Oil And Gas ‘Human Capital’ A Valuable Asset For Canada

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A few months ago, I talked about the future of the oil and gas industry — pointing out that it faces a huge task over the coming years in growing production to match ever-increasing demand worldwide.

Oil and gas development requires smart, educated people doing solid technical work and creating new technology.  But what do we see happening in Canada?  Continued contraction of our highly skilled and experienced workforce, as conventional oil and gas activity shuts down because fewer and fewer people are required to develop and maintain the Montney, Duvernay, a few other tight reservoirs, and the oilsands. Both bright young minds and mature experienced professionals are being driven away from the industry by a difficult investment climate and hostile societal attitudes.  New graduates (and industry veterans) are looking for opportunities to work. 

We have the human capital now, but it is being squandered, and may not be available by the time the oil industry (and society) realize they still need it, and reach out to use it.

Great advances have been made in geoscience and engineering in Canada, built on incredible datasets ranging from the rocks stored at provincial core research centres to comprehensive data files on every well ever drilled in the country.  Can we maintain and leverage those data storehouses as they are used by fewer and fewer people?

And I’m talking long term — we are not just experiencing yet another cyclical economic downturn in an industry that has experienced many downturns over the years.  The changes are structural, both in our focus on unconventional reservoirs and the attitudes of society.

What can we do?  How can we maintain our wealth of human capital, and also make use of the immense knowledge and datasets generated by oil and gas exploration?  Here are a few ideas.

International oil and gas – India, China, Pakistan and many other developing countries are keen to develop their own oil and gas reserves to satisfy growing demand and gain control over their energy futures.  Canadian companies have invested money and expertise internationally for decades, but Canadians are increasingly supporting international oil and gas in other ways. 

As I write this article, I’m sitting in the offices of a large oil company in New Delhi, surrounded by hundreds of people working hard to grow India’s oil and gas industry.  They have an exciting range of conventional plays to explore and develop in basins across the width and breadth of the country.  My team of consultants is bringing experience developing oil and gas reserves in Canada to advise Indian professionals on optimizing their work.

We are supported by Canadian provincial and federal governments providing networking and financial incentives.  It’s a highly competitive game, however, and can be very challenging to enter.  And not everybody has the knowledge, or is willing and able to travel overseas.

Lithium and other metals – Lithium is a hot commodity in this age of batteries, and substantial portions of world supply comes from mineral-rich brines.  In Chile, these are produced from deep water wells to surface salt pans, and minerals are precipitated out in the hot sun.  That’s a little harder to do in Western Canada, particularly in the winter, but we do find rich saline brines in oil-producing reservoirs like the Leduc formation.  New companies are leasing up the rights to produce brines, doing reservoir characterization work to maximize productive capacity, and working out economic extraction processes.

Other Brines – There are other uses for brines – for example, there’s a market in Western Canada for calcium chloride-rich brines to be sprayed on gravel roads for dust control, and on city streets for winter de-icing.  Western Canadian oil and gas databases help locate the appropriate water chemistries, and our subsurface knowledge directs us to the best brine reservoirs.

Helium – Helium is critical to many modern technologies — it supercools MRI magnets and provides inert atmospheres for electronics manufacturing.  It’s produced primarily from gas reservoirs, so helium exploration is not very much different from oil and gas exploration.  Western Canada is a great place to explore for helium, building from our incredible well control and rich databases.  A few companies have restarted helium production from historical wells, while others are mapping and drilling exploration targets — just like a regular gas play!

Water disposal – Demand for water disposal capacity is growing as resource play development yields larger and larger volumes of frac flowback fluids, and water cuts increase from aging conventional fields.  Producers and disposal companies must systematically explore for disposal reservoirs with sufficient capacity to manage these volumes.  The process is much like conventional exploration — but the key objective is high-quality aquifer capacity, not hydrocarbon production.

CO2 sequestration – Identifying deep reservoirs for sequestration is another process using oil and gas data and workflows.  Shell has developed a deep sequestration reservoir to support the Quest project, and work has been done to model sequestration capacity in other massive reservoirs such as the Slave Point carbonates in NEBC.  When the political and economic conditions are right, Western Canada can be a sequestration hotspot.

Geothermal energy – Heat energy in deep aquifers can be harnessed to generate electricity, but the economics depend on depth, temperature, and proximity to transmission and markets.  Subsurface studies supported by petroleum datasets are underway in all three western provinces to find viable geothermal targets, including oil and gas reservoirs like Clarke Lake in northeastern B.C.

Energy storage – The future success of renewables in power generation depends on efficient energy storage, which will require diverse solutions suited to local situations.  Novel ideas such as compressing air into subsurface salt caverns, or injecting fluids into subsurface fracture networks might be the best answers in some places.  Both of these build on our understanding of subsurface geology and geomechanics to be evaluated and implemented.

These ideas are all niche markets for Canadian oil and gas professionals and the datasets that support us.  But they do have value in generating creative thinking and innovation to sustain our human capital over and above the reduced requirements of mainstream oil and gas in Canada.  Let’s embrace them all and think of more.