Natural selectionCanada’s evolving natural gas vehicle sector

In the crosshairsSafety and environmental concerns place pipelines under scrutiny

Tax tussleBonnyville and Cold Lake fight over oilsands revenue

September/October 2011

where energy, the economy, and the environment intersect

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oilsands monitoring changes on tap

Jacqueline louieEnergize Alberta

Calgary’s SAIT Polytechnic is focused on edu­cating young people for a

brighter future—whether they’re from Canada, or from developing nations around the world.

SAIT, which has been of­fering international training for the past three decades, has built a global reputation for program excellence. One of its more recent suc­cess stories is its role in a workforce nationalization training program for young people from developing areas around the world. The initiative is sponsored by international oil companies.

“What we believe is that we are changing lives,” notes SAIT Polytechnic associate vice­president, energy, John Carlson.

While the program continues to advance, its evolution appears to be a win­win situation for all involved. When oil com­panies invest in a develop­ing country, they will often sign agreements with that country’s government to invest in the local com­munity at the same time, by building schools, for example. More and more, this type of social respon­sibility can include a com­mitment to train a country’s youth. In the past few years, increasing numbers of oil and gas companies have been agreeing to provide

training to young people in developing countries so that, one day, they may be able to work in the energy sector.

Spearheaded by the MacPhail School of Energy, SAIT has been involved in the workforce nationaliza­tion program since 2001 and has hosted groups of students from a wide range of countries such as Angola, Nigeria, Libya, Syria and Sakhalin Island in Russia’s far east.

a noble goalThe program aims to help developing countries na­tionalize their workforce by training and eventually hiring local people, instead of using expatriates from other countries. The goal

is to help these nations develop a skilled local work force and strengthen them economically and socially, explains MacPhail School of Energy Dean, Mary MacDonald.

“The opportunity to have these young people as a skilled workforce, working in such a vibrant industry, is critical for them to strengthen their country,” she says. “It’s always better if an oil company can get local people that are part of the community—then they’re not as likely to leave.”

Through the workforce nationalization program, SAIT provides training in the students’ home coun­try in technical English,

extending its reachYouth in developing nations benefit from SAIT program

lynda HarrisonEnergize Alberta

LAkE LOuISE, Alta.—A “significant amount” of government and industry resources are going to be spent on monitoring and managing the cumulative effects of Alberta’s oilsands pro­jects in the next few years, promises the province’s minister of environment.

On September 21, Minister Rob Renner told the sixth International Conference on Mine Closure that his min­istry is working on the legislation that he hopes will be enacted “in the very near future.”

The government will become much more focused on outcomes and that entails putting “overall air limits” throughout the region, he said. “We’ll still expect the same degree of regulation on individual approval owners, but we’ll also be watching from an overall ambient perspec­tive what is the outcome of that.”

Monitoring up to now has been largely based on ensur­ing that various approval holders are living within their approvals, said Renner.

“The amount of ambient monitoring that we have done has been somewhat hit and miss. We’ve been doing it and there has been a good attempt at finding out what is the ambient collective impact, but we are now going to enter into a stage where we’re spending a significant amount of government resources and, frankly, to a large extent indus­try resources, to focus on what is the collective impact of all this development on our environment,” Renner said.

“Because we cannot talk about being sustainable de­velopers of resources unless we can demonstrate that that is true and that is the case.”

Renner said he believes his government is entering an exciting phase of reinventing itself as regulators “and frankly industry [is] reinventing itself as being verifiable, sustainable developers of our resources.”

During Renner’s leadership, a new reclamation strategy for oilsands projects was introduced. It includes an up­dated reclamation certification process, public reporting on reclamation performance, a new mine reclamation financial security program and a new tailings manage­ment framework. The new policy targets oilsands projects but applies to coal mines and any future mines in the province, he told the conference.

Companies will have to commit every year to progres­sive reclamation and then meet those commitments, and their results will be made public through an online portal.

The previous public reporting process was flawed be­cause it had only three reclamation milestones, he said. It reported the amount of land disturbed, reclaimed and certified, whereas the new system has eight milestones to better reflect the ongoing process, said Renner. “I don’t have to remind you, there is a lot of work that goes on between all of those.”❯❯ continued on page 2

Mike Harcourt, SAIT academic chair, Millwright, instructs Angola LNG students in the Millwright lab.

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math, chemistry and physics, as part of its prep aration for bringing the students to Canada for more technical training. After that part of the process is completed, SAIT hosts the students for a six­ to 12­month stay in Calgary, where they learn about western culture and are trained in working at an oil or gas facility.

“They are immersed in our culture,” Carlson says. “The fact [that] they have been exposed to western culture and a western way of doing business gives them a leg up—it gives them opportunities they would never have seen before. They will be facilitators of change in their country.”

Angola is one of the countries that has seen several groups taking part in the pro­gram: approximately 300 Angolan students have participated in the initiative in the past several years. One of the most recent groups was sponsored by the Angola LNG Project—a joint venture between Angola’s national oil and gas company Sonangol Limited, as well as Chevron Corporation, BP plc, Total E&P Canada Ltd. and Eni S.p.A.

A total of 92 young people from north­ern Angola spent six months in Calgary, from August 2010 to February 2011. They were chosen from among several thousand applicants from Angola and Carlson says it was an incredible opportunity for the young people, as public education is of­fered for just six years in their home coun­try. “Only the people who have any sort of wealth can send their kids up to Grade 12 equivalent,” Carlson notes.

In SAIT’s gruelling six­month oper­ations and maintenance training pro­gram, trainees spent up to 10 hours per day in class, six days a week. Their studies included operations, instrumen­tation, mechanical, electrical, health/environment/safety, English and learning success seminars. The Angolan students, who graduated this past winter from SAIT’s liquefied natural gas (LNG) pro­gram, was the largest group ever hosted by SAIT as part of its workforce national­ization training.

opening doorsThe program is playing an important role in the students’ future. It’s helping

in “achieving and making my dream come true, of becoming a professional operator in the oil and gas industry, and showing my academic achievement,” says participant Nguinamau Fernando Mata, 29.

“It was really challenging to reach this step, but attending SAIT and gaining great knowledge was the chance of a lifetime,” adds participant Manuel Andre. “however, our biggest challenge was adjusting to the cold weather.”

helping students adapt to Canada’s cold climate was all part of the program for SAIT’s MacPhail School of Energy, which has an international team dedi­cated to managing the workforce na­tionalization project. The group handles everything from meeting the students at the airport when they arrive and ensur­ing that residence is ready for them, to ensuring they have medical coverage while in Canada and shopping with them for winter clothes.

“We teach them life skills—how to use the C­Train, how to do their banking and how to cook,” MacDonald says. “We teach them western culture and work ethics, about safety in the energy industry and technical subject areas.”

Once a month, SAIT took the students on cultural and sightseeing visits to places like Lake Louise and Banff. Skat­ing, skiing, a horse­drawn sleigh ride and a couple of hockey games were some of the highlights. SAIT also organized a graduation ceremony for the students when they completed the program.

After the Angolan students graduated from SAIT, they went to Indonesia for supplemental on­the­job training at an LNG plant in Indonesia.

Carlson says SAIT’s role in the work­force nationalization program “gives us international exposure and credibility—it shows the quality of the institution and our facility.

“And from a financial perspective, it provides a revenue stream to SAIT that supplements the funding we receive from the provincial government, so that we can do more than we would normally do.”

Going forward, MacDonald has high hopes for the workforce nationalization program and what it can offer young people. “I would like to continue to do this and apply this model to Canadian issues in terms of Canada’s work shortage and skills shortage,” she says, noting that the model could be used to train any foreign workforce, as well as for training for the aboriginal community.

natural gas vehicles no pipe dream for edmonton company

Continued from page 1

extendingits reach

JosepH caouetteEnergize Alberta

It’s a familiar refrain for fans of nat­ural gas vehicles (NGVs), but one that bears repeating: infrastructure, infrastructure, infrastructure.

That’s the biggest barrier to the spread of NGVs in Alberta, accord­

ing to Tim Dykes, president of hi­Tec Fuel Systems, an Edmonton­based business that specializes in converting vehicles to run on natural gas.

In late April, then­premier Ed Stelmach and Environment Minister Rob Renner

visited hi­Tec’s north­Edmonton shop to check out the latest in NGV tech­nology. And as Dykes makes clear, the vehicles are ready, even if the filling stations aren’t.

“Doesn’t matter what the weather is—[the NGV] starts, it runs. In fact, most of the time, it runs better on natural gas than it does on gasoline,” he says. “The setback is creating the infrastructure.”

The Canadian Natural Gas Vehicle Alliance currently lists only 12 refuelling stations in the entire province.

But Dykes remains hopeful about the future of NGVs, especially with large

companies like Encana Corporation working on converting their corporate fleets to run on natural gas. As the owners of “the return­to­base units start putting in stations, they will be making them available to the retail sector,” he says.

Dual­fuel NGVs running on both nat­ural gas and gasoline are also “a very critical thing to Canada,” according to Dykes. The combination of fuel sources would help compensate for the current shortage of natural gas refuelling stations.

And now there is also the prospect of tri­fuel vehicles that run on electricity in

addition to natural gas and gasoline. Dykes was showing off what he says is the firs such vehicle in North America to Stelmach and Renner. And after going for a quick spin around the block, the premier likes what he sees.

“I notice that the car had a lot of power, a lot of pick­up,” he says. While he did not reveal any specific plans for natural gas vehicles in the province, he was impressed by both the range and low maintenance costs of the vehicles.

“It’s the start of a very good thing,” Stelmach says. “We’re going to see the growth of the conversion in Alberta.”

An Angola LNG student looks at the technology found in SAIT’s Rance Fisher Wellsite Production Education Centre.

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September/October 2011 • energize alberta

Committed to the people and communities where we work and live.

www.cpcsustainability.com

Check out our new Sustainable Development website at:

www.conocophillips.ca

not an old boy’s clubGroup enables women to network and share knowledge

Canadian Women in Energy’s annual charity golf tournament, held July 6, raised $30,500 for the YWCA of Calgary. Pictured are (from left) Damarys Zampini, Colleen McDonell, Michele Suart (YWCA of Calgary), Maureen Crozier and Tara McCann.

diane l.M. cookEnergize Alberta

Exclusive petroleum clubs are no long er just for men. Women who work in the energy sector in

Calgary can now join Calgary Women in Energy (CWIE), a group dedicated to promoting, supporting and empowering women in the industry.

Colleen McDonell, president of CWIE, says that as the demo­graphics of those working in the industry continue to change, the need for such a group has grown.

“Since the early 1970s when women entered the workforce in droves, and Calgary’s population has since quadrupled, we now have record numbers of women working in the energy industry and many of these women have worked their way quite high up the ladder,” she explains.

CWIE was initially started by Michele Morissette, account manager at hSE Integrated, Jennifer Mendiuk, account

manager at Enseco, and Catherine Brownlee, owner of Prominent Personnel. It began as a weekly breakfast club in 2003. The women met to talk about who they were dealing with, what they’d heard, and to network with each other for new leads and contacts. As more women joined the breakfast club, the group started to bring in technical speakers and organize charity golf tournaments.

McDonell says the group re­cruits mainly by word of mouth and it currently has 35 members.

“We are seeing women from land, human resources, finance, legal and engineering depart­ments join our group.”

Before joining, prospective members are encouraged to at­tend one or two meetings first, to decide whether or not they believe the group is a good fit with their expectations. “I’m more than happy to have coffee with prospective members to explain the group to them and answer any questions they might have,” says McDonell.

Mentorship is also informal and includes helping individual members achieve their goals. McDonell says if a member asks for help, the group will help that member in any way they can.

What are the main attrac­tions to joining CWIE? The group is comprised of three major compon ents: education, network­ing and community service work.

McDonell says since the en­ergy industry is extremely large and complex, most people who work in the industry usually only know about one aspect of the industry—the area they work in—and it can be dif­ficult for them to grasp the “big picture.” She explains that the group offers its members monthly technical sessions that help “educate them about all aspects of the industry and to widen their knowledge base of the industry.”

On the third Thursday of every month, CWIE holds a special net­working session in a downtown Calgary establishment. “Our mix and minglers are held directly

after our technical sessions and men are more than welcome to join us. This is an excellent opportunity for members to socialize with other professionals in the industry and expand their network,” says McDonell.

The third component of CWIE allows its members an oppor­tunity to give back to their community. Once a month, group members get together at the Calgary Drop­in Centre and serve meals from 6 p.m. to 7 p.m. “The Calgary Drop­in Centre serves approximately 3,500 meals per day so we know we are making a difference when we volunteer at this organiza­tion,” McDonell says.

“We also hold an annual char­ity golf tournament in support of the Calgary YWCA Sheriff king home, an emergency shelter for women and children fleeing domestic violence. Since 2007, CWIE has raised over $83,000 for the Sheriff king home.”

Damarys Zampini, director of business development, energy and chemical at Exel Canada Ltd. and a member of CWIE for seven years, says she joined the group because the women are inspir­ing and driven to do their part in this very important industry. “We all can learn from each other and offer each other support when needed.”

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energize alberta • September/October 2011

addressing public concernhe notes that one issue of concern to the public is contamination of ground­water, which is usually characterized in the context of wellbore integrity and the frac fluids that are being used. The second is the overall amount of fresh water that is being used and the overall impact.

“We’re trying to ad­dress both of those broad concerns within these prin­ciples,” Collyer says.

The first recommended practices to be developed will likely deal with the is­sue of frac fluid disclosure, as well as operating prac­tices around well construc­tion and how to safeguard groundwater, he suggests. CAPP has committed to supporting the disclosure of fracturing fluid addi­tives and the development of fracturing fluids with the least environmental risks.

“From my perspective, I believe the groundwater issue is being effectively managed,” he says. “We obviously need to continue to ensure we don’t contam­inate groundwater and give the public the confidence that we in fact can oper­ate without contaminating groundwater, and I believe we can.”

In the guiding principles for hydraulic fracturing, CAPP members also com­mit to safeguard the qual­ity and quantity of regional surface and groundwater resources through sourc­ing fresh water alternatives

According to the Canadian Society for unconventional Gas, hydraulic fracturing is the pro­cess of pumping a fluid with a

suspended proppant down into a wellbore in order to create a series of fracture path­ways that will increase the productivity of a well. The combination of the rates and pressures at which the fluids are pumped causes the rock to fracture or crack.

The fracture then fills with the fluid/proppant mixture. Once the treatment is complete, the fluid is recovered by flowing back the well, leaving the fracture held open with proppant. The newly created fracture enables reservoir fluids to flow to the wellbore. The fracture(s) provides a sig­nificantly larger surface area that is open to the wellbore and enables economically feasible rates of production of hydro­carbons. Depending upon the reservoir properties, the fracturing fluids and the rates and pressures applied, the fracture

may vary in length from tens of metres to hundreds of metres. Except in rare cir­cumstances, the fractures are vertical and may be either in a single plane or form a complex network of multiple fractures.

To create the pressures that are needed to crack the rock and induce fractures within the reservoir(s), the slurry is pumped down the wellbore under high pressure. high pressure pumping equip­ment, usually in the form of pressure pumping truck units, are deployed at the wellsite. The number of pumper units is directly proportional to the size of the fracture treatment planned.

In addition to the pumping units, other fracture treatment pieces of equip­ment such as proppant blenders, sup­ply vehicles and monitoring units are present. Fracture fluids are stored on site either in tanks or trailers or commonly in water storage pits if water­based fluids are to be used.

Gas-rich shale

SandstoneSandstone

LimestoneLimestoneHYDRAULIC

FRACTURING

Shallow groundwater aquiferDeep groundwater aquifer

Protective steel casing:Steel casing and

cement provide wellcontrol and isolate

groundwater zones

Municipal water wellPrivatewell

Surface gas-well lease

Horizontal bore

Induced shale fractures

Note: Buildings andwell depth not to scale

1,000 m

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2,000 m

2,300 m

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Hydraulic fracturing guidelines look to calm public concernMeasures designed to improve industry performance

Hydraulic fracturingHow it works

“ From my

perspective, I believe

the groundwater

issue is being

effectively managed.”

— David Collyer, President, CAPP

ILLuSTRATION: CSuG

New guiding principles for hydraul ic fracturing in shale and

tight natural gas wells should help to improve overall industry water performance, says the president of the Canadian Association of Petroleum Producers (CAPP).

While CAPP believes the guidelines announced in early September will help to deal with external concerns or public percep­tion issues, “that’s not the sole driver,” David Collyer says. “The intent is to help to improve overall industry performance over time and get more consistency and alignment in how we are performing.”

CAPP’s guiding prin­ciples, developed by an industry committee, apply in all jurisdictions in which the upstream in­dustry operates in Canada. They were created with the understanding that some provinces are work­ing on regulation, and it expects the principles to complement potential future regulatory require­ments.

The broad guiding prin­ciples will be supported by recommended practices that will provide more de­tail on how they should be implemented and applied, Collyer says. These recom­mended practices will be put up on the association’s website over the next few months as they are com­pleted.

“Protecting Canada’s water resources is fun­damental to our social licence to operate and to grow,” Collyer says. “With the increase in natural gas production from unconventional sources such as shale, Canadians have told us they want more information as to how industry uses and protects water.”

where appropriate and recycling water for reuse as much as possible.

however, as the industry fractures more wells and fracturing becomes more pervasive, the more difficult issue is addressing the use of fresh water and obvi­ously it wants to minimize the impact on fresh water sources, says Collyer, add­ing that CAPP is trying to do two things when it comes to water for hydraul­ic fracturing: re using water and simply using less water overall through different design and fracturing tech­nology, he said.

In the oilsands, for ex­ample, companies have made significant prog­ress in using less steam, which means less water is required and those same types of opportunities exist when it comes to fracturing.

While there are some constraints to the use of brackish water in fractur­ing, that’s one area that is getting a lot of attention because of the opportunity it offers to reduce the use of fresh water.

CAPP also is committed to measuring and disclos­ing water use with the goal of continuing to reduce its effect on the environment.

industry’s on board“The Canadian natural gas industry supports all regulations that govern hydraulic fracturing, water use and water protection, because we recognize wat­er is a valuable resource,” Mike McAllister, executive vice­president of Encana Corporation, said in a pre­pared statement.

“Strong regulations exist in regions of active un­conventional gas develop­ment. Similar regulations are being developed in regions with an emerging unconventional natural gas sector, to ensure protec­tion of water resources and provide the public [with] confidence that these resources are being de­veloped responsibly.”

elsie rossEnergize Alberta

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September/October 2011 • energize alberta

barb glenEnergize Alberta

IRON SPRINGS, Alta.—Farmers harvest the sun by growing plants, using the sun’s energy to grow food and other products.

John kolk, a farmer from Picture Butte, Alta., is a middleman in that equation.

Since last year, he has generated electricity from an array of solar panels erected in a pivot corner of one of his fields near Iron Springs.

The electricity from the 10­kilowatt, three­phase, 460­volt solar system operates his irrigation pivot and grain bin aeration system. It produces about 13,500 kilowatt hours per year.

The system cost about $55,000, says Rick Dunsmore of Goose Creek Renewable Energy Inc., which built the system and its rack.

But kolk says it hasn’t paid for itself yet and, under provincial regu­lations, it won’t for some time.

“I can tell you at this point, just to get enough energy out of this to pay for the system, not even the interest, right now, it’s about 17 years, so it’s not very effective because it has a 30­year life. But that’s going to change. And you’ve got to start somewhere,” says kolk.

under the provincial micro­generation regulations, the power produced from solar arrays like this one enters the Alberta electrical grid and is tracked. That amount is then deducted from the owner’s bill.

however, the owner is not credited for any extra electricity the array generates beyond his own use.

“At this point, the payback under net metering is relatively low and the capital costs are a bit high,” kolk says.

Electrical rates fluctuate and are now six to nine cents per kilowatt hour, he says.

“Even if we were at 15 cents, it would start paying back, but right now, no. It’s kind of like having a golf game habit. It costs you money and hopefully you enjoy it.”

kolk showed his solar project to area residents August 24 when he in­vited Alberta Progressive Conservative leadership hopeful Gary Mar to make a campaign stop here.

Mar praises the micro­generation regulations adopted in 2008, but says his environmental policy will

go further, allowing those generating electricity from renewable sources to get paid for what they produce beyond their own use.

kolk is in favour of that idea. “What we should be doing is setting these things up at a cost­efficient scale rather than fixing them to regulatory sizes. That’s why we need to look at some changes in the regulatory part so that this can become a revenue generator for producers.”

In southern Alberta, electricity to run irrigation pivots is one

of farmers’ variable costs. Solar electrical production payments could offset costs in the four or five months of the year that pivots operate.

In the other seven months, the panels could contribute to the grid and pay farmers for the electricity produced.

until recently, technology didn’t al­low reliable solar generation in winter, but Sustainable Energy Technologies, based in Calgary, now has inverters that will operate in temperatures from minus 40 to 50 degrees Celsius.

Brent harris, chief technology officer for the company, says the in­verters have been available for more than a year. Most installations have taken place in Europe and Ontario, though 25 were installed in Alberta last year.

To put solar generation in per­spective, harris notes that Germany installs about half of all new solar power generation systems in the world and now has about 25,000 megawatts of solar power.

— Courtesy of the Western Producer

rules prevent solar from reaping profit

These solar panels in a pivot corner of one of John Kolk’s fields near Iron Springs, Alta., generate electricity to operate the pivot and the grain bin aeration system. It is a 10-kilowatt solar photovoltaic system that can generate an estimated 13,500 kilowatts per year. The electricity it generates enters the grid and is tracked by Fortis. Its cost value is deducted from Kolk’s electrical bill at the end of the year.

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President & CEObill whitelaw

Editorial

Interim Publisherchaz osburn

Editorpaul wells

Assistant EditorJoseph caouetteAssociate Editor

deborah JaremkoEditorial Assistance

Kate austinbrandi haugen

marisa KurlovichWEbsitE

Web Managerchris Fleming

CrEativE

Production, Pre-Press and Print Manager

michael gaffneyArt Director Ken bessie

Design/ProductionJeremy seeman

salEs and administration

Sales Manager—Advertisingmaurya sokolon

Account Executiverhonda helmeczi

administration

sandy Flaherty

Energize Alberta is published by an alliance consisting of JuneWarren­Nickle’s Energy Group, Great West Newspaper Group and Farm Business Communications, all members of Glacier Media Inc., in association with an advisory board consisting of industry professionals. Energize Alberta is circulated to Albertans in rural and urban settings, and is also available at energizealberta.com.

Find out more about us online at energizealberta.com and send your feedback to yourenergy@energizealberta.com.

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Find more online at energizealberta.com

Check out energizealberta.com for additional stories, polls, a link to the Energy IQ quiz and a searchable archive of past editions. You can also comment on our stories and forward them to friends. In addition, the site houses a directory of key players on the energy literacy stage.

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Rick Dunsmore (left) alongside John Kolk, Gary Mar and Brent Harris as they visit the solar array in Kolk’s field near Iron Springs, Alta.

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energize alberta • September/October 2011

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tricia radisonEnergize Alberta

A $32­million biorefin­ery slated for con­struction in

Lacombe, Alta., is expected to turn tonnes of waste into energy and fertil­izer, bringing economic, environmental and health benefits to the province.

The Lacombe Biorefinery project will be the first facility of its kind in Canada. It will serve as an international demonstra­tion and research centre to showcase a patented thermal hydrolysis process developed by Biosphere Technologies Inc.

Construction is expected to begin in 2012 with pro­duction scheduled to begin in 2013.

The process takes waste like animal carcasses, ani­mal by­products and other commercial and industrial organic waste materials and turns it into renewable electricity, heat, dry fertil­izer, liquid fertilizer and inedible tallow.

“Within about 40 min­utes, the thermal hydro lysis process can take or ganic material and destroy pathogenic agents while

retaining all the nutrients,” says Chris Thrall, president of BioRefinex Canada Inc., the company building the project and commercial­izing the technology.

Waste is ground and put into high­pressure thermal hydrolysis reactors. It comes out of the reactors in liquefied form, simply because organic materials have a large percentage of water. The output then goes through centrifuges that separate it into nutri­ent fractions, including fatty acids, amino acids and minerals. Some of this material can be used to make fertilizer, which returns the nutrients to the soil, and some is used as feedstock for biogas production.

The biogas will be produced in anaerobic digesters, which are large vessels that hold water and solid organic materi­al in an anaerobic, or oxygen­free, state.

“The biogas can then be cleaned up and put into the gas pipeline system for natural gas or you can run it through a cogener­ation unit and create electricity and heat,” Thrall says. The Lacombe Biorefinery project will be doing the latter.

Environmentally speak­ing, the thermal hydrolysis process is an attractive al ternative to sending waste to a landfill or incinerator. It’s estimated that the bio­refinery will reduce green­house gas emissions by more than 350,000 tonnes of CO2 equivalent over 10 years, a goal that has earned the project $10 million in fund­ing from Alberta’s Climate Change and Emissions Management Corporation.

The thermal hydrolysis process also has inter­national certification for de­stroying all disease agents and is a safe way to dispose of animal carcasses infected with bovine spongiform encephalopathy.

“We get rid of food waste because people are wor­ried about diseases,” says Erick Schmidt, president of Biosphere Technologies and inventor of the process. “At the biorefinery, we can take that material, process it, get rid of the diseases and odour, and keep and save all the nutrients.”

Schmidt has been work­ing on bringing his process to market for more than a decade. After years of test­ ing, there is now inter est worldwide, generating the need for a showcase facility that proves the

Proposed Lacombe processing facility would be a technology first for Alberta

technology can work on a commercial scale.

The facility will be located on a 13­acre site in Lacombe’s Wolf Creek Industrial Park. Lacombe is one of the largest livestock regions in the country, making it an ideal place for

a large­scale commercial operation. BioRefinex plans to process about 55,000 tonnes of material a year.

Although the facility is still in the design stage, it is expected to include a processing area, office and lab space, and small

demonstration greenhouses along the front to show the results of various fertilizers. BioRefinex had to obtain certification from the Canadian Food Inspection Agency (CFIA) and must meet a number of detailed CFIA design requirements.

energy goes organic

The above image is an architectural concept of the proposed biorefinery to be located at Lacombe, Alta. This facility will incorporate a new Canadian thermal hydrolysis technology, which transforms animal carcasses and municipal organic wastes into safe, organic nutrients for the production of fertilizers, methane biogas and renewable energy.

ILLuSTRATION: CNW GROuP/BIOSPhERE TEChNOLOGIES INC.

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7 energize alberta • September/October 2011

Large-scale electricity transmission projects raise the ire of opponents

44%  Coal   5,782 MW

29%  Cogen   3,780 MW

  7%  Combined cycle   933 MW

  7%  Hydro   879 MW

  6%  Wind   777 MW

  5%  Simple cycle   658 MW

  2%  Other   203 MW

Current installed capacity

29%  Coal   5,588 MW

23%  Cogen   4,304 MW

14%  Combined cycle   2,762 MW

  5%  Hydro   981 MW

13%  Wind   2,500 MW

11%  Simple cycle   2,088 MW

  2%  Other   395 MW

2020 

JiM benteinEnergize Alberta

V irtually ignored by the media and the public for decades, electri­city transmission in Alberta has suddenly become not only contro­

versial, but has stirred up strong opposition from groups trying to stop huge endeavours, like the heartland Transmission Project, in and around the Edmonton area.

The Alberta Electric System Operator (AESO) says $14.5 billion will be spent on transmission in the next decade or so. AESO, the independent body which over­sees daily operations of the province’s deregulated electricity system, as well as being involved in long­term planning, has a lot on its plate these days—and not just because there is public anger over the proposed heartland project.

That public concern led to the mara­thon hearing in April and May, which was held by the Alberta utilities Commission (AuC) at Edmonton’s EXPO Centre to al­low for public input into the proposed 65­kilometre, double­circuit 500­kilovolt line, which would run in part through the south side of Edmonton.

That line, proposed by partners AltaLink and Edmonton­based EPCOR utilities Inc., has aroused spirited opposition from sev­eral groups, the most outspoken of which is Responsible Electricity Transmission for Albertans (RETA), which was an intervener at the heartland hearings.

critical or Fodder For critics?heartland is the first of the major new transmission projects deemed “critical” by the Alberta government when it passed Bill 50 about two years ago.

under that bill, the Electric Statutes Amendment Act, transmission lines determined to be critical for economic development in Alberta don’t require the usual needs assessment study.

In addition to heartland, there are five other large projects deemed critical under Bill 50. They are two high­voltage direct­current (DC) transmission lines between Edmonton and Calgary, which would carry as much as 2,000 megawatts of power, as well as a new 240­kilovolt substation southeast of Calgary.

In addition, there are two proposed 500­kilovolt lines planned for the Fort McMurray area under AESO’s long­range plan.

If the controversy over the heartland project is any indication, the AuC will be busy holding marathon­like hearings over the next few years. Two preferred routes were examined for heartland, but the one chosen by AltaLink, the main developer of the line, would involve the extension of an existing 500­kilovolt line that extends from the Wabamun area of Alberta, near existing coal­fired plants west of Edmonton, through the city to the “in­dustrial heartland,” where petrochemical plants and refineries are located north­east of the city.

That line, which runs through the east­ern part of the city, will cost about $585 million to construct, was chosen because it was deemed as having the least impact on landowners and the environment, and because it was the most cost­efficient, says EPCOR spokesman Tim Le Riche.

Because it runs through part of EPCOR’s service territory (it provides utility service for the Edmonton area), AltaLink part­nered with the utility to develop the pro­ject. AltaLink would build it and operate it.

Le Riche explains that the decision to proceed with the application to build the project followed 20 open houses and 4,000 one­on­one consultations. “We contacted over 200,000 stakeholders overall,” he says.

Apparently, that wasn’t quite enough; or maybe all of that consultation stirred up the proverbial hornet’s nest, because there is strong opposition to the line on many grounds, best summed up by Bruce Johnson, the Edmonton entrepreneur (he runs an organic baby food company) who acts as the volunteer group’s president.

he’s a pragmatist when it comes to the ultimate outcome of the hearings. “I don’t expect a decision against the line,” he says. “But I think we’re scoring a few points.”

proJect overloadLike most other groups opposed to heartland, RETA claims it and other Critical Transmission Infrastructure (CTI) projects are too much of a bad thing. “They don’t need this much capacity,” says Johnson. “It’s a ludicrous amount of trans­mission and power. I think we’re building infrastructure that will haunt us for the next 60 years.”

RETA opposes the dramatic transmission build out on a number of grounds, including:

• It says the lines are ugly and mar the views of people living nearby and those passing through;

• There are concerns they harm health, with some reports suggesting that people living nearby have higher incidences of cancer, for instance;

• They have an environmental impact. Aside from the obvious disruption to land where the lines are built, Johnson says many birds are killed in North America by transmission lines each year and that heartland will kill 14,000 birds a year; and

• Transmission lines affect prop­erty values. he said there is some evidence property values drop by as much as 30 per cent under and near lines, with the average being seven to eight per cent.

To mitigate that impact, RETA and others have proposed that about 20 kilometres of the line that passes through more populated areas in and around Edmonton be buried.

Le Riche said EPCOR and AltaLink have calculated that would boost the cost of building heartland to $1.09 billion, a cost estimate Johnson disputes. “We believe it would be virtually the same price to build it,” he says, disputing a claim by the partners that it’s untried technology. he notes there are at least 12,500­kilovolt underground lines in the world and “hundreds” of 400­kilovolt and smaller lines that are buried.

Johnson says he has been told by AltaLink officials off the record that they are concerned that a decision ordering it and EPCOR to go underground with part of the line would be viewed as a precedent, forcing them to build other new lines underground and even to redesign some existing lines.

Le Riche said EPCOR and AltaLink stand by their cost estimates. “Our numbers are on the record,” he says. “however, if the AuC orders us to build some of heartland underground, we would do it.”

Albertans overall would end up paying the higher cost, Le Riche says, since the utilities simply pass along their costs to electricity consumers.

alberta’s growth will power-up demandGreg Retzer won’t enter the debate directly about heartland, but he cer­tainly has a good handle on the prov­ince’s power transmission needs going forward. It’s his job. Retzer, director of transmission for AESO, was a key part of the team that produced AESO’s 2009 Long­Term Transmission System Plan. Slice it and dice it whatever way you want, but the bottom line, he says, is that Alberta’s population is growing and its economy will experience many years of significant growth, most of it brought on by oilsands and other industrial development.

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September/October 2011 • energize alberta

enbridge plan to buy power line welcomed by residentsLandowners hope ongoing disputes will now be resolved

“Our demand for power has doubled in the last 20 years and our forecast says it will double again in the next 20 years,” he says.

On any given day, Alberta consumes between 8,000–11,000 megawatts of power or more, with total generating capacity of 13.462 megawatts. About 6,232 megawatts of that comes from coal­fired plants, 5,308 comes from gas­fired plants, wind accounts for 777, hydro provides 879 and there’s another 266 megawatts from other sources.

Retzer defends AESO’s forecasts, arguing that there is a direct correlation between economic growth and the need for electrical transmission. “If you overlap electricity demand and gross domestic product [a measure of overall economic growth], there’s a close correlation between the two,” he says. “It could also be argued that transmission is a facilitator of that growth.”

he notes economists and others forecast that Alberta’s gross domestic product will double over the next 20 years, to about $500 billion. In addition, the population, which now sits at about 3.3 million, is expected to increase by about one million.

Aside from its planning role, AESO acts as a kind of stock exchange or commodities exchange for electricity in Alberta, operating a real­time market where utilities and others can buy and sell power—so Retzer argues that it has a very good reading of what will be required to power the province in the future.

“We’re like the air traffic controllers of the power grid,” he says.

While heartland and other CTI projects are grabbing the headlines, Retzer adds they are part of a huge trans­mission infrastructure build­out. “There are 250 active projects on the go now.”

hearings will be held into the two, high­voltage, 500­ kilovolt lines that will run from near Edmonton to Calgary. A hearing into a line that would run west of Edmonton to Calgary was slated for September, with a hearing into a transmission line that would run east scheduled for November. AltaLink will build the western line and ATCO will build the eastern one. Both are to go into service in 2014.

other options availableRETA’s Johnson and environmental groups, such as the Alberta­based Pembina Institute, argue that AESO isn’t looking at other options to avoid the build out of such costly and controversial transmission.

For instance, Johnson says AESO and the utilities should be doing more to encourage the development of more district energy generation, produced closer to the source of consumption (such as small wind or solar).

Jessie Rowe, of Pembina, agrees with Johnson and also argues that AESO and the provincial government should be doing more to encourage Albertans to conserve power.

“We’re getting into a situation where very expensive trans­mission options are being proposed and we aren’t looking at other options,” Rowe says. “It’s cheaper to help people save electricity. We need a regulatory structure that encourages the adoption of new technologies, such as smart meters.”

Retzer denies that the AESO, AuC and others are blind to the deployment of smart­grid technology and other steps to conserve. The problem is, the nature of Alberta’s power consumption doesn’t allow for the same benefits such conservation­oriented approaches achieve elsewhere.

“Because so little of our load in Alberta is residential consumption, we can’t achieve the same results as in Ontario, for instance,” he contends. “About 80 per cent of our load is industrial and commercial. In Ontario, about 50 per cent of the power consumption is residential.”

Because of the highly industrialized nature of the system in Alberta—and, for that matter, in neighbouring Saskatchewan—large volumes of power need to move long distances to where it can provide power for industry.

But Retzer believes there are steps that can be taken to make the system more efficient. For instance, AESO is ask­ing AltaLink and ATCO to build DC, high­voltage lines.

“That’s new technology for Alberta,” he says. “It comes from a desire to squeeze more power from our transmis­sion. A DC line can move six times as much power as an AC (alternating current) line.”

The new 500­kilovolt lines can move about 1,000 mega­watts of electricity. The lines don’t require as much land as AC lines, so the environmental impacts are less, Retzer adds.

LEThBRIDGE, Alta.—Southern Alberta land owners involved in a controversial power line installation are hopeful that a

potential new owner of the line will improve their situation.

Enbridge Inc., a major energy delivery company based in Calgary, announced plans August 16 to buy the Montana Alberta Tie Ltd. (MATL) line that, upon completion, will stretch 345 kilometres from Lethbridge to Great Falls, Mont.

Construction of the 300­megawatt line has been mired in disputes with landowners along the route on both sides of the international border, to the point where construction halted in June and MATL announced the need to find another $50 million to complete the project.

It was initially estimated to cost $209 million when the process started six years ago.

Enbridge, well­known for its oil and gas oper ations across North America, proposes to buy Toronto­based Tonbridge Power Inc., owners of the MATL project, for $20 million, or 54 cents per share, and repay about $50 million in debt incurred during construction so far.

The proposal is subject to Tonbridge shareholder approval and a vote was scheduled September 26 (after Energize Alberta’s press deadline).

“We’re hopeful that Enbridge will be easier to deal with,” says Daryl Bennett, a land agent representing about 35 Alberta landowners in disputes with MATL.

“Enbridge may step in and say, ‘well, we don’t want all this hassle and problem,’ and they’ll compensate the landowners for what they’ve gone through, but I don’t know. We want to get someone from Enbridge down here and just drive down the line and say, ‘well, this is what you guys bought.’”

Lino Luison, vice­president of financial partnerships for Enbridge, doesn’t rule out that idea.

he says the company is aware of landowner disputes surrounding the MATL line, but it is used to dealing with such issues.

“We do put in place a lot of infra­structure relating to pipelines, and they tend to be long megaprojects, frankly, that cross a lot of juris dictions,” Luison says. “We have a long history of build­ing relationships with land­owners, so I would see that exact parallel being executed when and if this deal closes at the end of September.”

Luison says meetings with affected landowners are a possibility, although

they are unlikely to happen until the deal closes.

“We need to avail ourselves of access to their land and we’re partners for the long term because these assets don’t just disappear.… Nothing beats open communication with the stakeholders directly,” he notes.

Dianne Sincennes, a landowner who objected to the location of the line near her Coaldale, Alta., home, became an early spokeswoman for a group that objected to line locations and MATL approaches to compensation.

She says news of the potential pur­chase of MATL by Enbridge gives her hope that the route might be adjusted and compensation rates improved for those directly affected.

Luison says such discussions await deal approval as the com­pany will be in a better position to examine the issues once it owns the power line project.

When the purchase is finalized, Luison says Enbridge plans to make application for increased capacity to 550 to 600 megawatts from the initial plan of 300 megawatts. The change will not require additional

poles or wires beyond those origin­ally planned and the footprint of the line will remain the same, he said.

As well, the MATL management team will be retained because of its expertise in electrical transmission projects. This will be Enbridge’s first foray into electrical transmission, but Luison says it is unlikely to be the last.

Though electricity can flow both ways through the line, once it is completed Luison says the bulk of electricity will flow into Alberta from Montana’s wind power and other energy projects.

“Alberta has been a net importer of power since 2002. In fact, last year their imports grew by about 10 per cent so there’s a substantial need for additional power in Alberta and this line will accommodate Alberta’s needs for new sources of energy.”

he says Enbridge plans to complete construction by the middle of next year and will resume work as soon as possible after the purchase of Tonbridge is complete.

— Courtesy of the Western Producer

The 230-kilovolt, 300-megawatt MATL power line will extend from north of Lethbridge, Alta., to a point north of Great Falls, Mont., a distance of 345 kilometres. The placement of wooden H-shaped poles is well underway. Many Alberta landowners are not pleased with the compensation offered by MATL for running the line across their land.

barb glenEnergize Alberta

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9 energize alberta • September/October 2011

is that it’s really important to look at why something failed, and to iterate and test again if it looks like there’s something there. In fact, to quote GM’s Charles Kettering, “We need to teach the highly educated man that it is not a disgrace to fail and that he must analyze every failure to find its cause. He must learn how to fail intelligently, for failing is one of the greatest arts in the world.”

One of our staff tells this story:Our challenge was to create a program for grade 8 students that had them experimenting with mechanical systems, including hydraulics. The first program we tried out involved creating a machine driven by syringes that would move a marble from the bottom to the top of a board. The activity itself was pretty engaging overall, especially with a few select students. However, with this particular audience, their focus is so much on how they look to each other, what everyone else thinks, and they worry about looking stupid. As a result, lots of kids just gave up on the challenge early on. When it came to the sharing and reflection part of the program, many kids had nothing to share. We left the program thinking, great, we just gave the kids an experience to make them feel more self-conscious, and like failures themselves. Not exactly the outcomes we were looking for.

Upon reflection, we noted that it wasn’t really the activity itself that had failed. The students in the class who were a bit more mature and were not looking for approval from any of their peers got a lot out of it. So the new challenge became, how can we achieve those outcomes with ALL of the students? In the next round of testing, we created four different challenges. We kept that marble challenge, but added three more (trucks, water fountains and crushers, for any educators out there). Now when the students looked over their shoulders, they were curious to see what the other groups were doing rather than evaluating it against themselves. We set up the room so that dissimilar activities were closest to each other. In this test, we saw richness in the final sharing process, with students being delighted at the challenges they had overcome and genuinely interested in what other kids in their class had done. Teachers were amazed to hear from students who were typically quiet, willing to speak out and talk about what they created.

The analysis of WHY something fails is an important exploration, and furthermore, needs to take into account the complexity of the situation. If we wrote off the activity and tried another one, it’s likely that activity would have suffered the same fate. In this example, it was not the activity, but the relationship of the activity to the audience that needed revision and change.

Now that I’ve sold you on the benefits of taking a risk and the power of experimentation and its attendant risk of failure, I’m sure you’re ready for the next step—pilot testing amped up. In the next article, I will talk more about approaches to thoughtful experimentation, pilot testing and the traps you can fall into when taking on these techniques.

In the meantime—keep experimenting!

The Fuel for Innovation—Risk TakingBy Julie Bowen, Vice President, Content

It’s got to be one of the most common elephants in the room—for your kid at school, for you sitting in that meeting room talking about a project, for a CEO trying to balance shareholder value with innovation—what happens if this doesn’t work out? What happens if I/we/you take that risk and it fails? What happens to my kid’s future? My career? My reputation? Better to go with the safe idea/path/solution. Sound familiar? This is probably one of the biggest dilemmas out there—for innovation to happen, there are likely to be a whole lot of dead ends before you get there. A whole pile of failures. A big bin of oops. Thomas Edison put it pretty succinctly when asked why he still hadn’t developed the light bulb: “I have not failed. I’ve just found 10,000 ways that won’t work.”

I bet you’re feeling like you’d like to bail on this article and read something less stressful. I’ve probably conjured up for you that feeling in the pit of your stomach just before that exam/client meeting/performance review/board meeting you didn’t feel prepared for—that fear of failure. The challenge for a lot of high-performing people is that they’ve experienced so much success in their lives that they are unprepared for failure. And usually they are unable to cope with the emotions that come along with failure—shame, guilt, embarrassment, despair. The automatic response becomes to be defensive, to blame others, to see the failure as a personal affront, to work really hard to never have it happen again which usually means not trying something that might be a bit out there, to shy away from taking risks. And more tragically not something from which to learn.1 This is not only seen in individuals but in teams, organizations and societies.

So how do you get past the fear of failure? Past the organizational culture that rewards success and punishes failure? How do you get your kids or your team to embrace failure? Why should you? It sounds awfully uncomfortable.

Let’s tackle the last question first. Failure is going to happen to you at some point—it’s how you deal with it that will colour what comes after. Martin Seligman has studied failure and how different people respond to it and has concluded that optimism is the key to what happens after failure. “We discovered that people who don’t give up have a habit of interpreting setbacks as temporary, local and changeable.”2

Risk taking, and its attendant possibility of failure are crucial to innovation—creating something new rarely springs fully formed and successful out of the gate. “Literature asserts that innovation is difficult to achieve in organizations that do not tolerate risk taking and failure. An environment that promotes the freedom to think and act against the status quo spurs innovation.”3

So how do you move from actively avoiding the possibility of failure, or at least shying away from it, to getting comfortable with it or even to embracing it as a part of who you are and what you do? What if you reframed failure? What if failure became experimentation? Pilot testing? Another side of success? A learning opportunity? An expected outcome? Would that change how you felt about failure? Now granted, you probably don’t want to do this at a huge scale to start with. Small steps, after all, are the easiest way to make change.4

Experimentation by its nature is about trying and testing—and failure is definitely a consistent outcome. (Up to 70% of science experiments in some fields of research result in failure.)5 There also seems to be permission in the words ‘experimentation’ or ‘pilot testing’ that the outcome is uncertain and that the potential is there for failure, but that’s okay—after all it’s an experiment.

Experiments also often start off on a small scale, and pilot testing is all about trying something out usually early on in the genesis of an idea, at low cost, low risk and with the assumption that iteration and learning are outcomes.

People act in response to their environment. (If you don’t believe me, watch people line up at a bus stop.) If the environment doesn’t encourage risk taking, then it’s unlikely to happen. To set up an environment that is conducive to experimentation whether at home or at the office, here are some things to consider: sometimes designating a space for experimentation—could be the kitchen, the garage or an unused office or meeting room can signal a space that is safe to try things out without fear of reprisal or embarrassment. And a time for experimentation—allocate a couple of hours on Friday afternoon at the office—something that both Google and 3M have adopted and excel at. Or designate a couple of hours on a Saturday afternoon with the kids. This turns it into a habit, rather than a thing that gets supplanted by all the other things you need to get done.

A good experiment starts with a good question or a series of good questions. Try to come up with an experiment that isn’t designed to confirm your initial assumptions. Instead of building a volcano with your kids following the directions online—and give a predictable (albeit pretty cool) outcome, what about exploring what other kinds of cooking ingredients in the kitchen when combined together have interesting properties. (Just stay away from the cleaning chemicals.) And talk about what worked and what didn’t, why combinations of ingredients might have acted (or tasted) in the way they did and what was learned.

At work, is there a process, product or an idea that could become a ‘safe’ experiment to get people comfortable with the idea of experimenting? Or, if it feels too risky to try something directly in the company’s business, what about an experiment in waste reduction—zero-waste lunches. If you design an experiment to see how you can encourage staff who bring lunches to reduce their waste to zero—using reusable containers and cutlery, food without packaging. Are there ways that you can try to increase the numbers of staff who do this? Does starting with a single day of zero-waste lunch work? How do you get the word out? What are the most effective mechanisms for encouraging a behaviour shift? Does giving out company-branded lunch bags show support for the initiative? Experiments or pilot tests that require little money, a bit of time and can get you in the practice of learning from the successes, failures and iterations in something that isn’t crucial to the business’ success and are good dry runs for venturing into more experiments…

As a parent, a manager or a leader, talk about what was learned, what the next steps or next questions might be—how you respond to things not working out will send a strong signal to both the individual experimenting and those watching the experiment. Interestingly, praise and criticism can both be demotivating to the individual receiving either if there is no context, or that there is a perceived lack of sincerity. Instead of saying to your child, “That’s great,” engage them in a conversation about what they are thinking about: “I see you’re using balsa wood for that experiment—what do you think might happen?” 6

As a leader, talking about your own failures has been shown to dramatically increase the willingness of your employees to take risks. Although it might feel like you’re letting the team down, you are in fact showing that everyone can make mistakes. The biggest and probably the most unforgiveable mistakes are not to learn from them.6

One of the things we’ve learned about failure through the course of bringing the new science centre from dream to reality

The TELUS World of Science—Calgary is in the process of building and outfit-ting our new science centre. This series of articles explores the things that we’re learning along the way as we develop new kinds of experiences with our visitors.

End notes:

1 Argyris, Chris. 1991. Teaching Smart People How to Learn. REFLECTIONS Volume 4 Number 2. Pages 4–15.

2 Seligman, Martin E. P. 2011. Building Resilience. Harvard Business Review April 2011. Pages 100–106.

3 Corporate Leadership Council. December 2005. Embedding Innovation in the Workplace.

4 Chip Heath & Dan Heath. 2010. Switch: How to Change Things When Change is Hard. Random House. 305 pages.

5 Edmondson, Amy. 2011. Strategies for Learning from Failure. Harvard Business Review April 2011. Pages 49–55.

6 Farson, Richard and Ralph Keyes. 2002. The Failure-Tolerant Leader. Harvard Business Review August 2002. Page 3–8.

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JosepH caouetteEnergize Alberta

If you head out to the Canadian Petroleum Discovery Centre near Devon, Alta., the first thing you’ll likely see is the towering oil derrick set up beside the facility. Observant

vis itors, however, may notice a more sur­prising and unexpected exhibit sitting just beyond the rig’s shadow: a solar panel array.

The centre may be filled with artifacts of Alberta’s petroleum past—like that his­toric rig outside—but it always keeps one eye on the future as well. For that reason, it puts a special emphasis on bringing in young Albertans to learn where the province’s energy industry has been—and where it’s going.

On a bright summer’s day early in August, 58 members of the provincial intermediate 4­h camp at Battle Lake, Alta., visited the centre to learn about the history and science of one of Alberta’s key indus­tries. It was the third year for the tour, which has been sponsored by Penn West Exploration from the start.

The children, aged 12 to 15, explored the oil and gas industry through the centre’s historical exhibits and hands­on activities. They learned about the petrochemicals common in everyday objects like house­hold cleaners and clothes, stood inside a chamber that simulates the inside of a well as it is drilled and even got the chance to craft their own makeshift geological strata (with the help of some ice cream and rock candy).

For Penn West, the goal of the partner­ship is to help rural Albertans learn a little more about an industry that very often affects them.

“Many of these kids have wells or pipe­line crossings on their property,” explains Nicole Collard, public affairs specialist with the company. “Many are familiar with industry and many of their lives have been impacted by oil and gas.”

The oil and gas industry hits close to home for some of these children. In fact, it even pays for that home in some cases.

“One girl was telling me she really appreciated seeing what goes on in the industry because her parents drive trucks and move riggings, and she didn’t have a clue how it worked,” says Sarah McCray, assistant director of summer programs for the 4­h camp.

Collard was also impressed by the curi­osity of the students. “They asked so many technical questions. Where do the workers work? Where do they stay? how do they get there?

“It wasn’t just the job, but the lifestyle. They were thinking [about the] big picture.”

But that big picture stretches well be­yond questions of lifestyle to the future of the industry itself, as evidenced by the recent appearance of renewable energy at the facility.

According to Dan Claypool, the centre’s president, the solar panels are just one more way of teaching people about the ever­evolving nature of Alberta’s energy industry. “That will be the future of the petroleum industry when someday we run out of oil and gas or wish to not use it,” he explains.

The panels, which are not hooked up yet, will serve as a demonstration of renew­able energy in action, while also perhaps shaving a few dollars off the centre’s power bills. Wind power is also in the works, Claypool says, and he hopes to have a geo­thermal system that could heat and cool the building installed within the next five years. All that is required is a bit of fund­ing—and a lot of patience.

“The problem with geothermal is that it’s a 20­ or 30­year payout,” he admits, noting the costly initial investment required by the technology. Still, Claypool is willing to take the long view when it comes to the ambitious energy plan.

“Everything we do around here we do for the future,” he says.

petroleum centre moves into future while preserving pastAlmost 60 young 4-H members enjoy a hands-on learning experience at Devon facility

Pipeline protests, coal controversy and land sales through the roof—catch up with the key energy stories shaping Alberta’s future in Energize Alberta’s Top 10, online now at energizealberta.com.

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energize alberta • September/October 2011

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Technology Changes Everything15–17 NOVEMBER 2011

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Altex looks after all the rail cars, Randy Meyer, CN’s sen­ior manager of business development, told the Canadian Institute’s North American Pipeline Symposium in June. “You pay a toll for that, that’s it, that’s all and you deliver your oil to a terminal.”

targeting Key marKetsAccording to CN, it has been moving diluent, pipe, ag­gregate, steel, cement, sulphur and petroleum coke into and out of the oil­producing regions of western Canada, and now it is prepared to transport from 1,000–200,000 barrels of bitumen per day from Alberta’s oilsands to the u.S. Gulf Coast, the u.S. Midwest or eastern and western Canada.

CN has direct access to the Louisiana Gulf Coast and, through the company’s rail interline partners or barge, can access the Texas Gulf coast.

Oilsands projects are all within about a 100­kilometre radius of the end of CN’s network just east of Fort McMurray’s Linton yard at the end of highway 69. The yard is currently being used to truck in commodities such as sulphur and petroleum coke, and to truck out products like heavy components for construction.

Trains have capacity for about 60,000 barrels of bitu­men and do not need to run full. Shippers only pay for what they use when they use it. According to CN, five trains can take the equivalent of a 400,000­barrel­per­day pipeline.

Meyer promoted rail as a complementary option to pipe­lines and part of a portfolio approach to market access.

“When the type of oil that needs to go to a market changes, pipelines are dedicated to a certain type of oil and you’re kind of committed, but rail is segregated each way so you don’t have to worry about whichever oil you want to deliver,” Meyer says.

The network provides connections from Fort McMurray –area oilsands to upgraders in Alberta’s

Industrial heartland near Edmonton and to the port in Prince Rupert, B.C., where production can be shipped to Asian destinations such as hong kong, Shanghai and Tokyo.

many beneFitsRail can get bitumen from Fort McMurray to the Gulf Coast in 10 days, versus 50 or 60 days via pipeline, he says.

Shipped by rail, bitumen does not have to be diluted, he added.

“In fact, it’s better if you don’t because there’s no point. Not having to dilute bitumen with diluent makes trans­port safer because, in the case of a break or crack, it won’t escape into the environment. At ambient temperature it doesn’t flow,” says Meyer.

Rail shipments of bitumen use existing infrastructure, avoiding the necessity of getting permits and approvals that proposed pipelines such as Northern Gateway and keystone XL are going through, he said.

Rail also offers less risk, as much of the capital has already been spent and it does not require 20­year take­or­pay commitments or $10­billion investments. Infra­structure commitments would likely consist of $5­million or $10­million terminals, he said.

A scalable transportation option, rail lowers the risk of project development, he said. Steam assisted gravity drainage producers run the risk of having fields that don’t perform to expectations while having already built pipe­lines. That risk does not exist with the rail system. “You scale into what you need.”

Rail also offers security, he said. If something goes wrong with a pipeline and there is an interruption, producers have no alternative mode of shipment. Meyer suggests they use rail as part of their portfolio by hav­ing some component of their production moved on rail so that they can “dial it up or dial it down, depending on market demand.”

lynda HarrisonEnergize Alberta

Moving crude oil by rail is nothing new. It’s how the commodity was transported until the late 1800s before John D. Rockefeller came up with the idea of pipelines as an

alternative, and today is still carried this way in parts of the world where pipelines don’t exist.

Now several Canadian companies have started using rail as an alternative to pipelines and proponents say it’s catching on.

“It’s kind of going crazy,” says Glen Perry, president of Altex Energy Ltd., which has partnered with Canadian National Railway Company (CN) to promote the concept of moving bitumen by rail to create new markets for the hydrocarbon.

Canadian Pacific Railway is also getting a piece of the oil­transportation pie.

growing interestThe market has opened up “a fair bit” and interest in re­ceiving bitumen where Canadian pipeline access currently doesn’t exist has been expressed “from all over the place, really,” said Perry. Buyers such as refiners and asphalt plants in places such as California, Texas, Louisiana and the east coast have made proposals, he said.

Interest has grown in the past six months, he adds. It’s gone from producers saying they’ll review the proposal to asking, “Can you do it tomorrow?” he says. Perry estimat­ed seven or eight companies are now moving their heavy oil by rail, five of them moving bitumen, but he would not disclose their names due to confidentiality agreements.

he guessed about 5,000 barrels per day of western Canadian production is currently being shipped by rail.

“You keep bringing on supply and you don’t build take­away, it’s inevitable what happens,” Perry says. “It’s just happened a lot quicker than we thought it was going to happen, maybe as a result of all the pipeline problems. We can’t even take away as much oil as we thought we could.”

CN’s three terminals are not built for heavy oil, so cus­tom loading and unloading facilities are needed in Peace River, Fort McMurray and the Cold Lake/Lloydminster area of Alberta. But their construction is proceeding slowly, he notes, and no shovels have hit the ground yet.

CN has the rail while Altex is handling everything else: the terminals, loading and unloading, and putting produc­ers and refiners together, explains Perry.

“ You keep bringing on supply and you don’t build take-away, it’s inevitable what happens.” — Glen Perry, President, Altex Energy Ltd.

riding the railsOil companies climb aboard potential alternative to pipelines

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www.energizealberta.com

13 energize alberta • September/October 2011

…to all of us. We take pride in our reputation and for being good neighbours in your community because our families live here too.

Stronger communities are built by the strength of their members and by our ability to communicate with one another. That’s why we established our “Community Matters” program which encourages people to come together to exchange ideas and information about the things we all care about—the safety and well being of our friends and family, stewardship of the land, and having respect for our neighbours.

If you have questions or concerns about operations in your community, or would like more information about Penn West, we invite you to contact us at 1-877-454-8844. To learn more about us, please visit our website at www.pennwest.com.

www.pennwest.com

kevin MaEnergize Alberta

Two Alberta students recently won national fame for show­ing how a pet store product could help

clean up oilsands tailings ponds.Brennon Grohn of St. Albert

and Michael Gras of Edmonton, both junior high school stu­dents, won bronze in the junior category at the Canada­Wide Science Fair as well as $1,300 in scholarships. The event, held from May 14 to 21 in Toronto, saw 500 Grade 7 to 12 students from across Canada competing for about $1 million in prizes.

Grohn is a veteran of science fairs, he says, having attended his first in Grade 4 with a project on how people drown in grain bins. he teamed up with schoolmate Gras at Edmonton’s Aurora Charter School two years ago.

The team decided to research oilsands tailings ponds after about 1,600 birds died on Syncrude’s Aurora tailings pond in April of 2008. “It was a problem that had to be fixed,” Grohn says.

The duo started brainstorming potential ideas. They did exten­sive research online, spoke to oilsands researchers and visited the CanmetENERGY Technology Centre in Devon, which is known for tailings research.

“Tailings are the by­products of the oilsands process,” Grohn ex­plains. Once companies remove the oil from the sand, they’re left with a watery mix of sand, clay, lead and other toxins that are now stored in massive ponds.

Last year, Gras says, they researched what substance was best at removing organic matter from tailings pond water. The winner was sphagnum moss, especially when combined with magnetic stirrers. This year, they

decided to focus on naphthenic acids—complex, corrosive sub­stances that cause birth defects in animals.

The team took tailings water that contained 1,000 parts per million of naphthenic acid and ran it through pipettes packed with one of four commercial filter products used by industry. These products were compared to pipettes filled with activated charcoal bought from a local pet store sieved to various grain sizes. Once the water filtered through the pipettes—a process which took anywhere from 10 seconds to two days—the team measured the amount of acid left in the water with a colour­ changing liquid (it turns more red when exposed to more acid).

The team found that activated charcoal could remove up to 98 per cent of the acid in the sam­ples, while the best commercial filter managed just 68 per cent.

science mattersTwo young Albertans rewarded for their research efforts to improve tailings pond reclamation

“Charcoal worked much more ef­fectively than all the other ones,” Gras says.

Activated charcoal is a known adsorbent, Grohn says, and has much more surface area than other substances. This decreases the flow rate of the tailings, which gives the acid more time to be trapped in the filter. “Activated charcoal isn’t

too expensive,” he notes, “but in large amounts it would add up to a pretty hefty price.”

he and Gras plan to see if they can make the charcoal reusable next year to reduce those costs.

Full results of the fair can be found at cwsf.youthscience.ca.

— Courtesy of the St. Albert Gazette

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Brennon Grohn and Michael Gras won a bronze medal at the Canada-Wide Science Fair for their project on removing pollutants from oilsands tailings pond water.

www.energizealberta.com

15 energize alberta • September/October 2011

ALBERTAISENERGY.CA

We are Albertans and we are energy. Whether inside municipal offices in Fort Saskatchewan or between neighbours on a farm near Crossfield, an informed discussion about a vibrant and competitive oil and gas industry is important.

Recognizing the contribution of oil and gas to Alberta’s communities allows us to address the important relationship between a thriving economy, a healthy environment and a high quality of life.

Alberta is Energy showcases the men and women of Alberta, their careers, challenges and accomplishments. These people may be from your community. Read about a student at SAIT, a farmer near Crossfield, and the Mayor of Fort Saskatchewan, and see how the oil and gas industry plays a role in their lives.

Visit www.albertaisenergy.ca

Alberta is Energy is supported by several Alberta business associations, many of which are focused on the oil and gas sector.