PETROLEUM GROUP MOVES WITH THE TIMES
PSAC, like the energy industry itself, is evolving to capitalize on new realities
Nothing reflects the shift going on in the local energy sector these days more than the evolution of the Petroleum Services Association of Canada.
Founded during the height of federal-provincial energy wars in 1981, the organization was created to reflect the views of service, supply and manufacturing firms in the oil and gas sector.
But 2017 is a vastly different energy era.
Carbon pricing is coming in across the country, there’s a push for more renewable power and a realignment is unfolding within the oil and gas industry itself.
Following the oil sector downturn and loss of some members, PSAC decided last year to make some changes. It is now allowing companies that work in clean technology and provide services to renewable energy developers to join their group.
A name change is also being explored.
These moves represent an attempt to attract more members. But it also reflects a transformation by some existing members who are now offering different services to improve energy efficiency and environmental performance.
“We want the public to know that we as an industry association, supporting responsible Canadian energy, recognize the winds of change,” says PSAC chief executive Mark Salkeld.
“Our members are changing. We are not stuck in the mud, old roughnecks that are going to stick by our ways come hell or high water. No, we are forward thinking and recognize that Canada needs to have everything” in its energy mix.
Previously, regular association members had to be based in Canada and get at least half of their revenue from the oilfield services business.
But the change, approved last November, now has PSAC talking with groups and firms representing geothermal, solar and wind power.
Salkeld points to members like Alberta-based Cleantek Industries Inc. as one of the reasons for the adjustment, as oilfield service companies continue to evolve.
The business, with operations just outside Calgary, employs about 60 people and is growing. Founded in 2009 as Horizon Oilfield Solutions, it rebranded last year as Cleantek to reflect its business.
The firm started out designing and manufacturing wastewater dehydrators for the oil and gas sector. It has since developed hybrid solar light towers used in the energy sector, as well as on construction sites and in remote areas.
“We only expanded into the construction (sector) in a large way when the downturn started,” says Kristine McPhail, company director of marketing and corporate operations.
“We were like ‘OK, we need to diversify.’ You can’t be tied to the drill bit when the drill bit is disappearing.”
Questor Technology Inc., a Calgary-based company that manufactures gas incinerator systems, turning waste heat into electricity, isn’t a PSAC member — but will contemplate it, says CEO Audrey Mascarenhas.
“In the past, because it was very focused on traditional oilfield services, we didn’t really see a place for us,” she says.
“But certainly, as things start to change a+nd regulation comes in that starts to define how our industry has to change … it’s certainly an opportunity and something we would consider.”
All of this talk reflects the fact global energy development is undergoing a transformation.
Oil and gas will continue to be needed for decades; hydrocarbon fuels will be required to meet increased energy demand over the next 50 years, according to Suncor Energy’s Climate Report issued Monday.
Yet there’s also a push to decarbonize. Companies in the oil and gas industry are striving to become more efficient, reduce their inputs and lower emissions.
“There is a coherent path to the future that includes both traditional and new sources of energy,” Suncor CEO Steve Williams said in the report.
“In a world of rising energy demand, it is not a choice between one or the other; we will need many forms of energy.”
There are also business opportunities ahead with the expansion of the clean technology sector, not only for groups like PSAC, but for energy jurisdictions such as Calgary and Alberta.
The International Energy Agency says renewable energy capacity will increase by more than 40 per cent by 2021.
Alberta wants to add 5,000 megawatts of renewable energy into the province by 2030, attracting more than $10 billion in investment into wind, solar and hydro.
A report last month by Clean Energy Canada says global investment in renewable power hit $348 billion last year, including $2 billion in Canada.
That’s far lower than the oil and gas industry’s $29 billion of capital spending in Alberta last year, but still significant.
“It really is a conversation not about oil and gas or coal power, but about energy,” Mascarenhas says.
“The reality is we need oil and gas and fossil fuels. Our global energy demand can’t be met solely on renewables, so there’s an opportunity (here) on how do we become more sustainable in our oil and gas production.”
For PSAC, the shift means the hopeful addition of new members, a broader mandate and possibly a new name.
For Alberta, it reflects a strategic shift in thinking across an industry firmly in transition.