thinking ‘outside the box’ · ‘thinking outside the box’ But through it all, examples...

N O R T H W E S T B U S I N E S S

‘what recession?’fearless local entrepreneurs undefinedand undaunted by market conditions

an energetic platformAlberta’s energy minister on gettingthe industry back on the map

gaining the edge in acompetitive fieldwhat successful companies are doingto stay top-of-mind

more efficient, fasterand cleanerincreasingly sophisticated technologymeets the ‘patch

thinking‘outside the box’

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MAY2009 ROCH DALLAIRE GEMINI HELICOPTERS

RECORDS, PAGE 21

SHOW TIME!

Grande prairie hosts

the 2009 peace Region

petroleum show

APRIL 2009 Volume 15 | Number 3

NOR T H W E S TBUSINE S S

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15 ON ThE jOBThis year’s spring breakup may have been a bit of a misnomer for many across the region who report they didn’t have much work to ‘breakup’ during the current slow stretch.

21 ECONOMy DOwNTURN CiTED FOR RECORD-BREAKiNG AUCTiON iN GPMore than 5,400 people from 17 countries registered to bid on CA$32 million of equipment sold at an unreserved public auction.

28 A TiME FOR ThiNKiNG OUTSiDE ThE BOXEconomic lull allows for some creative thinking.

41 GOiNG wiTh A whOLE NEw LOOKWhy re-branding may be a good idea in uncertain times.

51 iNNOvATiONWhen people think of innovation, they don’t necessarily think of the energy industry as a leader in emerging technologies.

59 hOw LOw CAN ThEy GO?With commodity prices fluctuating, the bottom denominator is front and centre.

67 KNiGhT OPTiMiSM ABOUT ENERGy STraTEGyThe next number of years will represent both significant challenges and opportunities.

FEATURES

From the wellhead to the wholesale marketplaceIn this issue, we’ll take you inside the business of midstreaming. We’ll look at the whole gamut including gathering, processing, transportation, storage and marketing of crude oil, refi ned products, natural gas liquids and natural gas. We’ll fi nd out exactly who is gathering, processing and moving product in and out of the greater resource base and we’ll explore all the magic factors it will take to keep the industry viable for both the standalone midstreamers, as well as the larger companies diversifi ed into the business.We’ll examine the tricky equation between the reserves needed to justify the expenses, how low commodity prices can drop before operating costs give, comparing gathering capacity to processing capacity, and all factors in between in this industry crucial to the economic foreground of our region.

AND:From the County of Grande Prairie to the world.In the grand scheme of things, it is a small parcel of land, but within the confi nes of the county surrounding Grande Prairie lies one of the most highly-concentrated collections of major exporters of service and product to the international community in the entire country.

Plus:Find out how to make our unparalleled distribution and relevant editorial translate into tremendous value for your business through a spotlight on your venture. By focusing on the two factors that best determine the effectiveness of advertising – editorial content to which readers respond and mass distribution, Northwest Business can offer you the best rates of getting your message across to the most comprehensive audience of business readers from the Far North to the Northeast oilsands, to head offi ces in the South and all points between. Talk to one of our branding experts today about getting your message across to our 75,000 loyal monthly readers.

If you mean business, we’re here to serve you.

Deadline: May 15, 2009

KEEPING THE REGION’S BUSINESS COMMUNITY CONNECTED FOR OVER 15 YEARS

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Northwest Business Magazine

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28 N O R T H W E S T B U S I N E S S M A Y 2 0 0 9 29N O R T H W E S T B U S I N E S SM A Y 2 0 0 9

A T i M E F O R T h i N K i N G O U T S i D E T h E B O X

Alexander Graham Bell, an innovator best known for inventing the tele-phone, is credited with saying the oft-repeated quote, “When one door closes, another opens; but we often look so long and so regretfully upon the closed door that we do not see the one which has opened for us”.while Bell’s statement certainly has merit even at the best of times, at no time is it truer than during difficult periods – and it is especially significant for companies and individuals currently struggling through the global economic crisis.Since the global economy took a turn for the worse last September, companies big and small have had to deal with a caval-cade of setbacks: credit markets have clammed up; energy prices plummeted; revenues nose-dived; there was downsizing and restructuring; and consumer confidence levels reached all-time lows.

‘thinking outside the box’

But through it all, examples abound of companies look-ing to open doors – as Bell suggested - despite difficult economic conditions.jim Letersky, a contractor with Grande Prairie’s Centre for Research and innovation, explains that the key to success for companies during recessionary times is in-novation or “thinking outside of the box’.

“Businesses who had new ideas but were too busy to pay attention to them now have the time. So, what we find is people who found better ways of doing things but hadn’t had time to do it right, develop them, and research it,” Letersky said, adding that monetary concerns also play a part in a company’s willingness to innovate dur-ing an economic downturn.

“i think that has an effect, too, because they’re looking at different ways to make money, that’s definitely a motivator. But so often the idea has already been hatched, but nobody’s had time to devote to it because they were busy making a

living,” he said. “So, i think you’ll find as much or more innovation in periods of recession than you will when things are really booming.”it’s for this reason, Letersky said, that the Peace Coun-try region remains economically viable, in spite of falling energy prices that forced the Alberta government to go from a projected $8 billion surplus when oil was at $147 a barrel, to a forecasted $4.7 billion deficit for 2009-10. Letersky pointed to statistics compiled by the Canadian intellectual Property Office that showed that Alberta had the third highest total of patent filings and patents grant-ed in the country in 2007-08 (771 and 360, respectively),

A time for

Economic lull allows for some creative thinking

Remo Zaccagna

“We’re diversifying, we’re providing different solutions for

our clients to save money,” ~ Roch Dallaire, Gemini Helicopters

~ Roch Dallaire, Gemini Helicopters

Alexander Graham Bell, an innovator best known for inventing the tele-phone, is credited with saying the oft-repeated quote, “When one door closes, another opens; but we often look so long and so regretfully upon the closed door that we do not see the one which has opened for us”.while Bell’s statement certainly has merit even at the best of times, at no time is it truer than during difficult periods – and it is especially significant for companies and individuals currently struggling through the global economic crisis.Since the global economy took a turn for the worse last September, companies big and small have had to deal with a caval-cade of setbacks: credit markets have clammed up; energy prices plummeted; revenues nose-dived; there was downsizing and restructuring; and consumer confidence levels reached all-time lows.

‘thinking outside the box’

But through it all, examples abound of companies look-ing to open doors – as Bell suggested - despite difficult economic conditions.jim Letersky, a contractor with Grande Prairie’s Centre for Research and innovation, explains that the key to success for companies during recessionary times is in-novation or “thinking outside of the box’.

“Businesses who had new ideas but were too busy to pay attention to them now have the time. So, what we find is people who found better ways of doing things but hadn’t had time to do it right, develop them, and research it,” Letersky said, adding that monetary concerns also play a part in a company’s willingness to innovate dur-ing an economic downturn.

“i think that has an effect, too, because they’re looking at different ways to make money, that’s definitely a motivator. But so often the idea has already been hatched, but nobody’s had time to devote to it because they were busy making a

living,” he said. “So, i think you’ll find as much or more innovation in periods of recession than you will when things are really booming.”it’s for this reason, Letersky said, that the Peace Coun-try region remains economically viable, in spite of falling energy prices that forced the Alberta government to go from a projected $8 billion surplus when oil was at $147 a barrel, to a forecasted $4.7 billion deficit for 2009-10. Letersky pointed to statistics compiled by the Canadian intellectual Property Office that showed that Alberta had the third highest total of patent filings and patents grant-ed in the country in 2007-08 (771 and 360, respectively),

A time for

Economic lull allows for some creative thinking

Remo Zaccagna

“We’re diversifying, we’re providing different solutions for

our clients to save money,” ~ Roch Dallaire, Gemini Helicopters

~ Roch Dallaire, Gemini Helicopters

behind Ontario and Quebec. A majority of these pat-ents, he said, come from the Peace Country, as innova-tion and an enduring entrepreneurial spirit have been a hallmark of the region for nearly a century.

“That statistic comes from as far back as 1927 when the Na-tional Research Council did a study on patent applications, and found that per capita the Peace Country has more pat-ent applications than everywhere else,” Letersky said.Examples of Peace Country companies innovating, ex-panding their reach, and thriving during the current eco-nomic malaise are numerous.

“we’re diversif ying, we’re providing different solutions for our clients to save money,” Dal-laire said. “One example is we provide an extra man at the gas plants for the oil companies so they don’t have to have an extra person there with the helicopters, so it saves them money. A nd that person is trained to go out and do ser-vice wells, and do what they need to do out at the well site.”As the company has grown, Dallaire has Dallaire has made several employees partners, and has im-

plemented a program where the remaining employees can buy a helicopter and lease it back to the company. And despite the downturn, Dallaire has hired two more employees in Grande Prairie and two new pilots for high Level.

The net result of these changes: a $3.5 million increase in revenue last year.

“We took the hit right away. When the markets fell, the oil companies there stopped things within a week. Everyone was sent home. But within one week we were back on site.”

~ Dick Barendregt

Roch Dallaire founded Big Rock helicopters in high Level, Alta. in 1998 and eventually merged with anoth-er company to form Gemini helicopters inc., a charter business with bases in Grande Prairie, Peace River, and Rocky Mountain house.Gemini’s principle customers are in the oil industry, but since energy prices began dropping Dallaire said he’s been actively looking for new customers and new reve-nue streams. This means a new firefighting contract start-ing in April in Mexico with a possibility of more on the horizon.

behind Ontario and Quebec. A majority of these pat-ents, he said, come from the Peace Country, as innova-tion and an enduring entrepreneurial spirit have been a hallmark of the region for nearly a century.

“That statistic comes from as far back as 1927 when the Na-tional Research Council did a study on patent applications, and found that per capita the Peace Country has more pat-ent applications than everywhere else,” Letersky said.Examples of Peace Country companies innovating, ex-panding their reach, and thriving during the current eco-nomic malaise are numerous.

“we’re diversif ying, we’re providing different solutions for our clients to save money,” Dal-laire said. “One example is we provide an extra man at the gas plants for the oil companies so they don’t have to have an extra person there with the helicopters, so it saves them money. A nd that person is trained to go out and do ser-vice wells, and do what they need to do out at the well site.”As the company has grown, Dallaire has Dallaire has made several employees partners, and has im-

plemented a program where the remaining employees can buy a helicopter and lease it back to the company. And despite the downturn, Dallaire has hired two more employees in Grande Prairie and two new pilots for high Level.

The net result of these changes: a $3.5 million increase in revenue last year.

“We took the hit right away. When the markets fell, the oil companies there stopped things within a week. Everyone was sent home. But within one week we were back on site.”

~ Dick Barendregt

Roch Dallaire founded Big Rock helicopters in high Level, Alta. in 1998 and eventually merged with anoth-er company to form Gemini helicopters inc., a charter business with bases in Grande Prairie, Peace River, and Rocky Mountain house.Gemini’s principle customers are in the oil industry, but since energy prices began dropping Dallaire said he’s been actively looking for new customers and new reve-nue streams. This means a new firefighting contract start-ing in April in Mexico with a possibility of more on the horizon.

“we’ve always been looking at diversifying ourselves, and that’s part of the reason why we did well last year when other companies didn’t, because we’re diversified enough to continue our growth,” he said. “we’re constantly on the move, we’re constantly looking at stuff, we’re con-stantly changing things as needed to make our products better, to make our people better, to educate our people more.”Last year, Paul Dagesse, president of Trans Peace Con-struction Ltd., patented a new product called Silver Rhi-nokore, a composite mat made of a honeycomb product, polyurethane and composite glass.Produced by Rhinokore, a Trans Peace subsidiary, Da-gesse says the new product can be used for roadways, rig mats, stabilizer pads, bridge decks, and boat docks. he said despite the economic downturn, he’s extremely proud of the new product, and will forge ahead with it.

“it’s something that we started at the start of the recession, but we’re going to work right through it,” he said, add-ing that he’s already received national and international interest in the product.

“we’re excited about it (Silver Rhinokore),” he said. “Any time there’s a downturn there’s always opportunities. we’re more confident now, if we can put a new product in a market when times are in a downturn, you know they’re going to really prosper during high times.”Much of the product is being created in their plant in Armstrong, B.C., but some will also be made at Trans Peace’s Grande Prairie location, which Dagesse said will undergo an expansion later this year and by next year will be the city’s largest manufacturing plant.

“we’ve been around for 21 years, so the slower things get the harder we’re going to get after work and you don’t wait for the telephone to ring, you have to step out there and find new markets,” Dagesse said. “just because things slowed down doesn’t mean your business has to slow down.”The sudden drop in energy prices affected Grande Prai-

rie-based Cobalt Tanks, which has developed and pat-

ented a specialty tank fluid separator, which takes liquid

from everything from sludge and mud pits, flooded areas,

separates the solids and cleans the remaining water for

re-use.

“we had all of our equipment slated to go in October or

November, and after Christmas – we were working for

some smaller drilling companies – and they all folded their

tents and basically went home, they hardly did any drilling

this winter,” explained company owner Randy wold.But rather than folding their own tent, wold said he be-gan looking for opportunities outside of the oil industry, and has received interest from municipalities large and small, including Edmonton.

“we’re looking at going into other industries to help, other than the just the drilling industry, that use a lot of fresh water. So, we’ve approached a few other industries, one of them municipal,” wold said. “Some of the major cit-ies like Edmonton recycle all their sand, and they’ve got big yards built where they pile up all their snow over the winter, and the water when it melts runs into big pits. we did one of those last summer.”wold’s tanks have been used in B.C. to southern Alberta, and he said he plans to leave no stone unturned to find new markets and customers – especially since water is such a precious commodity in Alberta that he feels needs to be recycled rather than wasted.

“There are all kinds of contaminated water pits and all sorts of stuff there that we have the ability to go and clean up”. ~ Randy Wold

“There are all kinds of contaminated water pits and all sorts of stuff there that we have the ability to go and clean up.”it’s not an uncommon sight to see a construction area around Grande Prairie and beyond being heated using a device from CERTEK heating Machines inc.The company designs, leases, and services heating units for construction sites, but four years ago began develop-ing a boiler into a thermal heating unit that can be used on oil sites.

“what that does is it allows a boiler to be operated by anyone, you don’t need a technician…you don’t need to have supervision of the boiler. And because we did that, we could drop the price by 25 per cent to what they were normally paying in the oil fields for heat,” explained CERTEK’s CEO, Dick Barendregt.

“And then we convinced the oil people that there’s no need to call up heat when something is frozen, but if we could put our units on their sites we could heat their (sites) from the begin-ning of winter to the end. it was like proactive heating.”

But while the oil industry was booming in Alberta, Barendregt found no takers for his product here, so he expanded to the United States. He doesn’t mince words as to why he was shut out of Alberta.

“During the boom years, i couldn’t get in, and because of that i got into the United States. i think it’s too much of a big boys club in Alberta in the oil and gas industry. A lot of it is the reason because we have these downturns, be-cause you have a small group of people manipulating a lot of what’s actually happening,” Barendregt said.

Randy Wold, owner Cobalt Tanks, Grande Prairie