Friday, 30 December 2016

Can we TRUMP The Status Quo?

By: Mark Scholz
Published: Oilfield Pulse


       As 2017 approaches, the Canadian oil and gas industry is part of the national conversation like few times in our history. Our responsible, ethical, world leading industry is at risk of being permanently damaged by an orchestrated attack from radical environmentalists. Over the past decade, millions of dollars have been spent by well-organized, media savvy ENGOs to position Canada's oil sands in popular culture as the focal point of climate change, dirty oil, and corporate greed. They have managed to place several of their key representatives, such as Tzeporah Berman and Gregor Robertson, in important government roles in Western Canada and are now using taxpayer dollars, in addition to their considerable private funding, to drag the Canadian energy industry through the mud in front of the world.
      Ironically, at the same time, Canada's oil and gas industry continues to lead the world in responsible and ethical production. The oil sands itself has seen a 30% reduction in carbon emissions per barrel since 1990, demonstrating the industry has been working on carbon reduction even before carbon reduction was cool. All told, Canada produces less oil per day than the state of Texas alone and amounts to 1.6% of global greenhouse gas emissions. Canada uses the royalties from the sale of oil and gas to fund hospitals, schools, and parks, and the industry itself provides approximately 500,000 Canadians with jobs. Canadian technology and regulations for things like pipelines are used around the world as models of best practices in oil producing areas, and Canadian trained engineers, geologists, and rig workers are highly sought after. Yet, in our own country, there continues to be a very vocal, emotional, and prominent group of people who want to shut our industry down.
       As Vivian Krause points out in her recent article, The Great Green Election Machine, it would appear Canada has been duped. Our country's greatest virtues -- selflessness, charity, responsibility, compassion -- have all been taken advantage of using misinformation and celebrity culture to the point where Canadians are fighting amongst ourselves over a problem the rest of the world seems to have, based on their actions, bestowed on Canada and Canada alone.
      Yes, many countries came together to ratify COP21 in Paris in 2015. Since then, however, the United States has lifted a 40 year ban on oil exports and built 16,000km of pipelines. China, while trying to reduce its dependence on coal, continues to build new coal facilities at a rapid pace. Germany, a country praised for its renewable energy policies, is moving back to natural gas in many areas due to high costs and inefficiencies in wind and solar. Nigeria continues to allow the uncontrolled release of methane from its production facilities. Saudi Arabia, the world's wealthiest oil producer, continues to see class and wealth inequality on a scale unheard of in Canada. The actions do not match the words.
      There is a role for Canadian oil and gas in global markets, even though the world will continue to shift toward renewable and lower carbon energy forms and as clean technology evolves over the coming decades. Canada's role should be to offset and displace environmental laggards in oil and gas production not be shut down from participating altogether.
      In 2017, we are forecasting a modest increase in the amount of wells and a WTI price of between $40-$60 USD. Given the climate described above, the Canadian oil and gas industry has a uphill battle ahead even with a recovery in the price of oil. The recent election of Donald Trump in the United States, however, could be seen as a huge opportunity for Canada. Trump has stated, on multiple occasions, his support for Keystone XL and favoured approving the pipeline within his first 100 days of President. Our Prime Minister should be using his first meeting with the new President to reinforce Canada's support for North American energy security, which requires Canadian oil to have greater access to the US market. Keystone XL would provide an additional one million barrels per day of Canadian crude to the US and significantly reduce current price differentials. It would mean better profits for Canadian governments, and more jobs for Canadian workers.
     Additionally, the election of Trump should force the federal and Alberta government to reconsider their position on carbon pricing. The new Trump administration and Republican controlled congress will likely move the United States away from Obama's commitment to the Paris Agreement on climate change or, at the very least, significantly slow its progress. As a result, Alberta's new carbon tax will no doubt push capital away from Canada toward oil and gas investment opportunities south of the border.
      Contrary to what our detractors would like us to thing, the oil and gas industry is not dying. The International Energy Agency (IEA) forecasts the world will consume almost 40% more energy by 2040, and fossil fuels will make up 75% of the energy mix. This energy growth will be driven, almost entirely, by the emerging economies of Asia, the Middle East, Africa, and Latin America, which are home to more than four-fifths of the world's population and a rapidly expanding middle class.
      In 2017, there are huge opportunities for our sector, but in order to realize these opportunities, a few things must happen. First, federal, provincial, and municipal governments need to seriously address business competitiveness in the face of incredible changes in American politics. They must accept our industry is important and recognize it is crucial in providing jobs and tax revenues for all Canadians. They must start treating our industry, and the people and families who rely on it, with respect. They must understand Canada's role in transitioning toward whatever the future of energy may be. They must realize transitioning from a position of financial strength and technical ingenuity will enable us to continue to be an energy leader able to produce, consume, and export affordable, reliable energy so we do not become an energy follower forced to rely on others for supply and paying prices we have no control over. They must approve pipelines and allow our world-class products to be sold on the world market for the benefit of everyone involved.
       Secondly, Canadians who support and understand our world-class oil and gas industry must work hard to share the truth about what we do. Rather than dying, our industry is evolving, improving, and staying competitive as it always has. We must work hard to show the rest of the country and the world why we are the best and why our industry is so important to our quality of life and high standard of living. We need to be unapologetically proud of what we do and not let our detractors continue to carry the conversation.
       The status quo will not provide Canadians with a strong economy and high paying jobs nor will it encourage them to stand behind our industry with support and compassion. The year 2017 can be year that sets Canadian oil and gas apart for what it really is. Let's work together to make it happen.

Tuesday, 20 December 2016

National Suicide

By: Darrell Stonehouse, Editor
Published: Oilweek - JWNENERGY

     
      The election of Donald Trump as the U.S. president has a lot of Canadians smugly looking down on our neighbours to the south, believing they have made a grave error in judgment.

      But rather than wallowing in arrogant condescension, Canadians should be taking a sober look at what Trump's election means for Canada's economy because if the new president carries through on his stated plans, we could be in big trouble.
      The Canadian economy is already uncompetitive versus the U.S. Labour productivity statistics bear this out. For every hour of work in 2012, the U.S. produced $52 of value, compared with $42 of value for Canada.
      Trump, if he walks the walk and isn't just another politician, is set to further roll back the regulatory state and taxation rates that act as a brake on productivity growth. He is set to cut federal corporate tax rates from 35 per cent to 15 per cent, freeing up capital to be invested in  productivity-growing technologies. He has also pledged to cut the regulations that hamper growth, including environmental and land-use regulations.
      There has been a lot of focus on whether a Trump government will walk back the current government's pledge to bring in a tax to limit carbon emissions. It is almost a certainty he will. But he is also going to open up more land to resource development and reduce the red tape that slows development. He is going to invest an expected trillion dollars in real physical infrastructure that could increase productivity.
      Meanwhile, here in Canada, we are headed in the opposite direction.
      Taxes are going up, taking potential capital investment to improve productivity out of circulation. The carbon tax is one example. In 2014, Canada produced 732 million tonnes of CO2. When the proposed federal carbon tax reaches its peak of $50/ tonne in 2022, it will siphon $36.6 billion annually out of the private sector that could have been invested in productivity growth.
      And we continue to add more and more regulations that add costs and slow economic growth that can pay for productivity gains. First Nations, who represent around four percent of Canada's population, basically have a veto on resource development. When development is finally green-lighted, there are usually hundreds of conditions put on it that eat up investment capital.
      These are some of the reasons the Canadian economy is already 18-20 per cent less efficient than the U.S. economy. If Trump carries through on his plans to get government out of the way of investment, this productivity gap will likely grow. The value of the Canadian dollar to the greenback generally tracks productivity. Right now it is at 75 cents.
      Any anti-Trumpers want to wager where it will be four years from now?


Thursday, 15 December 2016

Here Comes Trudeau's Carbon Cops

By: Jordan Bateman
Taxpayes Federation
Published: Fort Nelson News


           Justin Trudeau's climate change plan just keeps getting worse for Canadians.
    It's bad enough that he is forcing British Columbia to hike its carbon tax by 60 percent, while the rest of the world rejects the idea. Reliably Democrat-loving Washington State voted down a carbon tax last month and US president-elect Donald Trump has already ruled out a national tax. Australia and France have scrapped their carbon taxes. We're boldly going where no one else is bothering -- all to address our miniscule, 1.65 percent share of global carbon emissions.
    Now Trudeau is bragging about the bureaucracy his plan will beget. The government plans to unleash thousands of carbon cops across Canada. Buried in a 209-page document of environmental red tape to be discussed by Trudeau and the provincial premiers this weekend are a dozen words that will cost taxpayers millions: "Compliance and enforcement will create thousands of new jobs across the country."
     That's right - thousands of new government employees, paid by your tax dollars, policing carbon emissions and making sure people are installing double-glazed windows, driving less, and following the hundreds of other policies in the report. Or, if these new compliance jobs are forced on the private sector, it will mean higher consumer prices and housing costs. Pick your poison, Canadians: higher taxes or higher prices.
     Amazingly, this is listed in the report by the Trudeau government as an economic benefit.
     The climate patrol is referenced in a section on energy-efficient building codes. The report itself admits that adopting such a code will trigger a "20% increase over average commercial construction costs." (The section also applies to high-density residential, so it's safe to presume the same cost hike will apply to condos.)
      Again, that will drive up the cost of consumer goods and services, and housing. Any suggestion that these buildings will make up for that initial expense with lower energy costs is wishful thinking - Vancouver's natural gas ban will force people here to use much more expensive electricity to heat the buildings. There will be no savings - just more costs for consumers.
      This 209-page report is staggering in its impacts, costs, red tape and pure ludicrousness. Taxes, fees, levies, government intervention in agriculture, transportation, construction, reducing forestry: it's all there, right down to red tape restricting the diets of methane-spewing cattle and new government rules on how to manage farm manure.
      You can see why Trudeau will need a climate police bureaucracy to enforce all of this. There won't be a single part of life that won't be more expensive and more difficult.
       Contrast that with Australia. Our friends down under brought in a carbon tax in 2012 and repealed it two years later. During that time, it cost the Australian economy $16 billion and four political party leaders lost their jobs over it - this according to Chris Berg, a senior fellow with Australia's Institute of Public Affairs, who spoke in four Canadian cities this week as part of a Canadian Taxpayers Federation tour.
       "We were told we would lead the world, but it didn't look like the world was interested in carbon taxes," Berg told Postmedia editors in Calgary. "The idea that anything we in Australia could do to make a legitimate impact on climate change was fairly ludicrous... Climate change is a global problem, not a regional problem."
       Berg is right. The rest of the world aren't interested. And neither Australia, with 1.5 percent of the world's emissions, or Canada, with 1.65 percent, is going to make any difference.
      It's time for Trudeau and the premiers to scrap this plan for higher taxes and more red tape before they do irrevocable economic damage.

Monday, 5 December 2016

“HUBRIS” A Hard Look At Climate Change


Preface

Imagine a movement so bent on achieving its political objectives that it is willing to corrupt science to meet them. Imagine governments around the globe, first adopting and then promoting this official science for more than two generations. Imagine that they are willing to use their regulatory power to implement a massive program of social engineering in order to “save” the planet. Imagine the United Nations leading this movement and insisting that a global effort is required. Imagine the movement’s leaders believing that people around the globe must change their eating, heating, cooling, lighting, toilet, transportation, manufacturing, entertainment, even housing habits and reject values that are critical to their prosperity, happiness, and welfare, confident that humans can adapt and revert to simpler, more primitive, more local lifestyles, have fewer children, and embrace lives presumed to be more in harmony with nature.

Imagine thousands of scientists engaged at public expense in developing a convincing rationale for this unprecedented project. Imagine that these scientists are willing to compromise their integrity in pursuit of the role of a single factor that they insist controls the most complex and chaotic earth system, a molecule – carbon dioxide – that is literally the building block of all of life. Imagine that they believe that by reducing its miniscule – .04 percent – presence in the atmosphere, the planet will cool and climate will stabilize at an optimum level, a level seen only in micro-seconds of geological time. Imagine scientists who dismiss the work of hundreds of their colleagues and believe that their work must be suppressed. Imagine a scientific movement dominated by greedy grant farmers and cheered on by the media, insisting that there is no further need to study the science and that governments need to start implementing its preferred policy of worldwide social engineering. 

Imagine that many leaders of this movement believe that the world’s population needs to be thinned down to a billion people within a generation or two. Imagine that some of the movement’s most revered leaders, even as they advocate that ordinary people must curb their consumption and live simpler lives, pursue lifestyles that consume more energy and other commodities in a year than an ordinary family of four would need over its lifetime. Imagine a movement whose leaders habitually dissemble and mislead and justify this on the claimed greater good they are pursuing. Imagine politicians, civil servants, scientists, activists, and the media flying from one exotic location to another as they plan what must be done to coerce changes in our lifestyles, even to the point of sacrificing human freedom and democracy. 

Most thoughtful people would conclude that only Hollywood could come up with such a bizarre plot. A little more thinking, however, and they might connect the dots. There is such a movement, and it has demanded our attention for more than thirty years. It has devoured billions of dollars in public money and has inserted its menacing tentacles into every aspect of modern life. The UN and all its organs are the leading force behind it, but most governments of the world support it in one way or another. Elites, the media, and even religious leaders, have embraced it, even though they seem poorly informed and ignore its demands while urging others to adopt sharply reduced lifestyles. 

The public face of this science, climate science, is part of a worrying new trend: the emergence of “official” or consensus science. In this perversion of real science, policy becomes the goal of scientific enquiry rather than its result. Over the last thirty years and more, public policy has focused increasingly on dealing with risks to health, safety, and the environment. Much of that policy ostensibly relies on scientific findings. In their decision-making, governments increasingly look to scientists and have resorted to funding science that meets their political need for certainty. Consensus on controversial issues is critical to governments. Ever since Rachel Carson published Silent Spring in 1962, activists have stood ready to convince governments of all manner of risks to humanity and nature, and scientists have obliged by reporting findings that satisfy activist political needs. Once governments acquiesce, it is critical that scientists not undermine their decisions with awkward new findings. Public policy is not easily reversed. The result is a potential monster spewing out more and more regulations, presumably making us safer and healthier and safeguarding the environment, but also substituting social for personal responsibility, reducing freedom and choice, and creating an ever larger, more costly, and intrusive public footprint. 

For many years it seemed that the public agreed that there was a need to take action to control the globe’s climate, but that support has steadily eroded as people have begun to realize the enormity of what is being demanded, the flimsy ground on which this demand is based, and the impact of what would need to be imposed. Public support has declined further as sceptical scientists have pointed out more and more problems with the underlying scientific hypothesis, as engineers have indicated the extent to which purported energy substitutes are not up to the job,  and as economists have calculated the enormous costs and minimal benefits. Only general scientific illiteracy has kept the project afloat. 

                The movement advocates fundamental changes in lifestyles and succeeds by spreading alarm based on the alleged adverse consequences resulting from human-caused (anthropogenic) changes in the climate system. The movement points to the prospect of catastrophic results if those changes are not imposed by public authorities. Alarmism best describes this phenomenon. Critics of the movement are characterized as sceptics because their criticism is grounded in scepticism of various aspects of the science, the economics, and/or the politics of climate change alarmism. Some alarmists refer to sceptics as deniers, a term used in the pejorative sense. Sceptics do not deny climate change or the role of greenhouse gases (GHGs). As explained further in the scientific chapters, many sceptics consider the role of anthropogenic GHGs to be relatively minor and the prospect of catastrophic changes to the climate to be minuscule, thus obviating the need for anything other than appropriate adaptive measures.

This book dissects the global warming/climate change movement in all its ramifications. It analyzes the evolving science of climate change and places its pursuit and findings within the broader context of modern scientific praxis, identifying its strengths and weaknesses and areas of agreement and disagreement. Unlike the popular meme that the science of climate change is settled, the book demonstrates that in proper scientific practice, no issue is ever settled; scepticism is at its heart. Climate science is no exception. The book further argues that, as with other ambitious UN agendas, from the New International Economic Order (NIEO) of the 1960s to sustainable development in the 1990s, embrace of these movements by governments has a predictable life cycle, starting slowly, building momentum, and then gradually fading as a more realistic appreciation of the issues intrudes. While the primary movement is withering on the vine, its effects linger for generations. Governments may never meet the primary objectives of the global warming movement, but they have succeeded in embedding many of its tentacles into public regulatory policies and programs. Multiple interests have become dependent on these policies and will fight to maintain them, including thousands of officials whose careers are wedded to them. As so often happens in public policy, the unintended and harmful consequences become accepted practice, despite their costs and annoyance.

 The world will be a better place when governments agree to tame this monster and refocus their energies on issues within their competence; when religious leaders and other elites accept that they have fallen prey to a movement whose motives are much darker and more damaging than they realize; and when the media adopt a more balanced approach and provide the public with the critical assessment that is often missing from their reporting. It is time for all three to accept that the UN is pursuing a path that can only result in a less prosperous and more divided world. 



 Author: Michael Hart

Friday, 2 December 2016

Mayor's Letter to BC Citizens

"USA stops importing Canadian oil and gas"


Dear British Columbia Citizens,

That is not a current headline but it could be. What would happen to our economy if it was?

I would like to talk to you about energy, pipelines and our natural resources. I am a mum and a grandma and I have lived in the north all my life. I am also the Mayor of Fort St. John --- right smack in the middle of one of the world's largest supplies of oil and gas. I live in a region surrounded by pipelines, wells, hydraulic fracturing (fracking) sites and canola and wheat fields. I have eaten the food we grow here and I drink our water. I understand what it takes to extract our natural resources and what it takes to protect our environment. I live it.

I don't want to try to convince you of anything but I would like to share with you what I know to be true. I strongly encourage you to do some of your own research. Learn more than what you read in a tweet or a Facebook post. I have added some links to reliable resources below for you.

Where does the petroleum we all use every day come from? Canada has some of the largest petroleum resources in the world and yet Canada imports 634,000 barrels of crude oil from foreign countries every single day. That is $26 BILLION of oil imports every year that we could have supplied to ourselves. That product arrives in tankers and is transported t where it needs to go by truck and train right through our communities. And yet we don't want our own product to flow in pipelines to our communities for our own use or tow our ports so we can export it? That just makes  no sense at all to me.

So let's talk about pipelines. I know pipelines are a safe, cost-efficient means of oil and natural gas transportation and emit fewer greenhouse gases than alternate transportation methods. Canada has 830,000 kilometers of pipelines. Three million barrels of crude oil is transported safely every single day. B.C. has over  43,000 kilometers of pipelines. if we took that oil out of the pipelines, we would need 4,200 rail cars to move it. How many of those cars would you like rolling through your community? Between 2002 and 2015, 99.9995% of liquid was transported through our pipelines SAFELY. You probably spill more when you fill up at the gas station.

I understand you don't want tankers floating down our beautiful B.C. coast. But did you know the USA has been shipping up to 600,000 barrels a day of crude from Alaska to the Puget Sound through the Salish Sea for the last 20 years? Did you know that B.C. has a Tanker Exclusion Zone that has been respected for years? That zone stipulates that full tankers must travel on the west side of the zone but those that are not transporting goods can stay inside the protective zone. Other than one natural gas pipeline, Vancouver Island receives all of their petroleum by barge every day. I don't remember ever hearing anyone complain about that. According to Transport Canada over 197,000 vessels arrived or departed from west coast ports in 2015-1487 of them were tankers. 400,000 barrels of crude oil is safely transported off the B.C. coast every single day. Sooo..... I think we are OK there.

Emissions? 80% of the emissions associated with fossil fuels are generated in their combustion -- not their extraction and transportation. If you want to do something about our reliance on fossil fuels then address the demand for them not the transportation of them. Change starts with consumers not industry. A large part of the demand for them not the transportation of them. Change starts with consumers not industry. A large part of the demand for fossil fuels in B.C. is transportation. 33% of our fossil fuels are used to operate cars, trucks, planes, and trains and ferries. If we switched all of that over to electricity we would need not just one Site C dam but 15 of them. Which communities do you want to flood to provide the energy for your electric cars? Remember I live 7 km from Site C dam so I have a pretty good understanding of them.

I love this quote from Blair King an Environmental Scientist and Writer:

"We live in a world where all the work we do to reduce our greenhouse gas emissions in B.C. can be undone with the flick of a pen in China or India. No matter what we do, those developing countries are going to get electrical power to their populations -- if not with LNG, then with coal; and if not with B.C. LNG, then with lower-intensity (read:dirtier) LNG from on of our competitors. In both cases the end result is higher global GHG emissions than if B.C. LNG was used."

He is telling us to look outside our province and see the impact we can have o n GHG on our planet. Our LNG is cleaner than the stuff already on the market because our regulations are tougher and we emit far less GHG in our production than in other countries. Our natural gas industry is committed to continuous improvement.

I understand that you are concerned about safety. I am too. In Canada we have some of the strictest safety requirements in the world. Canada's oil and gas producers are continuously improving the safety of their operations and transportation of their products. Emergency Response Plans are customized for each community, covering key areas such as public safety, protection of community infrastructure, and a clear plan of action with local emergency responders. And we have the B.C. Oil and Gas Commission to oversee B.C. projects and the National Energy Board oversees the larger multi-jurisdictional projects.

The Oil and Gas Commission is our provincial agency responsible for regulating oil and gas activities in British Columbia, including exploration, development, pipeline transportation and reclamation. Core responsibilities include reviewing and assessing applications for proposed industry activities, engaging with First Nations, cooperating with partner agencies, and ensuring industry complies with provincial legislation and all regulatory requirements. International delegations come to B.C., as world leaders, to learn how we have partnered environmental protection with resource extraction. I think the Oil and Gas Commission does a good job protecting the interests of citizens.

Many of you have concerns about the rights of our Indigenous Peoples. I will not speak for them but I will provide you with a quote from Stephen Buffalo, president and CEO of the Indian Resource Council:

"I think industry is willing to be a partner (with First Nations). They want to come with the First Nations together. We are depending on these pipelines for the success of the Canadian economy."

Here is the link to the full article: http://business.financialpost.com/news/energy/pro-oil-first-nations-seek-end-to-pipeline-gridlock?_Isa=f499-1f26

So let's talk about the economy. B.C.'s energy sector offers some of the largest provincial economic opportunities in a generation. It is estimated that, in 2010, 11.2% of the provincial exports came from the natural resource sector. That was over $21 billion worth. Canada's oil and natural gas sector contributes $1.5 billion to the provincial government but it is estimated that it could go as high as $2.4 billion per year. This is money for health care, education and infrastructure. The resource sector is the foundational stone upon which the B.C. economy was built, and it is as important today as ever.

440,000 Canadians are employed because of the oil and gas sector. A recent study by Philip Cross, former chief economic analyst at Statistics Canada, shows the huge economic value of the natural resource industry in B.C., and in particular the Lower Mainland. Cross' report demonstrates that over 55 percent of resource-related jobs and income (direct, indirect and induced) flow to the Lower Mainland. This means those workers contribute to our economy by renting or buying homes, buying groceries, enjoying a quality life and shopping their local businesses.

Let's lead the world in resource extraction, continuous improvements and long term planning.

Let's be leaders in reliable and renewable energy development.

Let's support Canadian industry and stop buying foreign oil.

Let's grow our economy by meeting our domestic needs and exporting our abundant resources.

Let's live well now and in the future.

Thank you for taking the time to be an informed citizen.

Sincerely,

Lori Ackerman,
Mayor of the City of Fort St. John

Published: Vancouver Sun - November 20, 2016 (A16)


Monday, 28 November 2016

Fewer Seismic Firms Could Taint Recovery: Executives

By: James Mahony
Published: Daily Oil Bulletin

While raising few problems in the current downturn, a dwindling stable of Alberta seismic firms could pose problems later, when a recovery starts to take shape, seismic industry leaders said recently.

For seismic acquisition firms in particular, activity in Western Canada has been at a low ebb for the past two years, three, according to some executives. When oil and gas producers once again turn to exploration, as they likely will, the fear is that the ensuing rush will overwhelm the few surviving firms, leaving many producers hanging.

“Our initial [concern] is that there won’t be enough [acquisition contractors] left to put out the number of crews that could be required,” said Mike Doyle, head of the Canadian Association of Geophysical Contractors (CAGC). While the market will eventually catch up, a key question is just how long that will take, he said.

Doyle estimated that in 2002, Alberta had about 20 seismic acquisition companies. By 2006, the number was down to 15, and has fallen steadily ever since (DOB, Nov. 24, 2015). Today, only a handful survive, compared to the many that worked the rural landscape 20 years ago. For the roughly five Calgary-based contractors remaining, the world is a different place since the 1990s.

In those days, a local industry supplier tracked Alberta’s seismic crews, sending out a weekly fax, indicating which crews were active and where. At the time, so many crews were at work, the active crew list typically ran to several pages, an industry veteran recalls.

“It wasn’t uncommon to have 110 crews on that [list] in the 1990s,” Forrest Burkholder, vice-president, operations, for seismic acquisition firm SA ExplorationLtd., told the Bulletin. As it turns out, those years were likely the high watermark for Alberta’s seismic contractors over the past 30 years.

No longer an ‘exploration basin’

The heyday for seismic contractors is likely over. According to some in the industry, the Western Canada Sedimentary Basin will never again be what it was in the 1980s and ‘90s. Even when the industry emerges from the downturn, as many expect, few think activity will return to levels seen in the ‘golden’ years, when contractors could barely keep pace with business.

“Our basin has changed over the last 10 to 15 years. It’s [no longer] an exploration, but an engineering basin, so the use of seismic has definitely diminished,” said Elvis Floreani, president of Absolute Imaging Inc., which reprocesses seismic data for the industry (see: Juniors turn to reprocessing, below).

Floreani makes no bones about what’s behind the change, arguing the call for new seismic has diminished largely due to rising costs. Instead of shooting new surveys, producers will use existing data they own, typically reprocessing it. In Western Canada, especially Alberta, ample seismic data is on file with seismic data brokers, a useful resource for cash-strapped juniors in the current downturn.

Workforce evolves

Now in its second year, the downturn has taken a toll on acquisition companies. Like oilfield services, the seismic industry has lost plenty of workers, many returning to their home provinces after layoffs, while others, frustrated they can’t find steady work, have simply left the sector for more stable jobs elsewhere.

In the 1990s, seismic workers were often farm boys off the prairies. With some exceptions, that’s no longer true. Today, most workers come from the east, often Quebec or the Maritimes, said Stuart Gall, a partner with LXL Consulting Ltd., a prime contractor that manages seismic surveys, typically for producers.

Until about two years ago, some Alberta acquisition firms were paying airfares for seismic workers heading west, a trend that was problematic, since consistent work was hard to come by. “If you can’t string together a season of three or four months, it’s not worth it for [the workers] or the seismic companies,” Gall said. As a result, most firms have discontinued the practice.

The industry is still losing workers, many of whom will not be returning. “We’re losing a skillset as well,” Gall added. “[Acquisition companies] are losing the skilled field workers and supervisors. We’re pretty much down to the bone now.”

At project management firm RPS Canada Energy Ltd., which also handles seismic surveys, the view was similar. The steady decline in work “has resulted in a lot of talent — veteran people — leaving the industry,” said Orrin Foster, RPS operations manager. When the long-awaited industry turnaround eventually begins, “it’s going to be a hard squeeze to find qualified people to do the work,” he added.

The sharp drop in seismic during the downturn has made for brutal competition, since producers typically invite several project management firms to bid on a job. “We see a lot of bids, but we also find out … that they’re seeing the same bid from five companies,” said Foster. “…Every single contractor has the opportunity to bid on the work, so it has driven prices right into the ground.”

Juniors turn to reprocessing data

In the downturn, Foster believes many juniors will choose to reprocess ‘trade’ data, including 2D, rather than shoot new seismic. “With processing techniques being what they are, [producers] are stretching existing [seismic] data to its limits and will continue to do so until the economy turns around, making it worthwhile to shoot something better,” he said.

In the heyday of Canadian seismic, acquisition companies in Western Canada far outnumbered management firms, a situation that is reversed today. “It’s [been] weaned down to four acquisition companies and 12 or 13 management companies trying to manage them,” said Brian Hale, technical services manager for acquisition firm GeoStrata Resources Inc. “[But] there’s not enough work for even the four acquisition companies.”

While the current downturn lasts, Hale also feels reprocessing data will be popular. At the same time, he said juniors will have to live with the limitations of the older data, which might have been collected with different targets and depths in mind. “You might get 3D data, but if it was designed for a different target, it might not image what you’re looking for as well as you want…” he said.

Speaking for reprocessor Absolute, Elvis Floreani agreed that older data may have limitations. “It can be limited in its use, but it’s not of no use,” he said, adding that much depends on the data’s quality, and what customers are trying to find. Absolute has reprocessed data from as far back as the 1970s and ‘80s.

“It actually turns out OK,” he said, “but it depends [on your purpose]. If it’s for reconnaissance and things like that, it’s sufficient.” On the other hand, he said juniors planning detailed drilling will typically gravitate to newer seismic data, if it’s available.

International firms surviving

In the 1990s, many seismic firms in Western Canada were local, but that too is changing. While one local firm remains, most are now international, often U.S.-based, with an ability to shift crews — and equipment — in and out of Canada at will, giving them an edge over local firms that may be less mobile globally.

“Anybody that’s left [in Western Canada] is an international company that, at a minimum, works in the Lower 48 [states] as well,” said Forrest Burkholder. “There’s not a single seismic company left in Canada that doesn’t operate outside of Canada to help offset …and utilize their people and equipment.”

The last acquisition firm to fall in Alberta was Tesla Exploration Ltd., for which a receiver was appointed in August, although some in the industry wonder if other insolvencies will further deplete the small pool of recording firms before the downturn ends (DOB, Aug. 2, 2016).

Moving beyond exploration

Traditionally the bread and butter for seismic firms, exploration in Western Canada is clearly on the wane, but other seismic work is giving the industry a much-needed shot in the arm. SAGD operators, for example, often need a new survey each year, partly to track reservoir changes and gauge how well steam-injection is working, according to the CAGC’s Mike Doyle.

On this score, acquisition firms in particular have benefited, since surveys are often shot in ‘4D’ mode, also known as ‘time-lapse’ 3D. “A lot of [our] work is 4D surveys” in oilsands and heavy oil regions, from Lloydminster all the way up to north of Fort McMurray, said Trent Middleton, general manager (Canada) for Geokinetics Inc., another acquisition contractor.

Indirectly, Alberta seismic contractors benefited from a 2006 incident in which a producer blew through the caprock on a SAGD project, due to excessive steam injection pressure. In response, the Alberta Energy Regulator (AER) became more stringent in requiring that SAGD operators have evidence that the caprock affected by their projects can bear steam injection pressures. Seismic is one of the methods used in raising that evidence, providing work for some contractors.

Like some colleagues, Middleton expects that ramping up in the recovery — whenever it begins — will be tougher, in part because some management-types in seismic are finding work elsewhere. “Our key personnel here in Calgary and in the west are finding that three or four months’ work a year is just not doing it for them,” he said. The situation is less critical with Geokinetics’s field workers, who typically come from Atlantic or central Canada.

“A lot of our [them] still come from out east,” he said. “They’re still happy to come out here, because they also have seasonal jobs out east. It still works for them.”

Despite the grim mood that has prevailed in the seismic sector for much of the past year or two, some in the industry already see signs of a better day ahead. “There will definitely be an improvement [in activity],” said SA Exploration’s Burkholder. “It’s just starting to pick back up now.”

Others in the business are finding that, while few producers are yet committing, the phone is ringing more often now. With crude oil inching up toward $50 (WTI), “we have seen a lot more …producers at least experimenting with the idea of putting out questions as to how much it would cost to acquire seismic,” said Orrin Foster.

“I think we’re getting close, and that’s usually a key indicator for us,” he added. “Once the [oil] price starts to go up, you see more wells being licensed, and they might not be production wells. We started seeing a little bit of that in September. Usually, the next step is [companies] looking for seismic exploration.”

Tuesday, 22 November 2016

2016 State of the Climate Report

By: Marc Morano
Publisher: ClimateDepot

Introduction:

CO2 is not the tail that wags the dog. CO2 is a trace essential gas, but without it life on earth would be impossible. Carbon dioxide fertilizes algae, trees, and crops to provide food for humans and animals. We inhale oxygen and exhale CO2. Slightly higher atmospheric CO2 levels cannot possibly supplant the numerous complex and inter-connected forces that have always determined Earth’s climate. 

As University of London professor emeritus Philip Stott has noted: “The fundamental point has always been this. Climate change is governed by hundreds of factors, or variables, and the very idea that we can manage climate change predictably by understanding and manipulating at the margins one politically selected factor (CO2) is as misguided as it gets.” “It’s scientific nonsense,” Stott added. 

Even the global warming activists at RealClimate.org acknowledged this in a September 20, 2008, article, stating, “The actual temperature rise is an emergent property resulting from interactions among hundreds of factors.”

The UN Paris climate change agreement claims to able to essentially save the planet from ‘global warming’. But even if you accept the UN’s and Al Gore’s version of climate change claims, the UN Paris agreement would not ‘save’ the planet. 

University of Pennsylvania Geologist Dr. Robert Giegengack noted in 2014, “None of the strategies that have been offered by the U.S. government or by the EPA or by anybody else has the remotest chance of altering climate if in fact climate is controlled by carbon dioxide.” 

In layman’s terms: All of the so-called ‘solutions’ to global warming are purely symbolic when it comes to climate. So, even if we actually faced a climate catastrophe and we had to rely on a UN climate agreement, we would all be doomed! 

The United Nations has publicly stated its goal is not to ‘solve’ climate change, but to seek to redistribute wealth and expand its authority through more central planning. UN official Ottmar Edenhofer, co-chair of the IPCC Working Group III, admitted what’s behind the climate issue: “One must say clearly that we redistribute de facto the world’s wealth by climate policy … One has to free oneself from the illusion that international climate policy is environmental policy. This has almost nothing to do with environmental policy anymore.”

EU climate commissioner Connie Hedegaard revealed: Global Warming Policy Is Right Even If Science Is Wrong. Hedegaard said in 2013, “Let’s say that science, some decades from now, said ‘we were wrong, it was not about climate,’ would it not in any case have been good to do many of things you have to do in order to combat climate change?”

The UN is seeking central planning. UN climate chief Christiana Figueres declared in 2012 that she is seeking a “centralized transformation” that is “going to make the life of everyone on the planet very different.” She added: “This is a centralized transformation that is taking place because governments have decided that they need to listen to science.”

Key climate data highlights:

  •  Global temperatures have been virtually flat for about 18 years, according to satellite data, and peer-reviewed literature is now scaling back predictions of future warming 
  • The U.S. has had no Category 3 or larger hurricane make landfall since 2005 – the longest spell since the Civil War. 
  • Strong F3 or larger tornadoes have been in decline since the 1970s. 
  • Despite claims of snow being ‘a thing of the past,’ cold season snowfall has been rising. 
  • Sea level rise rates have been steady for over a century, with recent deceleration. 
  • Droughts and floods are neither historically unusual nor caused by mankind, and there is no evidence we are currently having any unusual weather. 
  • So-called hottest year claims are based on year-to-year temperature data that differs by only a few HUNDREDTHS of a degree to tenths of a degree Fahrenheit – differences that are within the margin of error in the data. In other words, global temperatures have essentially held very steady with no sign of acceleration. 
  • A 2015 NASA study found Antarctica was NOT losing ice mass and ‘not currently contributing to sea level rise.’  
  • In 2016, Arctic sea ice was 22% greater than at the recent low point of 2012. The Arctic sea ice is now in a 10-year ‘pause’ with ‘no significant change in the past decade’ 
  • Deaths due to extreme weather have declined dramatically. 
  • Polar bears are doing fine, with their numbers way up since the 1960s.

While the climate fails to behave as the UN and climate activists predict, very prominent scientists are bailing out of the so-called “consensus.” 

You can read more on the Report by visiting


Tuesday, 15 November 2016

Restarting The Conversation And Finding A Balance On Energy And Carbon In Canada

By: Carter Haydu
Published: Daily Oil Bulletin

Communities are not “particularly exercised” over the climate change impacts of pipelines, gas-fired power plants or natural gas developments so much as they are concerned about the local impacts of these developments.

Therefore, says the Canadian Gas Association’s former president and chief executive officer, industry should address local concerns, providing practical assurances to help “restart the conversation” around energy developments.

“The climate activist community that makes such an effective use of Canada’s reputation as a climate shirker has the interest of conflating the risk of local effects with the climate consequences of energy development,” Michael Cleland told last week’s Petroleum Services Association of Canada (PSAC) Industry Insights Luncheon “That is why I argue it is in Canada’s interests to shift the narrative by acting more forcibly and visibly on carbon.”

He added: “At the same time we need to revisit the social contract that governs the pace of development and management of the cumulative effects, and with local and regional scales and methods of mitigating impacts, including the risks of system failures.”

Most of all, he suggested, Canada must reconsider its decision-making mechanisms, especially in regards to how policymakers and regulators interact with local authorities and their role in the processes. Cleland said provincial and municipal governments must “get a grip” on the most basic principles that have kept Canada united and prosperous.

“No principle is more important than the right of free passage of goods in order to reach markets. As long as the world needs oil and gas resources — as it will for many years to come — and as long as Canada can produce such resources competitively and responsibly, we should be in the game.”

According to the Energy Council of Canada’s 2015 Energy Person of the Year, Alberta Premier Rachel Notley was correct to tie her support for the federal carbon pricing plans to federal support for pipelines. However, he believes the federal government should state unequivocally that a growing oil and gas industry is in Canada’s interests, and that for the industry to grow it requires pipeline access to all world markets, as well as Canadian domestic markets.

“The bargain of Canadian confederation includes the proposition that there should be free movements across provinces, but we recently treat that like some quaint idea that is now being [exceeded] by something more fashionable that we call ‘social licence.’ But if every province and every community — including several hundred increasingly independent-minded First Nations — all find themselves with an effective veto, then we are hardly a country.

“Our challenge is to restore confidence in the institutions that actually make this country work. That means finding mechanisms that actually engage local and First Nations governments as constructive partners, working under systems of democratic accountability and the rule of law, all of which make these processes function.”

Rebalancing the conversation starts with addressing carbon, he said. This includes a plausible strategy on climate change that includes oil and gas sector growth. Further, restarting the conversation requires a “new deal” with First Nations who stand to benefit from industrial growth, provided it is done in ways that respects their traditions, the environment, and local decision-making. Local authorities in general also need assurance of some measure of control.

“Above all, [the conversation] needs to include a broader spectrum of voices arguing the case for a truly sustainable energy future — voices that include many Canadians who know something about the energy industry who are on the ground and who are known and can be trusted in their communities.”

He added: “The industry is unavoidably associated with environmental effects that contribute to an ever-more complex political environment for most governments. The industry needs to acknowledge and respect that reality.”

Through most of its history, the Canadian energy sector has existed in the background, said Cleland, sustaining communities with secure, reliable and affordable supplies, providing highly valuable employment and business opportunities especially for western provinces. However, the “background” nature of the oil and gas industry has changed in recent years, and that change is probably permanent.

“Attention that energy gets these days is pretty much unprecedented, driven considerably by climate change, but almost as much by local community concerns and growing distrust of public authorities and energy decision-making processes,” he said. “Too little of the debate seems to be anchored in accurate information or a solid understanding of how energy systems work, or the forces that will drive it in the future.”

While many Canadians would suggest Canada get out of the fossil fuel business and instead pursue clean energy opportunities, Cleland told the event that the oil and gas industry continues to be an economic mainstay for Canada, accounting for over 20 per cent of exports and a similar share of capital investments. He argues Canada should not cease energy growth, because such a move would not impact the world demand for fossil fuels.

“If Canada were to eliminate its oil and gas industry tomorrow, the savings in greenhouse gas emissions would be made up by growth in world emissions by sometime next spring. Canada’s sacrifice would be empty symbolism.”

Wednesday, 2 November 2016

WE WILL SURVIVE

By: Steve Chapman M.Sc. - Change Management Specialist/MOYO Inc.
Published: Oilfield Pulse

    Albertans are resilient. We survive. This is not our first downturn in the market. It's not our first crisis. It's not the first time oil prices have fallen. It's not even the second or third time. I well remember in 2001 as oil plummeted to under $15 a barrel and ALL my clients were oil and gas. I remember the sinking feeling as my monthly consulting revenue fell from $150,000 to less than $40,000 in 45 days,  and suddenly, I was losing $60K a month by staying in business.
     It is also not our first time we have seen government spending outside their means by bringing in questionable fiscal practices and mismanaging what seems to be basic business practices. We have seen inexperienced MLAs making poor decisions.
     Albertans do not have much experience however with our government seemingly abandoning us in our time of need. Sure, we have history of making sweeping changes to the Legislature every few decades, but we have always sat in firm conviction that everyone in this province pulls together in times of crisis.
     Two huge examples are the Calgary Flood and the Fort Mac Fire. There was no shortage of Albertans rolling up their sleeves to help their neighbour or, in fact, perfect strangers to get through it.
     So, it is justifiably confusing to most Albertans when our new government seems more focused on putting their agenda forward than on helping our province get through one of the most challenging economic downturns in a generation. This is a time where our unemployment rate keeps increasing, when businesses are closing, and families are losing their homes and their hope.
     One homily of American humorist Will Rogers I frequently share with clients is, "When you find yourself in a hole ... stop digging." It's not unique or original but one of the most practical pieces of advice I have ever heard.
      All too frequently people feel they can work themselves out of a hole, like a motorist stuck in the mud who keeps spinning the wheels harder convinced eventually he will find traction and get out. We just need to dig harder.
     I understand its exiting for the NDP to suddenly be in the driver's seat after decades of sitting at the kids table. Suddenly, all those seemingly wasted years of near empty policy conventions have a place to see daylight. You can sense their giddiness and eagerness to as much on the table as possible before the dream ends. The NDP are acutely aware they might only have one chance at this.
     In stronger more affluent times, Albertans might be willing to see how this experiment plays out. But, this is not those times. We are in pain. We have a deep ache as we see years, even decades, of work and sacrifice slowly slipping away pulling our hopes and dreams with it. We have entire families living week to week on part time pay cheques.
      So, what do we say to Premier Notley and her government? STOP DIGGING
      In the last year, we have been experiencing one radical change after another without a pause to see what the outcome is. Before our agricultural industry came to grips with Bill 6, we were hit with both a rising minimum wage and corporate tax hikes. Before we grasp that impact, we are facing down a massive carbon tax heralding the largest transfer of tax wealth in the history of Alberta.
     Albertans across the province are begging the Premier to take a breath. We are a strong, proud, and careful people. We are ruggedly entrepreneurial and self-reliant. We need time to understand and get used to change. This new relationship is just happening far too fast at a time when we are looking to the government for leadership and healing.
     Most Albertans are not asking the government to fix the problem. We understand oil prices are a product of world markets. We just don't want new government policies to make a bad situation worse.
     If Premier Notley wants to help Alberta in this time of need, then we need cooperation. The Carbon Tax needs to be put on hold for a year until we get our feet under us. We need a strong united resolution for getting pipelines to the coast. Any coast. We need a task force to take action on rising unemployment. We need an action on Flood Mitigation before we risk another multi billion-dollar natural catastrophe. We need government ot get back into the trenches with business and city leaders to help shoulder this province out of its current crisis. Mostly, we need to feel that Notley and her people are actually listening to Alberta citizens.
      Please STOP DIGGING long enough for Alberta to catch a breath.

ENEMY OF BUSINESS The Policies of the NDP

By: Holly Nicholas - M.SC. Candidate, GEO.I.T. Petrologist Consultant
Published: Oilfield Pulse


       It's a rare occurrence to find an Albertan who will admit they voted for Rachel Notley and the NDP these days. When you do stumble across that uncommon entity, their reasoning is usually along the lines of wanting change. At this point, I'd be willing to bet the majority of Albertans would take the previous Progressive Conservative government back in a heartbeat if they had a choice. Out of all the hope and change that was promised, not one single NDP policy has been effective in alleviating any of the pertinent issues the province and Albertans face. Among the worst decisions for business were raising the corporate tax, the promise of a royalty review, and the implementation of the carbon tax coming January 1st, 2017. However you look at it, the NDP strategy is counter intuitive to basic economics.
      Oil prices are low, but business investments are not attracted by raising costs in hard economic times. This is a no brainer. The corporate tax rate was increased by 2%, which is higher than our closest competitor, Saskatchewan. The NDP seem to believe businesses make decisions based on feelings more than they do with their bottom line in mind. The fact of the matter is businesses work with all types of governments across the board and will invest in jurisdictions where they can make the most profit. However, in the worst move that can be pulled in a time of economic crisis, the NDP increased cost, and we saw investors run to more amicable business atmospheres. Saskatchewan has now seen billions of dollars dumped into the Kindersley region by Raging River, while Shell walked away with a $2 billion dollar loss from their Carmon Creek project in Alberta. Neil Rozwell, CEO of Raging River, cited consistency and lower geopolitical risk for investing in Saskatchewan rather than Alberta.

Their solution to garner more revenue is to punish businesses by increasing costs.
It's clearly not working.

        Although the NDP didn't end up shaking too much up with their royalty review, this was also bad decision making on the government's part, especially during a downturn. The royalty review in 2007 pushed businesses out of the province, since the combination of increased rates and dropping oil prices meant much smaller profits. These changes ended up being rolled back in January of 2011 when it was clear companies were leaving the province due to a 20 percent hike in royalty rates. Knowing past behaviour predicts the future, the NDP soldiered on with their plan to review the royalty framework for a third time. In many ways, driving business away from the province in this instance could have been avoided, because the negative outcomes have been realized in the past. Couple the prospects of an increased corporate tax and potential royalty increases, and it's a recipe for disaster when trying to attract investors.
        As for the future, there is no doubt we will see increased drops in business activity while the Alberta government busies themselves with finding new and creative ways to implement new taxes. Their solution to garner more revenue is to punish businesses by increasing costs. It's clearly not working. The latest fiscal update revealed losses of approximately $900 million in corporate revenue. And, we can only expect more of the same in the future. The upcoming carbon tax will cost producers much more, and NDP carbon policies come with the possibility of actually limiting production. In a report issued by the Fraser Institute, it was fond that production will have to be levelled off between 2025 and 2027 based on current and reduced emissions targets in order to meet the 100 mega tonne cap the NDP have applied. This, despite National Energy Board predictions that demand for oil, in particular from the oilsands, will actually increase in the coming years.
        No matter which way you slice it, the real target of the NDP seems to be the end of the oil and gas industry. They continue to kill off business by increasing business costs, reviewing policy unnecessarily, and increasing taxes everywhere possible. The NDP campaigned on change, but change isn't always a good thing. The real test for Rachel Notley and her caucus will come next election, when those voters, who blindly opted in and voted on the premise of hope, are now living in real life despair. Sometimes, we create our own problems through expectations.

MORE CANADA NOT MORE CARBON TAX

By: Mike Binnion - President & CEO Questerre Energy
Published: Oilfield Pulse

     The 20th century famously was going to belong to Canada, according to Sir Wilfred Laurier. It didn't quite turn out that way. Canada turned out to be the reliable junior partner to Britain, then America and often the international community. Through two world wars and international peace keeping, we showed that Canada can be trusted to punch above our weight and do the right thing. Canadians have a lot to be proud of and deserve our amiable international reputation.
     We can afford to be generous. Canada is blessed to be the second largest country in the world with a relatively small population. We have more resources that the world's largest economies need, than we could ever hope to use ourselves. Even better, we have the enormous geopolitical advantage of both, having the shortest trade routes to the world's largest economies and being one tof the world's most trusted partners.
       One of the great advantages of resources is they can't be outsourced. While the production of Blackberry's might move to Asia, Canadian wheat must be grown by Canadian farmers. As Canadians we must also take note that resources are one of the few hopes of our indigenous peoples to enjoy prosperous lives on their traditional lands.
       While the 20th century turned out to belong to Canada's senior partners, the 21st century is still within our grasp. Billions of human beings aspire to a Western lifestyle. A trustworthy provider of resources, produced with the lowest carbon footprint, utilizing the shortest trade routes will be more valuable to the international community than  ever before. This century can belong to Canada, still punching above our weight as an essential economic partner to the world's largest economies.
        Telling Canada not to produce the resources the world needs is like telling Florida not to grow oranges or Hawaii to ban tourism. Yet for decades, environmentalists have been telling us that the planet is in trouble and we need to reduce Canadian resource production or even 'leave it in the ground'.
 
     Thousands of Canadian companies have learned scaling is the most effective export strategy.

        If the planet is in trouble how could the solution be less Canada? Wouldn't the world need more Canada?
        Environmentalists protest Canada because it's easy, not because we're the problem. Canadian junior partner niceness represents low-hanging fruit to professional protesters in a world where other jurisdictions don't care as much about international opinion. It's obvious that US- funders of environmental groups have other agendas, when the US now exports oil & gas to Canada and has beaten Canada to international LNG markets.
        Norwegians understand that capitulating and shutting down their oil and gas industry would make the world's environment worse, not better. The International Panel on Climate Change and international environmental organizations warn about carbon leakage. Carbon leakage occurs when local policies to shut down industry have the effect of creating even more carbon when other countries step in to replace production. Norway recognizes that problem and it's why their policymakers ensure their oil & gas industry is internationally competitive, as well as environmentally responsible and sustainable. Norwegians care about the global environment so they support their oil and gas industry to prevent carbon leaks.
        Our current policies are making the world's environment worse at the expense of Canadian workers. Preventing Canadian LNG from reaching China leaks massive amounts of carbon by ensuring that brown coal is burning instead. By not focusing on the competitiveness of our oil and gas industry, we create environmental problems elsewhere; often under regulatory systems with questionable human rights records. How can that possibly help the planet?
        Canada's oil and gas industry is ranked even higher than Norway's for the strictness and effectiveness of our regulatory system. How much better than best, does Canada need to be, before we put our big boy pants on like Norway?
         Empty, symbolic gestures will not help the global environment but they will hurt Canadian workers and indigenous peoples. We need to stand up to US-funded groups at home and internationally. Canadians can be proud of being the best in the world and do our part to actually help the planet by stopping carbon leaks.
         In the  21st century the world needs more Canada. Let's give the world what it needs.
       

Stop protesting and be thankful

Stop protesting and be thankful: cheap energy has brought us pretty much everything, including the capacity for green energy

By: Terry Etam
Published: Fort Nelson News

It's Thanksgiving season in Canada, and soon in the US, and it's time to show some gratitude. It's time to reflect on how we live, all the things we are able to do, and how that all happens. This isn't just about energy, it's about effort and building and creating. And it's about recognizing that we owe respect to those that provide so much of what we take for granted.
     Examples are not hard to find, both economic and not. Someone somewhere spends his time writing a song that may lift the mood of millions, but no one says hey thanks for doing that. Some lonely farmer pounds around the field and produces enough grain to feed a small town, but no one says thanks when they buy the lentils. Some solitary operator does his rounds checking on gas wells to make sure they are running, and indirectly heats a hundred homes or hospitals or whatever through the long winter.
      Put down the protest signs for a minute and think. Think about where the food comes from that you will eat today. Think about how you got to the protest.
      Let's also set the record straight about heroes and villains. Protestors do not have a monopoly on caring for the environment. The energy industry does know that a functioning and healthy environment is good for everyone. No one disturbs forests or grasslands for the fun of it. No one wants to kill a cow for the fun of it either - but we all enjoy the benefits when someone does. Seven billion people need food, clothing and shelter. That creates a massive footprint; there is no other way to distribute energy across the globe. Cutting off supplies of cheap energy is a conscious choice to doom some populations to extreme hardship in accessing the basic essentials. Protestors should be honest enough to lay out exactly who they intend to punish, because that is an inevitable consequence.
      Environmentalists view green energy as a  necessity in order to save the planet. Regardless of your thoughts on that, no one should lose sight of the fact that green energy is also an absolute luxury. People who are starving or freezing don't spend much time worrying about carbon footprints. Our western lifestyle affords many luxuries, one of which is the ability to turn up our noses at the very energy sources that enable our advanced way of life. Isaac Newton said that if he could see further than most, it was by standing on the shoulders of giants. Renewable energy is the personification of that principle; green energy options exist because of the efforts of those which have brought you cheap energy in the first place. That means fossil fuels, which everyone knows will not last indefinitely.
     Go ahead and work towards a greener future. That's great, and that's what the sincere ones, the builders, are doing now. They are laying the groundwork for an economic future that can survive once fossil fuels become too expensive. The irony is that green energy developments often face the same hurdles, the same wearying battles against Nimbyism that the petroleum industry faces.
     We have to face the realities of today. The simple traditional lives some yearn for don't exist anymore; we are all addicted to cheap energy. We choose trucks instead of horses. A nomadic lifestyle of living off the land sounds satisfying and wholesome as long as we can have the internet and travel wherever we want. We may grow some vegetables and herbs, but outside of farmers no one can feed themselves alone (and even that's a stretch - farmers hit the grocery store now and then too.)
      Someday historians will look at this period as one where cheap energy propelled us to levels of technology and comfort undreamed of a hundred years before. Look around at how we move and live. None of this would be possible without the benefits that petroleum has brought us. No solar panel would ever have existed without the cheap energy that furled the development of the products that make them. Without fossil fuels, wind turbines would be at best wooden structures that would hardly power a small water pump.
      Stop protesting and start working for the greener future you claim to want. We live in a world where 7 billion people consume 30 billion barrels of oil per year to maintain their way of life. Some of it is indeed wasteful and can be curbed with ease, and those are the best places to tackle. The hard part is tackling them without hypocrisy; anyone can easily begin by never getting on a plane again. Any volunteers?
      The world's population cannot exist without a significant environmental footprint. For those convinced that the world can't warm by another degree without catastrophe, they must by any sensible measure take up signs and protest against the worst problems - primarily coal burning, and primarily in China. Actions that slow pipelines or energy developments in nations with the most advanced and stringent standards are a waste of time and utterly misguided. If you are in that camp, chain yourself to a Chinese embassy, not a pipeline valve.
      Oil is what got us here and what will permit the transition to green energy in due course. Imagine a world of n o plastic or advanced materials. There would be no cheap energy (hydroelectric is a glaring exception; glaring because it falls in the renewable camp with a free pass, despite the upheaval to ecosystems man-made lakes create) without the materials, factories, and building blocks that fossil fuels have enabled.
       The ungrateful go on the attack against the very industry that brought us this far. And the attack isn't against faceless corporation; countless people are being vilified because they choose to work in the energy business. Leave them alone to do their jobs. We all need them, more than most would admit. Few  complaints about natural gas are heard in the dead of winter.
        Show respect and gratitude for how you got here, and how you live. Yes, times are changing, and the world is going greener. But show some respect for the millions of men and women who work hard to get food from the field to your table, and that prevent you from freezing to death in the dark. It's not altruistic, they make a living at it. But it is only because of those people - many of whom are facing dire economic circumstances at present - that we enjoy the standard of living we have. Protests are non -constructive and embarrassingly ungrateful. Fight the good fight if you want, but do it by going and building something, not the opposite.


Wednesday, 26 October 2016

We need to rework a timeless proverb

By: Bill Whitelaw // President and CEO at JuneWarren-Nickle's Energy Group. Troy Media
Published: Fort Nelson News

To bring the devastation in Canada's oil and gas sector into sharp focus

Calgary - An old proverb makes connections where they seemingly don't exist to show that all actions have consequences, often unintended.

         It starts with the loss of a single nail that affixed an iron shoe to a horse's hoof. The linking narrative builds from there.
         Most often attributed to Benjamin Franklin, the proverb offers simple homespun logic, building to a powerful conclusion.
             For want of a nail the shoe was lost
             For want of a shoe the horse was lost
             For want of a horse the rider was lost
             For want of a rider the message was lost
             For want of a message the battle was lost
             For want of a battle the kingdom was lost
             And all for the want of a horseshoe nail.
        The proverb has morphed over the years to adapt to changing contexts and circumstances. But its underlying essence remains unchanged: little things can have big consequences and sometimes you have to work hard to connect the dots.
        Just ask the thousands of Canadians and their families who are the human dots - and have been profoundly disconnected from the normalcy of being employed as Canada's oil and gas sector crashes and burns.
        What's most frustrating for them is that Canadian politicians, while generally sympathetic, seem only vaguely aware of the consequences when drill bits don't turn. They don't connect the human dots to the real consequences of an energy sector on its knees and the implications for the Canadian economy and, therefore, ordinary Canadians.
         The tough reality is that the men and women who run for public office, regardless of party affiliation, are generally well-intentioned but in matters of energy, frequently poorly informed. More often than not, they know little more than those who voted them into office.
         And if Canada has a problem bigger than politicians without the credentials or experience to shape meaningful policy, it's a body politic that woefully and shamefully ignorant of the complex energy dynamics that shape and define their world.
        The catastrophic state of the nation's petroleum sector barely registers on most Canadians. They have no sense of the longer-term impacts it will have on their lives. Perhaps a requirement of citizenships should be a basic course in energy civics.
        Our energy future is being shaped by individuals who came to office with good intentions but bad energy backgrounds. For the most party, their source of energy intelligence and insights comes from bureaucracies too often suffering from their own energy myopia.
        It opens up the very real possibility that political action and policy creation will produce consequences diametrically opposite of the intended objectives. (Current debates over carbon pricing and carbon taxes are perhaps the most useful example at the moment.)
        In the spirit of the proverb's flexibility over time, here's a contemporary variant that remains true to the original theme. It will certainly resonate for the thousands of Canadians who today bear the consequences of the profound collapse of Canada's oil and gas sector - those who know well what happens when the drill bit doesn't turn.
       For the want of a bit the well was lost
       For the want of a well the job was lost
       For the want of a job the career was lost
       For the want of a career the family was lost
       For the want of a family a sector was lost
       For the want of a sector an economy was lost
       And all for the want of a drill bit.
     Many Canadians would be happy if at least one politician understood the simple, undeniable logic of this updated version.

Friday, 14 October 2016

The 'social licence' myth

By: Goldy Hyder
Published: National Post

What we are actually talking about is social acceptance a far more ambiguous concept. The term "social licence" is fast becoming one of those ubiquitous expressions that everyone uses, but nobody understands.

To some, social licence is a shield used to defend the public interest. To others, it is a sword used to strike down specific infrastructure projects or other industrial developments. The federal government recently added its own definition to the mix: "Social licence is about ensuring public confidence in the decision-making for major resource projects."

Having considered the matter for some time, I have come to believe that the confusion stems from the fact that social licence is actually a myth or, at the very least, a gross misnomer. Using the word "licence" in relation to projects requiring government approval falsely suggests that there exists some type of formal certificate or other legally binding document that these projects need to go ahead. In reality, there is no social licensing authority to which companies can apply and no set conditions to be met in order to obtain a universally accepted permit to operate.

There is no such thing as a "social licence." What we are actually talking about is social acceptance, and therein lies the problem; acceptance is a far more ambiguous concept. A licence is something fixed and permanent, but acceptance is both fluid and temporary. A licence provides enforceable rights, but acceptance can be unilaterally revoked. By asking companies to obtain a "social licence," we are giving them the mistaken impression that gaining such a licence can be handled like any other regulatory process. It is vital that companies understand that social acceptance requires more than simply putting forward a carefully reasoned case that demonstrates the merits of a given proposal.
Instead, social acceptance requires that companies work closely with multiple stakeholders to build trust and earn the legitimacy needed to act on their plans. More specifically, it involves inviting the full range of interested stakeholders into the corporate decision-making process at the earliest possible opportunity, then listening to what they have to say.

It is human nature that people are more likely to endorse and less likely to oppose a proposal that they have had a role in creating. We help defend what we help develop.

Many corporate leaders come from backgrounds in finance, engineering, accounting and law, and are trained to excel in situations involving defined parameters and defined rules. It is understandable, therefore, that they might be uncomfortable with the notion of developing plans based on the shifting sands of such an unsettled foundation.

More importantly, it used to be taken for granted that government would help gain public support for projects that it considered to be in the best interests of the country. That is no longer true. Successive governments have now shifted the burden of building public support to those proposing the initiatives. Absent a wide degree of social acceptance, government won't act.

Over time, this approach has cost governments both the ability and legitimacy to make unilateral decisions about major infrastructure projects. As a result, large companies with even larger ambitions can suddenly find themselves being held back just as the fictional Gulliver was held down by an army of Lilliputians.

Yet, instead of a hundred tiny strings, companies are restrained by thousands of individual tweets and blogs. It is in the way that individuals can now overpower institutions. The Internet and social media have created a societal power imbalance, where the vocal and active minority have an outsized influence over what gets built and how companies operate.

It used to be that if a majority of people kept quiet on an issue, their silence was taken as a sign that they were either unopposed, or perhaps, that they were largely indifferent. Today, their silence is co-opted by the vocal minority who tirelessly assert that they are speaking for 99 per cent of the people. This is why companies need to mobilize silent supporters.

Ultimately, the message is simply this: whether it is called social licence or social acceptance, the reality today is that without active and demonstrable public support, nothing gets done. And companies that undertake large projects requiring government approval must do all the heavy lifting themselves, which means engaging key audiences from the outset.

Thursday, 6 October 2016

An argument for clean fossil fuel investment

By: Darrell Stonehouse/Editor
Published: Oilweek- October Issue

       Replace fossil fuels with renewables like wind and solar. Almost years after the Kyoto Protocal first attempted to tie countries around the world to greenhouse gas reductions, this argument remains the only scenario that global green groups can come up with to stem the flow of emissions into the atmosphere.

        Yet despite almost a quarter century of hyperbolic alarmism, warnings of catastrophe and trillions of dollars in renewable investment, those emissions just keep on rising.
         In developing economies, coal-fired power plants continue popping up like weeds and cars continue populating the landscape like ants as global poverty slowly recedes and more and more people get a taste of the better life.
         And oil and gas and coal supplies keep climbing to meet this demand.
         Maybe it's time for a different strategy, one that accepts the world is going to be using fossil fuels for a long time so it better get a lot more efficient and greener in how it does it.
         This isn't to say the world should stop looking for renewable solutions. It should, and  it should implement them as they become cost-effective. It is simply a statement of reality: fossil fuels will continue dominating the energy mix for at least the next 25 years, with most forecasters expecting them to remain 80 per cent of the total energy mix in 2040. Renewable will grow from current levels of three per cent to nine per cent of the energy mix.
         If climate change is a serious issue and must be dealt with now, the world needs to find ways to burn fossil fuels cleanly.
         Who carries this responsibility?
          Almost 90 per cent of emissions come from four sectors: power generation (30 per cent), transportation (26 per cent). industrial uses (21 per cent), and commercial and residential heating (12 per cent).
          In global power generation, coal is king, generating over 40 per cent of electricity. Oil accounts for over 90 per cent of transportation emissions, and petroleum dominates in the industrial and residential heating categories. Right now, the only area renewables are having a measurable impact in is power generation, and that impact is minimal as growth in energy demand is driving construction of new coal plants in emerging economies.
          Research is underway to clean coal emissions. One example is an effort by MIT to combine two existing technologies - coal gasification and fuel cells - to increase plant efficiency and reduce emissions by 50 per cent. More investment like this is needed.
          Approximately 99 per cent of vehicles on the road in 2035 are expected still run on internal combustion engines, according to recent U.S. Energy Information Administration forecast. There are a variety of technologies like forced induction (supercharging) and cylinder deactivation (only using half of cylinders when on light duty) that show promise in increasing efficiency and cutting emissions. Here is another good place to invest.
         You get the point.
          If we are going to deal with climate change now, we are going to deal with it through investing in clean fossil fuel technologies. There turnover to renewables is a long way off, even if they were ready for prime time now, which they are not.
         The premier of Alberta and the prime minister of Canada need to think about where they are going to invest their carbon tax windfalls. Clean fossils fuel technology is a good place to start.
          

Is Canada's Public Service Infected By Unicorns and Fairy Dust?

By: Heather Douglas
Published: The Roughneck - September Issue

         "Lovers and madmen have such seething brains
           Such shaping fantasies, that apprehend
           More than cool reason ever comprehends."
                        William Shakespeare (1564-1616), A Midsummer Night's Dream

      The eggheads in Policy Canada (Horizons), a think tank housed within the Public Service of Canada, recently pontificated that renewable energy will soon be so cheap it will be the norm. Perhaps the civil service has fallen so deeply in love with the notion that "dirty oil" is ruining the planet their brains have developed a form of temporary absurdity.
      In June, 2016, Policy Canada published a report entitled, Canada in a Changing Global Energy Landscape, where they gleefully preach the notion that renewable energy - solar and wind - will soon replace fossils fuels. The federal government's policy wonks, who were always presumed to evaluate every issue through an unbiased and impartial lens, believe this shift away from coal, oil and natural has will occur much quicker than anyone thought.
      The report hypothesizes the costs for renewables will nose dive, there are looming breakthroughs in electric storage and electric car technologies, and the globe will turn its collective back on fossils fuels causing the price of a barrel to plummet.
      What's driving these changes? The authors cite cost reduction, digital economy, as well as climate change and air pollution. "Many components of a renewable-based electricity system are declining in cost much faster than predicted due to advances in technology, economies of scale, and accelerating learning curves as experience with these system grows," they wrote.
      "The digital systems run on electricity and as the global economy shifts to become increasingly digital, the relative proportion of electricity in energy use will increase," they added. Furthermore, "developing countries are embracing renewable energy to meet their economic and development goals with trading off environmental quality and human health."
        The Fraser Institute dusted off its eyeglasses and called the report environmental wishful thinking. "Energy systems are massive, and being massive, they have massive momentum - they're slow to change, requiring many decades for one fuel to replace another," wrote Kenneth P. Green, an environmental scientist and director of the organization.
       " The risks of believing in fairytale high-speed change is in not realizing the kind of economic wreckage that can ensure by trying to rapidly rebuild the energy systems that are key to out prosperity, that keep the lights on and planes flying, and that give us a quality of life that is the envy of much of the world," Green added.
        What if the feds decided to implement Policy Canada's recommendations and mandate the elimination of these sources of fossil fuels within the next 10 to 15 years?
        Ultimately, policies that prohibit the use of conventional fuels would impede these lesser-known but no less valuable uses. This would have an enormously negative impact on the entire economy and also means that product development scientists must find new feedstocks -for industrial and consumer goods - in warp time.  
         According to Ranken Energy, an E&P company based in Oklahoma, approximately 46 percent of a barrel of oil used in North America is refined into gasoline, jet fuels, diesel, and lubricants. The rest - about 54 percent - is consumed in the fabrication of more than 6,000 products consumers need and use on a regular basis to:
  •          Save lives - anesthetics, antiseptics, aspirin, dentures, heart valves, prosthetics, etc.;
  • Clean humans and houses - cold cream, deodorant, shaving cream, mops, trash bags, shower curtains, plastics, etc.;
  • Enable the assembly of cars - sports car bodies, wheels, motor oils, etc.;
  • Entertain our children - balloons, crayons, juice boxes, cartoons on TV, etc.;
  • Track our friends and enables us to access the latest news and sports - cell phones, computers, iPads, Xboxes, etc.
  • Clothe us - blouses, dresses, pants, shoes, etc.; and
  • Keep us fit to participate in sports -footballs, skates, motorcycle helmets, footballs, fishing gear, skis, etc.
  "Lord, what fools these mortals be!"
       Shakespeare, A Midsummer Night's Dream

        Maybe the Ottawa mandarins are not fools but steely-eyed realists. Perhaps they understand that conventional fuels are the backbone of the Canadian way of life. Canada's fossil fuels are efficient, abundant, and environmentally sound sources of energy. Possibly they think burning hydrocarbons to heat homes and to power vehicles is a colossal waste - and will soon be obsolete. Maybe they are actually advocating that every barrel of Canadian oil and cubic metre of natural gas produced - 100 per cent - should be refined into feedstock to manufacture industrial and consumer goods.
        Every lifestyle poll indicates that Canadians are not willing to make "significant changes to their current standards of living" yet want "to transition to clean, affordable energy." When probed about the 54 per cent of a barrel of petroleum which prevents deaths, enables spotless homes and clean paws, amuses the grand-kids, and gives them the latest electronic toys, their enthusiasm for shutting down fossil fuels diminishes.
       The energy industry needs to rethink how hydrocarbons are used. Burning it as fuel makes less and less sense. Whether it takes one or five decades to achieve, we support sustainable practices, the transition to clean, affordable energy, and focusing on producing the feedstock needed for consumer products.
       We salute the steely-eyed realists.