Despite a challenging economic climate for the Canadian oil and gas industry, PTAC set a new record for the number of projects launched in 2015 aiming to reduce both costs and the environmental footprint of the industry.

Petroleum Technology Alliance Canada’s collaborative model was developed during and for hard times in the late 1990s and has proven effective throughout 20 years of shifting markets, president Soheil Asgarpour told PTAC’s annual general meeting Thursday. By pooling resources in pursuit of innovative R&D projects, its members are now saving millions of dollars per year while mitigating environmental impacts and creating new value-added opportunities.

In 2015, PTAC formed the Tight Oil and Gas Innovation Network (TOGIN) to articulate the challenges associated with multi-stage hydraulic fracturing, and identify technology solutions using the PTAC collaborative model. TOGIN’s primary project is the development of the Tight Oil and Shale Gas Innovation Roadmap to identify key challenges and opportunities related to the relatively new area of production.

The network also launched several other projects in 2015 including mapping of the unconventional Duvernay and Bakken plays, development of a novel water treatment to remove pollutants from completions water in multi-stage hydraulic fracturing, and an evaluation of an innovative surface treatment and well stimulant for tight oil and shale gas operations.

Asgarpour noted PTAC was also recognized on the international stage with an unprecedented partnership with the United Nations Environmental Program’s (UNEP) Climate and Clean Air Coalition (CCAC) and the launching of the Accelerating Methane and Black Carbon Reductions from Oil and Natural Gas Production Project. PTAC is responsible for the component on Technology Demonstration and Evaluation for the Recovery of Hydrocarbon Liquids. The project is working to identify where venting and flaring of natural gas rich in volatile organic compounds occurs, and to identify cost-effective opportunities to reduce short-lived climate pollutant emissions.

A major project planned for 2016 is the Methane Venting and Flaring Initiative, which will combine existing activities and new initiatives under an overarching program to economically reduce methane venting and flaring from western Canadian hydrocarbon activities by 80 per cent. It will involve innovative applied research and also develop, demonstrate, deploy and commercialize new technology.

Additionally, three new TEREE (Technology for Emissions Reduction and Eco-Efficiency) projects will examine opportunities to reduce emissions in field operations—two through changes to glycol dehydrators and another exploring the use of solar power. And PTAC will launch a network focused on Optimization of Steam Oil Ratio for SAGD Operations that will aim to reduce both costs and greenhouse gas emissions in oilsands and heavy oil operations. The network developed out of a 2015 technology project measuring steam quality downhole in conjunction with cognitive computing technology and insulated tubing.

Meanwhile, Michael Gatens, chair of the Canadian Association of Petroleum Producers, said in the PTAC luncheon speech that he is positive in his view of new infrastructure being built to take oil and gas to new markets as Canada increasingly loses market share in the U.S.

“I think the current leadership in Ottawa is committed to getting at least one or two of those oil pipeline projects done,” he said in answer to an audience question. “They have established some new, extra regulatory processes that are currently underway that I am hoping will give them the cover they need to make positive decisions in the national interest to approve certainly Kinder Morgan Inc.’s

[expansion of its Trans Mountain Pipeline] and [TransCanada Corporation‘s] Energy East at the very least.

“Now that’s my opinion, but I think there are a lot of things lining up that lead me to believe that this government has a chance to deliver the goods and we ought to give them the opportunity to do that, and if they do we ought to give them some credit. Likewise, on the LNG side, [there are] a lot of positive signs there that point, I think, in a direction to approval of at least one of the bigger projects in the very near future,” he said. “We are trying to work constructively with this messaging to help them make what we think ought to be a pretty easy decision for the country.”

Gatens, who led a CAPP delegation to Washington, D.C., last week, said Canada appears to be making progress there as well. “I think they are pretty encouraged by the positive relationship that the prime minister has established,” he said. “They are looking to us, selfishly I think, to help supply some of their needs, but I do think we matter a heck of a lot to them and I think we really made a lot of headway on helping them understand just how far along we are with some of our environmental practices compared to where they are.”

In  an answer to a question about the new Alberta carbon levy to be implemented in 2017, Gatens declined to speculate on where the new revenue should go, but was supportive of the revenue neutrality of the B.C. carbon tax. Gatensis also chief executive officer and director of Unconventional Gas Resources, which operates in northeast B.C. but as an Alberta corporation does not fully benefit from the tax’s revenue neutrality, which has led to lower corporate and individual taxes in B.C. “But that is a positive element—if you are a citizen of B.C., those funds are somehow being rolled back into the economy, so we have been supportive of that principle.”

In his speech, Gatens emphasized the importance of the oil and gas sector to the Canadian economy and its growing need to find new markets. “The oil and gas industry generates on average $17 billion per year in government revenues across the country,” he said. “The oil and gas industry remains the largest capital investor in the country, even in the current downturn. Oil and gas is expected to invest more than $31 billion in capital this year, as much as any other sector, but we are in the midst of the worst two-year decline in capital investment on record, down $50 billion or 62 per cent since 2014.

“We have seen the job losses in the west, over 100,000 and counting. It has especially hit our services sector hard, as the rig count and well completions have fallen off.”

Reaching new markets for Canada’s producers has become all the more vital as the U.S. has rapidly increased its ability to produce its own oil and gas, Gatens noted. “From 2008 to 2014 the oil production in the U.S. jumped by 3.7 million barrels of oil a day. That’s roughly equivalent to all the oil production in Canada and that increase makes the U.S. the fastest growing oil producer in the world, soon to be the largest oil producer in the world.”

The U.S. has also lifted a 40-year old ban on oil exports and has begun shipping oil around the world. “Our number one customer is now our number one competitor.”

Simiarly, shale gas has boomed to unprecedented levels. “Today the U.S. makes about 60 per cent of its dry gas, over 42 bcf per day, from gas shales—15 bcf a day from the Marcellus and Appalachian basin alone. That’s more than all of Canada by itself, for a play that didn’t exist 10 years ago.”

Growing U.S. production has driven down the volume of Canadian natural gas exports by about a third and eastern Canada now gets about two-thirds of its natural gas from the United States, displacing Canadian gas, Gatens added. “The result: the U.S. needs less and less of our oil and gas. Before the end of this decade, the United States, historically our only customer for our natural gas, may not need to buy any natural gas from Canada.”

PTAC also handed out its annual awards. The recipients were:

Collaborative Spirit Award: the Canadian Association of Petroleum Producers (CAPP) and the Explorers and Producers Association of Canada (EPAC). CAPP and EPAC have provided support to the Alberta Upstream Petroleum Research Fund program, helping provide a unique collaborative platform between industry, the Government of Alberta, and the Alberta Energy Regulator.

President’s Award for Leadership in Collaborative R&D: Chris Holly, previously with the Alberta Department of Energy. Recently retired, Holly is the past executive director of the Alberta Department of Energy. His contributions, collaborative spirit and support have led to the launch of over 30 PTAC Joint Industry Projects made possible through ADOE grant funding.

Chair Person’s Award:  Bryan Helfenbaum of Devon Canada. Devon Canada’s technology development manager, Helfenbaum has been involved in many collaborative industry consortiums such as COSIA, and the PTAC led Phoenix Network.

Lifetime Achievement Awards: Eddy Isaacs, former chief executive officer of Alberta Innovates – Energy & Environment Solutions, and Dan McFadyen, previous chairman and chief executive officer of the Alberta Energy Regulator (AER) and current executive fellow at the University of Calgary, School of Public Policy. This award is presented to those individuals who have left an outstanding legacy in the Canadian oil and gas industry in regard to their strong collaborative efforts and leadership in progressing research and technology development, devoted service and commitment to achieving sustainable hydrocarbon development.

Outstanding Service Award: Joseph Odhiambo of Environment Canada and Doug Boyler of the Alberta Energy Regulator. Odhiambo has provided strong collaborative effort and direction to the Accelerating Methane and Black Carbon Reductions Project, launched in partnership with the United Nation’s Environmental Program’s Climate and Clean Air Coalition, whose goal is to improve global air quality while reducing costs and GHG emissions through the application of existing and emerging technologies. Boyler has served on PTAC’s board of directors for several years and has provided strong leadership and collaborative efforts in progressing research and technology development, and ongoing commitment to achieving our shared vision for sustainable hydrocarbon development.

Commercializing of SME Technology Award : Spartan Controls and REM Technology Inc., a wholly owned subsidiary of Spartan Controls. Spartan Controls and REM Technology have demonstrated outstanding collaborative effort in the successful development and commercialization of REMVueSlipStream technology to capture and conserve methane and other hydrocarbon emissions. Hundreds of Slipstream units are currently operational in Canada, reducing greenhouse gas emissions equivalent to removing 150,000 cars off the road annually.

Ecological Leadership Award: Tara Bernat of Encana Corporation. Bernat has provided direction and leadership on collaborative projects related to industry performance and environmental excellence through the PTAC Ecological Research Planning Committee.

Soil and Groundwater Research Leadership Award: Ayan Chakraborty of Imperial Oil Limited. Chakraborty has provided direction and leadership on collaborative projects related to industry performance and environmental excellence through the PTAC Soil and Groundwater Research Committee.

Water Innovation Leadership Award: Deanna Cottrell of Shell Canada. Cottrell has provided direction and leadership on collaborative projects related to industry performance and environmental excellence through the PTAC Water Innovation Planning Committee.

Air Quality R&D Leadership Award: James Beck of Suncor Energy Inc. Beck has provided direction and leadership on projects collaborative related to industry performance and environmental excellence through the PTAC Air Research Planning Committee.

Well Abandonment Leadership Award: Gord Jesse of Husky Energy Inc. Jesse has provided direction and leadership on collaborative projects related to industry performance and environmental excellence through the PTAC Well Abandonment Research Initiative Committee.

Eco-Efficiency Leadership Award: Fern Maas of Enerplus Corporation. Maas has led the implementation of a methane emissions reduction project at Enerplus during a year of corporate reorganization and budget challenges, and has demonstrated outstanding collaborative efforts in activities related to technology for emissions reduction and eco-efficiency (TEREE) Committee.

Pipeline Leadership Award: Alan Pentney of the National Energy Board (NEB). Pentney has been instrumental in the success of the Pipeline Abandonment Research Steering Committee since its inception in 2012, and has provided outstanding collaborative effort and leadership to the committee through his active participation in helping address knowledge gaps in the area of pipeline abandonment.

By Maurice Smith

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