Derrick Digest for July 6, 2017: Canada’s energy for tomorrow: Innovating for the future

Technological advancements ‘the true energy behind Canada’s oil and gas sector,’ says CAPP president

The Derrick Digest is a weekly collection of curated content, based on events from across the oil and gas industry, that caught our eye at Pennine Petroleum Corporation.

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JULY 6, 2017


Maple syrup. Hockey. Moose. Lacrosse. Beavers.

Canada is known for all of these things and more.

Tim McMillan also believes there’s a particularly unheralded, but essential, item that should also be on that list—innovative, and responsible, energy development.

“The world is growing and will need all forms of energy,” McMillan, president and CEO of the Canadian Association of Petroleum Producers (CAPP), wrote in a Canada Day editorial for the Calgary Herald. “And the world wants more Canadian energy.

“We have always been a high-tech industry, always innovating for the future,” he added. “That’s the true energy behind Canada’s oil and gas sector. That is Canada’s energy for tomorrow.”

Since North America’s first commercial oil well was drilled in Ontario in 1858, Canada has been at the forefront of responsible and sustainable energy development, says McMillan.

There’s the hot-water extraction process for the oilsands, pioneered by Karl A. Clark in 1928, and Royal Dutch Shell’s first natural gas offshore well off the coast of Nova Scotia in 1967.

On the horizon are new technologies being developed by Canada’s Oil Sands Innovation Alliance (COSIA), further refinements to steam-assisted gravity drainage (SAGD), and more.

“Our determination, perseverance, and frontier spirit have made Canada an energy superpower as the world’s sixth-largest oil producer and fifth-largest natural gas producer,” said McMillan.

“It’s the future of our energy industry that will help determine who we become tomorrow.”


Fracking rarely linked to seismic activity, says U of A study

Hydraulic fracturing has been around since the 1950s.

In recent years, banning the practice—known as fracking—has become a cause celebre in jurisdictions around the world.

Perhaps, suggests a team of University of Alberta researchers, a bit of a seismic tempest in a teapot.

For two years, U of A geophysicist Mirko Van der Baan and a team of researchers have been examining decades’ worth of earthquake rates from the top hydrocarbon-producing jurisdictions in North America—including North Dakota, Alberta, Texas, Oklahoma, Pennsylvania and West Virginia.

Their findings? Fracking and saltwater disposal in the oil and gas industry are safe, and that fracking is rarely linked to felt seismic tremors.

“What we need to know first is where seismicity is changing as it relates to hydraulic fracturing or saltwater disposal,” says Van Der Baan, as quoted in a recent U of A news release.

“The next question is, why is it changing in some areas and not others? If we can understand why seismicity changes, then we can start thinking about mitigation strategies.”

The U of A study appeared in the scientific journal Geochemistry, Geophysics, Geosystems, published by the American Geophysical Union.

Van der Baan will be sharing his team’s findings with industry and academia in the fall of 2017 during a lecture tour to 25 North American cities.

“Hydraulic fracturing is not going away. The important thing is that we need to find the balance between the economic impact and environmental sustainability of any industry,” he says.


Industry mulls Aboriginal equity participation deals

Enbridge’s now-defunct Northern Gateway pipeline proposal included a 10-percent Aboriginal equity stake.

Such an arrangement may still happen with Kinder Morgan’s Trans Mountain expansion project.

“I worked for a long time, quietly, to try and assemble support for (Aboriginal equity participation) on this project,” Kinder Morgan Canada president Ian Anderson said at a recent Global Petroleum Show conference in Calgary, as quoted by the Financial Post. “It didn’t come to fruition. I have never ruled it out.”

With Canada’s energy industry open to the idea of Aboriginal equity participation, Joe Dion says the time is now to seize opportunity and take advantage of economic prosperity.

“Industry is finally saying: ‘How do we work with you?’ ” Dion, CEO of the Alberta-based Frog Lake First Nation’s Frog Lake Energy Resources Corp., said at the same conference. “The easiest thing to do is to protest and oppose. But I think there is an opportunity to work with projects, governments, and take leadership.”

Adds Dion: “The environmentalists have hijacked the Aboriginal agenda . . . we need to take that back.”


‘Going in the right direction’ on Aboriginal employment

As National Aboriginal Day arrived in Canada in late June, Syncrude announced its own milestone in Aboriginal employment totals.

These days, 10 percent of Syncrude’s 4,700 full-time workers self-declare as First Nations, Metis or Inuit—and among new workers hired in 2016 by the major Canadian oilsands operator, more than 16% were Indigenous.

The math says we are going definitely in the right direction,” Greg Fuhr, Syncrude's vice-president of mining, extraction and production, recently told CBC.

Still, Syncrude and Aboriginal leaders say more work can be done to boost those numbers. Suncor, Syncrude’s majority owner, intends to boost Aboriginal representation in its workforce by 50 per cent through 2025.