Peace Train

DAW­SON CREEK IS BEN­E­FIT­ING FROM A SURGE IN NAT­U­RAL GAS PRO­DUC­TION THAT DE­FIES THE LNG NAYSAY­ERS, BUT EN­ERGY IS JUST ONE PART OF THE NORTH­EAST CITY'S DI­VER­SI­FIED ECON­OMY

BC Business Magazine - - Best cities for work in B.C. - pho­to­graph by K AT I E TAN­NER

From 2,000 feet above the city of Daw­son Creek, snow- dusted Peace Coun­try shows off its riches in the af­ter­noon sun. The rolling land­scape is a patch­work of fields and forests, criss-crossed with fin­ished and un­fin­ished pipe­lines. Scat­tered in all di­rec­tions: huge nat­u­ral gas pro­cess­ing and com­pres­sion plants, oil and gas wells large and small, and drilling rigs, many sit­ting on farm­land. Our 1963 Cessna, flown by pri­vate pi­lot Garth Wal­ter, floats over hill­sides cleared of trees, their trunks stacked like tooth­picks. Be­fore re­turn­ing to town, we sur­vey ground­work for the con­tro­ver­sial Site C hy­dro dam on the banks of the Peace River.

My host and con­stant com­pan­ion for this two-day March visit to north­east B.C. is Daw­son Creek’s gre­gar­i­ous mayor, Dale Bum­stead. The prov­ince’s lon­gawaited liq­ue­fied nat­u­ral gas in­dus­try may be stalled, but as Bum­stead notes, that isn’t stop­ping En­cana Corp. and other play­ers from spend­ing bil­lions on ex­plo­ration, pro­cess­ing and pipe­lines in the Peace. Ex­trac­tion costs are low, and they want to be ready to sup­ply LNG plants on the coast. Also, the lo­cal

Mont­ney shale for­ma­tion’s pro­lific oil and gas re­serves yield bonus liq­uids such as propane and bu­tane. “The Mont­ney is that big a re­serve that it could pro­duce eight to 10 bil­lion cu­bic feet of gas [daily] for 100 years,” Bum­stead says.

All of this ac­tiv­ity is bring­ing thou­sands of well-paid work­ers to Daw­son Creek, a com­mu­nity of about 13,000. For the ever-smil­ing Mayor Bum­stead, a third-gen­er­a­tion res­i­dent and a re­tired In­surance Corp. of Bri­tish Columbia ex­ec­u­tive, ac­com­mo­dat­ing the in­flux is a good prob­lem to have fol­low­ing a rough cou­ple of years for the en­ergy busi­ness.

Af­ter meet­ing me at Fort St. John air­port the pre­vi­ous af­ter­noon, Bum­stead drives us 75 kilo­me­tres south along the route of the Alaska High­way, built by U.S. troops dur­ing the Sec­ond World War. Out­side Daw­son Creek we stop at the Tower pro­cess­ing plant, one of three lo­cal fa­cil­i­ties that Cal­gary-based En­cana is build­ing and ex­pand­ing with lim­ited part­ner­ship Vere­sen Mid­stream to the tune of $2.5 bil­lion. To shield against the cof­fee-coloured mud that sig­nals spring breakup in the Peace, wood pal­lets cover the road to the sprawl­ing site, whose spires rise above a neigh­bour­ing cow pas­ture. (The Tower plant is now open, and Pem­bina Pipe­line Corp. of Cal­gary has since ac­quired Vere­sen Inc.)

The Peace some­times feels more Al­berta than B.C., partly thanks to its prairie ter­rain and farm­ing. Daw­son Creek is the ser­vice hub for a thriv­ing agri­cul­ture in­dus­try that spe­cial­izes in crops like wheat, canola and field peas. Grain el­e­va­tors stand next to the rail­way tracks run­ning along­side main drag Alaska Av­enue, home to many of the city’s 920- odd ho­tel rooms. On one drive, Bum­stead points out RVS in­hab­ited by en­ergy work­ers, even with tem­per­a­tures still dip­ping to –15 C at night. “Our ho­tel rooms are full, the restau­rants are full, rental ac­com­mo­da­tions are full,” he says.

Bum­stead’s grand­fa­ther moved to the Peace from Saskatchewan in the early 1940s to home­stead. An en­tre­pre­neur, he bought a sawmill in Fort Nel­son. One day in Oc­to­ber 1958, he was brush­ing the snow off the ma­chin­ery when his hand slipped and turned on the planer. “His mitt gets caught in the planer and pulls his arm in and cuts his arm off to his el­bow,” Bum­stead says.

There’s a much stronger em­pha­sis on safety when we visit the lo­cal of­fice of ARC Re­sources Ltd., a Cal­gary-based oil and gas pro­ducer that em­ploys 90 peo­ple in Daw­son Creek. Ron Toly, ARC’S man­ager of field op­er­a­tions for north­east B.C., ex­plains that op­er­at­ing costs in the Mont­ney are much lower than else­where. For ex­am­ple, it costs ARC about $3.6 mil­lion to es­tab­lish a gas well there, ver­sus $9.2 for pro­duc­ers in the Ap­palachian re­gion of the U.S. “It’s the liq­uids driv­ing the bus, and the low op­er­at­ing costs,” says Toly, who wears a hoodie and ball cap.

Don­ning fire-re­tar­dant red jump- suits, steel-toe boots and other safety gear, Mayor Bum­stead and I jump into Toly’s pickup and head out to an ARC oil drilling rig. In a por­ta­ble across from the rig, a tow­er­ing struc­ture dan­gling 4,000 me­tres of seg­mented drill pipe, a com­puter screen shows a 3-D map of the well. War­ren Schnedar, drilling su­per­in­ten­dent, op­er­a­tions, out­lines the process: drill straight down through the Mont­ney shale, then open a hor­i­zon­tal hole as long as 2,500 me­tres. Once the pipe comes out, “the whole thing will be ce­mented on the out­side all the way to the sur­face” be­fore com­ple­tion, Schnedar says.

Next stop: an ARC com­ple­tion site where hy­draulic frac­tur­ing, or frack­ing, for oil is un­der­way, with help from 14 roar­ing 2,200horse­power pumps housed in tractor trail­ers. “We’re open­ing the for­ma­tion up—by mil­lime­tres, of course—and then we’re putting sand and wa­ter in there, so that when the for­ma­tion closes on it­self again, it can’t seal off,” says com­ple­tion su­per­in­ten­dent Sam Tschet­ter.

Bum­stead down­plays fears about frack­ing's en­vi­ron­men­tal im­pact. “We all want re­spon­si­ble re­source devel­op­ment,” he says. “That's the key for not only our com­mu­ni­ties, our res­i­dents and our fu­ture gen­er­a­tions, but in my view, any­way, it's not be­ing done in a hap­haz­ard, unsafe man­ner.”

A tire­less pro­moter of the oil and gas in­dus­try—both of his sons work in the busi­ness as power en­gi­neers— Bum­stead knows his stuff. At a lunch held by the Daw­son Creek & District Cham­ber of Com­merce, he out­shines the guest speaker, a Busi­ness Devel­op­ment Bank of Canada ex­pert on the sec­tor, by shar­ing his en­cy­clo­pe­dic knowl­edge of the Mont­ney and its de­vel­op­ers. The for­ma­tion al­ready pro­duces some 4.5 bil­lion cu­bic feet of nat­u­ral gas a day, ac­cord­ing to the Na­tional En­ergy Board, about one third of the Cana­dian to­tal.

Bum­stead down­plays fears about frack­ing’s en­vi­ron­men­tal im­pact. “We all want re­spon­si­ble re­source devel­op­ment,” he says. “That’s the key for not only our com­mu­ni­ties, our res­i­dents and our fu­ture gen­er­a­tions, but, in my view, any­way, it’s not be­ing done in a hap­haz­ard, unsafe man­ner.”

We spend an af­ter­noon with Brian Liev­erse, se­nior com­mu­nity re­la­tions ad­viser with Cal­gary-head­quar­tered En­cana, about 200 of whose staff work in Daw­son Creek. Liev­erse, a long-time Peace res­i­dent with a wry man­ner, has been in oil and gas for al­most 30 years. Be­fore that he was a meat cut­ter. “I had some fam­ily that was in the in­dus­try, and I looked around and said, ‘OK, you know what? I’m 25 years old, and I look at the guys be­side me, and a lot of them were miss­ing dig­its, deal­ing with arthri­tis in their hands or back prob­lems.’ And I thought, ‘Jeez, is this what I want to do when I’m 45? There’s got to be some­thing a lit­tle bet­ter.’”

Start­ing as a power engi­neer in pro­cess­ing plants, Liev­erse be­came an op­er­a­tions co­or­di­na­tor with En­cana be­fore the com­pany asked him to move into com­mu­nity re­la­tions about a decade ago. He’s philo­soph­i­cal about op­po­si­tion to oi­land-gas devel­op­ment, whether it’s from groups on the coast or lo­cals. “You have to work with those res­i­dents and find out what their con­cerns are and, in the end, try to work for a so­lu­tion for ev­ery­body.”

Liev­erse shows us En­cana’s Wa­ter Re­source Hub, whose two big tanks contain about 100,000 bar­rels ready to be used for fracks. One crit­i­cism of frack­ing is that it re­quires vast quan­ti­ties of fresh wa­ter. The hub gets its sup­ply from three sources, Liev­erse says: re­cy­cled frack wa­ter, salty wa­ter brought to the sur­face with nat­u­ral gas and wa­ter from a shale for­ma­tion that con­tains lit­tle gas. Pumped to sites by pipe­line, this wa­ter ac­counts for as much as 80 per cent of En­cana’s to­tal us­age, he es­ti­mates.

On the site of En­cana and Vere­sen Mid­stream’s Sun­rise pro­cess­ing fa­cil­ity (now up and run­ning), a maze of stair­case-and lad­der-be­decked build­ings with a daily ca­pac­ity of 400 mil­lion cu­bic feet, we meet baby-faced plant lead Randy Munch. Wages have fallen in the past two years, but many in­dus­try work­ers still make $100,000 to $150,000. On a plant startup, some will earn as much as $200,000, says Munch, a na­tive of nearby Chetwynd who joined En­cana 15 years ago af­ter get­ting his power en­gi­neer­ing ticket.

Peo­ple with that kind of dough need some­where to spend it—and some­thing to do in their off hours. Per­haps Daw­son Creek’s most sur­pris­ing fea­ture is the En­cana Events Cen­tre, owned and

sub­si­dized by the city and op­er­ated by a divi­sion of U.S. me­dia ti­tan Com­cast Corp. The build­ing’s 6,500- ca­pac­ity arena has hosted ev­ery­one from Bob Dy­lan to B.C. pop sen­sa­tion Carly Rae Jepsen to coun­try star Jason Aldean— and there’s a room full of au­to­graphed gui­tars to prove it. But the com­plex also con­tains a com­mu­nity swim­ming pool and an eques­trian cen­tre, com­plete with 110 stalls and an in­door cor­ral.

It’s part of Daw­son Creek’s ef­fort to at­tract doc­tors, lawyers and other pro­fes­sion­als, ob­serves gen­eral man­ager Ryan Mcivor: “When they come here and see the ameni­ties that the city has for them,” he says, “it re­ally helps them make their de­ci­sion to move.” In turn, Daw­son Creek can draw other new res­i­dents be­cause those work­ers make it a re­gional cen­tre, Mcivor adds.

To see forestry’s con­tri­bu­tion to the econ­omy, we visit Louisiana-pa­cific Canada Ltd.’s ori­ented strand board (OSB) plant on Alaska Av­enue. The fa­cil­ity em­ploys about 150 peo­ple and makes its board from high-qual­ity lo­cal aspen. “Most of the OSB in­dus­try has a cer­tain level of envy for the wood that we have here,” says en­vi­ron­men­tal man­ager Shawn Trot­tier. For him, OSB is en­vi­ron­men­tally friendlier than con­ven­tional lum­ber be­cause it’s made from species that re­grow quickly and uses wood more ef­fi­ciently.

Out­put from LP’S hot fac­tory floor is stag­ger­ing: about 30,000 four-by-eight pan­els a day—us­ing 40 truck­loads from the sea of logs out­side—for a to­tal of some 350 mil­lion square feet in 2016. Roughly 80 per cent of the fin­ished prod­uct goes to the U.S.

In his of­fice at Daw­son Creek’s retro­fit­ted 1961 city hall, I ask Bum­stead what he says to peo­ple else­where in B.C. who ob­ject to nat­u­ral gas devel­op­ment. “Most con­sumers are not go­ing to pay the dif­fer­ence in what it’s go­ing to take to tran­si­tion off of this tra­di­tional nat­u­ral gas,” he ar­gues. “There’s go­ing to be an al­ter­na­tive de­vel­oped at some point in the fu­ture, but this is go­ing to be a tran­si­tional fuel that’s, in my view, a clean, clean op­tion, not only in Bri­tish Columbia and North Amer­ica but the world.”

With that out of the way, Mayor Bum­stead smiles.

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