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
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.