It’s been a quiet past few years in Kitimat, the town of just over 8,000 in Canada’s British Columbia that is closer to Alaska than it is to Vancouver. Boasting a natural harbour in a deep inlet, Kitimat has geographical promise. It is the closest launch point in North America to deliver LNG volumes to the ravenous markets of East Asia. Eight years ago, when the Asian wave of demand first began cresting and Canada’s ambitious LNG ambitions took shape, Kitimat was a hub of activity. Then hopes were dashed as energy prices crashed. It was a return to sleepiness for the town, nestled by stunning mountainous terrain.
But over the past six months, activity has crept back in. Empty parking lots are now full again. Landlords are raising rents. Workers at the nearby Rio Tinto smelter are considering switching jobs. As Shell and its partners rumble towards a Final Investment Decision on the US$40 billion Kitimat LNG project, the town is hoping that this will finally be its time to shine.
It’s been a rough few years for Canadian LNG. There is plenty of natural gas in British Columbia but not many local markets that it can be piped to. So it stayed in the ground until the rise of Asian LNG demand spurred Canada into considering using its proximity to Japan, South Korea and China to its full advantage. Between 2011 and 2014, some 20 LNG projects were announced in British Columbia alone. Some were speculative, but some were also concrete. Fast forward to 2018, and there is still no LNG terminal operational, let alone being built. In contrast, Australia is on the verge is completing the last of its LNG megaprojects when Ichthys begins operations this year.
The problem here is government redtape and environmental sensitivity. Last year, Malaysia’s Petronas – the world’s third largest exporter of LNG – walked away from the Pacific Northwest LNG project. At that point, it was the furthest along of all Canadian LNG projects, but intense debate over the environmental impact of its location and political hostility from the National Democratic Party (which took over the state government in 2017) along with the Green Party scuppered that. At the time Petronas expressed ‘major disappointment’ with the cancellation, but went on to purchase 25% in the Kitimat project.
So with Shell, Petronas , PetroChina, Mitsubishi and Korea Gas all on board as partners, Kitimat has become the nexus for BC’s previous LNG ambition failures. Crucially, it has backing from the new NDP-led government as well as endorsement from First Nations indigenous groups, something that Pacific Northwest LNG lacked. Shell has claimed that Kitimat is ‘very promising’ but stopped short of full endorsement, choosing to wait (until the end of 2018?) to sanction the project. The reason is that the market has changed.
The world is still hungry for LNG, but with Australia now already fully mobilised and the US surging ahead with Gulf Coast infrastructure, there is concern that the market may not be able to support another mammoth LNG project. If sanctioned, Kitimat will only come onstream by 2022 at the earliest, by which time the opportunity for Canadian LNG may already be running late in the game. But the people of Kitimat will be hoping that their catalytic LNG project will be able to find a place in this new cleaner energy world.
LNG Canada, Kitimat Project
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Headline crude prices for the week beginning 5 November 2018 – Brent: US$72/b; WTI: US$62/b
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It is a well-known fact that the oil and gas industry has a lot to offer in terms of opportunities - paycheck, lifestyle, and work-life balance. However, like everything else in life, it has a flip side as well. If you are planning to make a career in oil and gas industry, it is important to know the cons as well. Here is a list of risks associated with working in oil and gas industry that you must know to make an informed decision.
Highly competitive: survival of the fittest
Oil and gas industry is highly competitive and dynamic in nature. The job requires high level of expertise and productivity. With digitization and automation of the industry, the work functions are changing rapidly. The employees who cannot cope up and upskill with changing time and need will be automatically pushed out of the system. The foremost challenge in oil and gas industry is to stay relevant and keep upskilling.
Long work hours
Some job functions in oil industry like offshore rig workers have to work in 12-hours shift, seven days a week and for seven to 28 days in one stretch. Sometimes, overtime is also expected due to emergency or to manage the project deadlines. However, the oil companies do give equal amount of resting period to the rig workers to compensate for the long working hours. Even then, the continuous long hours is strenuous for the workforce.
The accident-prone work environment
Although rigorous safety trainings are provided to the workforce along with numerous safety measures and laws in place; accidents do occur. Sometimes, these accidents can be life-threatening. Here is quick overview of the possible accidents that you might encounter:
Risk of confined space and fall- The line workers in oil and gas industry sometimes work in confined spaces like mud pits, reserve pits, storage tanks, sand storage, and other excavated areas, where they are exposed to potential risk of ignition of inflammable vapors, exposure to harmful chemicals, and asphyxiation. Additionally, these kinds of workplaces involve risk of falls, slips and trips too which can cause severe injuries and can even turn fatal. Though the companies are extremely careful and take all safety precautions, but the risk cannot be ruled out.
Additionally, frequent exposure to chemicals used in refineries and drilling operations can impact long-term health. To offset these dangers, oil and gas companies provide comprehensive training to employees to ensure safety protocols and site-specific features.
Working in remote location
The oil and gas professionals have to work on remote location for exploration, offshore duties, pumping stations, gas plants and more. The workers in remote location often feel isolated and they are on their own to cope up with numerous work-related accidents and health hazards.
Working in oil and gas industry is extremely rewarding in terms of career growth, travelling opportunities and compensation. However, the above points must also be considered before stepping into this industry. It is important to mention here that majority of oil and gas companies are aware of the risks associated and thus have sound safety measures in place to avoid any contingency. Moreover, the government and regulatory bodies also impose strict regulations for safety and security of the workforce. Therefore, in many cases, the risk associated is considerably reduced. So, before you accept any offer from any oil and gas companies, you must carefully verify the safety measures and policies of the company. Once, you are assured, your career in oil and gas will be highly rewarding.
If you are looking for relevant opportunities, check out NrgEdge.com to kickstart your career in oil and gas industry.
Due to shortage or limited availability of oil and gas, companies today are evaluating how they can harness alternative energy sources. The alternate fuel market is targeting hydro and thermal power plants, however solar and wind are catching up fast as preferred energy sources. There are still reservations about nuclear energy considering the risk of nuclear waste or manufacturing of nuclear weapons. However, strategies are shaping up to minimize the risk and maximize the profitability potential. Until then, sources such as solar and wind are being focused upon more and new sources like biofuels are explored extensively.
How will the shift towards alternate energy impact traditional oil and gas market?
There have been huge investments in the different alternate energy avenues by most of the big oil majors. These heavy investments on various alternate technologies by big oil majors and other oil companies around the world indicates a positive outlook towards the scope of clean fuel energy. However, the feasibility of its application is still questionable. Whether or not it will be able to meet the energy needs of the world while upholding its profitability is a question that is bothering the world.
Let us understand what the shift means for the companies in the energy sector.
Rate of employment
Among all renewable energy sources that have been studied, bio energy has been most influential. The fuel is created and transported within a confined space. The work is extremely labor-intensive and hence scope of employment increases. Hydropower and wind power will generate job opportunities during construction and project development phase. However, once the unit is commissioned only few operational staff will be required to perform the operational work.
Traditional energy is more expensive than renewable energy. If renewable energy can be produced on large scale, it can eliminate the gas shortage. Even other forms of renewable energy are much cheaper in comparison to traditional oil and gas sector. The cost benefits will be transferred to the consumers and they’ll be able save considerable amount on utility bills.
Improved Brand Image
It makes good business sense to make a move from traditional energy resources to renewable ones. The environmentalists have been arguing about the negative impacts of using and overusing the non-renewable source of energy. The shift towards alternate energy will boost the brand image of the traditional oil and gas company.
Higher market penetration and Mass access to energy
Due to dependence on fossil fuels which are non-renewable sources and expensive, a significant number of people in the world have no access to power. A chunk of people in Asian and Sub-Saharan Africa area are still using traditional biomass for cooking. However, if the alternate energy can completely replace the traditional oil and gas then it will have a deeper penetration into the market and majority of people will have access to it.
Ethical Investment Avenue
Renewable sector is considered as an attractive and ethical investment avenue for the ones who wish to invest outside traditional channels and are futuristic in outlook. The rising investment on alternate energy is impacting the job creation and community cohesion, which is again a positive move.
How the alternate energy is transitioning the oil and gas?
Big oil companies and other oil companies are making practical, well-researched, and steady approach towards renewable energy spanning from solar panels to genetically engineered algae. However, there are still many companies which are in research/experimentation phase and do have a concrete plan in place.
The pathway to clean fuel technology that operates with efficiency and profitability is getting paved. More than 100 countries in developing as well as developed nations have set a clean fuel target and are working towards it. The European Union has set a goal to meet its 20% energy requirements via renewable sources by 2020.
The world has acknowledged climate change and are working together to shift from carbon-intensive to carbon-neutral environment which might pave the way for generations to come.