Abbotsford MLA Darryl Plecas Films at Mainland Machinery

Abbotsford MLA Darryl Plecas Films at Mainland Machinery

Yesterday Mainland Machinery was excited to host Abbotsford MLA Darryl Plecas and his crew as they filmed our shop as part of his upcoming Constituency Video. MLA Plecas was first here a few weeks ago, touring and learning about Mainland’s 45 year history in the community and the work that we do. We were honored when Darryl asked that we would be a part of his upcoming Constituency Video. The video will be highlighting various companies and organizations in the area.

As our President, Paul Hiebert said “Really appreciate the effort of Darryl Plecas to highlight companies in his constituency!”

We look forward to seeing the finished product, and will be sure to share it once it is ready. In the meantime, here are a few “behind the scenes” photos from the shoot!

Abbotsford MLA Darryl Plecas Abbotsford MLA Darryl Plecas Abbotsford MLA Darryl Plecas Abbotsford MLA Darryl Plecas Abbotsford MLA Darryl Plecas Abbotsford MLA Darryl Plecas Abbotsford MLA Darryl Plecas Abbotsford MLA Darryl Plecas

Keystone Pipeline Delay Not Affecting Canadian Oil Producers

Seamless background of water pipeline

keystone pipeline delay

Keystone Pipeline Delay Not Affecting Canadian Oil Producers

“Keystone is kind of old news,” said Sandy Fielden, Director of Energy Analytics at Austin, Texas-based consulting company RBN Energy. “Producers have moved on and are looking for new capacity from other pipelines.” That’s a quote worth considering. With Keystone XL still years away from even potential completion, it might seem that hopes for Canadian oil exports are caught in limbo. However, nothing could be further from the truth.

Despite six years of delays on the Keystone XL pipeline — which would mimic the existing pipeline between Hardisty, Alberta and Steele City, Nebraska in order to bring bitumen from Alberta to Gulf Coast refineries efficiently — Canadian crude shipments are still projected to climb to more than 400,000 barrels a day next year. That figure is nearly double the current Canadian export rate.

Of course, Keystone’s capacity would provide an even greater increase to the present export rate, but the expanded pipeline would only be a strong addition to an already existing system that is operating successfully.

In fact, Canadian crude exports to Gulf refineries have gone up 83 per cent over the past four years, all while the Keystone XL pipeline has been waiting for the Obama administration’s approval in order to go ahead.

Pipeline Workarounds Abound

Canadian exports to the U.S. have never been higher than they have been in the past few weeks, and the slow progress on the approval of the Keystone XL is not proving to be a stopping block for the industry.

Other large pipelines have become strong alternative options, including the Trans Mountain expansion, Enbridge’s Northern Gateway and TransCanada’s EnergyEast — sometimes touted as Canada’s alternative to the Keystone XL. Additionally, some old Midwest pipelines have even been reversed to bring crude oil to Gulf refineries, rather than bringing refined oil to consumers as they used to.

Canadian oil is being shipped by rail, with increased efficiency and safety as time goes on. In the first half of 2014, Canada was sending 54,000 barrels a day to the Gulf by rail. The main disadvantage to using the rail system, besides it being a slower way to get crude oil to the market, is that there is no systematic oversight or design strategy to guide its development. Keystone would provide a unified method for exporting oil, and providing protection for producers and consumers alike.

The Future of Keystone XL

The American Senate Democrats may have blocked a move to start construction on Keystone XL in mid November, but the pipeline is still in the plans.

When the bill comes up again in the new year, under a Republican-controlled Senate, there is a good chance the bill will pass. However, there remains the chance that President Obama might refuse the pipeline, as he did in 2012.

Even with the President’s historical opposition to the pipeline and other transport measures in place, Canadian oil producers haven’t given up on the project. According to a spokesperson from TransCanada, who owns the potential project, Keystone XL would still be the least expensive way to get Canadian oil down to the Gulf. TransCanada’s clients have maintained their contracts for the use of the pipeline, and the company remains devoted to its plan.

So while Canadian oil transport hasn’t been entirely limited by the long delays on the pipeline, it still remains a much-anticipated project.

Canadian Pipeline Safety Measures

Industrial zone, Steel pipelines and valvesCanadian Pipeline Safety Measures

Understanding the 2014 Canadian Pipeline Safety Measures

Oil spills are bad business for any company in the industry, no matter the scale. It hurts the bottom line, and it hurts a company’s reputation. Any spill is a high-profile event — some examples being the Kalamazoo River spill in 2010, or the spill in Slave Lake earlier this year.

Since pipelines are the fastest and most reliable way to transport Canadian crude oil, it makes sense that keeping spills that occur using this method of transportation to a minimum is a high priority for the Canadian government and oil companies alike.

That said, Canadian pipeline safety is second to none, and pipelines are one of the safest and most environmentally-friendly ways to transport oil over long distances. Natural Resources Canada reports that between 2008 and 2012, nearly all, in fact, 99.999% of the crude oil and petroleum products shipped through federally-regulated pipelines, was done without incident, and safely. That puts the rate of spills on Canadian federally regulated pipelines at two thirds lower than the rates in both Europe and the United States over the past decade. And, due to effective spill cleanup, 100% of the liquids spilled from 2008-2012 were recovered.

Furthermore, new funding provided in the Economic Action Plan 2012 allowed the National Energy Board to increase annual inspections of oil and gas pipelines by 50 percent and to double the number of comprehensive audits to improve pipeline safety across Canada. But the measures to maintain high levels of safety don’t stop there. Additionally, on May 14, 2014, Canada’s Natural Resources Minister, Greg Rickford, announced increased measures to improve Canadian pipeline safety.

Here’s a brief overview of what the National Energy Board measures address:

Absolute Liability

Under Absolute Liability, pipeline companies will be liable for costs and damages up to $1 billion, irrespective of fault. Companies at fault will also have unlimited liability for spills, which means their retributions are not capped at a maximum amount and exist regardless of the amount of investment each party has personally made. This follows the polluter pays principle, demanding that pipeline operators can show their ability to respond to any potential incident. The Canadian government believes that placing financial onus on companies will keep them incentivized to keep their pipelines spill-free.

Increased Aboriginal Participation

The new regulations mandate higher levels of Aboriginal participation in pipeline safety, from planning and monitoring to incident response. This is a particularly important opportunity for many Aboriginal communities located close to future energy projects, and could offer an immense benefit for their communities.

A Stronger National Energy Board Role

The new regulations will give the NEB several important powers. These include the authority to order reimbursement for cleanup costs, the ability to provide guidance on technologies and techniques in the pipeline building process, and the ability to take control of incident response in the place of responsible companies.

Additional Measures

In 2013, the government instituted penalties up to $25,000 for individuals and $100,000 for companies, municipalities and utilities for every day of non-compliance with safety requirements. If penalties prove ineffective, the NEB can revoke authorizations, impose operations-restricting safety orders, issue stop work orders, and, in the most serious cases, pursue criminal prosecution.

Finally, the NEB undertook an increase in both inspections and auditing last year, mandating company inspections through the use of state-of-the-art monitoring technology.

The quantity and the intensity of these various safety measures stand as an assurance for Canadians with a desire to protect the environment.

The Future of Canadian LNG

future of canadian lngThe Future of Canadian LNG (Liquefied Natural Gas)

Canada isn’t fully capitalizing on the global LNG market due to speculation and storage – but with global LNG demand growing, how soon should Canada bolster its LNG production and market strategy?

Indexing the Concern

A survey conducted by Alberta Oil Magazine offers a look into the current state of liquid natural gas (LNG) in Canada, particularly in British Columbia, where over twelve LNG megaprojects of historic proportions have been proposed.

Unfortunately, final investment decisions have yet to be made due to price variances because of unfortunate seasonal influence and hoarding.

With regards to investor sentiment, the survey found that:

  1. Investors are concerned with the possibility of over-supplying the market to the point it would make the industry significantly less profitable.
  2. Increasing domestic industry demand will not have a negative effect on the economic viability of the BC projects.
  3. Investors would like to see more government support to introduce training measures that address the small labor pool that the LNG industry will be facing.
  4. Investors would support the idea of using foreign workers to fill the labor gap.
  5. Investors are concerned with the prospect of Japan’s current dependence on natural gas slipping due to the reinitializing of their nuclear power plants, which were shut down since 2011 after the Fukushima disaster.
  6. Investors are on the fence about how much of an effect changing the price index will have on the industry.
  7. Investors feel that the B.C government isn’t doing enough to promote the industry, finding the two-tier tax policy uncompetitive compared to policies in the US and Australia.
  8. If the industry would further pursue floating LNG facilities, with their reduced capital and operating costs, LNG projects would be viable and competitive.

The Answer to Cold Feet: Export, Export, Export

While some LNG productions are being switched over to oil production because of LNG’s low price point, other LNG producers such as Quicksilver Resources and Liquefied Natural Gas Ltd have asked for federal permission to export 20 million tonnes of LNG per year over 25 years. This is a constructive attempt to diversify the markets beyond North America and benefit from higher prices in the Pacific markets. This is in part the reason there is such high interest in developing over a dozen LNG projects along the B.C. coast.

If these projects can gain ground and funding, this can help bring consistency and competitiveness back into the North American LNG market where in turn a wider application and use of natural gas in public and private transportation can help contribute to ongoing efforts to reduce carbon emissions and pollutants, as well as progress the embedding of sustainable and renewable fuel.

In addition to pursuing exportation as an option, it is important for LNG companies to address the investor concerns uncovered through the Alberta Oil Magazine survey. If industry leaders would work to gain greater government support and would consider alternative practices such as foreign workers and floating LNG facilities they may see investor interest increasing and their proposed megaprojects may become a reality.

Canada’s Marine Shore Power Technology Program

Canada's Marine Shore Power Technology ProgramCanada’s Marine Shore Power Technology Program

The shore power technology program for ports in Canada, also known as marine shore power, is a $27.2 million dollar program. It allows marine vessels to plug into a local electrical grid when their vessels are docked at a port. Instead of having ships idling and releasing emissions, they will use the port’s electricity for power. The ships, who dock at ports with shore power, will not burn diesel fuel. All of the power needed on the vessel will come from the electrical grid that it is plugged into.

First announced in January of 2012, the goal was to improve Canadian air quality by reducing emissions around marine ports. The Canadian government has committed to reducing emissions, air pollution and greenhouse gases by 17% before the year 2020. Transportation is the largest contributor to emissions, so having electrical power at port docks will help to reach this goal.

Benefits of Shore Power Technology

The Shore Power Technology for Ports program will increase competition in Canadian ports. It will also create new jobs across Canada and present new opportunities for expansion in Canadian tourism. The program will attract new businesses to Canadian ports, because it will significantly reduce diesel fuel costs to ship operators.

Halifax Port Authority Signs Up

In January of 2013, the Halifax Port Authority announced that it was undergoing construction for a shore power system. They are proud to announce that once the system is ready, ships will be able to dock and plug in to the electrical power grid. This will allow the ships to then shut down their engines. This has many benefits for Nova Scotia. Those benefits will include a reduction in emissions, which will help the environment and air quality for the surrounding residents. Since ports are usually close to cities, this particular benefit is important. Another great value for the province will be the increase in economic prosperity.

Transport Canada’s Marine Shore Power Program ran from 2007 to 2012. The Transport Canada funded $2 million dollars to Port Metro Vancouver, so they could effectively create shore power for cruise ships. Additionally, Transport Canada funded $1.6 million dollars for shore power to the Port Authority of Prince Rupert, so container ships could dock and plug into their electrical power grid.

Applying for Funding

The Canadian government made an official judgment for proposals on May 4, 2012. Ports may continue to apply for funding until December 31, 2015. In order to apply, the port must submit a project proposal and a funding application. Eligible participants have to be Canadian Port Authorities and the companies that own or operate marine ports or terminals in Canada.

The shore power program for Canada will reap many benefits, especially with reducing emissions from ships idling and burning diesel fuel. This may also be a great step toward reducing the use of fossil fuels for energy.

First Nations and Mining

first nations and miningFirst Nations and Mining: Canadian Supreme Court Ruling for First Nations

The First Nations are now armed with a Supreme Court ruling. Mining companies are taking notice of this. The Tahltan First Nation announced that they are planning a title and aboriginal rights claim. This announcement came hours after the Tsilhqot’in First Nation received their ruling. Both tribes are fighting against the construction of mines on their land.

The Supreme Court Ruling

The Supreme Court’s landmark history-making ruling confirms that the Tsilhqot’in’s have title to their traditional territory land. It also finds that the government of British Columbia violated its fiduciary responsibility when it distributed licenses to harvest timber in Tsilhqot’in land in 1983.

Chief Joe Alphonse spoke about the ruling saying that this brings them one step closer to being independent, without living on handouts. The Tsilhqot’ins are the first Indians in Canada to own their own land. Furthermore, they wish to be free to govern their own people independently. It is likely that more cases are pending, or are going to be started, by tribes throughout Canada. The tribe’s hope is to use the Supreme Court ruling to put a stop to the construction of the New Prosperity copper mine on their land, which was proposed by Taseko Mines.

The Tahltan have the same thing in mind. They want to stop Fortune Minerals’ proposed Arctos Anthracite Coal project. The president of the Tahltan Central Council, Annita McPhee, expressed her gratitude for the Tsilhqot’in people. She stated that it was a historical day for the First Nations people of Canada. The Arctos Anthracite Coal project is in Sacred Headwaters, which is considered to be a traditional hunting ground for the Tahlton tribe. They do not want any development in that area. McPhee says that she has tried to get Fortune Minerals to stop, but said they will not listen. So, she and her tribe will fight them legally.

Canadian Mining Companies

This Supreme Court ruling means that Canadian mining companies, looking to start mining projects on First Nations land, may have to look elsewhere. The Tahlton tribe has already hired a lawyer to prepare their claim to receive the same recognition that the Tsilhqot’in was granted from the Supreme Court. Since it has been ruled in favor of the Tsilhqot’in tribe, it is likely that more tribes will win recognition for their land as well.

However, this will not restrict mining companies from starting projects on all First Nations land in Canada. The Tahlton are negotiating with Imperial Metals for an agreement on the Red Chris Mine. It is scheduled for commissioning in August. The tribes are not looking to put a stop to all mining on their land, but simply wish to be able to govern their own region. The First Nations people have been empowered to express their needs with this ruling. Canadian mining companies, who currently have mines on First Nations land, might want to negotiate with the tribes to avoid future problems.

Canadian Ports Carbon Footprint

ports carbon footprintCanadian Ports Carbon Footprint: Encouraging Energy Efficiency through Incentives

Controlling greenhouse gas (GHG) emissions and pollution caused by the marine shipping industry has always been a serious problem. Many of the marine shipping vessel companies do implement carbon emission control norms and do their best to bring down their carbon foot print. To help boost the efforts by the shipping companies, Canadian ports have implemented the Echo Action and Green Wave programs to help further encourage shipping companies to control their ports carbon footprint.

Marine ports intend on running each shipping vessel through an emissions test, each time it enters the port. This is to determine the amount of emissions released by the vessel. The vessels will be examined and rated using an A-G rating.

Rewards of Meeting the Canadian Port Energy Efficiency and Pollution Standards

The reward for achieving low carbon emissions and pollution standards will be a 10% discount of the vessel’s sea harbour dues. This may not seem like much, but with vessels paying harbour dues based on the tonnage being loaded and offloaded from the vessel, the total costs are large and saving 10% is a great incentive for any shipping company. Many vessel owners visiting the Canadian ports have been noted to take radical action towards reducing carbon emissions and meeting the required pollution level recommendations.

Other areas that port authorities examine and evaluate on each vessel include:

Engine fuel consumption with relation to exhaust emission levels

When measuring a ship’s pollution level, the test begins from the tail pipe, where the exhaust is released by the vessel. Combustion gasses released through the exhaust are the most damaging to the environment and health, since they escape freely in to the atmosphere. Today, there are several technologies developed to help manage exhaust gases released by marine vessels, but the most efficient are carbon scrubbers. Carbon scrubbers help filter the exhaust gases, retaining the majority of Co2 in the scrubbers’ filter, which can later be disposed of in a safe manner. Vessels that use or install the scrubbers are more likely to score better grades and secure more discounts from the Canadian ports.

Oil and lubrication waste management

Vessels also require lubrication like oil and grease to function properly. Oil lubrication is one example of a lubricant which can be used and repacked for proper waste disposal or recycling. This means that shipping vessels must maintain an accurate record of all incoming and used lubrication, which will also contribute towards determining the vessel’s energy and fuel efficiency.

Human Waste Management

Another important area which shall be closely examined is the management of human waste. This includes sewage, laundry and any other polluted water which requires being treated and neutralized before being released in to the open ocean. There is also the concern linked to solid waste produced by the vessel’s employees while on voyages. In this case, a record of food stocks, consumption and the amounts of solid waste, like packaging, will be evaluated to determine how the vessel’s staff has been managing their synthetic waste. More waste will generally mean they stored synthetic packaging for proper processing while at port, while less waste will suggest they have been dumping their solid waste out at sea which is bad for marine life.

The discount incentives being offered by the Canadian ports have seen many of the regular shipping vessel owners taking the necessary steps to improve the energy efficiency of their ships. This is because being able to pass the test on just 10 visits will result in the company having saved full trip dues at the harbour.

2014 Canadian Budget: What it Means for Mining

2014 Canadian BudgetWhat the 2014 Canadian Budget Means for Mining

The annual release of Canada’s budget is met with equal parts praise, condemnation and apathy. This year’s effort is no exception. It was the Finance Minister’s goal to put Canada’s financial house in order. Translation: balance the books and curb spending. As for Canada’s mining industry, there haven’t been any major additions or reductions and that is actually good news.

There are a few key highlights that are of importance for the mining industry:

  • The 15% Mineral Exploration Tax Credit will be extended until March 2015;
  • Increase in investment for the Northern Economic Development Program;
  • Increase in the transportation infrastructure in the North;
  • Investment in Aboriginal communities to provide a source of skilled labor.

Among the highlights of the budget is an extension of the 15% Mineral Exploration Tax Credit (METC). This will now be in effect until March 2015 and that is very welcome news according to the Mining Association of Canada (MAC). This extremely helpful tax incentive benefits all Canadian miners, providing an incentive for continual exploration of minerals. Investors also benefit from the tax credit, creating a robust environment in managing risk. Naturally, every stakeholder in Canadian mining would like to see this tax credit become a permanent fixture.

The budget also includes $40 million to be spent over the next two years on the Strategic Investment in Northern Economic Development program (SINED). This will provide a much-needed boost for geological mapping which will have a positive trickledown effect for mining operations everywhere. It has been estimated that for every dollar spent by the government in this area, five dollars will be generated from the private sector.

Another concern to Canada mining is the investment in infrastructure. Without decent means of transportation across the country, the mining industry and the entire economy will suffer. This budget proposes $47 billion for a Build Canada Fund. It is meant to be spent on all kinds of road, bridge, rail and public transit projects over the next ten years. Some have noted that the funding earmarked for infrastructure from last year’s budget still hasn’t made its way to the First Nations communities it was meant for. Hopefully, that money and this new money will have a better flow rate. In other words, it needs to be spent.

Finally, the new budget contains provisions that are set up to help aboriginal youths gain a better foothold in education. A financial infusion of $1.9 billion will hopefully steer more First Nations youth towards better education and job training resources. This will provide them with greater opportunities to contribute to the Canadian workforce. That will certainly benefit Canadian mining as the need to find skilled workers grows. Already, Canada’s mining industry is the leading employer of aboriginals. There is no reason why that trend can’t continue.


Quebec Reforms Mining Act

mining actQuebec Reforms Mining Act  

Mining companies are sorting through a piece of legislation that will have a direct impact on the way they do business in the province of Quebec. Before the end of last year, the Quebec Assembly adopted the Mining Act, Bill 70 or simply, Bill 70. This was actually the fourth attempt at overhauling the Mining Act, 1987. All of this builds upon the groundwork put forth by Bill 55 entitled “An Act To Amend The Mining Tax Act.” Even though this sounds a bit confusing, when you get into the details of Bill 70 you’ll soon realize what sweeping changes it may bring to the entire mining industry.

Among the highlights of Bill 70 are the following:

  • Allows municipalities to directly oversee mining activities in their districts;
  • Expands the obligations of certain mining rights holders in an attempt to keep them more accountable and transparent in their business practices;
  • Broadens the scope of environmental and economic concerns;
  • Requires increased consultation with Aboriginal groups;
  • Provides more oversight authority to the Minister.

With regard to the involvement of municipalities, Bill 70 allows districts to determine which plots of land should be classified as incompatible or compatible to mining operations. All of these newly granted oversight powers could be superseded by Quebec’s Minister of Natural Resources, if it determined that a municipality’s decisions goes against the provincial government policy.

With the new rules governing claim holders, they are now obligated to notify any municipality that they have taken over mining rights within 60 days of transfer. Before any work can be started on the claim, the holder must also notify the local governments within 30 days. This puts the burden on the claim holder to be more responsible with their business. In other words, you can’t just “stake a claim and start digging.”

The environmental impact of Bill 70 is an issue that was hotly debated. According to the principles of this legislation, mining companies will now have to put up a financial guarantee that will cover any costs for restoring a mine site. That restoration must also begin within three years of the operation shutting down. There will be no more abandoned mines in Quebec. Failure to comply with these new regulations can mean hefty fines in the neighborhood of $6,000,000.

Bill 70 has addressed a major concern of Aboriginal groups, the exploitation of land that is deemed burial grounds. After consulting with the Minister, those lands can be excluded from any mining operation. This doesn’t mean that all Aboriginal groups are happy with the passage of Bill 70. There was mounting frustration when debate on the bill was cut short by the majority party, Parti Québécois. While the Aboriginals applaud the efforts to get them more involved, there was hope that the bill would do more to curtain exploration on those sacred lands.

Finally, another key component of Bill 70 is granting the Minister the right to put mining claims up for auction. This replaces the previous “first-come-first-served” procedures used by mining companies.

Bill 70 now moves on to the Quebec National Assembly where it is sure to attract more debate. 

New Arctic Spill Regulations Coming in 2014

arctic spill regulationsNew Arctic Spill Regulations Coming in 2014   

The Arctic is an area which can be covered in ice for up to nine months out of the year; plus, geographical conditions cause the region to be dark for three of these months. Even in the summer, there are rough conditions such as high winds, freezing temperatures, fog, and floating ice. All of these contributing factors equal a setting that would be extremely challenging to navigate and operate within, if a major oil spill were to happen.

Thankfully, an incident like the Deepwater Horizon, which took place in the Gulf of Mexico, hasn’t happened in the Arctic. A spill even a fraction of the size of that disaster would have a devastating impact on the Arctic’s marine ecosystem. With the Arctic becoming a valuable region for oil exploration, while having a fragile ecosystem, it is of high importance that rules are set and enforced.

A new set of Arctic Spill Regulations, created by the US Congress, regarding procedures for handling Arctic oil spills is scheduled to be implemented next year. In light of this, a U.S. based, non-governmental organization, the Pew Charitable Trust, has put together a report they hope will serve as a guide for shaping the regulation updates. The suggested guidelines cover a wide range of topics, from the need to develop safer rules for hydrocarbon development in the Arctic Ocean, to emerging technology standards for staging recovery equipment.

The Pew Charitable Trust provides resources to government agencies to help them develop legislation in relation to environmental issues. Their report, Arctic Standards: Recommendations on Oil Spill Prevention, Response and Safety, recognizes the need for oil extraction, but highlights their desire to help facilitate a balance between this type of energy development and the need to protect the environment.

The following are among the suggested guidelines in the Pew report:

  • All vessels, drilling rigs and other support facilities should be designed and built to stand up against the maximum level of ice forces and sea conditions;
  • Any equipment that would be required to contain a spill should be staged in Alaska for easy deployment. This includes machinery such as relief rigs and well-control containment systems;
  • The spill response equipment needs to be strong enough to quickly remove any amount of oil that pollutes ice floats or has become trapped under the ice;
  • Redundant systems should be part of the staged containment equipment. This would pertain to backups of blowout preventers, double-walled pipelines, and double-bottom tanks. Too often, the hard weather conditions would prevent these types of machinery from reaching the region, in the event of a spill.
  • All offshore drilling in the Arctic should be restricted to times when the response system can be operated. In other words, during the most severe times of year, there should be no drilling if spill containment cannot be achieved.

The new regulations for oil and gas exploration in the U.S. Arctic Ocean will be brought up for review in the early part of 2014. As the rules are subjected to legislative scrutiny, undoubtedly, this will generate a fair amount of debate; especially since whatever is decided in the U.S. will have an impact on all other countries.