Pipeline News North July 2016

VOL. 8 ISSUE 7 DIST: 11,600 SERVING THE OIL & GAS INDUSTRY IN NORTHERN B.C. AND ALBERTA

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Special Report: Layoffs come with hidden costs, biz leaders told / Page 15

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LNG or BUST returns home with optimism on PNW LNG, but FID may not come until 2017Northern Gateway officials ‘fully committed’ to project in wake of appeals court ruling

Maryon: Uncertain business environmentunhealthy for Canada’s futureStereotypes & stigma: Pipeliner’s rant against lifted truck schadenfreude strikes a nerve

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

MIKE CARTER PhoTo

HIGHWAY 2 UPGRADES NEARLY DONE Three years and $21.4 million later, the Highway 2 four-laning project in Dawson Creek will be complete at the end of this month, according to the Ministry of Transportation and Infrastructure.

The total budget for the project came in at $36.5 million. Only one contract was awarded for the work and it went to Dawson Creek’s Brocor Construction, who began the project in June 2013. Four million was spent on the highway this year including paving, concrete barrier placement, gravel shouldering and signage. The project is part of overall highway improvements the ministry had planned from the Alberta border to Fort St. John. Other projects within the corridor included a 2.8 kilometre southbound passing land at Blockline Road in Tomslake, with intersection improvements at Highway 2, Blockline, Arndt and Wade Roads.

Intersection improvements were also made at Highway 2 and Tremblay Trail and a 2 kilometre, northbound passing lane at Mile 10 north of Dawson Creek. These projects were all completed in 2013.

Birchcliff calls $625M acquisition of Encana’s Gordondale assets ‘transformational’

In what it deems a “transformational” move, Birchcliff Energy Ltd. announced yesterday thatit will acquire Alberta Montney assets in its core Pouce Coupe/Gordondale area from Encana Cor-poration for $625 million in cash.

“The acquisition further strengthens Birchcliff’s business model and creates one of the largest con-centrations of high quality, low-cost production in the area,” the company said in a press release.

“The assets have an inventory of oil and liquids weighted drilling locations that complement Birchcliff’s existing Montney/Doig inventory and will provide Birchcliff with an opportunity to drill oil wells and liquid- rich Montney/Doig natural gas wells in a similar area to where Birchcliff’s management and technical team have a proven track record to efficiently integrate, optimize and grow the assets being acquired.”

The acquisition will be funded by the aggregate net proceeds of concurrently announced finan-cings and the company’s credit facilities.

Through the transaction, the company will take ownership of a contiguous land position of 91,833 (54,206 net) acres of lands of which 46,233 (40,920

net) acres (64 net sections) are core Montney lands with a high average working interest of 89 per cent.

The assets include 74,873 (42,862 net) acres of developed lands and 16,960 (11,344 net) acres of undeveloped lands, with an average working in-terest of 57 per cent in developed lands and 67 per cent in undeveloped lands.

Darrell Bishop, an analyst with Haywood Secur-ities Inc., said the transaction is an “exceptional deal” for Birchcliff.

“They are acquiring an excellent complement-ary Montney asset base, within the company’s existing core area, at very attractive metrics. We expect the market to respond favourably to the news,” he said.

“From a Gordondale perspective, it was an undercapitalized asset by Encana and now with-in the context of a more synergistic portfolio be-tween Birchcliff, it is a very focused consolidated asset that they can direct the cash flows from the combined Gordondale/Pouce Coupe area and really drive some synergies to develop this asset in a better way.”

Birchcliff noted that drilling buffers on lands

bordering its lands will be eliminated, allowing for optimal well development planning and reservoir drainage from the lands.

In light of the acquisition, the company said 2016 capital spending is expected to increase 35 per cent to $140 million from previous guidance of $103.5 million.

Encana said no drilling or completions capital has been spent or was planned for the area in 2016.

Following the sale, Encana’s Montney play will include over 9,000 potential drilling locations with two-thirds of those wells located in the conden-sate-rich part of the play.

“We are tightening our portfolio and sharpening our focus in the Montney where we expect to grow liquids production to 50,000 barrels per day by the end of 2018,” Doug Suttles, Encana president and chief executive officer, said in a statement.

“This transaction further strengthens our bal-ance sheet and gives us greater financial flexibility as we look to the future.”

—Daily Oil Bulletin

Plans for the Northern Gateway pipeline have been dealt several blows in the last few weeks, but officials say they remain “fully committed” to building the project.

The Federal Court of Appeal ruled June 23 that the federal government failed to properly consult First Nations impacted by the pipeline before approving the $7.9-billion project--quashing the certificates of public convenience and necessity for the project and sending the matter back to the federal government for redetermination.

The judgment says the government neglected to discuss subjects of critical importance to First Nations by ignoring many of the project’s impacts and offering only a “brief, hurried and inadequate” opportunity for consultation.

“The inadequacies—more than just a handful and more than mere imperfections—left entire subjects of central interest to the affected First Nations, sometimes subjects affecting their subsistence and well-being, entirely ignored,” stated the judgment.

“It would have taken Canada little time and little organizational effort to engage in meaningful dialogue on these and other subjects of prime importance to Aboriginal peoples. But this did not happen.”

The pipeline, planned to carry more than 500,000 barrels of Alberta crude oil to the B.C. coast per day for export, was approved in 2014 with 209 conditions.

The Joint Review Panel charged with examining the project concluded the pipeline was in the best interest of Canadians, weighing information it received during 180 days of public hearings in 21 communities throughout Alberta and B.C.

But the court’s ruling outlined Canada failed during Phase 4 of the review process – the phase which followed the release of a report of the Joint Review Panel. The Crown was to then engage in consultation concerning that report but failed to “engage, dialogue and grapple” with First Nations concerns.

“We conclude that Canada offered only a brief, hurried and inadequate opportunity in Phase IV – a critical part of Canada’s consultation framework to exchange and discuss information and to dialogue,” the court wrote in its ruling.

John Carruthers, president for Northern Gateway, said the court “addressed important concerns” about the project.

“Though the court found that the JRP recommendation was acceptable and defensible on the facts and the law and is reasonable they concluded that further Crown consultation is required,” he said.

“While the matter is remitted to the federal government for their redetermination, Northern Gateway will consult with the Aboriginal Equity Partners and our commercial project proponents to determine our next steps.”

He added: “However, the Aboriginal Equity Partners and our commercial project proponents are fully committed to building this critical Canadian infrastructure project while at the same time protecting the environment and the traditional way of life of First Nations and Métis peoples and communities along the project route.”

NEB suspends review of sunset clauses

The Joint Review Panel recommended approval of the project on Dec. 19, 2013, and the former Conservative government of Prime Minister Stephen Harper approved the project on June 17, 2014.

Northern Gateway had until the end of 2016 to begin building the pipeline, but applied to the National Energy Board for a three-year extension in May. The request was supported by several local governments in Northeast B.C., including the City of Dawson Creek and the Peace River Regional District.

But the National Energy Board said it is suspending its review of the request, and will also suspend its review of any filings from Northern Gateway regarding compliance with the 209 conditions attached to the project. The NEB said it made the decisions in response to the court’s decision.

‘Mortally wounded, maybe’

Kathryn Harrison, a political science professor at the University of British Columbia, believes the ruling means the Enbridge pipeline is now in serious jeopardy.

“It’s pretty close to a death blow,” said Harrison. “Mortally wounded maybe.”

When the project was approved, now-Prime Minister Justin Trudeau promised to reverse the decision if elected, saying the project threatened B.C.’s coastal economy. During his election campaign, Trudeau promised a moratorium on crude oil tankers on B.C.’s north coast. But in recent months, Transportation Minister Marc Garneau said that isn’t necessarily a death knell for Northern Gateway.

Trudeau, however, has also reiterated his opposition to the route of the pipeline in the wake of the court’s reversal.

Implications of the decision

Industry observers are asking what impact it might have on other

major Canadian pipeline projects, such as the Trans Mountain expansion (TMX) project proposed by Kinder Morgan Canada Inc. Not unlike Gateway, TMX weathered a review by the NEB, which in May of this year also recommended conditional approval by the federal cabinet. The cabinet has until mid-December of this year to decide on the project.

Kinder Morgan executives have offered little in the way of comment on the impact of the appeal court decision on Trans Mountain. “We are aware of the … decision … and will be reviewing it in detail,” Ian Anderson, company president, said in a prepared statement.

He said Trans Mountain has long-term relationships with Aboriginal communities along its pipeline corridor and is committed to creating new opportunities and shared prosperity.

“The federal government is currently consulting about our project directly with Indigenous peoples as well as through its ministerial panel and we anticipate those processes, along with what we’ve already undergone, will ensure the interests and needs of Indigenous peoples are taken into account when the federal government makes the final decision on the (TMX) project.”

—Staff, with files from Daily Oil Bulletin, Business in

Vancouver, Canadian Press


John Carruthers, president, Northern Gateway

“The Aboriginal Equity Partners and our commercial project proponents are fully committed to building this critical Canadian infrastructure

project while at the same time protecting the environment and the traditional way of life of First Nations and Métis peoples and

communities along the project route.”

PIPELINESNorthern Gateway ‘fully committed’ despite court’s ruling

OUTLOOKJULY 15, 2016 PIPELINE NEWS NORTH • 5

Canada’s business climate is becoming increasingly un-certain and we see this as a

problem.The most recent illustration

popped up right in our backyard. The Federal Court of Appeal last month overturned the federal government’s approval of the En-bridge Northern Gateway pipeline project.

The Court found that the federal government had not adequate-ly consulted with First Nations groups that would be affected by the pipeline.

“It would have taken Canada little time and little organizational effort to engage in meaningful dia-logue on these and other subjects of prime importance to Aboriginal Peoples. But this did not happen,”

the ruling states.Based on previous approval

from the federal government, other groups involved had, in good faith, been investing time, energy and money, upholding their com-mitments and doing their part.

Notably, the chief proponent, Enbridge, the company behind the Northern Gateway project, went through extensive consulta-tions with aboriginal groups.

The federal government ob-viously chose not to.

This government may elect to blame this failing on its predeces-sors, the Harper Conservatives, but the uncertainty surrounding another major business venture, the Pacific NorthWest LNG pro-ject, falls squarely on the current Liberal government.

In March, the Liberals stated they’d decided to tighten up their environmental review process and wanted more time to review the ef-fects of the LNG terminal, planned for Lelu Island off Prince Rupert.

Local operator, Progress Energy, has already cut back its drilling and completions activities as it waits for a decision.

In late June, the federal govern-ment finally agreed to start the clock on another 90-day review period from the date of the latest submission from Pacific North-West LNG. At the end of this latest review, we all hope finally to hear the fate of this project, which is critical to Northern B.C.

Prudent investors look for cer-tainty and stability when they shop their dollars around. If Can-

ada wants to attract the invest-ment it needs to sustain a robust economy, it must present a vastly different picture from the one it’s displaying now.

If Canada becomes known for a business environment subject to continuing and extended gov-ernment approval delays, course-changes, and not keeping up its end of the bargain, potential in-vestors will take their business elsewhere hurting everyone in Canada. I call on the federal Lib-eral government to step up and fix this now.

Tim Maryon is vice-president of sales and business development at Peace Country Petroleum in Fort St. John.

Uncertain business environmentunhealthy for Canada’s future

OIL MATTERS

Tim Maryon

Enbridge looking to rent Dawson Creek office space after gas plant acquisitionJONNY [email protected]

Enbridge is considering opening an office in Dawson Creek after acquiring a pair of natural gas plants in the region earlier this year.

The company bought the Tupper Main and Tupper West gas processing facilities southwest of Dawson Creek from Murphy Oil Corp. in January.

The plants, located in the heart of the Montney shale gas field, treat raw natural gas extracted in the area.

The $538 million deal in-cluded 53 kilometres of high-pressure gas pipelines. Enbridge took over the oper-ations April 1.

Fred Schuetz, Enbridge’s senior manager of Canadian midstream assets, told coun-cil “our plan is to be here for the long-term.”

Troy Rider, another En-bridge official, told the Dawson Creek Mirror his

company was considering leasing office space in town. Murphy Oil currently has an office in Dawson Creek.

“We’re looking at our needs for an administration office here in town,” Rider said. “We haven’t made the final decision on it yet, but we’re certainly evaluating that right now. We’re looking at leasing opportunities for sure.”

In a presentation to Daw-son Creek City Council June 27, Enbridge officials said the plants employ 42 people full-time, many of them former Murphy Oil staff. The com-pany planned to hire up to six additional full-time staff.

According to a release when Enbridge bought the plants, Tupper Main and Tupper West are adjacent to the company’s existing Sexsmith gathering system, as well as the Alliance Pipe-line, which carries natural gas from Northeast B.C. to Chicago.

BRONWYN SCOTT PHOTO

FSJ FOR LNG RETURNS WITH OPTIMISMFSJ for LNG founder Alan Yu returned from his LNG or BUST mission to Ottawa with optimism on Tuesday, June 28. Yu travelled the country to inform the federal government of the precarious economic situation in the region and to encourage the government to get liquefied natural gas to market.

With the clock ticking toward a federal decision on Pacific NorthWest LNG this September, Yu says he’s optimistic his presence in Ottawa will help sway officials.

“I know for a fact that we did hit the daily summary news for Parliament ... I feel that they are aware of the economic need to approve the (the project),” Yu said.

“We are very happy, and I am optimistic that the federal government will approve Pacific Northwest LNG. Everyone in Ottawa is saying that it will be up to science, which is good. I just hope it is the right science that also involves economics.”

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MISSION STATEMENTOur mission at Pipeline News North is to provide

the most current, interesting, and relevant news and information about the oil and gas industry in Northeast B.C. and Northwest Alberta. Have an interesting story to share or a news lead? Email us at [email protected].


Site security more than being a night watchmanROB [email protected]

If you look close enough, you may see Roy Whitford spending his days and nights with his eyes peeled on both people of the region and their property.

But don’t worry, the owner of Armada Security is making sure things are locked up tight.

Working the dead of night, sometimes the roads are quiet. Other times it can be more excit-ing. Specializing in oilfield site as well as oil and gas security, Whitford has more than five years experience in the field. He said security comes down to a similar word.

“It is all about safety. Whether we are talking land security or oil and gas. There are safety drills and other formal operating procedures to be per-formed as well.”

Whitford, based out of Dawson Creek, says the job is more exciting than sitting through the night on a stakeout in his vehicle.

“We could be working a site that has more than 500 people coming on and off it on any given day. Employers need to know who is coming onto and leaving the sites,” he says.

“The responsibility of maintaining and even creating a safe environment is part of the job.”

Sometimes this includes monitoring or sur-veillance. When it comes to security, the job is sensitive in nature where nothing could be hap-pening and then the next second everything is going down.

It is not just being the night watchman, he says. “Helping people is something we do even as

children. Health and safety is so key.”Currently with a contract for substation work

near Tumbler Ridge, Whitford would like to employ more First Nations representatives in security.

“It is rare to see them in security and also rare in the oil and gas sector,” he said.

“I’d like to change that. This is a good industry to be in and great career to have.”

ROB BROWN PHOTO

Roy Whitford of Armada Security. When it comes to security, the job is sensitive in nature—nothing could be happening and then the next second everything is going down.

Thieves strike CNRL work sites, RCMP on the huntDawson Creek RCMP are investigating thefts

from Canadian Natural Resources Ltd. (CNRL) properties in the South Peace area.

The thefts happened on July 4. Police say the thieves targeted several of the company’s work sites, taking an undisclosed number of deep cycle solar batteries.

RCMP have received several reports of solar panels and batteries being stolen from oil and gas sites this year, as well as vandalism on a gas site near Fort St. John.

Surveillance video captured a vehicle RCMP be-lieve was involved in the thefts—a silver/grey 2013-2016 Dodge Ram 3500 Turbo.

Police say there is a large dent on the driver’s side near the gas cap and a small dent over the rear pas-senger’s side wheel well. The truck also had a thin red tidy tank in the box. Vehicle registration num-bers were seen printed on the side of the truck under a set of after-market dual antennas.

“The suspects may have known there was a sur-veillance system at the sites as they took time to cover the front and back licence plates,” Cpl. Dave Tyreman said in a release.

Police are asking anyone who recognizes this vehicle to contact the Dawson Creek RCMP at 250-784-3700, or if you wish to remain anonymous, call Crime Stoppers at 1-800-222-8477 (TIPS).


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MIKE [email protected]

The son of suspected 2008 Encana bomber Wiebo Ludwig has thrown his support behind residents in Tomslake protesting a natural gas facility planned near Blockline Road south of Dawson Creek.

Josh Ludwig joined a protest July 7 near the area off of Highway 2 where Encana wants to build the South Central Liquids hub on a 19 hectare plot of land. The plant will take in natural gas from existing pipelines in the area and extract liquids such as propane and butane.

About 25 residents live within a two kilometre radius of the proposed facil-ity. They fear their slice of rural living will become an industrial park and are concerned about emissions from the plant.

“I remember how badly we wanted some support (when we opposed En-cana projects) and it was often hard to come by,” Josh said. “So many people (work) for the oil and gas industry and don’t want to compromise their salaries.

“The scripture says do unto others

as you’d have them do unto you—and I thought these people could use our sup-port,” he added.

In recent years, Josh has vowed to continue the fight against oil and gas development started by his late father—a preacher and leader of the Trickle Creek Christian community near Hythe, and anti-oil and gas activist who was convicted in 2000 of bombing a Suncor site near his home. Ludwig has always maintained his innocence.

Before his death in April 2012, Wiebo Ludwig was the subject of another RCMP investigation after Encana wellheads and pipelines in the Tomslake area were the targets of several bombings between October 2008 and July 2009.

Wiebo was arrested at a Grande Prai-rie hotel in 2010 after forensic experts found his DNA on two letters sent to the Dawson Creek Daily News that threat-ened Encana operations. He was held for 24 hours before being released with-out charge.

The RCMP had no comment on Ludwig’s appearance at the protest, saying it respects the right to democratic and lawful protest.

MIKE CARTER PHOTO

Wiebo Ludwig’s son-in-law Sebastian Mair, pictured, joined other members from the Trickle Creek farm, including Ludwig’s son Josh, at a July 7 protest against a proposed Encana natural gas plant in Tomslake.

Wiebo Ludwig’s son lends support to Encana protest


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Progress Energy supports extension of North

Montney sunset clauseEarlier this year, NOVA Gas Transmission Ltd. applied to the Nation-

al Energy Board (NEB) for a one-year extension to the sunset clause for its North Montney project, citing continuing uncertainty about the timing of Progress Energy Canada Ltd.’s Pacific NorthWest LNG project.

In a letter to the NEB dated July 5, Progress noted that unanticipated regulatory delay has been experienced in obtaining approvals associ-ated with the downstream Pacific NorthWest LNG facilities.

This delay has affected the ability to make a final investment deci-sion (FID). Achieving FID was incorporated into the board’s approval conditions for the North Montney project. “It now appears that this regulatory delay will continue through the summer and into the fall,” the company stated, adding that “Progress Energy urges the board to grant the extension as requested by NGTL.”

“The requested extension is warranted and is consistent with the past practice of the board to extend its approvals in order to accom-modate delays associated with obtaining approvals from other regula-tory authorities,” the letter noted. “Progress Energy further notes that significant costs have been incurred in advancing the North Montney project.

“As the board is aware from evidence submitted in support of the North Montney project, there is a large gas supply that requires the construction of the North Montney facilities. The requested extension is critical to preserving the significant investment made to date to ac-commodate the development of this North Montney gas supply.”



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Squamish First Nation approves pipeline for Woodfibre LNGNELSON BENNETTBusiness in Vancouver

Squamish First Nations chiefs and councilors have approved a new pipeline and compressor sta-tion that will provide natural gas to the Woodfibre LNG plant in Squamish.

The Squamish Nation last year approved the Woodfibre lique-fied natural gas plant itself, which also received federal approval in March.

The one final piece of the puzzle was the pipeline extension and compressor station, which will be built by FortisBC.

The Squamish Nation con-ducted its own environmental assessment, and issued 25 condi-tions for approving the LNG plant and the FortisBC pipeline exten-sion. Nine of those conditions re-lated to the FortisBC component of the project.

One of the concerns addressed in the Squamish environmental assessment agreement was the location of a compressor station. Another was the routing of a new pipeline extension.

FortisBC agreed to relocate the

compressor station and to take a different route on the pipeline ex-tension to avoid the Skwelwil’em wildlife management area.

Squamish Chief Ian Campbell said that the environmental as-sessment agreement undertaken by the Squamish First Nation – agreed to by both FortisBC and Pacific Oil and Gas (the company behind the LNG project) – is a legally binding agreement that gives the Squamish Nation legal recourse, should the conditions be breached.

“Under the environmental as-sessment agreement, we become watchdog over our territory — our land and aquatic habitats,” Camp-bell said in a memorandum to the greater Squamish membership.

“Squamish Nation has approval authority over aspects of the pro-ject that are much stronger than allowing the provincial govern-ment to monitor and enforce its conditions and plans.”

One of the 25 conditions that has been agreed to but not yet ne-gotiated is an economic benefits agreement with both Woodfibre LNG and FortisBC.

Wait for Pacific NorthWest LNG FID could drag into June 2017 JONNY [email protected]

The head of an advocacy group for B.C.’s oil and gas service sector says it could be almost an-other year before Petronas makes an investment decision on its Pacific NorthWest LNG facility.

At the annual general meeting of Energy Servi-ces BC late last month, President Dave Turchan-ski told members that, according to a source within the company, the Malaysian oil and gas giant likely won’t make a final investment deci-sion on Pacific NorthWest until June 2017.

The facility, which would be built on Lelu Is-land near Prince Rupert, would process gas from Northeast B.C. for export to Asia. It is undergoing a review by the Canadian Environmental As-sessment Agency, with a decision expected by mid-September.

“At the earliest is June of 2017, Petronas might come out with a final investment decision (FID),” Turchanski said in an interview. “If they come out with an FID, that doesn’t mean they’re going to go to work right away. They might delay it another year, they might delay it two years, they might de-lay it five years.”

“We’re looking at (the second quarter) of 2018 before things really get going again,” Turchanski

said. “We’re a long ways out yet.”A spokesperson with Pacific NorthWest LNG

would not confirm when a final investment de-cision would take place. The company gave conditional approval to the project in July 2015. However, the Canadian Environmental Assess-ment Agency has since delayed the project, say-ing it needs more time to review its impacts on carbon emissions and the Skeena River salmon fishery.

The facility and upstream assets total nearly $36 billion dollars, making Pacific NorthWest one of the largest foreign direct investments in Can-adian history.

A June 2017 final investment decision would be politically difficult for the governing B.C. Lib-eral party, which is facing an election campaign in May 2017. Developing a liquefied natural gas (LNG) industry was a major plank of the B.C. Lib-eral platform during the 2013 election.

SUPPLIED PHOTO

The suspension bridge which would carry processed LNG from the Pacific NorthWest LNG facility to a marine berth off Lelu Island. A decision to invest in the project likely won’t come until next June, the head of Energy Services BC says.

LNG


BUSINESS IN VANCOUVER PHOTO

In October 2015, LNG Canada CEO Andy Calitz told the Vancouver Board of Trade that Shell and its partners planned to make a final investment decision in 2016.

FID for LNG Canada delayedSite work continues; CEO reiterates project is not cancelledMIKE [email protected]

A final investment decision has been pushed back for a Shell-led liquefied natural gas (LNG) export facility planned for the B.C. coast near Kitimat. LNG Canada officials announced the news July 11, but weren’t saying when the deci-sion will be revisited.

“Given the challenges of the global energy market, our joint venture participants …have decided to delay a final investment decision on LNG Canada,” LNG Canada CEO Andy Calitz said in a teleconference call.

The company will continue site preparation work for the LNG site in Kitimat, Caltiz added.

“The project in Canada is FID ready and has not been cancelled,” he said.

An announcement on whether the project would receive funding was originally planned for the end of 2016. The partners—who include PetroChina, Mitsubishi Corporation and Kogas, the South Korean national gas company—said it would need more time to make the choice on whether it would fund the estimated $40 billion project.

The project would process natural gas from Encana’s Cutbank Ridge Partnership in the South Peace for export to Asia. It would employ 7,500 people during peak construction.

In January, the proposed plant was the first LNG project in the province to receive permits from the B.C. Oil and Gas Commission.

“LNG Canada remains a promising opportun-ity,” the partners said in a release, noting that the company has “important commercial and en-gineering contracts in place to design and build the project.”

Calitz also gave a nod to the province and First Nations. “Our project has benefitted from the overwhelming support of the BC Government, First Nations–in particular the Haisla, and the Kitimat community,” LNG Canada he said.

“We could not have advanced the project thus far without it. I can’t say enough about how valu-able this support has been and how important it will be as we look at a range of options to move the project forward towards a positive FID by the Joint Venture participants.”

Kathleen Connolly, executive director of the Dawson Creek & District Chamber of Com-merce, said the news didn’t come completely as a surprise to her.

But, “it’s very disappointing that we’re seeing an-other project go into a pause mode,” she said.

“It’s very concerning in the bigger picture that we see these projects face such a tough uphill battle and then when they do get approval, the market has changed.”

Connolly blamed Canada’s lengthy regulatory process for the province “losing its spot in line” for LNG exports.

”Everyone in our region understands the importance of the energy sector,” Dawson Creek Mayor Dale Bumstead said. “It’s so important to the development of the area around Dawson Creek so to hear (this project) has been delayed is just disappointing to me.”

Bumstead said it was hard to predict what the impact of this decision would be on the local community, but feared that it could mean less investment in the area.

“It’s a real biggie for (the area)—the drilling and the exploration and all that stuff drives the investment in the community, businesses and people coming here for opportunities to work. So, (losing that) is the worry.”

—with files from Business in Vancouver

LNG


The Fort St. John Petroleum Association held its 33rd annual Oilmen’s Trapshoot at the North Peace Rod and Gun Club July 8 and 9.

Dudley Wagner was handed the Ivor Miller award for his commitment to the association. Wag-ner first came to the Peace Country in 1956, and moved up in January 1957. He opened up Fort St. John Aviation where he taught locals how to fly and delivered mail to communities around the area. He was also involved in a number of other local busi-nesses throughout the years.

Association President Sean Thomas says Wagner was a member of the club before it was officially the petroleum association.

“He was a member in 1958 and was one of the original members to sign the charter,” Thomas says.

“He was the first secretary of the club, was part of the first trapshoot and had shot in the first 27. He is the only original member that still attends the monthly meetings on a regular basis, and always says a heartfelt and oilpatch-oriented grace for all of the guys before every meal.”

High Teams1st Place: Twilight Pressure Controls, Score 4132nd Place: Rapid Wireline Services, Score 397

High Overall for the shoot1st Place: Mike Nielsen, Score 912nd Place: Bruce Bell, Score 89

High Senior1st Place: Dave Wallace, Score 89

The Petroleum Association’s next event is the Family Campout Weekend set for Aug. 12 to 14 at Peace Island Park. The club hopes to fill all 120 spots, but is only about three-quarters full so far. Visit fsjpetroleumassociation.com for more infor-mation. Attendees must be a current member with dues paid.

—Matt Preprost

Dudley Wagner recognized at 33rd annual Oilmen’s Trapshoot

RON CARTIER PHOTOS

OILMEN’S


No more drilling in Peace-Moberly Tract as part of reconciliation deal

JONNY [email protected]

B.C. will no longer sell the right to drill for gas in a swatch of terri-tory south of the Peace River, part of an agreement with Saulteau First Nations aimed at environ-mental protection.

In an order signed March 8, Minister of Natural Gas Develop-ment Rich Coleman removed natural gas and oil dispositions from the Peace-Moberly Tract, a 107,000-hectare area south of the Peace River of cultural importance to the Saulteau and other Treaty 8 First Nations. The land has been heavily impacted by industrial development, including construc-tion of the Site C dam.

B.C. agreed to quit auctioning oil and gas parcels in the tract as part of its New Relationship agree-ment with the Saulteau, signed late last year.

Crew Energy, the oil and gas operator in the area, was issued new tenures further east, accord-ing to ministry spokesperson Lind-say Byers.

“The Peace-Moberly Tract was recognized as a significant area for

the Saulteau First Nations and as part of the New Relationship and Reconciliation Agreement,” Byers wrote in an email. “As part of the agreement, tenure in the Peace-Moberly Tract was relinquished last year.”

While the company owned ten-ures in the area, there were no wells or gas production going on in the tract. Late last year, Saulteau Chief Nathan Parenteau told the Alaska Highway News that oil and gas, forestry, and hydroelectric development in the nation’s trad-itional territory was opening the door for increased wolf predation.

Roads, seismic lines, and other development allows wolves to move easier through the back-country. On July 1, the province made changes to the moose hunt in the area aimed at taking pres-sure off ungulate populations.

SUPPLIED PHOTO

Late last year, Saulteau Chief Nathan Parenteau said that

oil and gas, forestry, and hydroelectric development in the nation’s traditional

territory was opening the door for increased wolf predation.

Crew Energy issuednew tenures

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JONNY [email protected]

Marc Morrissette works in the oil-patch, drives a big truck and enjoys mixing it up with the anti-pipeline crowd on social media. So in some ways, the rant was inevitable.

“I’ve had a lot of (rants),” said Mor-rissette, a pipeline boss and father of three who lives just outside Fort St. John. “My wife said ‘don’t get so fired up, just clean up your vocabu-lary and make it public and see what happens.’”

Morrissette’s Facebook post, which went up earlier this summer, tackled the “douchebags in lifted trucks stereotype” of the Canadian oilpatch.

“That was the first one I made public.”

As of July 13, it had been shared 6,648 times by oilpatch workers weary of lectures on their choice of vehicle.

Morrissette, who drives a F-350 diesel (with no lift) to get to work over rutted oilpatch roads, said he was sick of hearing about how Western Can-adians are suffering due to their fool-ish choice of vehicle.

This Hour Has 22 Minutes, for example, has riffed on down on their luck oilpatch workers in at least two segments this year. One features a greasy Fort McMurray correspondent lamenting the economic downturn (“I even had to sell the smaller truck that

sits in the bed of my bigger truck in case my bigger truck breaks down, bud!”) Another featured two Maritimers forced to move home to their mother’s house (“He had to sell his truck. Now he’s only got two trucks left!”)

It’s a sentiment Morrissette says has been thrown in his face during the latest debates over Pacific North-West LNG: hard times? Shouldn’t have bought that big truck.

“(It’s like) when Newfoundland lost its fisheries, if the West made fun of them and said get rid of those big fancy boats,” he said. “It’s the same

reason people like to drive by an acci-dent to see the carnage. It’s the wrong way to be.”

He said he hoped to convey that for many people working in the oilpatch, a big truck is a necessity. While some young “meatheads” might blow their money on bells and whistles, most just need to get to work.

“Pipeliners work on the road, so 90 per cent of them own travel trailers,” he said. “You’ve got to be able to pull it. You need a truck to get your trailer to where you’re going to be living for the summer or the next three months or whatever. Also, as soon as you get

off the highway, you’re on dirt.“You’re pulling trailers, you’re haul-

ing tools. It’s very important to be driving a truck. You can’t drive a car out there,” he said.

Morrissette spent years working north of Fort St. John when times where good, saying he put in “hun-dreds of kilometres of pipe up there.” He said he moved his family to Fort St. John full time when the NDP were elected in Alberta.

He described the new reality in the oilpatch as “brutal.”

Companies looking for work “are bidding so low just to have cash flow, and they’re driving rates down for guys who haven’t worked in awhile…let’s say you made $30 an hour, you’re going back to work for $17.”

Morrissette said he wasn’t sur-prised by the reaction he got to his rant, saying many in Western Canada feel they’re being kicked while they’re down.

While he drives a less ostentatious truck now, he doesn’t begrudge others their souped up ride.

“When you get a truck, you love it and you want to dress it up,” he said. “You put some rims on it, you put on some tires. It’s part of life that any young man in the North or in the West or anywhere goes through.”

Lifted trucks have become “part of the stigma that makes people against pipelines,” he said. “Yeah, (it’s) over-kill, maybe, but according to who?”

SUPPLIED PHOTO

Marc Morrissette’s Facebook rant against people lecturing oilpatch workers on their lifted trucks was shared nearly 7,000 times.

Pipeliner’s rant against lifted truck schadenfreude strikes nerve

At 69 wells, Progress Energy the most active driller in the NEBCDrilling activity in British Columbia over the

last year has been focused on the Montney nat-ural gas reserves, with Progress Energy lead-ing the way in wells drilled, according to BOE Report.

BOE reports that a total of 256 wells were drilled in the province since June 2015, with 226 in the Montney. Of those 226, Progress

has drilled 68 wells since June 2015, all in the Montney.

Tourmaline Oil Corp. is the next most active driller in B.C., with 21 wells drilled, all in the Montney.

Rounding out the top five are ARC Resources (17 wells), Shell Canada (15 wells), and Crew Energy and Encana with 12 wells each.

According to BOE, Progress produces more than 750 million cubic feet equivalent of natur-al gas in Northeast B.C. and Northwest Alberta.

The company’s production serves Canadian markets while it expands production capacity on its Montney land holdings in preparation for the possible opening of new LNG markets in Asia.

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Scott Land the top Crown buyer at the six-month land sale markCrown land spending in the first half of 2016 in

Canada was $80.18 million, the lowest for a six-month period for at least 21 years.

Industry has acquired 492,844 hectares at an aver-age price of $162.69 so far this year. At the six-month mark of 2015, government bonus revenue was $205.81 million, which was spent to pick up 1.09 mil-lion hectares at an average price of $188.25.

The second-lowest bonus total for a six-month period from 1995-2016 was in 2015. By contrast, the highest collected during a six-month period was in 2006, when industry shelled out $2.66 billion during a rush to tie up oilsands acreage.

AlbertaWhile Crown spending has been very weak so far

in 2016, Alberta has carried the lion’s share. Year-to-date, the province has attracted $63.77 million in bonus revenue on 428,269 hectares at an average price of $148.91. To the same point of 2015, industry had paid $165 million for 1.01 million hectares at an average price of $164.15.

Alberta’s July 6 land sale produced $6.28 million. Industry purchased 55,872 hectares at an average price of $112.44.

B.C. land sales continue sluggish paceBetween 1978 to 2015, the lowest bonus haul in a

single year for B.C. was $16.72 million in 1982, and the second lowest was in 2015 at $18.36 million.

After six sales so far in 2016, the province has col-lected $4.22 million, with six sales left this year to avoid the low watermark.

So far in 2016, the province has sold 27,377 hec-tares at an average price of $154.20.

To the same point of 2015, B.C. had collected $6.77 million on 24,203 hectares at an average of $279.68.

The heyday for land buying in Northeast B.C. occurred in the late 2000s. The peak of this land rush came in 2008, when industry paid $2.66 bil-lion for 756,752 hectares. In 2007, the government collected $1.05 billion in bonus bids.

B.C. pulled in $510,660 at its July 13 land sale. Industry picked up 14 drilling licences cover-ing 4,249 hectares, at an average price of $115.

Saskatchewan, Manitoba spending down

Over the first six months of the year, Saskatchewan Crown land spending is down at $12.04 million. In-dustry has acquired 35,784 hectares at an average price of $336.59. To the same point of 2015, industry had spent $32.65 million tying up 62,194 hectares at an average price of $525.

Manitoba spending, meanwhile, dove to $141,859 on 1,413.62 hectares at an average price of $100.35. Over the same timeframe of 2015, the province had collected $1.33 million on 1,360 hectares at an aver-age of $979.50.

Scott Land top Crown buyer in CanadaScott Land & Lease Ltd. was the top buyer of

Crown land in the first half of 2016, spending $34.55 million, with $29.49 million for acreage in Alberta.

The broker acquired 154,410 hectares on behalf of its clients for the six-month period at an average price of $223.77. Scott Land picked up 126,803 hec-tares in Alberta from January-June 2016.

The top bonus for a single parcel occurred at the June 22, 2016, land sale, where Plunkett Resour-ces Ltd. acquired a parcel for $3.48 million in the Athabasca oilsands area. Several other multimil-lion-dollar parcels that were sold in the Athabasca oilsands area at the auction, and were also acquired by Plunkett.


RICHARD MACEDO PHOTO

LAND SALES

Layoffs come with hidden costs, business leaders told JONNY [email protected]

Two years ago, business owners gathered at a Dawson Creek hotel for a panel called Living With The Boom to discuss labour shortages, climb-ing rents and other problems arising from a liquefied natural gas bonanza.

Two years later: a presentation from an employment lawyer on downsizing.

On June 21, the Dawson Creek and District Chamber of Com-merce hosted Geoffrey Howard, a labour and employment lawyer with the Vancouver firm Roper Greyell. Around a dozen local busi-ness people turned out for a crash course in their legal obligations when laying off employees.

For Executive Director Kathleen Connolly, it’s a reflection of how quickly Northeast B.C.’s fortunes have changed.

Connolly said there wasn’t “a ton of interest” in the event, partly because “a lot of our employers have already done most of that stuff.”

“They’ve done the 20 per cent

(cut), they’ve done the work-share, they’ve done all that stuff and now they’re just waiting for the economy to turn around,” she said.

Over the past two years, oil prices have dropped precipitously, bring-ing natural gas prices down with them. Twenty LNG export projects were once proposed for the B.C. coast—now, some analysts say it’s possible none will move forward. Northeast B.C. has consistently had the province’s highest unemploy-ment rate this year.

Howard said many employers facing those odds turn to layoffs, but don’t realize the hidden costs of staff reductions.

More than 129,000 people lost their jobs in Alberta last year, he said.

“There’s a lot of academic litera-ture out there studying businesses that go through these massive down-sizings,” Howard said. “What they show is it doesn’t always end up de-livering the results (managers and business owners) are planning on.”

Any savings from layoffs can quick-ly be lost in severance, legal challen-ges and lost productivity, he said.

He also outlined the tricky question of how much notice must be given to employees in a tough job market.

“A couple of judges made the good observation that you can’t double punish the employer,” he said. “They didn’t want to lay this person off, they only did it because the indus-try’s in recession. You can’t increase

the notice awards by 50 per cent just because it’s a tough job market. You can’t shift it all onto the employer, it’s a bit of a balance.”

“The fact the employer had to do it to save the company is not a fac-tor that reduces how long the notice period is,” he added. “It’s specifically excluded.”


• Distributed to the community in general through these fi ne publications, Alaska Highway News, Dawson Creek Daily and Fort Nelson News.• Distribution by mail and direct drop-off to Oil & Gas companies,and related businesses and organizations, in the following communities:BRITISH COLUMBIA – Arras, Baldonnel, Cecil Lake, Charlie Lake, CHETWYND, Clayhurst, DAWSON CREEK, Farmington, FORT NELSON, FORT ST. JOHN, Goodlow, Groundbirch, HUDSON HOPE, Moberley Lake, Pink Mountain, Pouce Coupe, Progress, Rolla, Rose Prairie, Sunset Prairie, Taylor, Tomslake, TUMBLER RIDGE, and Wonowon.ALBERTA – Baytree, Bear Canyon, BEAVERLODGE, Berwyn, Bezanson, Bonanza, CLAIRMONT, Eaglesham, FAIRVIEW, Falher, Girouxville, GRANDE PRAIRIE, Grimshaw, Grovedale, HIGH PRAIRIE, Hines Creek, Hythe, LaGlace, MANNING, McLennan, PEACE RIVER, Rycroft, SEXSMITH, Silver Valley, Spirit River, VALLEYVIEW, Wembley, and Worsley, Zama City.

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Geoffrey Howard, a labour and employment lawyer with the Vancouver firm Roper Greyell, said many businesses aren’t aware of the hidden costs that come with layoffs.

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