Post on 14-Apr-2018
transcript
House of Commons
Standing Committee on Natural Resources
Ottawa, ON
June 16, 2015
Presentation Outline
1. PSAC is Working Energy
2. Canadian Oil and Natural Gas
3. Hydraulic Fracturing
• Overview
• Issues of Concern
• PSAC Code of Conduct
4. Growing Canadian Potential
Petroleum Services Association
of Canada (PSAC)
• Represents the service, supply and
manufacturing sectors in Canada’s upstream
petroleum industry
• Works for 230 member companies and their
70,000+ employees, who directly support and
supply exploration and production (E&P)
companies
• Mission: To champion the interests of members
and the industry
Upstream Petroleum Industry
Exploration
& Production
Seismic
Service, Supply
& Manufacturing
Drilling
Pipelines
Petroleum Services Sector
drilling fluids &
chemical suppliers
supply &
rental stores
pipeline & oilfield
construction
pipe coating &
inspection
pipe & drill bit
manufacturers
energy environmental
services
equipment & processing
manufacturers
cementing & stimulation
services
safety services
production testing
snubbing services
wellsite consultants
wireline & perforating
services
rathole conductor
contractors
various supplier/service fabricators,
coring, BOPs, tongs
specialized trucking services
drilling & completion tools & services
cathodic protection
hydraulic fracturing
Who is PSAC?
Canadian Oil & Natural Gas:
Contribution in Context
Industry Capital Spending ($billions CAD) Oil & Gas Investment Spending:
2012: $67 billion
2013: $74 billion
2014: $73 billion (estimate) Northern Canada
2013 2014E
$0.7 $0.5
Oil Sands
2013 2014E
$31 $33
Western Canada
2013 2014E
$39 $36
East Coast Offshore
2013 2014E
$3.9 $3.5
Source: CAPP, 2015
OGS 2009 GDP Compared to
Other Major Industries (in $Billions CAD)
$0
$10
$20
$30
$40
$50
$60
$70
$80
Oil and GasServices
Oil and GasProducers
Construction(Residential)
Agriculture Mining Automotive Forestry
$75
$48
$34
$23 $20
$17
$4
Total Reported GDP: $ 221 B Oil/Gas Services: 33.93 %
Oil/Gas Producers: 21.72 %
Residential Construction: 15.38 %
Agriculture: 10.41 %
Mining: 9.05 %
Automotive: 7.69 %
Forestry: 1.81 %
Total Oil and Gas GDP Contribution
= $123 billion
Industrial Diversification
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
2013 2014 2013 2014 2013 2014 2013 2014
Contract Drillers Oil and GasServices
Manufacturing PipelineInfrastructureProcessing
$2.9 $3.2 $10.6 $13.7
$1.1 $1.5 $20.1 $21.9
$3.6 $4.4
$4.5 $6.0
$2.0 $2.5
$24.9
$29.6
Canada International
International Revenue
by Sector (in $Billions CAD)
• Petroleum services sector
has outgrown domestic
clients
• A sampling of 42 Canadian-
headquartered companies in
2014 revealed international
revenues of $42.5 billion,
up 21 percent from the
previous year
• Most of the equipment
employed internationally is
manufactured in Canada
• Majority of the technology
deployed internationally is
developed in Canada
Hydraulic Fracturing
• Overview
• Issues of Concern
• PSAC Code of Conduct
Issues of Concern
• Ground water protection and well construction
• Water usage
• Surface disturbance
• Fracturing Fluid and Disclosure
• Seismicity
First hydraulic fracture
treatment was in 1949
Unconventional is the new conventional
60 Years of Hydraulic Fracturing
Photo: Trican Well Service
• Game-changer
• Tapping previously uneconomic
reservoirs
• Innovation in horizontal drilling is the
big technological story
• Reaches unconventional sources of
oil and natural gas (shale)
• AB –about half of drilling activity
• BC – 90% of total drilling activity
• SK – accounts for 60% of all drilling
Source: Alberta Energy Regulator, 2013
Shift to Horizontal Wells
• R&D centres
• Scientific protocols
• Environmentally friendly chemistries
• Equipment to reduce wellsite footprint
• Simulators to map out hydraulic fracturing operations
• Real-time microseismic monitoring and interpretation
• Canadians are experts and leaders in technological innovation in oil and
natural gas, and invest significantly in research and development
Hydraulic Fracturing Today
Shift to Horizontal Wells
Source: Alberta Energy Regulator, 2013
• 85% of all wells drilled and
completed in Canada are
hydraulically fractured
• The 11 companies active in
Canada are all PSAC members
• Completed hydraulic fracturing
of ~10,000 wells in 2014
• Over 215,000 wells
hydraulically fractured in
western Canada
(CAPP, 2012)
Hydraulic Fracturing Today
Video courtesy: Canadian Association of Petroleum Producers (CAPP)
Water and the Environment
Ground water protection
• The provinces have well established regulations to guide how a wellbore is drilled and
completed, what testing is done, and what data is reported.
• Industry must comply with these regulations and if complications do arise, regulations
are in place to ensure that corrective measures are completed
Water and the Environment
Ground water protection
• Regulations require isolation of useable groundwater
and saline groundwater and hydrocarbon zones
• Proper wellbore construction is critical to protection
of groundwater
• This isolation is accomplished during the well
construction stage by installing multiple layers of
steel casing and cement to ensure wellbore integrity
Source: Trican Well Service
Source: Trican Well Service
Wellbore construction and integrity
• Surface casing is set and cemented in place to
below base of groundwater protection. Cement is
pressure tested
• Production casing is used to isolate hydrocarbon
zones between the reservoir and surface casing
• A cement bond log is run to validate cement
integrity prior to any completion
• If a well is deep enough, intermediate production
casing is also run >
2,0
00
m
Water and the Environment
Source: SPE 145949n Hydraulic Fracture Height Growth (Real Data)
Water and the Environment
Wellbore Construction and Integrity
>2,0
00 m
Water and the Environment
Water usage
• Lessening the quantity of fresh water
needed for a fracturing operation is one
way to reduce the demand on river and
stream flow, and on lakes and ponds.
• The oil and natural gas industry is
increasingly relying on reuse and
recycling of fluids to reduce consumption
of fresh water, and minimize
environmental impacts and costs.
Water and the Environment
Innovation and Collaboration
• The Dawson Creek Reclaimed Water
Project treats municipal wastewater
for use in a natural gas project in
B.C., as well as for the city’s
municipal operations
• This project virtually eliminates the
company’s need to use fresh water
for their operations in that area
Water and the Environment
Water and the Environment
Surface Disturbance
• Technology has
dramatically reduced the
drilling and completion
process environmental
footprint
Source: CSUR; Adapted from www.encana.com
Source: Trican
Typical Fracture
Fluid Composition
for slick water:
99.51% water & sand
0.49% other
For gelled water: 98% water & sand
2% other (older technology)
Fracturing Fluid and Disclosure
Fracturing Fluid and Disclosure
Fracture Fluid and Disclosure
Typical Fracture Fluid Composition for slick water:
99.51% water & sand 0.49% other
For gelled water:
98% water & sand
2% other (older technology)
Ingredient Common Name Carrier Fluid use Common use
Gellant Guar bean gum Water viscosifier Cosmetics and food
Crosslinker Borate salt Water viscosifier Laundry product, cosmetics
Breaker Sodium borate salt Gel breaker for flowback Laundry products
Friction Reducer Polyacrylamide Minimizes friction between fluid and pipe soil conditioner for farming
Clay Control Salt compound Prevent clay swelling Additive for feed/farming
Flowback Enhancer Surfactants Flowback carrier fluid Cosmetics, soaps
Scale Inhibitor Polyamine Prevents scale from forming on pipes Water treatment, hot tubs
pH Control Sodium carbonate Maintains gel crosslinker Soap, hot tubs
Bactericide DBNPA (amide) Kills bacteria in mix water Hot tubs
Fracturing Fluid and Disclosure
Source: https://www.esgsolutions.com/sites/esgsolutions.com/files/img/microseismic-fracture-mapping-esg-small.jpg
Technology and Development
Technology and Development
Microseismicity
• Typical fracture treatments are -3 to -1 on
Richter Scale (1= 10-1)
• Largest measures 3.8 on Richter Scale
• Passing trucks or trains can cause similar
scale vibrations at the surface
• Dam building construction
and mining (~1.4)
Technology and Development
Microseismicty
Health, Safety and Training
Certificate of Recognition (a WCB safety program) is required for PSAC membership
PSAC WORKING ENERGY COMMITMENT:
Statement of Principles
• Operate safely and responsibly
• Meet or exceed all environmental standards
• Act with integrity
• Continually improve our practices and services
• Treat all members of the community with respect, dignity and trust
Robust Regulation in Alberta Alberta Energy Regulator (AER)
• Responsible Energy Development Act
• Draft Directive: Hydraulic Fracturing
• Directive 8: Surface Casing Depth
Requirements
• Directive 20: Well Abandonment
• Directive 27: Shallow fracturing Operations-
Restricted Operations
• Directive 29: Energy and Utility Development
Applications and the Hearing Process
• Directive 31: Guidelines for the Energy Proceeding
Cost Claims
• Directive 35: Baseline Water Well Testing
• Directive 44: Surveillance of Water Production in
Hydrocarbon Wells
• Directive 38: Noise Control
• Directive 50: Drilling Waste Management
• Directive 51: Injection and Disposal Wells
• Directive 55: Storage Requirements
• Directive 56: Energy Development Applications
• Directive 58: Oilfield Waste Management
Requirements for the Upstream Petroleum Industry
• Directive 59: Well Drilling & Completion Data Filing
Requirements
Robust Regulation
Community Engagement
Code of Conduct and Commitments
Our Goals:
• Communicate about our members’ commitment
to listen and openly discuss public concerns
• Emphasize our members’ efforts and priority
towards mitigating risks to health, safety and
environmental impacts
Robust Regulation
Community Partners
Public and Stakeholder Outreach
Canada’s Opportunity
Canada’s Opportunity
Source: International Energy Agency World
Energy Outlook 2014
• Global demand for energy is not
abating; population growth,
increased standard of living
• Increasing role for renewables,
but the ongoing high reliance on
hydrocarbons and non-
conventional oil and gas to meet
demand
Canada’s Opportunity
Source: Oil & Gas Journal Dec. 2014 & AER 2014
Canada’s Opportunity
http://www.theguardian.com/environment/ng-interactive/2015/may/28/carbon-bomb-
canada-tar-sands-fort-mckay-town-sold-itself
Canada’s Opportunity
• Canada is losing ground in the global economy:
• 10 years ago we were the world’s 10th largest exporter; today we are 13th
• In 2014, the World Economic Forum ranked Canada 15th in global competitiveness,
down five spots from 2009
• Industry revenues down 40%
• From $150 billion in 2014 to $90 billion in 2015
• Canadian capital investment down 38% ($28 billion)
• From $73 billion in 2014 to $45 billion in 2015
• Well drilling down 45% (10,400 wells in 2014) to 5,700 wells in 2015
• Oil and gas share of TSX down from 20% in 2014 to 12% in January 2015
Source: Canadian Chamber of Commerce, ARC Financial & CAPP
Canada’s Opportunity
Thank you
For more information, please visit:
psac.ca
Questions?