Increased Efficiency for Sustainable Growth

Better Drilling in the Western Canadian Sedimentary Basin

In the 2013 federal budget, as well as the 2013 Economic Action Plan, the Canadian government placed a large emphasis on the skilled trades and efficiency in the Western Canadian sedimentary basin to ensure the sustainability of the industry and maintain the many economic and social benefits of a strong economy.

When examining the petrochemical industry in Canada, it is important to consider more than just the resource in question – petrochemicals in this case – but rather how the management of such a resource can result in a bountiful economy, finding a balance between promoting the resource as a commodity and continuing to foster a strong labour market while ensuring a focus on environmental protection and standards to protect the industry as a whole.

As of 2010, hydraulic fracturing has opened up access to formerly inaccessible hydrocarbons. Fracturing, or “fracking” as it is commonly called, is a technique in which water is mixed with sand or other chemicals and injected into a wellbore at high pressure to create fractures which allow fluids / resources to navigate to the well through conduits created in the process.

This process has been met by some public concern as groundwater can become contaminated, fresh water supplies can become depleted, and increased risks to air quality are experienced, as gasses and hydraulic fracturing chemicals rise to the surface. It is in light of these concerns that efforts are being made to ensure the efficient and effective exploration, extraction, production, and ultimately, final reclamation of the resource.

Although these processes have been used for decades, new efforts are being made to grow the efficiency of the industry while protecting the people who rely on these industries, and the natural environment in the process, to accommodate any social and political unease.

The collective efforts being made by the Canadian government, as well as companies such as Secure Energy and associations like the Canadian Association of Oilwell Drilling Contractors (CAODC), indicate that many industry leaders are collaborating to create a new, sustainable approach to the entire life cycle of the petrochemical industry in Canada from exploration to production – creating new ways to deal with waste and building an industry which values and upholds accountability.

The efficiency of rig drilling is measured by metres drilled and in previous years these efficiency measures were down as a result of a shortage of skilled labour, another symptom of the 2009 economic downturn. The industry is recovering as increased numbers of new workers are joining the workforce, partially as a result of the policy response made by the Canadian government as well as the industry responding to, and rebounding from, the economic downturn.

Statistically, mixed industry activity when comparing the first half of 2012 with the first quarter of 2013 shows an average drop in rig numbers by eight percent in Canada and 12 percent in the United States. Incidentally, there was a marked increase of three percent in total number of metres drilled in the Western Canadian sedimentary basin (WCSB).

As well as metres drilled, well counts and number of rigs are useful measures used to gauge the strength of industry activity; so too is the number of operating days. Rig contractors charge for services based on operating days and thus, number of operating days must be considered when examining the strength of the industry.

Directly correlated to operating days and the number of metres drilled, there is an increasing demand for services related to focusing on and preserving the environment, as increased production yields increased waste and an increased need to accommodate the expanding industry activity.

Secure Energy provides a host of services related to environmental and midstream services, as well as the means to assist development of upstream services. The organization’s website makes it clear that Secure Energy has been rapidly expanding the breadth of its “suite of services,” and continues to do so in order to provide “integrated solutions throughout the entire lifecycle of oil and gas exploration, to production, and final reclamation.”

The efforts made by Secure Energy are reinforced and enhanced by the efforts of the CAODC, which promotes safer and more efficient operations through advocacy, communication, products, and services, aimed at providing both a meeting place and coordinating resource for Canada’s drilling and services rig contractors. The CAODC provides a forum for which federal and provincial governments, municipal authorities, and the Ministry of Natural Resources can cooperate with the industry to achieve the most efficient and effective industry output.

Essentially, the CAODC creates and upholds, through cooperation, industry standards to protect people and the environments in which they live and work. Since 1949 efforts have been made in the areas of training, health and safety, environmental guidelines, contracts, and apprenticeships, advocating for and educating about changes to industry regulations and standards.

WCSB metres drilled reported by the CAODC increased three percent to 7.4 million metres – a positive indicator for companies like Secure Energy because more metres drilled means an increased need for more drilling fluids and will produce more runoff waters which will ultimately require further processing and disposal. As drilling becomes more complex, more metres are drilled; the move to horizontal wells has resulted in operators pursuing greater depths and lengths.

Secure Energy anticipates that continually increasing numbers of operating days and metres drilled will continue to facilitate demand for its environmental and midstream services in order to account for the increased waste, which requires processing and disposal facilities.

Secure Energy’s services include fuel service terminals, water disposal facilities, landfills, fluids and controls, as well as environmental and lab services in order to deal with waste by-products associated with a rapidly expanding industry. So long as the demand for its services exists, Secure Energy is likely to continue to expand its host of services to account for this industry growth.

The CAODC anticipates 10 409 wells will generate 118 401 operating days, a forecast which boasts the growing strength of the petrochemical industry. As a result of this growth there will be a stimulated demand for additional skilled labour and will ultimately strengthen the local, provincial, national, and international economies.

The resounding growth is due in part to the Canadian government, but also companies and associations such as Secure Energy and CAODC who are working together, joining their efforts in the Western Canadian sedimentary basin, to establish industry standards to protect workers, the environment, and the societies that depend on the petrochemical industry each and every day.

In our ever-changing, dynamic global economy, one that is dependent on many unpredictable market conditions coalescing, it is of primary importance that many players in the petrochemical industry are in a position to adapt to the rapidly evolving economic landscape. Strong industry requires strong leaders on the government, corporate, and association levels, to ensure the most effective, efficient, and accountable, petrochemical industry in Canada.