks to our

diversified, rich resource base and our competi-

tive environment for investment and business.

More than that, I have confidence in the fu-

ture because our oil & gas sector is composed of

tough, resourceful, resilient entrepreneurs who

are finding ways to ride out the current market

turbulence.

They will need to be resilient because most

analysts believe there will be no meaningful in-

crease in crude oil prices anytime soon, with the

most optimistic forecasts calling for an upturn in

the second half of 2016.

However, I believe when markets rebound,

our industry will be stronger and more competi-

tive than ever. Our government is doing its part

to make sure this comeback story unfolds as it

should.

Our top priority has been to establish a royalty

and tax regime that is competitive and stable.

While other jurisdictions have considered chang-

es to their royalty structure, we understand that

what the industry needs from government now

is certainty. And so we are following the ancient

medical dictum: first, do not harm.

That stability is central to our efforts to maintain

a good business and regulatory environment. It

may explain why our province will account for 50

per cent of Western Canada’s shale and tight oil

output by 2017, according to the National Energy

Board.

We’re grateful the industry continues to invest

in Saskatchewan even in difficult times. For exam-

ple, Crescent Point Energy (Saskatchewan’s largest

oil producer) expects that most of its $950 million

to $1.3 billion in capital spending will take place in

our province; the company is planning to increase

production by five per cent over 2015.

Husky Oil announced a $500 million capital

budget for 2016. Whitecap’s ongoing drilling op-

erations in Saskatchewan include 66 new wells in

2016, an investment of nearly $60 million. Mean-

while, Raging River expects to spend $168 million

in 2016, and has a long-term plan to drill nearly

1,900 wells and invest over $2.8 billion over the

next 17 years.

Our government will maintain its focus on en-

suring we have sensible oil and gas policies and

responsible governance, in Saskatchewan and

across Canada.

To that end, we continue to advocate for in-

creased pipeline capacity for Western Canadian

oil. All oil pipelines are important to Saskatch-

ewan, not just those that carry Saskatchewan oil,

because they can free up space on existing pipe-

lines and open the door for even more invest-

ment.

This is why our government has been so vocal

in our support of pipelines like Energy East that

will help bring western Canadian oil to tidewater

and decrease our reliance on imports from other

countries; this is important not just for Saskatch-

ewan, but for all of Canada.

In addition, we remain steadfastly opposed to

a national carbon tax that would unduly penalize

western Canadian oil & gas producers. In our view,

a carbon tax would result in an unconscionable

and punitive wealth transfer from the west to oth-

er regions. It would add insult to the injury rep-

resented by Canada’s unfair equalization system.

If the objective of a carbon tax is to reduce

greenhouse gas emissions, a far better way to ac-

complish this goal is through an investment in

technology. That’s why the Government of Sas-

the IMpact of oIl prIcesBRaD WaLL, PREMIER Of SaSkatChEWan

MESSAGE


katchewan has committed more than $1 billion to the Boundary

Dam 3 project, the first commercial power plant in the world with

a fully integrated post-combustion carbon capture system.

Our advocacy has also included a call for the federal government

to support the industry as it deals with the impact of lower prices.

For instance, we urged Prime Minister Justin Trudeau to commit

$156 million in federal funding to pay for the cleanup of oil and

gas wells no longer capable of production. The Accelerated Well

Cleanup Program (AWCP) would create about 1,200 badly needed

jobs in the decommissioning and reclamation of about 1,000 non-

producing wells in Saskatchewan.

Saskatchewan’s oil production has held up remarkably well de-

spite the turmoil. We produced about 177.6 million barrels in 2015.

This is a 5.6 per cent decrease from 2014, but a less severe drop-off

than what was experienced in Alberta, where conventional pro-

duction declined nearly 10 per cent between November 2014 and

2015.

Our energy sector remains a crucible of innovation.

R.I.I. North America recently commissioned a $60 million en-

hanced oil recovery project near Lloydminster that uses state-of-

the-art downhole steam generation in heavy oil production. The

technology will raise recovery rates significantly while reducing the

energy and water required in the production process and cutting

upstream greenhouse gas emissions.

Meanwhile, applications for steam-assisted gravity drainage

(SAGD) are being examined in projects under construction in the

Lloydminster area – four operated by Husky Energy, two by North-

ern Blizzard and one by Serafina Energy, with more planned.

SAGD is an enhanced oil recovery technology for producing

heavy crude oil. Current recovery rates under primary production

methods are approximately five per cent of oil in place; with these

projects fully implemented, recovery rates are expected to increase

to as much as 50 per cent.

Husky has been investigating the use of carbon dioxide to en-

hance heavy oil recovery with support from Saskatchewan, and

has also been undertaking research to develop new technologies

to provide a source of carbon dioxide. We are optimistic that in

time, these new technologies will benefit other heavy oil produc-

ers. Thanks to the industry’s commitment to innovation, the du-

bious charge that Canada produces “dirty oil” will become more

implausible than ever.

Driving all of this is a simple understanding: it is not enough to

be blessed with the resources the world needs – the world needs

to be able to access these resources. Consequently, we’ve done

our best to create an operating environment that is highly com-

petitive.

We are a low-cost jurisdiction with an approach to red tape ac-

countability described as “on the right track” by the Canadian Fed-

eration of Independent Business. The Fraser Institute Global Petro-

leum Survey, 2015, a survey of petroleum industry executives and

managers, ranks Saskatchewan as the most attractive place to do

business in Canada and the sixth most attractive jurisdiction in the

world among the 66 jurisdictions ranked in the survey.

Our commitment to maintaining a favourable environment for

oil and gas investment will not waver. We know how important en-

ergy is to the economic and social well-being of our province, our

nation and the world. During the last eight years, Saskatchewan

has gone through a remarkable period of growth. Our population

is now at its highest level in our history – over 1.1 million – and

growing faster than it has in generations. Tens of thousands of

people have come to Saskatchewan because there is opportunity

here. And much of that opportunity has been created by the oil &

gas industry and the dynamic businesses that serve it. We’re grate-

ful for this, and we intend to keep a good thing going. v

Brad WallPremier

Kathleen Neset | [email protected]

www.nesetconsulting.comOffice (701) 664-1492 • Fax (701) 664-1491

6844 Highway 40, Tioga, ND 58852

Drilling Production & Geology


MakIng the case for pIpelIneshIGh SafEty RatES aRE a GOOD StaRt But InvEStMEnt ShOuLD BE a PRIORIty

North American pipeline capacity is in the spotlight af-

ter a decade of surging oil and natural gas production

in the United States and Canada. While the most fa-

mous pipeline, Keystone XL, hasn’t been constructed,

the tens of thousands of miles of pipelines transporting oil and

natural gas every day demonstrate the benefits – and impres-

sive safety record – of this crucial infrastructure.

More than 199,000 miles of liquid pipelines crisscross the

United States. According to the latest data collected as a part

of the Pipeline Safety Excellence initiative (http://www.aopl.org/

wp-content/uploads/2015/03/2015-Annual-Perf-Report-Strate-

gic-Plan-Mar-3-s.pdf ), pipelines transported about 16.2 billion

barrels of crude oil and petroleum products in 2014 at a safety

rate of 99.999 per cent. Pipeline Safety Excellence – launched in

2014 to ensure continual safety improvements – also reported

that pipeline releases along the sensitive areas of the right-of-

way dropped 50 per cent from 1999 to 2013. Particularly, two

causes that have been excessive in the past have significantly

decreased. These are corrosion incidents, which are down 76

per cent, and damage from third-parties, which have declined

78 per cent, in this same time period. While these trends show

progress, the industry focus is prevention of all incidents, so op-

By Robin Rorick, Group Director of Midstream and Industry Operations, american Petroleum Institute


erators continue to advance technology that can better detect

threats to pipeline integrity.

The industry also continues to develop safety standards pro-

moting best practices that achieve the industry-wide goal of zero

incidents. This year, the American Petroleum Institute plans to is-

sue a new recommended practice, RP 1176, to strengthen the

industry’s capability to predict and prevent crack-related pipeline

failures by enhancing the gathering, integration, and analysis of

data. Issued in December 2015, RP 1174 provides operators with

an enhanced framework to enable continual improvement of the

pipeline emergency planning and response process. Also issued

last December, RP 1175 provides guidance on the development,

implementation, and management of a sustainable leak detection

program. Finally, RP 1173, Pipeline Safety Management Systems,

was published last summer and provides a scalable and flexible

framework ensuring companies continually assess their practices

to guarantee the appropriate steps are taken to prevent spills.

Commitment to continual safety improvements is nothing

new, but the 21st-century energy resurgence has created new in-

frastructure needs. Prior to the production advances of the past

decade, the priority was to transport imported energy from the

coasts to points inland. Now that production is surging in places

like North Dakota, Pennsylvania, and the Canadian oil sands, infra-

structure priorities have shifted. According to a study from Energy

Policy Research Foundation, Inc. (http://eprinc.org/wp-content/

uploads/2013/10/EPRINC-PIPELINES-TRAINS-TRUCKS-OCT31.pdf ),

shipments of crude oil from the Midwest to the Gulf of Mexico

jumped from just 50,000 barrels per day (b/d) in 2008 to over

380,000 b/d in 2013, while shipments from the Gulf to the Midwest

decreased 500,000 b/d.

For producers, inadequate transportation infrastructure creates

bottlenecks that can raise production costs and depress revenue.

The lack of efficient access to markets can lead to lower well-head

values and reduced revenues for royalty owners, as well as local,

state and federal governments. Failure to address these limitations

could discourage production investment – along with the associ-

ated employment and economic advantages that greatly benefit

consumers.

Updating energy infrastructure in the United States could gen-

erate up to $1.15 trillion in new private capital investment and

support 1.1 million new jobs over a 10-year period, according to

a study by IHS. Pipeline investment alone could support up to

830,771 average annual jobs.

Pipeline constraints, on the other hand, can be costly to consum-

ers too. According to the U.S. Energy Information Administration

(EIA), residents of the northeastern U.S. paid up to 68 per cent more

for electricity than the national average in the winter of 2014, while

industrial users paid up to 105 per cent more for electricity than

the national average. Failure to expand natural gas and electricity

infrastructure in the Northeast could cost the region’s households

and businesses an estimated $5.4 billion in higher energy costs and

more than 167,000 private-sector and construction jobs between

2016 and 2020, according to a study from the New England Coali-

tion for Affordable Energy.

Some progress is underway. EIA reports that over the past 10 years

pipeline operators have invested more than $57 billion to complete

more than 400 projects adding about 15,200 miles of pipeline and

approximately 151,300 million cubic feet per day (MMcf/d) of ca-

pacity to transport natural gas to consumers and businesses. At the

same time, according to EIA, operators have announced plans to

invest more than $40 billion on 105 projects to add more than 7,500

miles and more than 72,650 MMcf/d in pipeline capacity.

It’s a good start, but more expansion is needed. With a 99.999

per cent safety rate, pipelines are among the safest, most efficient

methods for transporting energy. To maintain and build upon the

economic benefits of North America’s energy renaissance, addition-

al pipeline investment must be a priority. v

Updating energy infrastructure in the United States could generate up to $1.15 trillion in new private capital investment and support 1.1 million new jobs over a 10-year period.

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ManItoba contInues to be hIghly regarDeD for petroleuM exploratIon anD DevelopMent InvestMentfRaSER InStItutE 2015 GLOBaL PEtROLEuM SuRvEy fInDInGS

By Gerry angevine

As in 2013 and 2014, the 2015

Fraser Institute Global Petroleum

Survey of explorers and devel-

opers indicates that Manitoba

is the second most favourable jurisdiction

in Canada, behind only Saskatchewan, for

upstream petroleum exploration and de-

velopment. Moreover, the province has

now placed first or second in Canada, and

achieved a very high rating when com-

pared with jurisdictions in the United States

and other countries according to the sur-

vey’s all-inclusive Policy Perception Index

scoring methodology, for seven straight

years.

The Fraser Institute’s ninth annual survey

was conducted during the summer of 2015,

and the results were published on Decem-

ber 1st. The findings are based on respons-

es from 439 petroleum industry executives,

managers, and experts to questions regard-

ing barriers to investment in petroleum ex-

ploration and production development in

126 provinces, states, regions and countries.

As in previous years, the survey questions

targeted 16 important factors impacting

investment in upstream petroleum explo-

ration and development. These include

fiscal terms; taxation and other factors af-

fecting the commercial environment, such

as the availability of skilled labour; quality of

and access to essential infrastructure; the

regulatory climate which investors face

including the cost of regulatory compli-

ance, duplication, inconsistent interpreta-

tion, and enforcement of regulations; and a

number of other important issues such as

land claims disputes and uncertainty with

regard to how environmental regulations

may be changed.

The survey scores assigned to the various

jurisdictions are based on the percentage

of responses that indicate that a given fac-

tor is considered to be “a mild or strong de-

terrent to investment” or is so onerous that

respondents “would not invest” in the juris-

diction in question due to that policy factor.

Because of the focus on negative percep-

tions, jurisdictions with the lowest scores

are considered to pose lower or fewer bar-

riers to investment and, therefore, to be the

most attractive for investment.

It is important to note that the “Policy Per-

ception Index” rankings referred to above

(with regard to Manitoba and Saskatch-

ewan), in which all 126 of the jurisdictions

rated in the survey are included, do not

reflect the extent of the various jurisdic-

tions’ crude oil and natural gas resources

or reserves. When jurisdictions’ proved pe-

troleum reserves are considered, the rank-

ings are much different. For example, when

grouped with 14 jurisdictions each holding

at least one per cent of total proved pe-

troleum reserves (of the 118 jurisdictions

ranked in the 2015 survey which have at

least some proved reserves), Alberta – the

only Canadian jurisdiction with “large” re-

serves – ranks as the third most attractive

jurisdiction for investment (down from sec-

ond in the 2014 survey when there were 26

jurisdictions in the group), behind only Tex-

as and the United Arab Emirates but ahead

of Iran, Russia, Venezuela, Qatar, Iraq, Kuwait

and five other jurisdictions in the group of

14 large reserve holders.

Among 38 jurisdictions holding at least

0.1 per cent of total proved reserves, but

less than one per cent, British Colum-

bia (the only Canadian jurisdiction in this

group) ranks as the 17th most attractive for

investment. This compares with 19th (of 44)

in the 2014 survey and 14th (of 40) in 2013.

Oklahoma, North Dakota, Norway-North

Sea, West Virginia and Louisiana are the five

top-ranked jurisdictions in the group of me-

dium reserve holders.

All of the other Canadian jurisdictions

with proved reserves fall in a group of 66

jurisdictions with relatively small reserves.

As in 2014, Manitoba ranks just below Sas-

katchewan in this group, lying in seventh

position compared with third place a year

earlier. The only jurisdictions of the 66 that

ranked more highly than Manitoba were

the Netherlands-Offshore, Alabama, Mis-


sissippi, Kansas, Arkansas and Saskatch-

ewan. The high rankings awarded to these

seven jurisdictions, and eighth-place South

Australia, reflects their generally positive

attributes with regard to most of the in-

vestment drivers addressed in the survey.

Newfoundland & Labrador, Yukon and the

Northwest Territories’ fairly attractive scores

placed them in 16th, 22nd, and 23rd place

(of 66), respectively. Nova Scotia ranked

33rd and New Brunswick, 38th.

On the basis of the Policy Perception In-

dex rankings obtained when all of the juris-

dictions for which sufficient survey respons-

es were obtained are included, regardless

of the extent of their petroleum resources,

Table 1 demonstrates that Manitoba and

Saskatchewan were ranked higher by sur-

vey participants in 2015 than Canada’s five

other significant oil- and gas-producing

jurisdictions in terms of attractiveness for

upstream investment – repeating the rec-

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Table 1


ognition that the two provinces have had

for many years. But the fact that both prov-

inces’ survey scores were somewhat higher

in 2015 than a year earlier reflects some slip-

page as to how they are regarded by sur-

vey participants. This is because the higher

scores reflect higher percentagers of nega-

tive responses with regard to a number of

the investment drivers captured by the sur-

vey questions.

Of the seven jurisdictions compared in

Table 1, the Northwest Territories demon-

strated the most improvement in 2015, ris-

ing to 4th place from 7th position in each

of the previous four years as the result of a

lower (i.e. more positive) score. Newfound-

land & Labrador moved up to third place,

from fourth. Nova Scotia dropped to last

place from fifth in spite of a slightly im-

proved score.

During 2012 through 2014, as Alberta

backtracked from the royalty hikes embed-

ded in the so-called “New Royalty Frame-

work”, it achieved relatively attractive survey

scores and ranked third among the group

of seven Canadian petroleum jurisdictions

included in Table 1. However, Alberta’s score

was worse in 2015 than at any time since

2010, causing the province to slip from 3rd

place to 5th.

With respect to Manitoba, the cost of

regulatory compliance was indicated to be

of much less concern in the 2015 survey

than in 2014. Regulatory duplication was

also less of an issue. However, rather large

increases in the percentages of negative re-

sponses to the survey questions pertaining

to land claims disputes, uncertainty regard-

ing protected areas, taxation in general,

and infrastructure were observed. As well,

although more modest, there were indica-

tions of greater concern than in 2014 with

regard to other investment drivers includ-

ing environmental regulation, regulatory

uncertainty, and fiscal terms. As a conse-

quence, Manitoba’s score increased (i.e. de-

teriorated) by 6.7 points from 2014.

In the case of Saskatchewan, although

the fiscal terms, regulatory uncertainty,

and infrastructure factors were indicated

to be of less concern than during the pre-

vious year, respondents indicated that, as

in Manitoba, land claims disputes had be-

come much more worrisome. In addition,

labor availability, uncertainties in relation to

protected areas, the cost of regulatory com-

pliance, taxation in general, and a number

of other regulatory issues were of greater

concern than in 2014. The less positive in-

dications with respect to some of the sur-

vey questions were sufficient to more than

offset reduced levels of concern within rela-

tion to others, thus increasing (worsening)

Saskatchewan’s score by 3.6 points com-

pared with 2014. But because this was less

than the increase in Manitoba’s score, the

gap between the two jurisdictions is now

more apparent.

Newfoundland and Labrador’s improve-

ment from 2014 is attributable to signifi-

cantly lower negative score percentages

on the survey questions pertaining to labor

regulations and agreements, labor avail-

ability, land claims disputes and regulatory

duplication. This, as well as more positive

perspectives in relation to fiscal terms,

more than offset a rather large increase in

the extent of concern pertaining to the cost

of regulatory compliance and regulatory

uncertainty and somewhat greater worries

with regard to taxation in general and envi-

ronmental regulation than indicated in the

preceding survey.

The Northwest Territories achieved a

remarkably improved score in the 2015

survey compared with the preceding year

(Table 1) because of lower percentages of

negative perspectives over a wide range of

survey questions but, especially, regulatory

duplication (which had been a major issue

there for some time), labor regulations and

agreements, uncertainties in relation to pro-

tected areas, the cost of regulatory compli-

ance, regulatory uncertainty, and quality of

infrastructure. More concern was expressed

than a year earlier in relation to environmen-

tal regulation but this was more than offset

by the widepstead reduction in negative

sentiment in relation to other issues.

Alberta’s less attractive score than a year

earlier and drop in the rankings is mainly at-

tributable to a significant increase in negative

perceptions in relation to fiscal terms. How-

ever, increased concern was also indicated

by the survey respondents with reference to

a number of other issues, especially taxation

in general, environmental regulation, regula-

tory uncertainty, and uncertainties pertain-

ing to protected areas. The worries in rela-

tion to fiscal terms undoubtedly reflect the

new provincial government’s commitment

to launch a review of oil and natural gas roy-

alties. The rise in the percentage of negative

responses with regard to taxation in general

is most likely a consequence of both the

increase in the corporate income tax rate

and increased tax rates applicable to high

income earners. The greater level of con-

cern pertaining to various regulatory issues

suggests that respondents were fearful that

the new government would advance costly

new regulations on the upsream petroleum

industry. That concern over labor availability

was much less than a year earlier appears to

reflect the marked weakening of the Alberta

economy because of the drop in oil prices.

British Columbia’s score improved as the

result of lower percentages of negative re-

sponses over a broad range of survey ques-

tions. The improvement was most apparent

with regard to fiscal terms, taxation in gen-

eral and labor regulations and agreements.

The findings are based on responses from 439 petroleum industry executives, managers, and experts to questions regarding barriers to investment in petroleum exploration and production development in 126 provinces, states, regions and countries.


Referring again to Policy Perception In-

dex results for all jurisdictions regardless

of the extent of their petroleum resources,

Table 2 shows that Manitoba, which has

been among the top 10 jurisdictions sur-

veyed by the Fraser Institute for four con-

secutive years, dropped from 5th place to

10th. Eighth place Saskatchewan (com-

pared with 3rd place in both 2013 and

2014) ranked among the top 10 jurisdic-

tions worldwide in terms of attractiveness

for upstream investment for the third year

in a row. Alberta fell from 16th (of 156) to

38th place (of 126) globally. British Colum-

bia improved its global standing from 62th

place to 50th place. No doubt that this re-

flects that province’s improved score. But

one needs to be mindful of the fact that

had the number of jurisdictions ranked in

the 2015 survey remained the same as in

2014 at least some of the changes in rank-

ing might have been less significant or

even in the opposite direction.

In order to maintain its position as one

the two most attractive attractive jurisdic-

tions for investment in petroleum explo-

ration and production development in

Canada, one of the most attractive jurisdic-

tions in the group of small reserve holders,

and a top-ten ranked jurisdiction globally,

Manitoba must ensure that royalties and

adequate infrastructure continue to con-

tribute to a competitive commercial envi-

ronment. It is also important that the cost

of regulatory compliance not be allowed

to escalate relative to competing jurisdic-

tions. Further, in view of the findings from

the 2015 Petroleum Survey, Manitoba

must strive to address stakeholders’ con-

cerns with regard to land claims disputes,

uncertainties surrounding protected lands,

taxation (in general), and several other is-

sues so that they don’t gradually erode the

province’s attractiveness for investment.

Dr. Gerry Angevine is a Senior Fellow at the

Fraser Institute, a non-profit research and

education organization. The full report on the

results of the 2015 Global Petroleum Survey

may be downloaded free-of-charge at:

http://www.fraserinstitute.org/sites/default/

files/global-petroleum-survey-2015-rev.pdf

The 2016 survey will be launched during the

summer and results will be available in the

fall. v

1 Since the 2015 survey was completed the Alberta Royalty Review Panel has recommended that the Province hold the line on oil and gas royalties and the Alberta Government has accepted those recommendations. As a consequence, participants in the 2016 survey are likely to view Alberta somewhat more favorably.

Table 2

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YEARS


oIl Downturn slows econoMy but hope stIll thrIves

By Melanie franner

There is no doubt that the im-

pact of the oil & gas industry

downturn has spread far and

wide throughout the province

of Manitoba. But that impact has been less-

ened by several factors, namely a diversified

economy, a resilient attitude, and an ongo-

ing hope that better times are on their way.

the numbers have itAccording to the Government of Manito-

ba, Jobs and the Economy, employment in

all primary industries in Canada decreased

by six per cent between 2014 and 2015. The

number for Manitoba was three per cent.

Statistics from the Statistics Canada Labour

Force Survey (LFS) show that employment

in occupations related to all primary indus-

tries was 1.4 per cent lower in Manitoba

in 2015 compared to 2011, while employ-

ment in the sector decreased 1.6 per cent

Canada wide.

And Manitoba’s Labour Market Occupa-

tional Forecast predicts further job contrac-

tion in the oil & gas sector for 2016. In fact,

the trend is expected to continue – albeit

slower – through 2017 and 2018 before re-

versing in the following two years, when a

small number of new jobs is expected to be

created.

The Government of Manitoba, Mineral

Resources Department, states that the

number of oil & gas licenses issued over the

last few years has also been on the decline

– falling from 537 in 2013 to 533 in 2014

to 235 in 2015. Similar trends can be seen

in the number of wells drilled and metres

drilled (1,000 metres). The number of wells

has decreased from 530 in 2013 to 464

in 2014 to 205 in 2015, while the metres

drilled has fallen from 1,017 to 848 to 364.

Estimates for 2016 show that there may

be only 100 licenses issued and drilled dur-

ing the year.

municipalities tough it outThe Town of Virden is one municipality

that has really felt the oil & gas bust.

“The oil fields are a huge part of our econ-

omy,” says Mayor Jeff McConnell. “But I don’t

think it has been as substantial a hit as in

some Alberta and Saskatchewan communi-

ties. Our activity had dropped a bit but there

hasn’t been a significant impact on families

as of yet. For those families who may be af-

fected, we as a community will try to band

together to help where we can. There is a

lot of nervousness, but businesses are trying

very hard to keep things going.”


At the same time, McConnell is quick to

point out that Virden is home to some sub-

stantial employers that are not part of the

oil industry.

“We call ourselves the oil capital of Mani-

toba, but the fact is that oil is not our only

industry,” he says. “Our community is so

much more than oil, particularly at times

like this when the oil industry is slow.”

The Town of Virden has managed to keep

momentum going on economic develop-

ment, with some businesses continuing to

develop plans in the town’s industrial park.

“Development may not be occurring as

quickly as it would have in the past, but it

is continuing,” says McConnell, adding that

the town will take advantage of this current

slowdown to ponder strategic planning go-

ing forward. “We will take the time to reflect

and see where the community fell short

on needs during the boom. Municipalities

aren’t in the position to respond in a heart-

beat to the needs of industry. I think we and

every other municipality around here will

take a breather and identify what needs to

be done in the future.”

A similar story comes from the Rural Mu-

nicipality of Pipestone, which encompasses

the communities of Reston, Pipestone,

Sinclair and Cromer and is home to about

1,500 people.

“The oil within our municipality is mainly

surrounding the communities of Sinclair

and Cromer,” says Tanis Chalmers, Economic

Development. “Enbridge has a large facility

in that area and Tundra has a large presence

as well. There is also a variety of other oil-

related companies.”

According to Chalmers, the communities

began to feel the effects of the downturn

about 10 months ago. Although she admits

that some of the “underemployed” individu-

als are looking at opportunities outside of

the municipality, she says that most are

looking for answers closer to home. And

there seem to be plenty of opportunities

available.

“During the oil boom, we noticed that it

would have been beneficial to have some

more service-oriented businesses here, like

convenience stores and rental properties,”

says Chalmers. “This is still something we

want to pursue. We also have some busi-

nesses for sale on our main streets, not

due to the downturn in the oil industry but

more related to retirement and succession.

Therefore, there are new opportunities in

the area of entrepreneurship as well.”

Chalmers admits that having the two

major employers of Enbridge and Tundra

puts the municipality in pretty good staid.

She also says that the focus on develop-

ment and growth will continue.

“This is an opportunity for us to prepare

for the future,” she says. “We’re still offering

commercial and residential cash incentives.

We also have some developed property

available for interested candidates. With

spring coming up, this is the perfect time

for us to do some research in business de-

velopment.”

that Was then, this is noWLocated in the southwest corner of the

province, the municipality of Deloraine-

Winchester has a population of about 1,500

and recently went through a forced amal-

gamation.

“This slowdown in the oil industry pro-

vides us with a great opportunity for the

new amalgamated councils to get together

for strategic economic development,” says

Liza Park, Economic Development Officer

and Recreation Director.

According to Park, the municipality is

more of a bedroom community to the oil

fields.

“We felt some growth during the boom,”

she explains. “For example, it allowed out

farmers to diversify during the off season by

hauling water and things like that. The slow-

down has definitely had an impact on our

economy, but oil was never the number-

one driver for us; agriculture is. We reaped

the benefits of the oil boom off our neigh-

bours, but the downturn hasn’t created a

crisis for us. We’ve just gone back to the way

it was before the boom.”

Park calls the boom a “good eye-opener”

for the municipality. And one that they

hope they will make them better prepared

for the future.

As the second-largest city in the prov-

ince, Brandon is more susceptible to expe-

riencing economic trends on a larger scale.

“Brandon is very fortunate to have a di-

versified economy,” says Sandy Trudel, Di-

rector of Economic Development. “Though

the oil sector is an important part of the

economy, it’s not the dominant economic

sector. The downturn in this sector has


positively impacted labour and negatively

impacted businesses that are directly tied

to the oil sector and others that are a step

removed but still do a lot of business with

oil-related companies. Admittedly, there

is less disposable income in the region,

which in turn is felt in the local retail and

hospitality sectors.”

According to Trudel, the city of Brandon

is “on par” economically with a year ago.

She cites a recent Chamber of Commerce

survey of Brandon business leaders that

shows close to half of them expect that

their company will perform better finan-

cially in a year’s time. Some 62 per cent

anticipate that they will employ the same

number of people, while 30 per cent ex-

pect to employ more.

“The unemployment rate has crept

upward over the past year as a result of

the downturn in the oil sector, which in

turn is helping local businesses that have

historically found it challenging to hire

for hard-to-fill positions,” says Trudel, who

cites that 36 per cent of the respondents

in 2012 cited labour shortages as the

greatest challenge for businesses while

only 28.8 per cent cited it in the most re-

cent survey. “Having access to additional

labour has helped those industries that

chronically ran short-staffed, which al-

lows them to capitalize on business op-

portunities, positively impacting the local

economy.”

Brandon is also home to a couple of

what Economic Development refers to

as “base industries”, which helps grow the

economy. Further to this, Trudel confirms

that Greenstone Structure Solutions is ex-

pecting to become operational in the first

half of 2016 with a new 26,000-square-

foot facility and Federated Cooperatives

Limited is in the permitting stage for the

construction of a new bulk granular-fertil-

izer storage facility.

“The North American retail sector con-

tinues to evolve as well, resulting in a few

retail closures and opening the door for

new opportunities,” says Trudel, who adds

that the city’s housing rental market has

softened but remains healthy, with an

overall vacancy rate of 2.2 per cent. “De-

velopers continue to plan and construct

new rental units, with several large, multi-

family projects either underway or in the

development application stage. Residen-

tial sales have also remained steady.”

in the pipelineWith the province of Manitoba repre-

senting close to 90 per cent of its total busi-

ness, Tundra Oil & Gas knows firsthand the

impact of the recent downturn in the oil in-

dustry. The privately owned company is the

province’s largest producer of crude oil and

currently produces an impressive 30,000

barrels a day, which is up from the 24,000

barrels a year ago.

“We have made a number of strategic

acquisitions over the last 15 months,” says

Tundra Oil & Gas President Ken Neufeld.

“However, we are definitely slowing down

activity in some areas of the business, like

exploration and development drilling. Our

capital programs are less than half of what

they were two years ago. But we have 3,500

active wells in the province, which we con-

tinue to actively operate.”

According to Neufeld, the company’s cur-

rent strategy is focused primarily on looking

at ways to manage its cost structure.

PHO

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NE


“Those activities that we’re involved in,

we’re trying to do less expensively,” he says.

“We’re trying to work with our suppliers and

partners to keep our operations going so

that all parties benefit.”

Neufeld reports that the company, in his

opinion, has done fairly well in weathering

out the current downturn. He admits that

he doesn’t have a crystal ball but hopes that

things will begin to turn around in 2016. “In

the meantime, we’re trying to do the things

that will help us manage in this difficult en-

vironment.”

In the near term, Neufeld anticipates

that the company will continue to focus

on operating strategies, such as replacing

its primary drilling activities with workovers

designed to improve production from ex-

isting wells and by focusing on enhanced

oil recovery projects aimed at recovering

more barrels from its existing fields.

“I think we will be fairly well positioned

when things ramp up again,” he says, add-

ing that to date, the company has been

able to keep most of its staff. “We’re very

pleased with being able to keep everyone

on board. There is no guarantee that we can

do this indefinitely, but we’re all working to-

gether to try to make it happen.”

the bigger pictureLike the province itself, many businesses

within Manitoba have a diversified prod-

uct line. Ron Koslowsky, Manitoba Vice

President of Canadian Manufacturers & Ex-

porters (CME), reports that it is this diversi-

fication that has limited the impact of the

downturn for his organization’s members.

“Companies tend to have more than one

area of focus,” he says. “In many cases, the

companies have two, three or more prod-

ucts. One of these may be oil & gas related

and the company is clearly experiencing a

downturn in that one area of its business.

But on the other hand, that same company

is spending more energy focusing on its

other product areas. So, in the end, it may

end up increasing its sales of a certain prod-

uct to the U.S., especially now with the low

Canadian dollar. Or it may increase its sales

within Canada but in a product line not

related to oil & gas. Businesses are getting

creative with their marketing and are find-

ing new customers as a result.”

Koslowsky cites an old adage: Never

waste a good recession because it gives

you a chance to grow your market share.

“This is one of the key strategies that a lot

of companies are now adopting,” he adds.

That being said, the CME Manitoba re-

mains actively involved in helping its mem-

bers.

“We have about 18 people who are com-

mitted solely to helping manufacturers in a

variety of different ways, like how to grow

the business or how to better use technolo-

gy,” he says. “This help is often at a very high

executive level.”

The CME Manitoba also facilitates ex-

ecutive council meetings with seasoned

individuals at the helm in order to provide

shared learning experiences and to make

new connections.

“We are certainly seeing more interest in

this area of our offerings,” says Koslowsky,

who adds that the organization also has

another six or seven individuals supporting

companies on LEAN methodologies.

a stronger tomorroW

Although the downturn in the oil & gas

industry has certainly impacted almost all

within the province, it would appear that

for the most part, the municipalities, busi-

nesses and people of Manitoba have man-

aged to weather the current cycle – for the

time being at least. Innovative marketing,

strategic thinking and the unerring drive

to survive have come together to create

a tough and resilient population. And let’s

not forget that the downturn has, in turn,

created some positives.

“Companies are taking advantage of the

lull to explore business opportunities that

in the past have been ignored, as they were

simply too busy,” concludes Brandon’s Di-

rector of Economic Development’s Trudel.

“Companies are also committing human

and financial resources to improving effi-

ciencies, professional development for their

employees and undertaking strategic plan-

ning – positioning themselves favourably

for the time when the sector returns to its

new norm.” v

Ron Koslowsky, VP of Canadian Manufacturers and Exporters .

Ken Neufeld, President, Tundra Oil & Gas.


By Melanie franner

Despite the low oil prices and

its impact on the economy,

the province of Saskatchewan

is poised for an upturn in em-

ployment. In their February 2016 Monthly

Economic Indicators Report, Saskatchewan’s

Ministry of Economy cites the Conference

Board of Canada (CBOC) August 2015 Pro-

vincial Outlook which states the labour mar-

ket is expected to “revive over the next two

years, with employment rising 0.6 per cent

in 2016 and 1.2 per cent in 2017.”

Unfortunately, the numbers aren’t quite

as uplifting when it comes to employment

levels in the forestry, fishing, oil & gas sec-

tors. The province’s Ministry of Economy

cites a year-to-date decline of 6.9 per cent

in employment levels from January 2016

over January 2015. The largest job losses

in 2015 took place in educational services

(-4,700), public administration (-2,600), and

construction (-2,200).

These are significant job losses, many

of which will have professional and per-

sonal repercussions on individuals for an

extensive period of time. And while other

provinces, including Manitoba, have been

impacted to different degrees by the recent

economic downturn, there are processes

and coping mechanisms available to help

lessen the anxiety and stress inherent in

these life-altering events.

instructional insight“Losing your job can be exceptionally

stressful,” says Therese Lardner, registered

psychologist and careers specialist with

Mining Family Matters, an online support

network empowering Canadian families in

mining, oil and gas. “Research shows that it’s

one of the top 10 most stressful life events

that you can experience, similar to reconcil-

ing a marriage or experiencing poor health

of a loved one.”

According to Lardner, it is important for

people who have recently lost their job to

“remember that it is a process – there will

certainly be good days and bad days, but

you’ve got to hang on for the ride.”

The decision to get out and start to seek

employment immediately or to take some

time is an individual one.

“How quickly to begin job searching will

be different for everybody,” she says. “Some

people need time and space to grieve for

what has happened and process their

thoughts and feelings. Others get started

right away. How quickly you can start can

be determined by how able you feel to

carry out an effective job search.”

Lardner admits that market conditions,

such as a downturn in the oil & gas sector,

can have a huge impact on a person’s job-

searching experience. But the trick is to not

focus on the fact that the market is flat but

to ensure one gets creative about how one

markets one’s skills and experience. She also

adds that networking is key to finding suc-

cess – and that the job loss itself can turn

into a positive.

“I can’t tell you how many people I have

worked who wish they had the ‘push’ to

a new toMorrow

COPInG MEChanISMS In tROuBLInG ECOnOMIC tIMES


find a new role sooner,” she says. “Active job

seeking following a job loss will force you to

really think about what you want to do so

job choices are often aligned with an over-

all career plan. It gives you the opportunity

to reflect on your skills, achievements, and

how far you’ve come over your career.”

stressful timesJob loss can be a very significant source

of stress for both the individual in question

and for the spouse.

“Even small demonstrations of daily sup-

port are vital,” says Lardner, in speaking of

ways in which a spouse may help. “This

is a time when the individual can lean on

the spouse, friends, and family. Spouses

or partners should try hard not to enquire

about what the individual is doing all day,

as comments like this may cause them to

shut down and get defensive. Instead, they

can assist with things like proofreading, if

that’s a strength. They should also be clear

on what sort of job the individual is looking

for so they can help with networking.”

Lardner cites symptoms such as disrupt-

ed sleep patterns (sleeping more/less than

usual, trouble going to/staying asleep), in-

creased or decreased appetite, and the use

of coping mechanisms like alcohol or rec-

reational drugs as signs that the individual

may be going through depression or anxi-

ety.

“You need to talk to the person to un-

derstand what’s going on with them,” she

says. “If you don’t feel equipped to have this

discussion, then you need to talk to your

doctor or local mental health professional

for some ideas on how you could approach

the situation. A simple ‘Are you okay?’ is a

great place to start.”

Stress and anxiety may also impact one’s

family, including children. The impact of

such is often dependent upon their ages.

“A very young child may only have the

capacity to understand that mummy or

daddy isn’t leaving the house and return-

ing as normal,” says Lardner. “An older child

may grasp the concept of the job that you

do and may understand that you’re looking

for another place to do that job. A teenager

may be more sensitive to the impact of the

job loss. The main thing is to keep the mes-

sage age appropriate and invite questions.

Try to be honest about any of the negatives

so that the child understands but, at the

same time, highlight the positives – such as

having more time to play with them.”

According to Lardner, there are ways that

one can help alleviate child stress.

“Try to be a positive role model for cop-

ing and talk them through why you’re ap-

proaching stress the way you are – like ‘I’m

getting really frustrated now so I am going

to take a break and come back to this later,’”

she advises. “Job loss can often upset the

normal household rhythm so try to create a

‘new normal’ to provide some structure and

certainty in their lives. Ask if they have any

questions or would like to talk about what’s

going on, and also try to make the most of

job search downtime by doing things that

raise your energy levels and nurture your

relationship with your kids.”

a neW tomorroWAlthough landing a new job is certainly

cause for celebration – Lardner suggests

that one celebrate in a way that’s meaning-

ful – it doesn’t necessarily mark the end of

the anxiety.

“Change can be daunting even if we

choose it,” she advises. “To reduce some of

the stress, you should think through your

short- and medium-term goals of your new

role. What will you need to learn? Who will

you need to get to know? How can you

build your reputation and career through

this role? What could be some of the new

challenges? How will you overcome them?”

By learning how to manage stress, an in-

dividual can better cope with job loss and

job seeking. This will also have an impact on

an individual’s spouse, family and friends.

Lardner advises that people maintain mo-

tivation and engagement throughout the

job loss/job find process. And to help keep

stress in check by taking care of oneself

through diet and exercise.

“Keeping your motivation up and stress

down is a sure-fire way to get through

tough organizational change or tough

career situations,” she concludes, adding

change in itself may be frightening but, in

the case of job loss, one is often rewarded

with a richer and more fulfilling career. v

24th wbpc focuses on the technologIes anD technIques that wIll Move the bakken forwarD

“ The one unchangeable certainty is that nothing is unchangeable or certain.”

– John F. Kennedy

PHO

TO C

RED

IT R

ENA

E M

ITCH

ELL


Certainty is something that all businesses strive for, but it is also elusive. This is especially true in commodities, where so many external influences from politics to weather can change the outcome of operations overnight.

Yet, as uncertain as certainty may be, it does breed innovation

and efficiency. While politics, weather and even economics can’t be

changed, individual operations of companies can, and we’ve wit-

nessed that over the course of the past year as the oil industry and

related businesses have done what they can to change and adapt

to market conditions.

And the change has been remarkable. Just two years ago, we lauded the fact that companies were becoming better at what they do, making it economic to produce oil and a “mere” $70 per barrel. Today, we see production continue as the barrels hovers at $35.

It has not come without its pains, but industry is rising to the challenge. Slowdowns afford the opportunity to evaluate opera-tions, cultivate ingenuity, embrace efficiency, and deploy the tech-nologies that will take the Bakken forward.

Although the mainstream media is concentrating primarily on the price collapse and lay-offs, industry publications are focused on

SAVE THE DATE

For more information please visit www.wbpc.ca

WILLISTONBASINPETROLEUM CONFERENCE

2 5 THMay 2 - 4, 2017

Regina, Saskatchewan, Canada

• Technical Talks

• Exhibitor Booths

• Workshops

• Activity Updates “Hot Plays”

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what it this period could be: the opportu-

nity to be better.

“This makes the phase that we’re in very

exciting. It’s not the best financial time

for any of us, for sure, but it’s a great time

of learning and reflecting,” Don Conkle of

Carbo Ceramics told E&P Magazine. Ryan

Hummer of NCS Multistage echoed those

sentiments: “We’ve probably learned more

as an industry in the last 15 to 18 months

than we have in the previous several years

where the activity was so high there wasn’t

as much focus on costs. Now everyone is la-

ser-focused on making every improvement

we can make, whether it’s on the comple-tion side, on the drilling side or reducing operating costs. It’s actually an exciting time for the industry as we go through this, even though it’s painful certainly for the services industry and painful for our customers as well.”

In fact, the Williston Basin Petroleum Conference was borne from very similar conditions that we face today. The resource was there but the ability to harvest it was not quite ready, and so began the Williston Basin Horizontal Drilling Symposium. This symposium brought together industry leaders to explore the technologies that have since unlocked the Lodgepole Field under Dickinson, the Cedar Hills Field in Bowman County, and of course eventually the Bakken, defining our region as a top energy producer in the world. This is a feat that just a little more than a decade ago may not have seemed plausible because, at that time, the Bakken was still consid-ered uneconomic to produce. The relent-less work of industry pioneers, however, led to the innovation and combinations of technologies that have since made the Bakken shale play a world-class resource. The conference has since evolved into the Williston Basin Petroleum Conference, but its focus is still on making the technology, technical and regulatory improvements needed to move our industry and this re-source play forward.

Risk Management | Insurance Brokering | Disaster Recovery Planning

NATE ANDREWS CRM, CAIB

Risk Management AdvisorDirect Line: 204-578-5660 [email protected]

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Commercial Account ExecutiveDirect Line: 204-851-6104 [email protected]

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Located on the TransCanada Highway & the CP Rail mainlineIndustrial Lots for SaleFull RTAC access to the Industrial ParkIndustrial Land� ll Services

John Gerdes Lou Holtz

At this year’s WBPC in Bismarck, North Dakota, we are pleased to welcome many prominent industry and company leaders to discuss the technologies and efficiencies that are changing the way we develop our vast natural resources. Among them will be CEOs Jim Volker of Whiting Petroleum, Rick Muncrief of WPX Energy, and Jay Ottoson of SM Energy, who will share their experience in the industry and how their companies are deploying technology, people and re-sources to protect and enhance their assets in the Bakken. Also joining them will be Ger-bert Schoonman, Vice President for Hess Corporation’s Bakken Asset, to talk about the company’s use of lean manufacturing to reduce well costs and optimize well pro-ductivity.

Attendees will also hear a keynote ad-dress from Don Hrap, the president of Lower 48 for ConocoPhillips. Hrap leads the development, operations and services related to the company’s exploration and production business in the Lower 48 region of the United States and will offer valuable insight into the future of the Bakken and

ConocoPhillips’ involvement as one of the largest producers in North Dakota.

Market Research Analyst John Gerdes of KLR Group will be present to add some insight into how and when prices may re-bound and what we can expect from the “new normal”, while other speaker panels will focus on optimization, technology and artificial lift to maximize production from existing wells. Neel Kashkari, the newly hired president of the Minneapolis Fed-eral Reserve Bank, will discuss the regional economy and widespread economic pull of the Bakken.

Encouraging our industry’s best and brightest to find these new opportunities


will require leadership, especially during these more difficult times. To inspire current and future leaders, legendary coach Lou Holtz will provide the keynote address the final day of the conference. Deemed “the master of the turnaround,” Holtz’s experi-ences and lessons learned as a coach can be applied outside of sports, especially when and where leadership is needed most.

A few years back, the motto for the WBPC was “The best is yet to come.” We still believe that’s true. We look forward to the discus-sions that will grow out of the 24th Annual WBPC and see the investments that can – and will – move the Bakken and our indus-try forward. v


the 2016 reDvers & DIstrIct oIl show Is fast approachIng

The sixth Redvers & District Oil

Showcase is coming up fast –

May 12th and 13th – so don’t

miss out, as there is limited space

available to get in as an exhibitor! This year’s

keynote speakers at the dinner on Thursday

night are Bernie and Sheila Inman, oilfield

safety ambassadors.

The schedule of events this year will be

the same as previous shows, with set-up

for exhibitors being all day Wednesday and

Thursday morning, and the show opening

to the public at noon and running until 4

p.m. Dinner will be served at 6 p.m., with

cocktails prior to that and the Inman’s tak-

ing the stage around 7 p.m. On Friday, the

show will be open to the public from 10

a.m. to 4 p.m.

The committee has made great strides

this year and has added online registrations

for exhibitors and visitors. Everyone visit-

ing the show is encouraged to pre-register

online, which will help you skip the line at

the door. Pre-registering takes just a min-

ute and can be done through our website,

www.redversoilshow.com.

The slow economy has challenged our

committee, but with Redvers being situ-

ated right in the middle of the Bakken play

in southeast Saskatchewan and southwest

Manitoba (as well as adjacent to the same

play in North Dakota), it’s in the perfect lo-

cation to showcase existing and upcoming

technologies for the oilfield and related in-

dustries. The Oil Showcase will have items

and exhibits of interest to everyone from

company officers, engineers, and consul-

tants to drillers, landpeople and many oth-

ers who work in the oil industry.

Our previous oil shows revealed Redvers

as a town progressing and moving forward,

and we want to show that we’re continuing

that trend. With our hotel and campground,

there’s ample space for all to stay and play in

town at the upcoming oil show.

The 2012 and 2014 oil shows were a tre-

mendous success, with Tim McMillan, MLA

in charge of Energy & Resources, being the

keynote speaker to a sold out crowd at

the banquet on Thursday evening. One-

hundred-and-thirty-seven exhibitor spaces

were filled both inside and outside the Red-

vers arena – showcasing a number of oil-

field and other industry technologies – and

close to 1,500 people came through the

door. Our show was made possible with the

tremendous help of dozens of companies

and individuals.

Feedback from the last oil show was re-

markable, and we anticipate another suc-

cessful show again with loads of exhibitors

and hopefully a similar showing of people

taking the opportunity to look around and

make new industry contacts.

The committee would like to thank all of

the sponsors and volunteers who helped

make the 2014 event a success, and we look

forward to seeing you!

To be a sponsor or to request a booth at

the upcoming show, please contact

the Redvers and District Oil

Showcase Committee at 306-452-3225,

e-mail [email protected], or visit

our website at www.redversoilshow.com. v


branDon

By Sandy trudel, Director of Economic Development, City of Brandon

Brandon’s proximity to southwest

Manitoba’s oil fields makes us close

enough to be home, especially

with WestJet’s daily direct flights to

and from Calgary. Trican Well Service, Evolve

Surface Strategies, and Hydrodig recog-

nized Brandon’s locational advantages and

set up operations in the city. Today they

continue to benefit from close proximity

to the oil fields while their employees and

families enjoy the amenities and the quality

of life available in an urban centre of nearly

50,000 people.

Brandon benefits from many positive lo-

cational factors including:

• Aone-hourdrivetothefield

• Fullserviceurbancentre

• A skilled and semi-skilled workforce of

32,000

• AssiniboineCommunityCollege’soilfield

safety certification training

• Excellenttransportationinfrastructurefor

ground and rail movement of materials

east-west and north-south

• Reliable supply of affordable electricity

and natural gas

• Available industrial land, both serviced

and unserviced

• Astate-of-the-artwastewater treatment

facility and potable water supply

Thanks to a diversified economy, the pro-

longed oil sector downturn – though cer-

tainly being felt in Brandon – has not had

the devastating effects found in many oil

sector-dominant communities. Local com-

panies directly serving the oil field are, for

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the most part, in what would be classified

as a stable holding pattern. Work continues

but growth plans remain on hold. With less

disposable income in the region, consumer

demand has slowed, but not sufficiently to

deter the retail and hospitality sector from

expanding. The local labour market has

benefited from the relocation of many indi-

viduals who were working in the Alberta oil

sector, providing existing businesses with

access to an expanded skilled labour force.

Located only an hour’s drive from the

Bakken, the oil & gas sector continues to be

an important economic driver within Bran-

don’s economy. Local consulting firms, con-

tractors, manufacturers, and trucking firms

have adapted their business model to meet

the needs of the nearby oil industry. Assini-

www. p e r i m e t e r . c a

Come fly with us.

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Toll free: 1-800-665-8986

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boine Community College added oilfield

safety certification to its course offerings in

2015. Local training in well service blowout

prevention, safety management and regu-

latory awareness for supervisors, detection

and control of flammable substances, and

coiled tubing well service blowout protec-

tion eliminates the needs for Manitoba oil-

field workers to travel to Saskatchewan and

Alberta for training.

Manitoba’s second-largest city, Brandon

boasts amenities, services, educational

and employment opportunities generally

found in much larger centres. As a medical

referral centre for Southwestern Manitoba,

the medical services available in Brandon

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offers the widest range of specialized ser-

vices.

A low crime rate, a wide variety of hous-

ing choices, educational excellence, and

abundant recreation and cultural opportu-

nities create an enviable quality of life for

residents. Brandon is consistently ranked in

the top 10 as one of the best places to live

in Canada.

Brandon is a sports-oriented city full of

top-notch recreation facilities offering mul-

tiple golf courses, skiing, soccer, equestrian

sports and everything in between. Multiple

indoor fitness centres offering a full range

of services and equipment, as well as per-

sonalized trainers, are found throughout

the city. Several racquetball and squash

courts, an outdoor and indoor running

track, and numerous indoor and outdoor

swimming pools and waterslides are read-

ily available in the city. For those who are a

little more adventurous, there’s a variety of

challenging recreational opportunities of-

fered in Brandon: pilot lessons, parachute

jumping and rock climbing walls to name

a few.

With the Assiniboine River winding 17

kilometres through the heart of Brandon

and 44 kilometres of paved walking and

hiking trails, the city is an oasis for outdoor

enthusiasts. Hiking and cycling are ex-

tremely popular in Brandon and the near-

by Brandon Hills. Brandon offers a nice mix

of man-made and natural scenic trails per-

fect for walking, hiking, biking, rollerblading,

horseback riding, skiing and snowshoeing.

Cottage country is as close as 25 minutes.

The city is home to diverse art and cultur-

al offerings, featuring visual exhibits, drama

and musical performances in a variety of

genres. A diverse offering of concerts and

performances are available at the Western

Manitoba Centennial Auditorium. The Art

Gallery of Southwestern Manitoba features

national and international exhibitions and

works by regional artists and is home to a

comprehensive art school facility. Their ce-

ramic facility is unmatched by any art gal-

lery in Canada, with many people using

the ceramic facility as a studio for their own

hobby or art practice.

At the end of the day, Brandon’s great-

est asset is the balance between profit and

personal reward. Please visit www.econom-

icdevelopmentbrandon.com or www.tour-

ism.brandon.com to further explore Bran-

don’s business opportunities and quality of

life attributes. You Belong in Brandon! v

(204) 725-0500www.brandonbearing.com


the breakup froM hell 2.0By Mark Salkeld, President and CEO, Petroleum Services association of Canada (PSaC)

Under normal circumstances, we

in the Canadian oilfield services

sector refer to the first quarter

of every year as the “100 Days

of Hell.” That’s when we go the hardest to

get the jobs done for our customers; lo-

gistically intense, fast, safe, and efficient. It

is one of our many claims to fame in the

Canadian oilfield services sector – on top of

a hard work ethic, pride in work well done,

and teamwork. This is all good when the

patch is performing. But last year and this

year have been anything but good. Instead,

spring breakup came around way too soon

last year and this year the same – but more

for economic reasons than environmental.

We stopped work sooner, and we’re bring-

ing our equipment home where we service,

repair, inspect, and rack it against the fence

so it’s ready for the next round.

And the next round didn’t come last

year, and it’s highly unlikely to come this

year. More and more of our folks are out of

work, out of luck, and out of income. Other

industries have gone through the same

bad circumstances, maybe even worse. For

example, think of fishing out east, the auto-

motive sector, and now manufacturing. But

what seems almost like adding insult to in-

jury is all the noise in the media and online

from so-called experts about how the oil &

gas industry is ruining Canada.

Tell me: how would we be better off leav-

ing these resources in the ground? I mean,

really? How ill-informed is that? Did those

same detractors write their opinions on

computers or papyrus paper? I don’t recall

reading anything about leaving the fish in

the sea, fruit on the trees, or parking all the

cars. And yet, how would all those opinion-

ated Canadian detractors find their way to

their computers, fresh fruit, and seafood if it

wasn’t for oil and gas.

Oil and natural gas products are found in

electronics, sports equipment, and in your

yard, closet, kitchen, car, bathroom, and

local hospital. There are petroleum prod-

ucts in the clothing and accessories you

wear every day – shades, clothing, shoes,

pantyhose, raincoats, and more. Petroleum

Services Association of Canada (PSAC)

produced a series of PSAC Product Videos

that everyone should check out to see

how many products in our world today are

made from petroleum products. Find out

more and watch the videos at: oilandgas-

info.ca/oil-gas-you/products/.

It’s like our detractors can’t see the forest

for the trees – all good in their world as long

as they are warm at night, have hardwork-

ing oilpatch workers to pick on from the

comfort of their natural gas heated homes

and synthetic bath robes, made in China

and flown to Canada on planes using oil

and gas derivatives.

And how do we get the industry detrac-

tors their natural gas? With hydraulic frac-

turing no less. A very old and proven tech-

nology perfected over the years by those

now unemployed oilfield services workers.

It seems there is a whole generation that

doesn’t appreciate the fact that Canada is

not an overly hospitable place to live if we

didn’t have heat for our homes, garages,

and places of work. Oil & gas provides a

means to bring food in when we can’t shop

for or grow food within walking distance of

our nice warm or cool houses. So industry

detractors pick on something they are not

educated about.

Fracking just sounds good to say in a neg-

ative way.

From the perspective of the hardworking

oilpatch worker, it’s like they’re telling our

world they are fools, and uninformed people

listen to these same fools because the word

fracking strikes an emotional chord. Just

how the detractors like it. Let’s play up emo-

tion and throw out facts, good old-fashioned

Canadian ingenuity, and entrepreneurialism

out the window. I find it interesting that quite

a few universities across Canada and the U.S.

teach hydraulic fracturing to their engineer-

ing students and have done so for years.

Hydraulic fracturing has been researched,

tested, improved, taken to such a high level

of sophistication and success that other

countries are banging on Alberta’s oilpatch

door asking for help on how to develop their

own natural resources in environmentally re-

sponsible manner.

And how does the oilpatch fare through

all of this? Like the other industries hit with

tough circumstances beyond their control,

we tough it out, find work elsewhere, ask for

help as a last resort and do the best we can.

So hats off to the Canadian Association of

Oilwell Drilling Contractors (CAODC) for their

Oil Respect campaign. I hope it begins to

resonate with the generation that thinks gas

for their cars comes from gasoline pumps

connected to convenience stores, just like

carrots and fresh fruit comes from grocery

stores, and their snow boards and bindings

come from the same sporting goods stores

that supply them with their down-filled

ski jackets flown in from somewhere other

than Canada for the most part. Oil Respect is

about connecting the dots between a high

quality of life our industry detractors take for

Mark Salkeld


granted and the oilpatch worker that just

wants to work for a living. So get your bum-

per stickers and T-shirts and sign CAODC’s

online petitions at oilrespect.ca. Retweet and

share their posts on social media.

PSAC is also working hard on initiatives to

raise awareness of this industry: who we are,

how good we are, and how highly respected

this industry is by folks from other countries

that want what we have. I travelled to India

last fall and discovered that many compa-

nies from India want to do business with

Canadian oil & gas services companies, es-

pecially PSAC members, because they hold

to high standards and are highly respected

in the industry. I also just came back from

Mexico and Colombia, where I participated

in trade missions to build connections with

Canadian oilfield services companies inter-

ested in doing business internationally. It’s

a good idea to diversify your markets in this

economic downturn.

At home, PSAC is working hard to edu-

cate, build relationships with, and influence

policy with provincial and federal govern-

ments and educating thought-leaders and

communities about how safe and technical-

ly sound hydraulic fracturing is to produce

our resources, as all of the pressure pumping

companies in Canada are PSAC members.

We are working hard on behalf of our mem-

bers to pave the way for them to go back to

work and stay working.

I am extremely proud of this industry, the

people, the work ethic, the ingenuity and

camaraderie. We are successful because we

communicate between each other, the ser-

vice providers, the customers, the regulators,

and the governments. We are transparent.

We are open. We want success for ourselves,

our families, and our friends. It’s too bad that

our industry detractors also benefit from the

hard work that we do. Sometimes I wish they

couldn’t so they could see the value the oil

& gas sector brings to their lives. Imagine if

those that think we should leave the oil and

gas in the ground have all that comes from

oil and gas taken away from them, from their

families and their like-minded friends. How

would they get dressed in the morning,

drive their cars to work or use their com-

puters without petroleum products? As

long as they live in Canada in comfort, our

detractors are truly exposing themselves as

ill-informed folks that take everything they

have for granted.

At the end of the day, we in the Canadian

oilfield services sector will survive. We will

go back to work, we will hire new people,

and we will continue to develop our natu-

ral resources better than anyone else in the

world. And because of our efforts, people

around the world with less than us will ben-

efit – maybe even to the point where they

can take an exceptional quality of life for

granted. v

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At home, PSAC is working hard to educate, build relationships with, and influence policy with provincial and federal governments.


let’s stIck to the factsBy Mark a. Scholz, President of the Canadian association of Oilwell Drilling Contractors

Oil Respect was launched a few weeks ago, and public support has been overwhelming. One of the campaign’s objectives is

to provide regular Canadians with an op-portunity to stand up for Canada’s oil & gas industry and the workers who make it run. It’s a goal that has attracted supporters from Victoria to St. John’s, which isn’t surprising.

Oil workers and oil families matter. The industry employs over 500,000 people, and everyone in the industry knows people who have lost jobs; a friend, a father, a daughter – more than 100,000 people unemployed because of the recent downturn. But oil workers aren’t just losing their jobs; families are losing their homes. It’s the worst slump since the 1980s, and soft oil prices aren’t the only problem.

Radical environmentalists, foreign celebri-ties and grandstanding politicians continue to distort the record of Canada’s oil & gas industry further imperiling job prospects for oil workers. Oil Respect is also about correct-ing the record against these exaggerations, half-truths and fabrications. If we don’t push back with the facts, bizarre ideas can take root in the media and among people in po-sitions of influence.

For instance many opponents of Canada’s oil and gas industry would have you be-lieve that if Canada quit producing oil, the world’s greenhouse gas emissions would go down. This of course is untrue. Other nations would immediately step in to make up the

extra production. In fact, the current swoon in oil prices has been caused by increased production from countries like Saudi Arabia, Iran, Russia and Venezuela. Unfortunately, none of those countries meets the same strict carbon emission standards as Canada, not to mention Canada’s far higher labour, safety and human rights standards. Despite this, imports of Saudi, Nigerian and U.S. oil are on the rise in Canada. We believe Cana-da would be better off in every way if east-ern refineries were taking oil from Alberta instead of Algeria, but we need pipelines to do that. To put the argument the other way around the world would be better off in many ways if a bigger share of the world’s oil production came from Canada.

Furthermore, the International Energy Agency projects that the world demand for oil will grow in the decades ahead. If so, doesn’t it make sense for that oil to come from a country like Canada? In the mean-time, many companies are developing new ways to produce clean and renewable en-ergy. In Canada, the leaders in the produc-tion of wind and solar energy are also some of Canada’s largest oil and gas companies such as Enbridge, Suncor, Shell and Trans Canada. Profits from oil and gas develop-ment and transport make that possible. Again, these are facts.

But the revenues from oil and gas de-velopment, transport and processing help in other ways too. Not only do they come back to us in the form of profits in our RRSPs

and to the Canada Pension Plan, they also provide billions of dollars in revenues to Ca-nadian governments. On average, $17 bil-lion dollars a year comes from oil & gas to fund nurses, teachers, firefighters and police officers. These are the facts of life in Canada, and if we ignore them we risk basic govern-ment services.

Finally, it is a fact that the safest and most efficient way to transport oil, or any petro-leum liquids, is by pipeline. Building pipe-lines also ensures that we can move Cana-dian oil to market, meaning better profits for companies, more revenues for governments and more jobs for workers. The proposed Energy East pipeline would mean a $14 bil-lion shot in the arm for the Canadian econ-omy. Trans Mountain would inject $9 billion, and all of that $23 billion dollars would be private money. Tens of thousands of workers would be employed without asking taxpay-ers to pony up. The much discussed “middle class” would benefit as soon as approvals were received. Again, these are facts.

Oil Respect ensures that regular Canadi-ans, and the hard facts, are at the forefront in the sometimes emotional but entirely legiti-mate discussion about Canada’s use of our oil & gas resources. Help us get the attention of governments by signing the petitions at www.oilrespect.ca and by liking our Face-book page. Let’s fight together to protect and promote an industry that has done so much to make Canada the best country in the world. v

Launch of the Oil Respect campaign in Calgary.Mark Scholz with Blake Richards, MP for Banff-Airdrie.


new pIpelInes can support actIon on clIMate changeBy Marg McCuaig-Boyd, Minister of Energy for the Province of alberta

Pipelines are the safest and most ef-ficient way to transport our energy resources, but over the last decade Canada has failed to build a major

new pipeline to tidewater.That must change. We have to get a pipe-

line built. For this to happen, governments have to address the concerns Canadians have with pipelines – not with talk, but with real action.

One of the main questions Canadians have is: how can we support the develop-ment of new pipelines while also combat-ing climate change?

It’s a good question, one that for years has lacked a good answer. As a result, the conversation about pipelines has been re-duced to two opposing positions, making it seem contradictory to support new pipe-lines and also support actions to prevent climate change.

Conservative governments in Alberta and federally just didn’t get it. They failed to recognize much of the battle against pipe-lines was a battle against the expansion of the oil sands. The conversation about pipe-lines became a conversation about the oil sands, and conservative governments re-fused to take that conversation seriously.

Turns out, they should have. Their inac-tion hurt our economy along with families in Alberta and across Canada.

Alberta’s single largest energy customer – the United States – blocked the Keystone XL pipeline not because of the safety of the pipeline, but because of the reputa-tion of the product carried in the pipeline. President Obama said our energy products aren’t good enough, that they’re too dirty. While this isn’t true, we need to change our

reputation, and we need to do so in a way that’s meaningful.

Alberta’s Climate Leadership Plan turns the page on that old debate and provides the opportunity to show the world that we can combat climate change while also pro-tecting the good, mortgage-paying jobs of our oil and gas industry. This plan has brought together an alliance never before seen in Alberta, including environmental-ists, oil sands executives, First Nations and the provincial government. These once-unlikely allies support us taking long-over-due, meaningful action to combat climate change, while also demonstrating that Al-berta can be one of the world’s most pro-gressive energy producers.

One of the key commitments of our climate leadership strategy is to limit emissions from our oil sands. Finding less carbon-intensive ways for our oil sands to produce, while also protecting and creat-ing more energy jobs, means investment in new technology. It won’t happen any other way.

For Alberta to make the kind of invest-ments necessary to transition away from a carbon emission intensive economy, we need to get full value for our resource ex-ports. Right now, we don’t. Almost all of our energy resources are sold to the United States, who as a result of the shale oil and shale gas revolutions, have in a few short years transformed from our best customer to our biggest competitor. As a result, we are selling our energy products to our only customer at a discount.

This discount means that Albertans and Canadians get less value from our natu-ral resources, with lower royalties and less

economic benefit. This in turn deprives us of critical public funds necessary to invest in the kind of technology that will be required to transition our economy toward a more prosperous, low-emission future.

Building pipelines to tidewater and to new markets, while at the same time taking action to curb emissions, are the two essen-tial components required to transition away from carbon intensive energy production and assert ourselves as one of the world’s most progressive, responsible and forward-looking energy producers.

But pipelines aren’t just good for Alberta. They are good for all of Canada. Canada currently imports almost a million barrels a day of oil from other countries. It makes no sense to finance the economies of other countries in this way, when it would be both more economically and more envi-ronmentally responsible for Canada to rely on its own abundant energy resources.

There was a time when discussions around pipelines would see new propos-als judged on their merit – public safety, job creation, market access. We want to re-turn to those discussions. Doing so will take hard work, an unprecedented commitment from our partners in the oil industry, envi-ronmental groups and First Nations, and a long-term commitment from the govern-ment of Alberta. The good news? Our cli-mate leadership plan has established the unprecedented coalition needed to get this work done.

Together, we can develop the technol-ogy to take the carbon out of the barrel. Together, by showing we’re serious about climate change, we can take the politics out of pipelines. v


long horIzonEnhanCED OIL RECOvERy Can ExtEnD thE LIfE Of a RESERvOIR By DECaDES

Working in a low oil price environment has Tundra Oil & Gas focusing on long-term production, including

how to recover a higher percentage of oil contained in its existing reserves base. The key to this is enhanced oil recovery (EOR), which usually involves injecting water or gas into the reservoir to add energy in order to sweep more oil to the producing wells and improve ultimate recovery.

Primary recovery, which relies on the natural energy of the reservoir, typically re-covers up to 10 per cent of the original oil in place. Secondary and tertiary EOR methods, including waterflooding and CO2

injection, can increase ultimate oil recovery up to 35 per cent. When you consider a play that consists of over a billion barrels of oil, such as Tundra has discovered in the Bakken res-ervoir, even a small increase in ultimate oil recovery can have a tremendous effect.

“Compared to the price of drilling new wells, it can be relatively low-cost to re-charge a reservoir by injecting water,” explains Jane Mactaggart, Tundra’s Vice-President of Reservoir/Exploitation. “In this

environment of low oil prices, using exist-ing infrastructure is a good strategy; we in-ject water in to increase the pressure and, hopefully, will see an improved production response in the future.”

Tundra was one of the first companies to apply EOR technology in the Bakken reser-voir and remains a leader in the region. With the company’s 2014 acquisition of over 840 wells from EOG Resources and 550 wells from Penn West in 2015, it looks forward to expanding its EOR applications.

“The purchase of the EOG and Penn West assets gives us an opportunity to apply what we’ve learned over the years as we continue to expand our enhanced oil re-covery processes,” says Raj Sharma, Tundra’s EOR Manager.

That’s not to say that implementation won’t be without its challenges, as the pre-vious operators’ focus was mainly on pri-mary recovery. But there are some things working in Tundra’s favour, including the fact that the wells are already drilled and that unitization (mineral owners must agree to EOR in exchange for a share of the oil that comes out of a larger project area rather

than from individual wells) on much of the land is already in place, which would oth-erwise be a lengthy process to undertake.

“While not all of the wells may prove to be ideal for secondary recovery methods, we look forward to leveraging what we’ve learned from similar reservoirs to keep this field producing for a long time,” Sharma says. “We believe if anyone can do it, it’s Tundra.”

the future of the fieldThe Midale Field is a 42-square-mile oil

patch located in the Williston Basin west of Virden. Vertical wells were first drilled on the land in 1952, and thanks to EOR methods, not only is the field still producing 60 years later, but many of its wells are expected to produce oil beyond the century mark.

“The Midale Field is an example of a ma-ture pool that should have another 30 to 40 years of life ahead of it,” Mactaggart says. “Tundra has similar assets in Manitoba, in-cluding a waterflood that’s really working well for us in the Sinclair-Daly Field. It’s really exciting to know that we’re part of a differ-ent kind of business now, one with a long range, 30- to 40-year viewpoint.”

Tundra was the first company to endeavour to apply EOR methods in the Bakken reservoir. This graphic shows Sinclair Unit 1 - Lyleton, an original vertical development of 16 producing vertical wells featuring 400m interwell spacing (2007).

Sinclair Unit 1 - Lyleton, waterflooded with open-hole horizontal injector wells, featuring 200m interwell spacing and a custom designed injector (2011).


Proudly investing in Manitoba since 1980.

Sharma explains that back in the day, oil companies would come in, purchase land, drill wells and move on quickly if they didn’t yield the expected results.

“Things have changed significantly in the last few years. It’s no longer a matter of getting in there, making a quick buck and getting out without worrying about what’s going to happen down the road because that’s ‘someone else’s problem,’” he says. “Our vision from day one has been to keep assets producing for a long time, to reinvest wisely and to do what’s right for the envi-ronment. That’s why with everything we develop, we always keep our ultimate goal of maximizing recovery in our mind.”

Making long horizon decisions means that Tundra must envision future socioeco-nomic changes.

“Realistically, if we have an asset that’s go-ing to produce for the next 50 or 60 years, we need to consider how world attitudes will change around carbon, as that’s defi-nitely going to be part of the commercial and environmental world we’re operating in,” says Mactaggart.

“We’re particularly intrigued by the poten-tial for CO2

, as we see a greater number of projects for carbon sequestration (the long-term storage of carbon dioxide to either mitigate or defer global warming and avoid dangerous climate change) in Canada and more discussions about carbon taxes as a way to encourage innovation,” she says.

Tundra implemented a CO2 pilot project

in 2008, which it has been continuously monitoring and modifying to evaluate its potential in commercial production. While there have been some short-term chal-lenges in containing the injected gas in the reservoir in order to keep pressure up, it has improved production quality.

“Any other company might say that in a low oil price environment, you should shut down the tertiary pilot if you’re merely spending money to learn, but that’s not the case with Tundra,” Sharma says.

“We believe CO2 fits into a longer-term re-

covery strategy and are committed to that focus,” Mactaggart adds. “We may not have all of the answers now, but in the coming years, we will continue to innovate as tech-

nology improves and we find ways to work with environmental changes that come at us. Although we’re producing carbon-based fuel, we can mitigate some of those poten-tial issues by injecting CO

2 back into the

ground and sequestering it in the reservoir. We’re excited to see how we can become part of the carbon solution.”

The low price environment has caused Tundra to shift its focus and innovation to-ward enhanced oil recovery, and according to Mactaggart, that’s not a bad thing.

“I think that there is a lot of innovation happening within Tundra, and we’ve con-tinued to build a team of innovative people who are continuously looking at ways to op-timize these secondary processes,” she says.

“Part of Tundra’s strength is that we have such a big base of opportunity that allows us to try new things in the field. Our team has struck a good balance between recog-nizing when its best to leave things alone when they’re working well and knowing when it’s time to roll up our sleeves and get innovative in order to make things even better.” v


why thIs oIl prIce collapse Is DIfferent froM the 1980s By David yager

Numerous comparisons of the

2014-2016 oil price collapse

to that of the 1980s have been

made, with many saying this

the worst downturn ever in this notoriously

cyclical business. It is not – there are paral-

lels to the 1980s price collapse but also sig-

nificant differences, including data showing

the current market overhang of crude oil

supply in excess of demand is nominal and

therefore temporary.

Here is some history: The red line shows

the price of oil (Illinois Crude Oil Sweet,

which trades slightly below WTI) in infla-

tion-corrected 2015 dollars. The first major

OPEC price spike of 1974 raised the price

of crude oil from about US$20 per barrel to

US$40 almost overnight. The relentless up-

ward climb caused by OPEC flexing its mus-

cles and other events culminated in crude

reaching the equivalent of US$117.18/b in

1979.

The response of the global industry to

the 1970s price spike was an unprecedent-

ed exploration and drilling boom, which re-

sulted in a flood of new supply – and even-

tually the price drop. Similar to the tight oil

bonanza of the past five years.

But back in 1973, non-OPEC oil pro-

duction was 24.67 million barrels per day

(mmb/d). By 1981, non-OPEC production

gains of about 9 mmb/d were starting to

seriously crowd out OPEC. A cartel that

was producing 30.9 mmb/d in 1979 (not

far from current output of 32 mmb/d) was

down to 16.1 million b/d by 1985, with

OPEC members withdrawing as a whole

some 14 mmb/d or 47 per cent.

Saudi Arabia alone lost over 6 million b/d

of crude oil output, at which point it an-

nounced it would not shut in even more oil

to sustain prices. The price collapsed, and

by 1986 oil would fall to about US$25 per

barrel 2015 equivalent, effectively losing 79

per cent of its value in real terms.

In late 1986, OPEC formally introduced a

16 mmb/d quota that officially pegged the

price at US$18 per barrel, the equivalent of

about US$39 today.

With the exception of a brief price spike

in 1990 concurrent with the First Gulf War,

oil stayed at or near these levels for nearly

eight years. During the slump of 1998, it got

as low as US$12.47 a barrel, less than 10 per

cent of its peak price.

When oil hit its recent low in mid-Janu-

ary, that price was still not much lower in

real terms than prices in the latter half of the

1980s. Back to the present. In November

2014, Saudi Arabia repeated history and de-

cided not to restrain production to sustain

prices – a move ratified again a year later.

But exiting 2014, correcting the market was

only a matter of one or two mmb/d, not 14

mmb/d.

Another factor contributing to the alle-

gation the current slump is the worst ever

is supposedly massive crude oil inventory

levels.

This chart (top left on opposite page)

shows the Organization for Economic Co-

operation and Development oil invento-

ries at the fourth quarter of 2015. Note the

average storage levels for the period 2010

to 2015, which saw both high and low oil

prices, is about 2.7 billion barrels. Oil storage

exiting 2015 was about 290 million barrels

above the five-year average.


This chart (top right) from 1988 shows

OECD oil inventories were higher than

current levels. Obviously, high inventories

didn’t help the price in the late 1980s, but

the numbers were larger than today. Pre-

sumably OECD countries have built more

storage in the past 30 years. Where did they

put the oil then? Where is it now?

So to compare the current situation

of world oil markets to that of the 1980s

is wrong. The crude oil market overhang

30 years ago was 14 million b/d. Today it

ranges from 1 million b/d to 2 million b/d,

depending upon which data set you are

reading. While the high inventory levels of

the 1980s did indeed exacerbate low oil

prices for an extended period of time, that

slump was caused by massive excess sup-

ply and inventories. According to this data,

both situations are significantly better for oil

prices today.

More analysts are concluding that due

to growing oil demand, continuing decline

rates in all reservoirs and massive capital

spending cutbacks in new supplies, the

global supply/demand curves will cross

later this year. In an oil-dependent world,

there is increasing understanding that the

price of oil has already been too low for too

long.

David Yager is the National Leader of

MNP’s Oilfield Services group and a

33-year veteran of the Canadian oilpatch.

Contact David at 403.648.4188 or

[email protected] v

As a player in Canada’s volatile oilpatch you’re as tough as they get. Agile, hard-working, able

to move forward in prosperity or adversity. To stay on top of this highly competitive industry

you need a strong team behind you. MNP’s oilfield services professionals deliver the financial

management, analysis and business advisory tools you require to make the right decisions at

the right time. No matter where the markets go, we’ll keep you ahead of the curve.

Contact:

Julee Galvin, CPA, CAVirdenT: 204.748.1340 E: [email protected]

Tough Times Require the Right Decisions

Deb Calverley, CPA, CGADeloraineT: 204.747.2842 E: [email protected]

Corie Wudrick-Mohrbutter, CPA, CA MoosominT: 306.435.3347 E: [email protected]

Source: International Energy Agency, January 19 2016 Source: Arthur Andersen & Co./Cambridge Energy Research Associates


recent poll unveIls canaDIans’ anxIetIesBy Melanie franner

Canadians across the country

are deeply concerned about

the state of the economy. They

also have strong support for Al-

berta and the province’s current energy

situation. Such are the findings of a recent

CBC-sponsored online poll undertaken by

EKOS Research Associations Inc. The poll

took place between February 16th and

26th, 2016 and included the responses

of a random sample of 2,098 Canadians

aged 18 and older.

“The most striking thing about the re-

sults of this poll is the collision of two forc-

es in public opinion, namely the economy

and the environment,” says Frank Graves,

President of EKOS Research. “Typically,

when people feel this gloomy about the

economy, their concern for other issues

like climate change, is lessened. In this

case, we see paradoxical views on the en-

vironment and energy.”

The poll found that Canadians identify

the economy as the most important issue

facing the country – capturing 33 per cent

of the votes, with education next in line

at 12 per cent. The economy also scored

high on the list when Canadians were

asked to rate their degree of concern with

a number of issues. The economy was

seen as the most significant, with 57 per

cent of the people saying they were “very

concerned” and another 35 per cent say-

ing they were “somewhat concerned”. Im-

proving the health care system garnered

46 per cent of the “very concerned” votes

and 43 per cent of the “somewhat con-

cerned”, while the environment came in at

44 per cent and 39 per cent respectively.

energy and environmentCanada’s oil & gas industry is recog-

nized in the poll for its role in the econo-

my. Some 92 per cent of Canadians think

that the oil & gas industry is important to

Canada’s economy today, while only 69

per cent think it will be important in the

future.

The poll also asked Canadians about

their support for various pipeline projects

– Energy East, Enbridge Northern Gateway

Pipeline and the Trans Mountain Pipeline.

Results show that Energy East is by far the

favourite, with 59 per cent of Canadians

expressing support for the project (35 per

cent were in opposition). The other two

projects received 48 per cent and 47 per

cent respectively.

“There are some regional differences,

which is less surprising,” says Graves. “For

example, Alberta and Saskatchewan are

very strong proponents of Energy East.”

According to Graves, one of the strong

take-aways from the poll is the recogni-

tion of the importance of energy to the

country’s economy and its importance to

Alberta’s present and future economy.

“From what I see, most respondents say

we should be helping Alberta out at this

stage,” he says.

Risk. Reinsurance. Human Resources.

Aon Risk Solutions

Aon is proud to support Manitoba’s oil and gas industry.

Alberta Environment Minister Shannon Phillips.


In fact, the poll showed that six in 10

Canadians support an additional $700

million in spending earmarked for Alber-

ta’s infrastructure. In comparison, only 33

per cent are in opposition. There is also

strong support to remove EI restrictions

for Albertans, with some 56 per cent of

Canadians in agreement versus 34 per

cent in opposition.

“I think this poll showed that there is

broad acceptance across Canada for the

fact that Alberta’s energy product powers

the country, which is a good thing,” says

Alberta’s Environment Minister Shannon

Phillips, who adds that the province’s

leadership on climate change looks like

it has been well received – although she

adds that there is still a lot of work to do.

“Canadians have an ethical environmen-

tal stance. All Canadians want to ensure

that we’re being responsible with the

environment. There is no doubt that we

have more work to do. That’s why we’re

engaged with the other provinces.”

Minister Phillips is also closely follow-

ing the government’s policy in regards to

green energy. The poll found that 73 per

cent of Canadians believe the focus go-

ing forward should be on green energy

investments, with just 20 per cent saying

the focus should be on expanding fossil

fuel use.

“We look forward to government

investments in the green energy and

green technology space so we can bet-

ter align ourselves,” says Phillips.

changing it upDespite the broad support that Alber-

ta has received across the country, the

province is in no way sitting back and

waiting for change.

“The number one reason our econo-

my is in the shape it’s in is because we

rely too much on one price on product

on one market,” says Phillips. “We can’t

do anything about the price, but we can

make some moves toward diversifying,

which we have. In addition, we need to

get our energy products to market and

to engage with our trading partners and

other provinces.”

The EKOS Research poll describes the

Canadian public as being “conflicted” in

their attempt to reconcile the threat of

climate change with the recognition that

energy will remain critical to the economy.

“How people are dealing with these two

forces describes the country as a whole,”

concludes EKOS Research’s Graves. “There

is deep division across many of the issues

surrounding these forces, especially once

you push down into the regions, demo-

graphics and partisan lines. For example,

the burgeoning need to deal with the en-

vironment is almost completely rejected

by the conservatives.”

The good news, it would appear, is that

Canadians for the most part are in agree-

ment in their concern for the economy.

How the environment will play out with

that remains to be seen. v

Gilles Rondeau He can be reached at

204-270-0140 or [email protected]

WEYBURN AREA 216-20TH AVENUE S.E., P.O. BOX 964 WEYBURN, SASKATCHEWAN, S4H 2L2

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hIgh stakesaRGuMEntS REMaIn hEatED On BOth SIDES Of thE EnERGy EaSt PIPELInE DEBatE

By Leonard Melman

One look at an atlas clearly il-

lustrates a serious problem

for Alberta and Saskatchewan

petroleum producers and de-

velopers. The simple fact remains that both

provinces are located some distance from

sizeable markets and, therefore, reliable

means of transporting huge quantities of

petroleum – both Alberta and Saskatch-

ewan light, as well as Alberta’s diluted bi-

tumen recovered from oil sands projects

– must be developed.

For various reasons, many producers be-

lieve that transportation via pipelines repre-

sents the only workable option since there

are no navigable waters available and using

lengthy trains of rail tanker cars has been in-

tensely discouraged since the Lac Megantic

tragedy of July 2013, which saw 47 people

killed in a fiery inferno.

Three important pipeline projects have

been proposed: various suggested pipe-

lines to Pacific ports which are presently

tied up in regulatory and legal knots; the

Keystone XL pipeline, which would carry

Western Canadian petroleum through the

U.S. to refineries and ocean ports located

inside that country but which is presently

likewise engulfed in time-consuming con-

troversy; and the Energy East Pipeline Proj-

ect, which would be located entirely within

Canada.

The proposed Energy East pipeline, to be

built by TransCanada Corp., would extend

about 4,500 kilometres from a new tank ter-

minal planned for Hardisty, Alberta across

the prairies, Ontario, Quebec, and New

Brunswick to marine shipment facilities on

the Bay of Fundy in the port city of St John.

Ocean-going oil tankers would then trans-

port the petroleum to major world markets.

As planned, the capacity of the pipeline

would be slightly more than 1 million bar-

rels of crude per day.

Underlying economic fundamentals

relating to the petroleum market are an

important consideration. As matters now

stand, Alberta produces far more petro-

leum than is required for domestic markets

within that province – and this is also true

for Saskatchewan production. Because of

the existing difficulties in storing, transport-

ing and marketing excess production, the

petroleum industry has inflicted a “negative

premium” on Western Canadian produc-

tion.

According to a December 22, 2015, ar-

ticle in Canada’s National Post newspaper,

while world commodity markets were pric-

ing crude oil near US$35 per barrel, the arti-

cle stated that, “…In Western Canada, some

producers are selling for less than US$22

per barrel.” Pro-pipeline commentators sug-

gest that a completed Energy East project

would allow for efficient transport of all pro-

duction, eliminating current storage costs,

and therefore would allow Alberta and

Saskatchewan production to sell at prices

much closer to world quotes.

TransCanada has planned for the project

to be developed in three sections. These

include converting an existing natural gas

pipeline into an oil transportation pipeline;

construction of new pipelines where none

presently exist or where necessary to link

up with the reconstructed sections; and

construction of associated facilities such as

pump stations, tank facilities in Saskatch-

ewan and St. John, and construction of ma-

rine facilities in St. John.

Consultation work began on the project

in the first half of 2013, and regulatory appli-

cations were filed in mid-2014, with a Regu-

latory Application Amendment being filed

in late 2015. A proposed future timeline

includes construction beginning in mid-

MBAB

BC

YT

SK

NT NU

ON

QC

PENB

NS

Existing Pipeline Conversion

New Pipeline Construction Terminals

Hardisty

Moosomin

Montréal

Saint JohnLévis


2017, and final commissioning and actual

service starting in 2020.

Passions are indeed heated on both

sides of the project approval debates, with

proponents pointing toward significant

economic benefits while opponents are

strenuously objecting to potentially nega-

tive environmental impacts.

Not surprisingly, the Alberta petroleum

industry itself remains one of the most

consistent supporters of Energy East. They

note that not only Alberta, but also the rest

of Canada, gains from a healthy oil sands

development industry, as more than 2,000

companies outside Alberta benefit from

the industry’s activities. They claim that as

of 2014 the industry provided more than

500,000 jobs for Canadians and, therefore,

they support the Energy East pipeline as a

project which will further economic prog-

ress.

TransCanada Corp. itself also provides

additional arguments in favour of the proj-

ect, noting, “Energy East alone will support

more than 14,000 direct and indirect jobs

annually during its design and construction

stages. This means employment opportuni-

ties for welders, truck drivers, crane opera-

tors, engineers and environmental special-

ists as well as other spin-off benefits…”

In addition, the company also notes it

is working toward a high level of environ-

mental stewardship and the pipeline will

be making a contribution toward energy

independence as “building Energy East will

reduce the need for higher-priced foreign

oil imports.”

Other voices being raised in support of

the project include Saskatchewan’s Premier,

Brad Wall, who was quoted in a February

2, 2016 Canadian Press article as declaring

that newly-elected Prime Minister Justin

Trudeau should take a stand and support

the Energy East pipeline. In the article, Wall

countered environmentalists’ arguments by

stating, “If you sift through some of the rhet-

oric, they just don’t like oil, and I don’t think

that is a good enough reason to hold up a

pipeline that will benefit all of the country.”

He was referring to objections filed by

environmental groups with the National

Energy Board (NEB), which is presently eval-

uating remaining portions of the applica-

tion approval process.

Environmental movement arguments

against the pipeline are numerous and

varied. One that has shown up with some

consistency is the declaration that oil sands

petroleum production is a significant pro-

ducer of greenhouse gases and construc-

tion of the pipeline would ultimately result

in greater oil sands production and, there-

fore, greater pollution. The Pembina Insti-

tute states filling the Energy East pipeline

would help spur 650,000 to 750,000 barrels

of additional production per day from the

oil sands.

Other objections found listed in literature

provided by The Council of Canadians – an

organization that describes itself as “acting

for social justice” – itemizes several argu-

ments against the pipeline:

• Thepipelinewouldnotresultinastron-

ger Canadian refining industry, but the

oil would be “shipped, unrefined, to

places like India, Europe, and possibly the

United States.”

• Company assurances that the regula-

tory processes ensure pipeline safety

are wrong as “The Harper government’s

2012 omnibus budget bill almost entirely

wiped out environmental regulations in

Canada.” They also stated that the NEB

was “industry-friendly.”

• Convertingtheexistingnaturalgaspipe-

line to petroleum transport would incur

safety risks such as “Pre-1970s pipelines

are predisposed to cracking corrosion

along lengthwise seams.”

• Company claims regarding economic

stimulation are wrong and that “Trans-

Canada has a bad record of over-estimat-

ing potential jobs.” They would rather see

advancement of renewable energy proj-

ects which would “outpace jobs in oil and

gas by as much as six to eight times.”

Passions on both sides of this project re-

main intense, and many wait to get a clear-

er picture regarding the future influence of

the new Trudeau government in Ottawa on

the application process.

The stakes are indeed high. v

scottland.caCalgary Edmonton Grande Prairie Fort St. John Lloydminster Regina Ph. 403 261 1000

Proud leader in land servicesin Manitoba for over 25 years.

Underlying economic fundamentals relating

to the petroleum market are an important

consideration.


reDucIng costs anD IMprovIng qualIty In herItage ManageMent

It’s no secret that resource development

industries – and oil & gas in particular –

continue to transition toward a future

defined by lower commodity prices. Low

commodity prices have had a wide range

of effects on Canadian firms, but in every

cloud, there is a silver lining. Suppliers are

doing everything they can to both lower

costs and raise productivity in order to

improve profitability and provide value to

their clients and partners.

Western Heritage provides heritage man-

agement and geomatics services across

western Canada. One of our key goals

across all levels of the oil & gas supply chain

has been reducing costs while improving

quality. We have successfully reduced our

costs and improved our response time,

while meeting or exceeding regulatory

and CSR goals. We don’t believe that you

can only pick two out of “speed, quality and

cost.” We allow you to pick all three.

To achieve this, over the past 15 months,

we have continued to innovate our service

delivery model.

task-based billingMost professional service firms charge

for a professional’s time at the same rate

whether they are delivering a high level

professional service or sending you a report.

Western Heritage thought this was unrea-

sonable and has adopted task-based billing.

This means that customers pay a set rate for

the task being completed, regardless of the

seniority of the person completing it. For

example, clerical work is charged at a single

rate, even if senior management performs it.

While this provides significant cost savings

to the customer (up to 30 per cent), it allows

us to improve response time, as all available

staff can be conscripted in order to meet

our customer’s deadlines. This innovation

has significantly reduced time required to

invoice and has effectively reduced our al-

ready low error rate to near zero.

field officesWestern Heritage has been experiment-

ing with the delivery of services from field

offices. In most cases these offices are only

open during peak seasonal demand, but

customers can book services from them

throughout the year, even if the staff needs

to be brought in from another office at

our cost. Currently our field offices include

Grande Prairie and Winnipeg. We will be

opening a field office in Swift Current in

2016. To serve the Weyburn area, we main-

tain an office in Regina year-round.

centralized coordinationWestern Heritage uses a centralized proj-

ect coordinator to handle coordinating our

team across Canada and the world. This

ensures a fast response time and the ability

to easily handle multiple jurisdictions for a

single client or partner. There is no need to

try to manage multiple service providers;

with licensed staff and offices across much

of Canada, we can provide service for all of

your projects.

discounts for repeat businessThis is our way of showing appreciation for

our repeat customers. Discounts start at the

second development in a single project year

and range from five per cent to 25 per cent

New Geophysics and Geo-archaeology tools (such as OSL profiling) increase accuracy and reduce costs.

Field offices and centralized coordination allow Western Heritage to provide fast response time across multiple jurisdictions, reducing administrative and management costs for our customers.


depending on the product or service. We

will apply the discounts even if the projects

are distributed across multiple jurisdictions.

ongoing innovation

Whether it is reforming internal processes

or finding a better way to characterize heri-

tage sites, research and innovation have al-

ways been part of our DNA (we were origi-

nally spun out of a research council). In 2015,

for example, we have been developing a

new geophysics tool for archaeologists to in-

crease accuracy. Another of our innovations

is using satellite imagery to minimize the

costs of monitoring environmental change

in reclamation sites and project footprints.

Satellite imagery provides more comprehen-

sive change measurements at a lower cost

and higher density that ground based-mea-

sures. This is the basis of our Environmental

Footprint Monitoring Platform.

Also, a subsidiary of Western Heritage de-

velops software to help manage travel costs

for health care practitioners. Over the past

few years, they have been developing an

advanced scheduling module that reduces

travel costs even further. Why should the

health care industry be the only ones to ben-

efit from these cost savings?

Wh fleet manager

WHFleet Manager is a scheduling/mile-

age determination app which determines

the optimum routing and mileage for your

service fleet. It reduces travel time and fuel

costs, and if operators are paid by the mile,

the software also generates mileage payroll

records. These products have reduced travel

expenditures by more than 30 per cent for

existing customers.

We believe that trying times build strong

companies. Looking forward, we are com-

mitted to doing all we can to reduce costs

while improving quality. Contact any West-

ern Heritage office to discuss your service

needs, and together we will continue to

create value for Canadian resource develop-

ment. v

Optimizing schedules and routes can reduce travel expenditures significantly.


applIcatIon of fIelD-portable xrf In oIl anD gas exploratIon anD proDuctIonBy a. Somarin, PhD, PGeo, Department of Geology, Brandon university

Fig. 1. Examples of FPXRF (left from Oxford, right from ThermoFisher).

Field-portable x-ray fluorescence (FPXRF) is a technique

that is gaining momentum and acceptance in addressing

applications in various fields in geology and mining includ-

ing oil and gas exploration and production. These instru-

ments are capable of measuring elements from Mg to U including

light elements (Mg, Al, Si, P, S) in an adjustable assay time from 30

seconds to a few minutes depending on the accuracy and preci-

sion requirements (Fig. 1).

FPXRF can analyze a variety of common sample types in the oil

and gas upstream exploration and production industry includ-

ing drill cuttings, oil and gas cores, outcrops, and piston cored

sediments. The geochemical data from these analyses can easily

be used in mud logging as well as chemo-stratigraphy. Although

FPXRF analyzers cannot analyze hydrocarbons, they can be used to

characterize reservoir properties that influence porosity (cements),

permeability (clays, cement type), fracture population (Si content),

and productivity (e.g. V, Cr, Mo content).

FPXRF is used on-site to determine elemental composition of a

sample in real time. Then mineralogy of the sample can be often in-

ferred from this geochemical composition. The mineralogy is sub-

sequently used to identify rock type and infer physical properties of

the rock unit using a geochemical strip log (Fig. 2). Bulk chemistry

is used to infer sample mineralogy and thus identify silicates, alu-

mino-silicates (e.g., clay and feldspar), carbonates, and sulfides. For

example, a low Si/Al ratio indicates greater alumino-silicate content

in a rock unit because these minerals have high Al content. In addi-

tion, clay types and their volume can be inferred from geochemical

data.

In conclusion, FPXRF analyzers can provide fast and reliable geo-

chemical data at the drill site, in the field, and in the core lab. This


536 536.5 537

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Si/Ca

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0 10 20 30 40

Th/U

536 536.5 537

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0 0.25 0.5

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536 536.5 537

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0 25 50 75 100

U (ppm)

536 536.5 537

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536

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0 5 10

Meters

Al%

Fig. 2. (above and below) An example of geochemical strip logs for a well from eastern Saskatchewan (as part of a Geology Honors Thesis at Brandon University, Manitoba).

1000 18th StreetBrandon

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allows geologists to predict where the oil and gas is in the rock for-

mation, what factors affect the porosity, and predict the volume of

oil and gas present. It also allows geologists to determine how the

permeability of the rock can affect the flow of oil and gas from the

rock to the well bore, and how a rock formation can be engineered

to produce more by fracturing and well treatments. This can help

operators to maximize the potential of each well and avoid waste

related to ineffective fracture treatments. v

Mark Klapheke, 4th Year Honours B.Sc. Geology Student, University of BrandonI am looking at the Lower Amaranth Formation which is primarily a silty to shaley Jurassic redbed with some very fine sand units at its base. Because shale is a very homogeneous looking rock, it is often difficult to notice changes in it by regular examination. However, shale has many more trace elements that are not generally found in sandstone or carbonates for example. As the PXRF can detect these elements very quickly, it can be used to suss out information that may not be as apparent. Changes in these trace elements as well as differences in ratios of more common elements allow me

to build a more complete story of what was happening in the past and to see things that cannot be seen otherwise. It allows me to build strip logs of individual elements quickly and to compare them which can reveal relationships and patterns. Although I have been scanning a core at Brandon University, because of its portable nature, it is possible to take the PXRF to a well site and even use it on the well cuttings to make decisions on the fly with minimal disruption to drilling. As you know, time is the driller’s enemy. However, used with traditional well site knowledge it can be an extremely useful tool in getting more accurate information to the drillers quickly saving both time and money while making decisions with better information.

lookIng forwarD: research applIcatIons of xrf technology

Maxwell Rogowski, 4th Year Honours B.Sc. Geology Student, University of BrandonPortable x-ray fluorescence is a useful tool for detecting geochemical proxies that help show productive hydrocarbon intervals. Accurate stratigraphic correlations are augmented by chemostratigraphic techniques, utilizing common mineral forming elements and trace element ratios and abundances. Lab data obtained from six Lower Amaranth cores, one Lodgepole core and one Three Forks/Bakken core located within the Northeastern part of the Williston basin provides a wealth of analytical and stratigraphic information. Visual

analysis alone of the three slabbed formations reveals minor color variations but fails to show the subtle geochemical components required for understanding the mineralogical controls of hydrocarbon traps in the carbonate rich Amaranth and Lodgepole reservoirs. The core study also provides additional information about the controls over source rock hydrocarbon potential in the Three Forks and Bakken Formations. Major elements such as Si, Ca and Al were analyzed for rapid rock categorization into specific lithologies at every ten centimeter interval. Minor elements such as Mg, Fe, S, K20 and TiO2 were used to further define lithologies and provide insight into the diagenetic and detrital processes.


Figure 3.19: Strip log of the 16-22-12-27W1 hole. Known oil saturation is shown in grey.

Figure 3.20: Strip log of the 16-22-12-27W1 hole. Known oil saturation is shown in grey, EF- Enrichment Factor of concentrations. All other concentrations are in ppm unless otherwise stated.

Figure 3.21: Fe/S correlation analysis, Si/Zr correlation analysis. Bulk lithology of the Bakken and Three Forks Formations.


Figure 3.1: Strip log of the 16-01-13-27W1 hole. Known oil saturation is shown in grey.

Figure 3.2 Strip log of the 16-01-13-27W1 hole. Known oil saturation is shown in grey, all concentrations are in ppm unless otherwise stated.

Further analysis of detrital input in carbonates was indicated by Zr abundance and Th/U ratios. The trace elements utilized in this study provided information into hydrocarbon saturation potentials of prospective units, such as Mo, Zn and U serving as proxies for organic content. U, Mo, Fe and S being utilized as proxies for anoxia. Other comparisons were made to determine silica type (terrestrial, biogenic or authigenic) through Si/Zr correlation analysis. Analysis of micro-fracture populations (Si wt% vs Zr ppm) provided possible target zones suitable for fracking. Fe/S correlation analysis was used to rapidly distinguish sulfides from microscopic evaporites and ferric oxides/silicates. Permeability was analyzed using Al/Si ratios to determine if detrital clays were affecting the hydrocarbon saturation in prospective units. Ca/S ratios were used to define the reservoir characteristics of the Amaranth Formation due to extensive anhydritization.

process of analysisEach core was rinsed with distilled water and wiped down with

paper towel to remove excess drilling mud from the surface of the 1/3 split core. The slab was marked using a measuring tape and permanent marker and analyzed using a Thermo Scientific Niton X3lt GOLDD+ portable XRF analyzer. The measurement was done at every 10-centimetre interval from the end of the core or a known depth, carried out for accurate depth confirmation. Analysis of the flat 1/3 cut core samples was accomplished using the attachable lead shield that served to stabilize the PXRF in place on the sample, and to minimize backscatter emissions. Cores with zones of brittle rock intervals that may have been mixed in the core boxes were carefully

organized and closely monitored for significant chemical changes. Intervals of core that were made up of shattered brittle rock were set into a fixing tray within a lead box that held the sample and minimized the distance from the analyzer to the sample. Brittle intervals and mixed rock types underwent batch analysis and averaging to improve the accuracy of the data collected. The instrument set to “Mining Mode” which had four filters. In each filter, a set of elements were analyzed and timing for each filter was adjustable. The overall analysis time was set to three minutes (30 seconds on Main, Low, High filters each, and 90 seconds on Light filter) to acquire the targeted elements in accurate quantities. Sample data (such as name, date, etc.) were entered and then the samples were analyzed. Once completed, the results were downloaded to a computer and saved as Excel file. Then the raw data were readjusted using certified standards that were previously analyzed by the same analyzer under the same conditions. Elemental abundances were plotted against depth into binary graphs. Major rock-forming elements were converted to pseudo-elements and used in ternary diagrams to determine the bulk lithology of each interval.

I should also mention that no one study will be applicable to all regions containing similar formations. For example, other studies completed on the Bakken utilized elemental abundances like V, Cr, and Ni to determine paleoredox conditions successfully. I was unable to use these proxies due to the high Fe content that had diminished V and Cr values in my samples.

Examples of the binary graphs, correlation analysis and bulk lithology are below and on opposite page.

(This study was completed for an Honours Thesis in Geology). v


people neeDsOIL & GaS hR REPORt IDEntIfIES nEW tREnDS anD REquIREMEntS In WORkfORCE DEvELOPMEnt

By Lisa fattori

A new report by the Petroleum La-

bour Market Information (PetroL-

MI) Division of Enform highlights

HR trends in Canada’s oil & gas

industry. Released in September 2015, Shift-

ing Priorities and a Shifting Workforce exam-

ines business shifts within the industry in

recent years and identifies drivers that are

changing workforce needs. The report of-

fers insights into emerging occupations,

corporate priorities, and current skills gaps,

which will help industry, educators, and

government stakeholders to implement

new workforce training and development

strategies. Grooming the next generation

of workers to meet future needs will ensure

that Canada’s oil & gas industry remains

robust and competitive within the global

market.

The findings within Shifting Priorities and

a Shifting Workforce are based on interviews

with 28 industry representatives, as well as

a broad array of secondary research. The

report identified three industry priorities

that are prompting changes in workforce

requirements: accessing technically com-

plex unconventional reserves; balancing

performance and cost management to

achieve profitability; and achieving market

diversification to grow the business.

Advances in the application of horizon-

tal drilling and hydraulic fracturing have

increased activity in unconventional oil

plays, as producers now have the ability

to tap into these reserves. The use of so-

phisticated technologies has, in turn, ne-

cessitated a more technologically savvy

workforce. Automated procedures and

computer-based tools for enhanced com-

munication throughout the supply chain

requires workers who are highly skilled at

reading, numeracy, communicating and

problem solving. Sophisticated tools that

improve drilling accuracy and microseismic

monitoring of the fracking process, which

has the potential to optimize production in

fewer wells, are state-of-the-art technolo-

gies that will become mainstream. As use

of these technologies ramps up, the indus-

try will require a higher level of expertise in

field operations, geophysics, geology, and

reservoir and completions engineering.

“The most significant change in the oil

& gas industry from 10 years ago has been

the advances in technology,” says Carol

Howes, vice-president of communications

at PetroLMI, Enform. “This has provided ac-

cessibility to tight reserves, but it has also

made operations more technologically

complex, with much more automated and

computerized equipment. Even for entry-

level positions, the expectations are much

higher. Rigs are more technical than they

were before, and we’re seeing new applica-

tions being used in the field, such as docu-

mentation and communications on tablets

and phones.”

Another significant business priority is

the need to cut costs and improve efficien-

cy for greater profitability. While companies

have always been motivated by the bottom

line, the current economic downturn in the

sector amplifies the need to get more bang

for your buck and to implement cost saving

practices throughout all facets of a com-

pany’s operations. Eliminating redundan-

cies, minimizing down time, scheduling the

timely delivery of supplies and equipment,

and organizing work crews to maximize

productivity is the new corporate culture

that requires commitment by all members of

an organization. Supply chain management

professionals, occupations that deal with or-

ganizing rotational workers and those with

expertise in asset management, equipment

reliability, and preventative maintenance are

playing a key role in helping companies to

achieve both performance and profitability.

“Oil & gas companies are in a very com-

petitive environment,” says Howes. “With the

ramp up of activity comes increased costs,

and the focus on efficiency and cost man-

agement has been driven further down in

the organization, broadening out to field

workers. The amount of services required at

the well site has grown significantly and you

now need expertise in logistics to get large

scale equipment and materials to those

sites. Many companies are streamlining pro-

cesses, such as sourcing out supplies and

services from their head offices.”

The breadth of services required in un-

conventional oil plays is evidenced in a 2014

Petroleum Services Association of Canada

study that reported the need for 45 or more

suppliers and up to 300 workers per well,

compared to 75 workers for a conventional

well. Horizontal drilling and hydraulic frack-

ing activity has increased demand for frack

operators; Class 1 and Class 3 drivers to haul

equipment and materials; and plant opera-

tors in charge of facilities that recycle water

used in drilling operations. Multiple well

pads and more technically advanced drill-

ing rigs require mechanical engineers and

technologists, instrumentation engineers

and technologists, and skilled tradespeople,

including welders, electricians, heavy duty

technicians and electronics/instrumenta-

tion technicians.


The surge in the U.S.’s domestic supply

of oil & gas has reduced demand for Ca-

nadian petroleum resources, prompting a

shift among Canadian producers to access

new offshore markets. The opportunities

afforded by Canada’s burgeoning liquefied

natural gas (LNG) industry also benefits the

midstream sector, which is experiencing

heavy investment in pipeline and facility

construction. New and retrofitted process-

ing plants will increase the need to hire

and train plant operators, and these mega

projects require the expertise of project and

construction managers, design and project

engineers, and supply chain and materials

management professionals. In addition,

given the pipeline sector’s aging infrastruc-

ture, there has been a growing demand for

pipeline integrity specialists.

“LNG is a new industry for Canada and

one that has very specific requirements,”

says Howes. “Other countries, including

Australia, have a lot more experience in LNG

development, and Canada can benefit from

expatriates who can come here and apply

their expertise.”

Issues surrounding the environment,

safety, and the impact of operations on sur-

rounding communities has added to the

growing complexity of oil & gas business.

“In the past, exploration projects were

located in more remote areas, but with

unconventional resources and pipeline de-

velopment, the industry is expanding into

new areas,” says Howes. “The need for more

negotiation and discussion has created

new occupations in regulation and com-

pliance, as well as stakeholder, community

and Aboriginal relations.”

More traditional roles in the oil & gas in-

dustry are giving way to new occupations

and the need to upskill the existing work-

force. Field technologists, for example, are

replacing workers who had a mechanical

aptitude and received on the job train-

ing. Growth in unconventional drilling has

decreased the need for wireline and slick

line services and, with fewer exploration

projects, the demand for seismic work has

decreased. The proliferation of walking

rigs has lessened the demand for workers

to dismantle and truck rigs between loca-

tions and the trend toward on-site water

recycling technologies will decrease the

need for trucked in water. Today’s HR re-

quirements, by contrast, include a greater

emphasis on supply chain management,

project and processing facility manage-

ment, contingent workforce management,

and professionals in regulatory roles and

stakeholder/Aboriginal relations.

“When we look at the labour market,

some of these new occupations are now

included in our forecasting,” says Howes. “In

May, we’ll also be launching an online tool

that will profile these emerging positions

and show people how they can transition

to these new occupations. Our goal is to

support workforce planners within the in-

dustry, but we also want to assist people

who want to develop new careers in oil &

gas.” v

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“ The most significant change in the oil and

gas industry from 10 years ago has been the

advances in technology.”

Carol Howes, Vice-President of Communications at PetroLMI, Enform


keystone xl controversy accelerates, enters u.s. court systeMBy Leonard Melman

Few subjects have garnered as much

media ink during the past couple

of years as the unlikely subject of

petroleum pipelines. Not only have

they become a subject of intense concen-

tration within the world of petroleum ex-

ploration, production and transportation,

but they’ve also infiltrated the highest lev-

els of public interest in political matters.

Perhaps the greatest degree of interest

in the subject of pipeline construction has

been the focus on one such endeavor: the

Keystone XL Pipeline project. As we enter

the early part of 2016, important headlines

continue to be made and rapt attention

continues to be paid to the project’s prog-

ress – or lack of same.

Keystone XL is a proposed massive pipe-

line extending almost 2,000 kilometres

(about 1,200 miles) from the prolific oil

sands of Alberta to Steele City, Nebraska,

where it would join up with existing pipe-

lines for transport to major refineries and

Gulf of Mexico shipping ports. The pipeline

would carry about 830,000 barrels of petro-

leum per day and would be constructed by

TransCanada Corp. Financing would be pro-

vided by that corporation, plus refineries

and oil shipping companies, which would

be recipients of the end product.

The matter is of vital importance to two

particular petroleum producing regions,

the economies of each one having pros-

pered mightily through previous petroleum

exploration, development and production.

The two regions are the province of Alberta

and the oil-rich regions of western North

Dakota, particularly including the Bakken

oilfields. In each case, these regions pro-

duce petroleum far in excess of their area’s

domestic consumption and therefore are

heavily dependent on transporting excess

production to various markets.

Few alternatives other than pipelines are

available to accomplish the necessary trans-

portation. Both regions are land-locked, so

marine tankers are unavailable; trucking is

a non-starter considering the quantities

of petroleum which must be transported;

and shipment via lengthy rail tanker trains

has been heavily condemned by environ-

mental and safety experts since the tragic

derailing of a lengthy oil tanker train in Lac

Megantic, Quebec in 2013, when the re-

sultant fire incinerated much of the town’s

downtown and tragically killed 47 people.

Some of the strongest arguments for the

project come from economists and those

politicians who strongly advocate resource

development, given that construction of

Keystone XL would result in 42,000 jobs and

completion of the project would permit

continued expansion of petroleum produc-

tion in both regions.

However, consistently strong opposition

to Keystone XL has arisen among environ-

mentalists, and their voices have strongly

impacted America’s political systems. Be-

cause those environmental voices are not

quite as potent in Canada as in America,

construction permits for the Canadian leg

of the pipeline were granted in 2010; but in

the U.S., much more powerful opposition

emerged. In fact, Keystone XL has even be-

come a major issue in this year’s American

presidential election.

At the same time Canada approved the

northern leg of the pipeline, it was anticipat-

ed America would grant similar approval, but

the Environmental Protection Agency (EPA)

strongly suggested that President Obama

not approve the project. He followed their

advice by verbally discouraging Keystone XL,

and finally in 2015, he took decisive action by

vetoing a Republican-led bill which would

have given the project final authorization.

Just prior to the president’s decision,

TransCanada Corp. asked the U.S. govern-

ment to simply put any review of the project

on hold.

Encouraged by the president’s action, the

environmental community stepped up their

attacks on the project, stressing two points

in particular. First, the route chosen through

Nebraska would pass through what they

regarded as a particularly fragile ecosystem,

which they wanted to protect. Second, they

declared that approval of the project could

be interpreted as tacit approval by the U.S.

government of expansion of production

from the Alberta oil sands, which they regard

as particularly “dirty” oil.

Matters finally came to a head on Novem-

ber 6, 2015, when the Obama Administra-

tion issued a formal declaration rejecting

TransCanada’s application to build Keystone

XL. Many believed the seven-year saga was

finally at an end as the president declared,

with apparent finality, that the pipeline, “…

will not serve the national interests of the

United States of America.” The State Depart-

ment also added that, in its view, the pipe-

line would not make a meaningful contribu-

tion to the U.S. economy.


TransCanada president and CEO Ross

Girling quickly replied in a positive manner,

stating simply that he continued to believe

that Keystone XL would be built and that

“TransCanada and its shippers remain abso-

lutely committed to building this important

infrastructure project.”

As reported by the CBC, reaction to

the president’s announcement was quite

predictable. Environmental organizations

were quick to heap glowing praise on the

president, while energy groups blasted the

president, declaring that his decision was

based more on political motivation than on

adherence to scientific fact.

However, one more dynamic develop-

ment remained and that took place on Jan-

uary 6, 2016 when TransCanada filed a $15

billion claim under Chapter 11 of the North

American Free Trade Agreement (NAFTA)

on the basis that the denial was “arbitrary

and unjustified”. The company also filed a

lawsuit in the U.S. Federal Court in Houston,

Texas asserting that the president’s decision

“…exceeded his power under the U.S. Con-

stitution.”

As this article is being prepared in Feb-

ruary 2016, matters are now winding their

way through the U.S. legal system. It’s worth

noting that, for many people, the stakes in

the eventual outcome of TransCanada’s

legal actions are vitally important, and

that several Republican candidates for the

U.S. presidency have staked out positions

strongly supporting of the pipeline’s com-

pletion. v

COURTESY OF TRANSCANADA CORP.


gearIng up to keep safe, Dry anD warM In the oIlfIelDBy Lisa fattori

From exposure to hazardous materials to the potential for

impact injuries, personal protective equipment (PPE) is de-

signed to minimize risk and offer another layer of protec-

tion for workers. Compliance with workplace safety regu-

lations extends to the use of PPE. Employers providing work wear

and gear are obliged to outfit employees with the appropriate

equipment for a particular task, and to train workers about the

proper use of the PPE. Employees, in turn, must use the equip-

ment in accordance with manufacturers’ specifications, take

steps to prevent damage to the PPE, and inform employers, if the

equipment becomes defective.

“PPE is seen as the last line of defense in keeping workers safe,”

says Dave Kramer, Portfolio Leader-Production, Manufacturing,

Agriculture, Forestry and Mining, SAFE Work Manitoba. “What

you want to see is a hierarchy of controls that engineer out the

hazards. This could be substituting a hazardous chemical for an-

other, or implementing administrative controls, so that the job is

performed properly within a particular environment. In the oil &

gas sector, PPE is very prevalent, with protective gear in eyewear,

flame-resistant clothing and equipment to protect workers from

contamination.”

Some commonly used PPE in the oil & gas industry include

hard hats, eye/face protection, hearing protection, steel-toe

safety footwear, gloves, flame resistant clothing and high-visibil-

ity clothing. Some work sites will have different procedures and

equipment, and may require specific types of PPE, such as respira-

tors. Manitoba’s Workplace Safety and Health Act may reference

a standard within a regulation, which makes that standard law.

Other standards are considered best practice, but are not legal

requirements.

With safety becoming increasingly important in the last de-

cade, many employers are equipping workers with PPE that goes

above and beyond regulations. “While flame-resistant clothing

is standard for oil & gas work sites, some companies want the

added protection of ARC flash and are ordering dual-approved

products,” says David Finlayson, North American Product Manager

for Helly Hansen Work Wear. “We’re also starting to see requests

for high-visibility clothing and flame-resistant base layers, as an

extra safety precaution. The overall interest in these products has

increased, which leads me to believe that people are adopting

safer practices in the oil patch.”

CAN-CGSB 155.20 Workwear for Protection Against Hydrocarbon

Flash Fire is the Canadian flash fire standard, while NFPA 2112 is the

U.S. standard. “There is no overseeing global body to regulate stan-

dards, but we’re starting to see a movement for North America to

come under one standard,” Finlayson says. “NFPA 70E for ARC Flash

is being accepted across the board, which is much better for larger

companies operating in multiple sites around the world.”


Manufacturers of PPE have long known the importance of

designing workwear that is as comfortable as it is protective, to

ensure compliance. Workers that are dry, warm and comfortable

stay focused, which improves personal safety, as well as produc-

tivity. An outer layer that is waterproof, windproof and thermal,

combined with base layers that transport moisture away from

the body to keep skin dry, help to maintain an even, comfortable

body temperature. A layered system offers flexibility, enabling

workers to add on or shed workwear so that they remain com-

fortable throughout a wide range of temperatures and weather

conditions.

“In the last 10 years, we’ve seen many improvements in the de-

sign of flame-resistant clothing, which is a change from the stan-

dard coverall, work shirt and work pant,” says Sara Olsen, Research

Analyst at Mark’s head office in Calgary. “Today’s designs are more

comfortable and look like regular clothing. Looking good and

feeling comfortable are important from a safety standpoint. If

people like what they are wearing, compliance increases consid-

erably.”

Key gear in the oil & gas sector includes self-contained breath-

ing apparatuses, which require clean-shaven faces for the equip-

ment to fit properly. If a worker isn’t prepared, a supervisor can

limit the worker’s access to a worksite. There are some reported

cases of supervisors keeping razors on hand to ensure that work-

ers are compliant. Proper fitting and comfortable gloves is anoth-

er safety regulation that some workers may consider less impor-

tant, but compliance is essential to avoid injury.

“The number one injury in the oil & gas sector is hand and

finger injuries,” Kramer says. “Wearing proper gloves is the one is-

sue that is the most challenging to address. If the gloves are not

comfortable, then workers will take them off. There has to be a

balance between protection and having the dexterity to do the

job. It’s important to have good communication between work-

ers and health and safety coordinators, so that people can try dif-

ferent models and find a pair of gloves that they like.”

A proper fit in protective eyewear is also a top priority, and bet-

ter access to optometry services is also helping to improve com-

pliance. In 2012, the Manitoba Association of Optometrists (MAO)

introduced an Occupational Vision Care (OVC) program that of-

fers company employees eye exams, and the fitting and dispens-

ing of prescription safety eyewear that meets the function and

safety requirements legislated in the workplace.

OVC buying power provides companies with the best value

and lowest product prices, and easy access to participating op-

tometrists throughout the province makes it simple to replace

scratched lenses, or lost or broken eyewear. If glasses aren’t com-

fortable or are scratched, workers are less likely to wear them and

run the risk of impact injuries, including metal foreign bodies and

injury from high-pressure spraying of materials, such as gravel. By

streamlining professional optometry services, the OVC program

helps to increase compliance in wearing protective eyewear.

“Before the OVC program, access to safety eyewear was limited

to maybe one location in a large city, which made it difficult for

workers to get the services that they needed,” says Michelle Geor-

gi, Chair of the OVC program for MAO. “The program is available

to every optometrist in Manitoba and currently about 80 per cent

of optometrists carry the kits. There are approximately 30 samples

of safety frames to choose from, and workers can go to the same

optometrist where they get their dressware glasses. According to

SAFE Work Manitoba, over the last 15 years, reported eye injuries

have gone down 50 per cent. Awareness and the availability of

safe eyewear is making a difference.” v


the nuMbers networkhOW CaPPa SuPPORtS PRODuCtIOn aCCOuntantS anD InDuStRy

By kylie Williams

Like so many great ideas, this one started over a pint.

In the early 1950s, two oil & gas production accountants,

Brian E. Smith and Ian Hartley, met for a drink to discuss

some of the issues they both faced in their similar roles.

Their gatherings quickly grew, and by 1955 a strong fellowship

of production accountants had formed to comfortably exchange

ideas and information.

In 1961, a group of eight founders wrote bylaws and applied

to become a society. The Canadian Association of Petroleum Pro-

duction Accounting (CAPPA) was born. Their application included

a vision for CAPPA; to educate its members, to keep its members

informed, and to provide opportunities for its members to network

and develop friendships.

The goals of the association remain similar today. CAPPA mem-

bership has now grown to over 1,000 oil & gas production accoun-

tants (PAs) and royalty accountants, and the professional association

offers an industry-recognized Certificate Program and numerous

opportunities for further education, advocacy and resources.

Gavin Schafer has been chair of the CAPPA board for three years

and in production accounting for 20 years. He explains that the pri-

mary goal of the association is to support its members and their

careers.

“We’re an open network for members to post job opportunities

and benefit from peer support. Current industry austerity measures

have led to job losses, so we’ve been an integral support system

for our members seeking career guidance and workshops,” Schafer

says.

His current role as manager of production accounting at Crew

Energy Inc. puts him at the centre of oil & gas accounting in Canada.

Calgary-based Crew Energy is a dynamic, growth-oriented explorer

and producer focused on development of their sizeable assets in

the Montney Basin in north east British Columbia, as well as some

small heavy oil properties in Alberta and Saskatchewan.

“The current low price environment, specifically on the oil side,

is very challenging for oil & gas companies. Producing at a certain

cost per volume and then selling it on a volatile market impacts

company budgets on a weekly to monthly basis, as opposed to

quarterly to yearly. This poses significant challenges for govern-

ments striving to maintain their budgets, given that industry royal-

ties make up a major part of their revenue,” explains Schafer.

It is oil & gas PAs who keep track of these numbers. They combine

accounting and data analysis skills, and a thorough knowledge of

oil & gas regulations, with the requirements to report revenue and

royalties.

Joe Chan, a CAPPA-certified PA who works as supervisor of pro-

duction accounting at Crescent Point Energy Corp, explains, “A pro-

duction accountant performs monthly tasks of gathering, analyz-

ing, interpreting and reporting production data into a specialized


accounting system. We are able to work collaboratively with field

staff and team members to accurately report financial data like rev-

enues, volumes and payment of royalties.”

The information needed to produce these monthly reports

comes from a range of sources, including field sites, land managers,

joint-venture analysts, marketing and financial departments. The

data is critical to company operations, management and financial

reporting, so it’s vital that the people juggling these numbers are

trained and certified.

“The data that’s collected on behalf of government regulators

is generated and submitted by production accountants. There is a

vested interest in making sure those people are well trained and

know what they’re doing,” says Schafer, who has been an instruc-

tor for the CAPPA Oil and Gas Production Accounting Certificate

program for over 10 years.

Practicing PAs can take the certification course full-time at Mount

Royal University and Southern Alberta Institute of Technology

(SAIT) Polytechnic, or via distance education online.

“The CAPPA course helped me gain the basic framework and

background required to understand my daily work. It led to a bet-

ter understanding of the industry’s standards and assisted in my

daily responsibilities as a production accountant,” says Chan, who

obtained his CAPPA certification from SAIT in 2005.

In response to student and industry feedback and the changing

regulatory front, a three-year project to redesign the course curricu-

lum is currently underway.

“We’re just over one year in and we are excited with the prog-

ress,” explains Sheila McFadyen, who was appointed as CAPPA’s first

CEO in January 2014. “In addition to providing an updated and ex-

panded program, we are structuring our courses to provide a more

dynamic, interactive technology-based style for the students. We

are also providing new, continuous-learning opportunities, includ-

ing webinars for distance students.”

Under McFadyen’s leadership in recent years, CAPPA has rebrand-

ed and rejuvenated their website, logo, offerings and advocacy. The

association has embarked on a new chapter and looks forward to

moving back into better economic times with their membership.

Typically, when there’s a downturn, people will take the time to

upgrade and hone their skills with courses like the CAPPA certifi-

cate. But this time around, observes Schafer, it seems to be a deeper

cut and the uncertainty in the industry is a disincentive to invest in

that training.

Canadian producers have been rocked by falling oil prices and

competition with other countries, including the United States. The

questions surrounding the approval and construction of pipelines

from the land-locked provinces of Alberta and Saskatchewan cre-

ates further uncertainty. During downturns like these, PAs face job

insecurity like all professions in the oil & gas industry.

“When they come to start cutting costs, companies may see

production accounting as something that can be outsourced and

offshored. Production accountants provide too much value being

on site and in the office here, closest to production. They need to

be talking to the field, they need to be engaged with the engineers

in-house. We’re very much the hub of information,” says Schafer.

PAs are the first point of contact for records of the oil & gas vol-

umes and emissions necessary for robust environmental regula-

tion too. In May 2015, the Saskatchewan Ministry of the Economy

(ECON) announced plans to update and modernize oil & gas mea-

surement and reporting requirements to align with the existing

systems in neighbouring Alberta. ECON is rolling out an Enhanced

Production Audit Program (EPAP) in Saskatchewan with the new

requirements coming into effect in April 2016.

“We’ve been executing EPAP on the Alberta side for about four

years and Saskatchewan will have adopted many of the same re-

quirements. Industry should be familiar enough with it to effec-

tively implement on the Saskatchewan side. It definitely should be

seen as a positive thing,” says Schafer, who is confident the transi-

tion will go smoothly.

The value that oil & gas accountants provide to the petroleum

industry cannot be understated, particularly during challenging

times when regulations, oil prices and the industry itself are chang-

ing so rapidly. Many PAs are looking outside the industry as con-

ditions continue to destabilize, but those who remain continue to

support each other, perhaps over a pint, as the founders of CAPPA

envisioned 55 years ago.

For more information, visit www.cappa.org. v

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Gavin Schafer, chair of the CAPPA board


traInIng opportunItIes prepare workforce for new trenDs In the oIl & gas sectorBy Lisa fattori

Despite the downturn in the oil & gas industry, Manitoba

is faring better than other oil-producing provinces.

Manitoba’s Labour Market Occupational Forecasts

reports that employment in the resources sector de-

creased by over six per cent in Canada, but by only three per cent

in Manitoba, between 2014 and 2015. In the oil & gas sector, further

job contraction is expected for 2016 – a trend that will slow over

2017 and 2018, and then reverse in the following two years with

the creation of new jobs.

A slower economy provides producers with the opportunity to

improve efficiencies and prepare their workforces for the even-

tual upswing in the market. According to Apprenticeship Mani-

toba, registered apprenticeships have more than doubled in the

last nine years, with a reported 10,971 apprenticeships in March

2015. In oil & gas-related skilled trades, top apprenticeships are for

Steamfitter-Pipefitter; Bas Turbine Repair and Overhaul Technician;

and Boilermaker. Heavy Duty Equipment Technician and Rig Tech-

nician apprenticeships are also available.

Launched in 2013, the Harmonization Initiative is aligning ap-

prenticeship training across Canada by streamlining training re-

quirements in the Red Seal Trades. Work to harmonize 10 trades

is almost completed and another eight are currently undergoing

interprovincial consultation to develop more consistent training

requirements. The goal of harmonization is to support the mobility

of apprentices, foster higher completion rates, and enable employ-

ers to access a larger pool of apprentices.

“With harmonization, technical training is paced the same across

Canada, so that workers can move from province to province and

have met the same standards,” says Jamie Carnegie, Manager of

Corporate Services and Special Projects at Apprenticeship Mani-

toba. “Colleges already update their programing regularly, and the

new curriculum will incorporate the harmonized technical train-

ing.”

A new certified occupations act is also providing better train-

ing and skills development for Manitoba workers. Passed by the

Manitoba legislature in May 2015, the act prepares new entrants

to specialized jobs, enabling them to receive certification in their

occupations from on-the-job training, as well as classroom train-

ing from accredited providers. The first occupation to be certified

under the act is commercial truck drivers, a sector that is key to

servicing the province’s oil & gas industry.

“The certified occupations act applies to professions that don’t

fit the traditional apprenticeship model,” Carnegie says. “Truck driv-

ers do a lot of hauling of dangerous materials. Companies can look

for this qualification and know that they are hiring a driver who

has been validated to a certain level of rigor. Certification benefits

companies using these services and the professionalization of their

occupation makes drivers more marketable.”

Within the oil & gas industry, building and maintaining pipe-

lines is a specialized skill that requires expertise in transportation

logistics, equipment operating, pipe trades and craft labour. On its

website, the Pipeline Contractors Association of Canada (PLCAC)

offers a series of short videos that outline the career opportunities

within the pipeline sector, and the Association helps interested

candidates by directing them to the appropriate training facilities.

“The mainline pipeline sector employs a huge number of work-

ers; a single pipeline spread will require 700 workers, so we have

about 5,000 to 6,000 people working in the field a year,” says Neil

Lane, Executive Director of PLCAC. “People who call in to our office

are showing the most interest in apprenticeships in welding and

operating equipment, which are two of the highest paying trades.”

While PetroSkills has provided oil & gas training for 15 years, the

2014 purchase of Research Development Company expanded

the company’s course offerings to include e-learning products.


PetroSkills e-learning programs include ePilot and ePetro libraries,

which enable companies to customize learning curricula to meet

the needs of workers. The ePilot online learning for Operations and

Maintenance is geared to facility operators, offering over 1,000

hours of content and unlimited access to the ePilot library. The pro-

gram provides pre-testing to identify knowledge gaps, and post-

testing to verify learning. Training is self-paced, using web-based

technology, and content can be customized.

“The trend now is to incorporate eLearning, which saves em-

ployers a lot in time and money,” says Lori Koran, Solutions Market-

ing Specialist for PetroSkills/RDC. “You don’t have to pull people off

of the job and reserve class time to train a group of employees.

Recently, we’ve had a lot of interest in blended programs, which

is a mix of online and instructor-led training that is delivered virtu-

ally. With the low price of oil right now, companies are tightening

their belts and don’t have the budgets to send employees away

for public course training. E-learning and virtual instruction can be

more economical and flexible.”

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For the second year, Assiniboine Com-

munity College (ACC) is offering oilfield

safety certification at its Victoria Avenue

East campus in Brandon. The training is a

collaboration between ACC and Enform

to give Manitoba workers required safety

courses locally. In 2015, course offerings

included Well Service Blowout Prevention

and Detection and Control of Flammable

Substances. People can earn tickets in

these courses again this April, as well as for

Coiled Tubing Well Service Blowout Protec-

tion. ACC plans to offer the courses every

spring, with registration for the next session

open in November.

ACC has also expanded its introduc-

tory oilfield safety courses, by bringing

programing directly to First Nations com-

munities. Introduced in 2015, the training

includes Standard First Aid, Fall Arrest, Con-

fined Spaces and H2S Alive courses, which

are required to begin working in the oilfield.

“These courses are geared toward peo-

ple interested in working in the oil & gas

sector,” says Tannis Hudson, Director for

the Centre of Continuing Studies at ACC.

“To save on transportation costs and be-

ing away from family, we’re bringing this

program directly to First Nations commu-

nities, for workers looking to start a career

in the sector.”

Employers looking to prepare their

workforces for emerging trends in oil & gas

can access a new report by the Petroleum

Labour Market Information (PetroLMI) Di-

vision of Enform. Released in September,

2015, HR Trends and Insights: Shifting Pri-

orities and a Shifting Workforce, identifies

three business shifts within Canada’s oil &

gas industry, which are driving the need

for new and more intricate skills and dif-

ferent occupational requirements. These

business shifts include new technolo-

gies designed to access harder-to-reach

reserves; cost-management strategies to

improve returns and productivity; and the

need to diversify into new and expanded

markets. In response, the industry requires

workers to be proficient in reading, nu-

meracy, communicating and problem-

solving. The report also identifies demand

for specialists in supply chain and logistics,

LNG, well abandonment and reclamation,

and stakeholder/Aboriginal relations.

“This report examines how technologi-

cal changes have impacted the labour

market, and what skills will be needed to

address those changes in occupations,”

says Carol Howes, Vice President of Com-

munications and PetroLMI, Enform. “Our

findings will help industry and educators

to develop training to meet these needs.

We’ll also be launching an online tool that

will profile these emerging positions and

show people how they can transition to

these new occupations.” v


transportatIon of Dangerous gooDs by grounDLIMItED quantItIES ExEMPtIOn – 1.17

By tracey thibeau, Safety Sales Consultant, Danatec

A limited quantity of dangerous

goods, other than explosives,

must be packed in a means of

containment in such a way so

that under normal conditions of transport

and handling, there will be no accidental

release of the dangerous goods that could

endanger public safety.

This special case, section 1.17, exempts

the shipper from Part 3 (documentation),

Part 4 (dangerous goods safety marks),

Part 5 (means of containment), Part 6

(training), Part 7 (emergency response

assistance plan) and Part 8 (accidental

release and imminent accidental release

reporting requirements) when handling,

offering for transport or transporting lim-

ited quantities of dangerous goods on a

road vehicle, railway vehicle or a ship on a

domestic voyage.

Each outer means of containment has

a gross mass less than or equal to 30 ki-

lograms. For solids, the amount per inner

container cannot exceed the number in

column 6 (a) of Schedule 1 of the Trans-

portation of Dangerous Goods Regula-

tions expressed in kilograms; liquids ex-

pressed as litres, must have a volume that

is less than or equal to the number shown

in column 6 (a) of Schedule 1; and gases,

including a gas in a liquefied form, must

be contained in one or more means of

containment, each of which has a capacity

less than or equal to the number shown

in column 6(a) of Schedule 1, when that

number is expressed in litres.

When a limited quantity means of

containment is placed inside of another

means of containment or wrapped in

plastic in such a way the limited quantity

mark is not visible, the word “overpack”

and the limited quantity mark must ap-

pear on the outside of the outer means of

containment or the plastic wrap.

Until December 2020, instead of the

mark used in the previous paragraph,

you may use the words “limited quantity”,

“ltd. qty.”, “consumer commodity”, or these

words in French. The means of contain-

ment may also have the UN number of

the dangerous goods displayed within a

square on a point and the line forming the

square on a point must be black and at

least two millimetres wide. If there are dif-

ferent UN numbers, the square on a point

must be large enough to include each UN

number. The line, UN numbers and letters

must be on a contrasting background.

Each UN number and letters must be at

least six millimetres high.

If you meet all the conditions of section

1.17 of the Transport of Dangerous Goods

Regulations, you may ship some danger-

ous goods as a limited quantity.

For more information on TDG training, visit

www.danatec.com or call 1.800.465.3366. v

PLEASE RECYCLE


pro-DrIll InDustrIes ltD. Moves forwarD wIth vIsIon anD InnovatIon

Diversification and innovation are

the key factors to the evolution

that Allan Brown of Pro-Drill

Industries Ltd. has seen from a

one-man operation in the early 1990s to

employing as many as 10 staff today. But

Pro-Drill’s roots go back to the summer of

1974 when Allan, a farm boy from south-

western Manitoba who had just graduated

high school, was looking at a whole life

ahead of him and asked the question “What

do I want to be when I grow up?”

By the spring of 1975, Allan had gradu-

ated from Assiniboine Community College

with a certificate and a dream of being a

machinist. He began work at Grant’s Weld-

ing, a machining and repair shop In Virden,

where he learned and grew alongside

many mentors until 1988, when he decided

he was ready to be more.

Allan ventured out, built his own shop

and designed The Judge. Built with blood,

sweat and tears, and fueled by testosterone,

The Judge was the final voice at truck and

tractor pulls across the nation: the country’s

best self-propelled pulling skid.

But being an achiever, Allan wanted

more creations, more challenges. In 1992,

he began building drilling rigs for the

horizontal directional drilling (HDD) world.

From the ground up he always had an idea

to make it bigger, better, stronger and faster

than anyone else had. A true innovation

specialist had come to life.

In the 1990s, horizontal directional drill-

ing was still relatively young industry with

ample opportunity for change and growth.

Pro-Drill Industries began building HDD

drilling rigs from scratch and also produced

their own line of accessories and tooling to

complement the drills. Soon the business

began to concentrate their resources on

the tooling line and ceased production of

the complete drill units. Once the tooling

line was fine-tuned, the company found

itself seeking new lines.

Enter the world of mass production. In

co-operation with another local company

that produced commercial grain handling

systems, Pro-Drill began producing a vari-

ety of shafts, couplers, and varied compo-

nents for incorporation into the grain-han-

dling systems. Once this venture settled in

and demanded less time from Pro-Drill staff

for organization and production, the desire

to expand and need to diversify was on the

front line once again.

In late 2012, Pro-Drill began to do some

occasional repairs for one of the oil produc-

tion companies in western Manitoba. These

repairs included the time-consuming task

of trying to rebuild pumping unit compo-

nents (including gearboxes, center-bearing

and tail-bearing units, and wrist-pin assem-

blies) built in the early 1950s and ’60s that

were totally worn out but had no OEM re-

placements available. This spurred Pro-Drill

to re-design and produce replacement

units that were compatible with the rest of

the existing structures. In most cases, it be-

came immediately obvious that it was less

costly to build the complete replacement

unit from scratch than spend countless

hours trying to rebuild the original com-

48”-diameter and 52”-diameter reamers built for a customer.


ponent. The second advantage to building

new OEM replacement units is the ability to

incorporate new technology and materials,

which enabled Pro-Drill to build a superior

unit. Pro-Drill now produces approximately

12 complete direct-replacement units, as

well as over 40 various components such as

shafts, housings and end caps.

In addition to pioneering and produc-

ing new revenue possibilities, Pro-Drill staff

continue to move the company forward

by researching innovative ways to improve

their existing product lines and make the

manufacturing processes more efficient.

“Having keen staff who are interested

and involved in the products we build or

repair, who embrace change, and welcome

challenges makes moving forward so much

easier for our company,” says shop foreman

Marcel Van Meijl.

Business Manager Duane Somerville

agrees, also noting the importance of con-

necting with customers.

“Part of being competitive and moving

forward is also communication with your

customers, listening to what they have to

say or what they think they need,” Somer-

ville says. “If you can build what they want

or can help them achieve their goals, you

have a customer for life.” v

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DESIGN – MANUFACTURE – SALEOF S TANDARD AND CUS T OM ORDER T OOL ING FOR THE HDD INDUS TRY

NOW REBUILDING ALL MAKES OF CENTRE BEARING,TAIL BEARING AND WRIST PIN ASSEMBLIES AND

RELATED COMPONENTS FOR YOUR OILFIELD INFRASTRUCTURE.

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TOLL FREE:1.866.827.2984347 SOUTH GOVERNMENT ROAD, VIRDEN, MANITOBA

[email protected] www.pro-drill.com

Considering a career in the machining industry...Join our team today – call for current openings.

You dream it – we build it!

New OEM replacement components.


lIvIngstone lanDscapIng: ManItoba-grownBy tammy Schuster

A lush residential backyard oasis,

a crisp and tidy stone patio be-

hind an industrial warehouse, or

a rich wood deck and trellis ex-

panding the seating area of a downtown

bistro. Livingstone Landscaping is helping

their clients extend the square footage of

their home or business by creating usable

outdoor space.

Established in 1992 and owned and

operated by the Berg family, the Brandon-

based company serves residential, com-

mercial, industrial clients throughout Man-

itoba and Saskatchewan.

A full-service landscape design-build

firm, Livingstone offers a complete range

of services from concept development

through to project completion. Using

the latest technology, such as full-colour

three-dimensional computer-generated

renderings, clients can virtually walk

through the layout of their proposed

landscape design.

Under the company’s landscape con-

struction division, Livingstone has full

capacity to manage a project, including

installation of plants and shrubs, paving

stones, retaining walls, and sprinkler sys-

tems. The carpentry division oversees and

builds fences, decks, patios, and water

features. Their team can operate the full

facet of a project from start to finish.

With the majority of the oil industry lo-

cated in southwestern Manitoba, Living-

stone regularly supplies and installs chain

link fencing, and provides site spraying or


site clearing to allow for pumping or drill-

ing equipment installation. They also pro-

vide regular site maintenance and snow

clearing throughout the year.

Livingstone’s services also include lawn

and grounds maintenance, mosquito

spraying, snow removal, and ice manage-

ment.

One of the most noticeable trends in

landscaping is the need to create a land-

scape that is both attractive and low main-

tenance – a design that extends a client’s

home into the outdoor space that’s also

sustainable and enjoyable for years to

come with little to no maintenance.

But the company says it is seeing more

thought and attention put toward the im-

age of commercial and industrial spaces as

well. Commercial clients have been more

focused on the beautification of their out-

door spaces, converting areas that were

previously parking lots or storage into ar-

eas their customers and employees can

enjoy.

A lot of industrial businesses are tying

into this trend as well by making space

more approachable and enjoyable. More

care has been put into creating small patio

areas for customer-appreciation barbecues

or social meeting areas for employees.

With summer approaching, the theme

is always maximizing outdoor space. Liv-

ingstone Landscaping can create a plan

that best utilizes the space available, mak-

ing it useable regardless of the size, terrain,

or season. v

Livingstone Landscaping Ltd. | 370 Park Ave East, Brandon, MB R7A 7A8PH: 204-578-5291 | FAX: 204-578-5294 | Email: [email protected]

www.livingstoneltd.com

Livingstone Landscaping Ltd is located in Brandon, MB and provides landscape design and construction services; certified paving stone installation. They also specialize in soil work, seeding, sod, hydroseeding, erosion control, chain link fence installation and repairs, general skid steer & excavator work, dump truck service, single and tandem, landscape design, and certified pesticide applicators for weed and pest control. Our full service

company has other offerings such as grounds maintenance, parking lot sweeping and line painting, and a full fence and deck crew.

presIDentIal electIon year 2016 lIkely to be fIlleD wIth surprIsIng DevelopMentsBy Leonard Melman



These are indeed difficult times for the world of petro-leum and natural gas in both Canada and the U.S.A. as the number of problems created by falling prices and declining industry activities is beginning to have a seri-

ous impact on many areas which only recently had been enjoying true boom times.

Alberta and Saskatchewan are excellent examples. It wasn’t too long ago that the corridor from Calgary to Edmonton and up to the rapidly-growing community of Fort McMurray was widely re-garded as one of the most prosperous regions on earth. Then the industry came face-to-face with price collapses for both crude oil and natural gas.

Crude oil plunged in a spectacular manner from a relative peak of US$112 in mid-2013 all the way down to below US$30 per bar-rel in January 2016, while natural gas suffered through declines from above US$6.50 per contract (10 billion British thermal units) in early 2014 to below US$2 per contract in late December 2015.

As a result of these declines, many projects that had been very profitable suddenly found that revenues had fallen below their production costs and, unable or unwilling to sustain losses, they began to reduce or even cease operations. At the same time, many exploration and development projects which had previ-ously been able to attract investment financing suddenly found those sources had dried up – and many such projects were put on care and maintenance or entirely abandoned.

The effects of these pullbacks on previously prosperous areas have been significantly negative.

In Alberta, famous for relentless growth of oil sands recoveries, the news has taken on an ominous overtone. Waves of newcom-ers to the province are now unable to find work and are return-ing home. Apartments and condominiums are being abandoned in cities like Fort McMurray. The Alberta government reported that recent job losses are the worst since the recession of 1980. Moody’s Investors Service recently indicated it was placing many Canadian oil companies under review for downgrading of their debt.

The situation is also turning bleak for those areas of southern Saskatchewan involved in exploration, development and produc-tion of oil within the northern regions of the Bakken deposit. In early February, Saskatchewan Premier Brad Wall reported that a deficit during this fiscal year was very likely and that it would be difficult going forward to maintain the government’s programs. He pointed to “falling resource revenue” as an important source of the province’s fiscal difficulties.

North American problems associated with falling energy com-plex prices are hardly limited to Canada, as several areas within America are also being hit hard with North Dakota – primary home of the Bakken discovery – feeling particular pain. State Governor Jack Dalrymple reported in late January 2016 that state revenues would fall by more than $1 billion this year and state agency budgets would face deep cuts. Williston, the epicentre of Bakken activity, has gone from boom to bust in short order with lengthy lineups each day at the city’s job center. One-bedroom apartments that used to rent for $2,000 per month are now sit-ting empty.


In addition to North Dakota, states such as Colorado and Texas, both heavily involved in petroleum recovery via the controversial method known as fracking, have likewise seen prosperity quickly evaporate like water in the hot Texas sun.

Given this difficult situation and the array of problems the in-dustry is facing, some are now turning more than ever toward government action to help provide meaningful assistance; but in fact, many others within the industry believe that government it-self might be a source of new difficulties given the powerful influ-ence of the environmental community.

Despite the evident problems, concerns relating to government policies continue to mount, including taxation; climate change; cap and trade; pipeline non-approvals; water purity; promotion of alternative energy sources; and continued land set-asides.

And now another vital ingredient is in place – the reality that 2016 is a presidential election year for America and the stated energy-related policy preferences of many of the candidates in both parties contain sharp differences. Accordingly, candidate statements on this topic are truly worthy of note.

In the Republican Party, three candidates have emerged from the pack following the initial round of primaries. Those candidates are Senator Ted Cruz, Donald Trump and Ohio Governor John Ka-sich. Each one has issued policy statements regarding petroleum development.

Ted Cruz: Senator Cruz has given several indications that he is a strong supporter of the petroleum industry. He has come out strongly against cap-and-trade legislation, declaring that this measure, which would add considerably to industry and con-sumer costs, would “weaken the nation’s global competitiveness with virtually no impact on global temperatures.” He has argued against government set-asides which would prevent oil explora-tion and development over wide areas.

In addition – and in line with an expressed goal of reducing general government interference in commerce – he has specifi-cally come out against excessive government regulations, stat-ing he would attempt to “stop costly new regulations that would increase unemployment, raise consumer prices and weaken the nation’s global competitiveness...”

On the issue of the Keystone XL pipeline, Cruz has spoken strongly in favor of the pipeline’s completion and co-sponsored Bill S2280, a bill to approve the Keystone XL Pipeline. (The bill sub-sequently passed but was vetoed by the President.) He also co-sponsored Bill S2181, which called for a prohibition on the adop-tion of any new Environmental Protection Agency regulations until a final cost-impact analysis had been completed.

Donald Trump: Candidate Trump has openly questioned the science behind the “human-caused global warming” concept. During a Fox News interview in 2014, he declared the concept to be a “hoax”. He has also stated that many of the suggested rem-edies, such as the widespread use of wind turbines, to actually be “an environmental and aesthetic problem.”

Like Cruz, Trump has also spoken out against cap-and-tax laws, stating that they would force Americans to “face ever-increasing (petroleum) prices.” He heaped scorn on President Obama’s oppo-sition to Keystone XL, calling the President’s rejection “disgraceful.”

In regard to the Keystone XL project, the San Antonio Business

Journal noted that “Trump is in favor of the Keystone XL Pipeline, which would run from the tar sands oil region of Canada to the Houston and Port Arthur areas.”

John Kasich: Kasich also has taken a stand against excessive environmental regulation by voting “no” in 2000 on an amend-ment that would have allowed full implementation of the inter-national Kyoto protocol of 1997. He has also been a strong sup-porter of Keystone XL and sharply criticized President Obama for his decision to terminate the project. However, he has taken some heat from the petroleum industry for favoring a sharp increase in taxation when recoveries take place through the fracking process.

While several candidates dropped out of the race by early spring, some of their industry-related comments show generally strong support among Republicans for petroleum exploration and development.

Senator Marco Rubio has been quoted regarding climate change that he would not do anything which would make “Amer-ica a harder place for people to live, to work or to raise their fami-lies.” He has been quoted by ABC News as declaring that he does not believe humans are responsible for current climate trends but rather believes that climate has always been changing and has never been static. As a result, he is opposed to the complex regu-lations being proposed which would control vast areas of human activity.

Rubio also strongly opposes cap-and-trade schemes. During his 2010 senatorial campaign, he stated, “As a U.S. Senator, I would oppose a national energy tax on American consumers, farmers and business owners. At a time when our economy is struggling, a cap-and-trade scheme would further strain family budgets and destroy jobs.”

Ben Carson declared his antipathy to government domination in general by stating, “I have concluded that the best policy is to get rid of all government subsidies, and get the government out of our lives and let people rise and fall based on how good they are. It goes back to the concept of regulations. Every regulation costs in terms of goods and services.”

Senator Rand Paul of Kentucky would also strive to cut govern-ment down to size. He recommends that “cutting the red tape and encouraging energy freedom, new technologies and discoveries will be a priority in my administration.” He also favors free-market competition, developing mineral and energy resources on public lands and completion of the Keystone XL pipeline.

On the Democratic Party side, only Hillary Rodham Clinton and Vermont Congressman Bernie Sanders remain as viable can-didates for the Democratic Nomination. Both appear to favour strong environmental regulation.


Hillary Clinton: During a 2015 broadcast of a CNN debate, Clinton stated her opposition to the Keystone XL pipeline by noting, “I now oppose Keystone, but I withheld opinion at first.” Regarding energy markets, she stated that a Clinton admin-istration would “go after energy traders and speculators.” She would also use government to investigate high gas prices when they occur.

In point of fact, Clinton has made few definitive statements regarding petroleum over the past few years, causing the Na-tional Journal to discuss her energy issue statements in this manner:

“At the same time, there is genuine sense of uncertainty about the front-runner, who has yet to offer detailed energy policy positions.” There was some hope among oil industry leaders that Clinton would be more open to their cause than President Obama, but Clinton recently supported Obama’s Keystone XL decision.

Bernie Sanders: Representative Sanders is the most avowedly leftist of all the important candidates and, in fact, has

described himself as a democratic socialist. As such, it is not sur-prising that he describes his commitment to climate change legislation as “very advanced”. He has issued statements describ-ing climate change as a moral matter, he advocates a tax on car-bon, and he opposes Keystone XL.

Sanders recently made the sharply partisan statement that “the fossil fuel industry is funding the Republican Party”, and he has made no secret of his advocacy of moving away from fossil fuels and toward sustainable energies. In a June 2015 statement, he defined those sustainable energies as wind, solar, geother-mal, and biomass, among others.

Many observers agree that in general, the positions espoused by the Republican candidates appear to be in closer conformity to the goals of petroleum developers and producers than those of the two leading Democrats, who indicate they are in agree-ment with the environmental movement’s goals and with the concept of using government’s regulatory powers to advance those objectives.

It should be fascinating for the world of petroleum to follow the presidential race as it progresses through 2016.v

InDex to aDvertIsersABCO Supply & Service Ltd. .................................................... 83

Annugas Compression Consulting Ltd. .............................. 23

AON Risk Solutions..................................................................... 50

Brandon Bearing Supply Ltd................................................... 41

Certified Inspection Services .................................................. 67

Collet Crane Rental Ltd. ............................................................ 40

Colonial Inn ................................................................................... 40

D & G Polyethylene Products Ltd. ............................................7

Dalziel Oilfield Consulting Ltd. .............................................. 12

Danatec ........................................................................................... 71

DL Parts for Trailers ..................................................................... 73

Driving Force ................................................................................ 81

Economic Development Brandon ....................................... IFC

Falcon Enterprises Ltd. .............................................................. 17

Fontana’s Trucking ...................................................................... 34

Fountain Tire ................................................................................. 69

GB Contract Inspection Ltd. .................................................... 11

Good Lands Environmental Inc. ............................................ 12

Graham ........................................................................................OBC

Guild Insurance Brokers Inc. ................................................... 34

Integra Tire ..................................................................................... 80

Leech Printing .............................................................................. 38

Livingstone Landscaping Ltd. ................................................ 75

Manitoba Petroleum Branch .....................................................7

Milwaukee Tool ............................................................................ 10

MNP .................................................................................................. 49

Neset Consulting Service ......................................................... 19

Norbert’s Manufacturing ......................................................... 16

Notre Dame Used Oil ................................................................. 69

Peloquin Mfg. Inc. ....................................................................... 61

Perimeter Aviation LP ................................................................ 39

Pixels Inc. ........................................................................................ 13

Prairie Battery ............................................................................... 40

Prairie Mobile Homes ................................................................ 14

Pro-Drill Industries Ltd. ............................................................. 73

Redvers & District Oil Showcase ............................................ 37

Reliable Metal Buildings Ltd. .................................................. 10

RM Wallace-Woodworth .......................................................... 34

Scott Land & Lease Ltd. ............................................................. 53

Silverline Oil Field Services .........................................................3

SNC Lavalin Inc. ............................................................................ 43

Synergy Land Services Ltd. ...................................................... 16

Town of Virden ............................................................................. 35

Tremcar Inc. ................................................................................... 51

Triangle Welding & Machining ............................................... 15

Tundra Oil & Gas .......................................................................... 47

Virden Meter ....................................................................................5

WCB .................................................................................................. 25

Welders Supplies Ltd. ................................................................ 57

Western Heritage ........................................................................ 55

Williston Basin Petroleum Conference................................ 33


DrIvIng force DelIvers new vehIcle optIons for ManItobans

A DRIVING FORCE logo may be

new to many Manitobans, but

if you’ve been involved with the

petroleum and gas industry in

Alberta, it’s a well-known and trusted brand.

Opening its first location in Manitoba in

February at 450 Oak Point Hwy in Winnipeg.

In July, the company opened a second lo-

cation at 1750 Sargent Road (the Sandman

Inn) to better serve customers using Winni-

peg’s international airport.

DRIVING FORCE Vehicle Rentals Sales

and Leasing brings decades of industrial

expertise to the province. The company

originated in Spruce Grove, Alberta – just

minutes west of Edmonton – and has since

expanded from coast to coast, with 24 loca-

tions to date and more on the way. A big

part of the company’s success since its

1978 beginning has been its unwavering

commitment to customer service, and its

recognition that keeping the industrial cus-

tomer well served and properly supplied

with the right equipment is every bit as

important as serving the retail rental cus-

tomer. In fact, DRIVING FORCE is one of the

most respected and wide-ranging rental

DRIVING FORCE has been serving the petroleum and mining industry for over three decades.

Jason Reid has over a decade of experience in commercial vehicle rentals.

204-748-2894337 King Street, Virden, Manitoba

100% Locally owned — Danny PierrardVisit our website at www.integratire.com


and leasing brands in the Alberta oil and

mining sector.

“DRIVING FORCE has developed great

relationships with many customers in

Alberta’s petroleum and mining sec-

tors,” says Jason Reid, branch manager

at DRIVING FORCE’s Winnipeg location.

“Working with them has made DRIVING

FORCE an expert in the commercial rent-

als field. For example we’ve been work-

ing with Flint Energy Services (a division

of URS and AECOM) in multiple mining

locations for years, providing everything

from half-tons to Class 4 heavy-duty ser-

vice trucks.”

DRIVING FORCE takes pride in giv-

ing customers exactly what they want,

whether it be half-ton pickups for yard

work, one-ton crew cabs for on-site haul-

ing and transportation, two-ton half-

decks, cube vans or any of a variety of

picker trucks and service bodies. Their

long-term relationships with trusted and

respected truck builders mean they really

can deliver on that promise.

Understanding that some companies

have specific preferences for certain makes,

models and body styles, this company

deals with all major truck manufacturers;

whether you’re looking for Dodge, GM or

Ford products, DRIVING FORCE can deliver

them completely equipped to meet the

specific standards of the mining site.

“Experience has shown us that our

customers value the convenience of or-

dering vehicles for a specific destination;

it can save them time and money while

creating peace of mind,” says Bruce Jack-

son, DRIVING FORCE’s Edmonton and

Area rental manager. “For example, when

we get a call for a specific mining proj-

ect, we know exactly what is required – a

buggy whip, amber light, back-up alarm,

a 30-pound fire extinguisher, first aid kit

and flares. We also install GPS (global po-

sitioning satellite) equipment and unit

markings. When the customer picks up

the vehicle (or we deliver it), they’re liter-

ally able to sign off, get in, turn the key

and head off for work on-site.”

That experience is now on tap for Mani-

toba customers. Reid has years of experi-

ence in the Manitoba truck market, and

close support from additional petroleum

project and mining site expertise whenever

he needs it.

“We’re continuing to build on that base

of experience as we develop long-term

relationships here in Manitoba. I’m al-

ready familiar with many companies here

in Manitoba, but it’s great to know there’s

also a wealth of connections within DF

to help me provide exactly what the cus-

tomer wants. We deliver anywhere in the

province – rigged for your specific needs

and ready to go. We’re looking forward to

working with customers and showing off

what DRIVING FORCE can do to make their

rental and leasing experience better than

they ever thought possible.”

Jason can be reached at 204-694-3488,

1-800-936-9353, or you can visit

www.drivingforce.ca for more information

about DRIVING FORCE. v

We Rent...• Cars• Trucks• 4x4s• Vans

• SUVs• Corporate and commercial• Daily, weekly, and monthly rates

450 Oak Point Hwy, Winnipeg 204•694•3488

1750 Sargent Avenue, Winnipeg 204•774•3488





Locations coast-to-coast-to-coast www.drivingforce.caLocations coast-to-coast-to-coast www.drivingforce.ca

• Cars• Trucks• 4x4s• Vans


• Cars• Trucks• 4x4s• Vans



abco Is your one-stop shop for qualIty proDucts anD InstallatIons

ABCO Supply & Service Ltd. is

a privately owned Winnipeg-

based electrical/mechanical

contracting firm. Recognized as

one of Western Canada’s most respected

and successful multi-trade contractor and

service companies, we have staked our

reputation on quality products and installa-

tions, and quick response times with supe-

rior workmanship since our incorporation

in 1973. We are proactive in continually re-

viewing and upgrading our training, safety,

procedures, and techniques to exceed the

ever-changing demands of the industry.


With our diversification of multiple trades,it enables us to provide our clients with:A One-Stop Shop AdvantageTeamwork ApproachValue-Added EngineeringRecommendations on alternative means and methodsSavings due to single source management of multiple

trades creating improved project scheduling.

COMMERCIAL/INDUSTRIALElectricalProcess PipingMillwrightingPlumbingHeatingWelding

Gas FittingRefrigerationAir ConditioningControlsInstrumentationDesign Build

24 HOUR SERVICE

1346 Spruce Street, Winnipeg, MB204-633-8071 | www.abcosupply.com

Mechanical, Electrical & Service Contractors

ABCO owns and operates a 33,000-

square-foot complex consisting of our

head office, warehouse, and fabrication

facility. Our fabrication facility has a five-

ton indoor overhead crane, enabling us

to pre-fabricate many of the complex me-

chanical piping systems used within our

industry. With our millwright division, we

also custom fabricate and modify many

components for clients in the manufactur-

ing, food & beverage, oil, gas, mining and

utility industries.

ABCO operates in all major economic

sectors: commercial, manufacturing, indus-

trial, utility, mining and institutional. Our di-

versification of multiple trades enables us

to provide our clients with:

•Aone-stopshopadvantage

•Skilledandexperiencedproject

management, supervisory and craft

personnel

•Teamworkapproach

•Value-addedengineeringrecommenda-

tions on alternative means and methods

•Savingsduetothesingle-source

management of multiple trades creating

improved project scheduling and costing

We approach every undertaking with

a great degree of pride and a philosophy

of providing uncompromising quality,

whether it’s a small retrofit or major con-

struction project. We are committed to our

customers’ needs and satisfaction. v

Recognized as one of Western Canada’s most

respected and successful multi-trade contractor and

service companies, we have staked our reputation

on quality products and installations, and quick

response times with superior workmanship since

our incorporation in 1973.

With 90 years of experience in construction, Graham has the resources and expertise needed to complete our client’s oil and gas projects safely, on-time and on-budget. As a leader in the industry, Graham delivers excellence on every project, every time.

Your Construction Solutions Partner.graham.ca

Documents

Manitoba Oil & Gas Review 2016