As we edge into the Spring of 2016, oil and gas prices seem to be looking forward to the summer season just as much as sun seekers across Canada. Prices have finally edged up and over the $40 USD mark despite another rather dismal outcome to the latest OPEC meeting in Doha, Qatar. Needless to say, even though ramped spending is a thing of the past, many, if not all companies are still focusing on cost reductions whenever and wherever they can find them.
Welcome you to our April edition of Oilfield PULSE. Our theme this month is ‘One Size Fits All’ and clearly challenges the oil and gas industry from a cost perspective.
Many industry insiders suggest millions of dollars are being needlessly wasted in the oil and gas industry in Western Canada each and every year with constantly over-engineered and re-engineered customized fabricated products, rather than adapting to and embracing industry wide standards for common products used extensively across the industry. Using a retail consumer analogy, when an individual wants to purchase a new truck, no matter the make and model, the automotive industry provides set option packages that one can purchase with the vehicle. The consumer can’t redesign the vehicle from the wheels up every time a new truck is purchased from a dealership. In other words, we can’t turn every new vehicle into a Monster Truck to drive around the streets and highways of Western Canada.
In the oil and gas industry history has shown that companies inadvertently, or perhaps deliberately, gravitate toward the Monster Truck approach. This results in many different makes and models of the same industry products being requested by each producer, or through their contracted engineering companies, for similar upstream and midstream projects. Worse yet, this often occurs from within the same company. The net effect is needless overhead and increased capital expenditures to achieve basically the same thing. I thing you will find many interesting and perhaps a few controversial opinions as you leaf through this edition.
This month I am going to take a different twist on our ‘One Size Fits All’ theme and apply the sort of same message to all of the rhetoric that is flying off the shelves by our federal government around, you guessed it, additional and new environmental requirements that are further delaying pipeline approvals. You see, I believe they are playing somewhat the same card here, but I think it’s even a more dangerous game of Russian roulette with our economy and the future well-being of our fellow citizens. Carbon has become the new buzzward that the Federal Liberals would have us all believe we a s nation are telling them to embrace on our behalf. Nothing could be further from the truth. But when you listen to our politicians, time and time again, they are brainwashing us to believe otherwise. Here are but a few brief examples in recent months……
Throughout this whole one-sided debate and countless series of brainwashing interviews, no one is standing up and asking what exactly was and is still wrong with the current NEB review process. What’s broke? Actually nothing, other than prime Minster Trudeau and his cabinet refusing to rubber stamp any economic stimulus nor private sector investment that has a hint of Tory blue attached to it. They say it is all about the environment, but come on, unless the Liberals can put their own brand of green stamp on these long overdue pipeline projects, our companies will continue to spend their money elsewhere and our people across the country will be disadvantaged needlessly for several more years.
So, in Trudeau’s eyes, one size actually does fit one and all, as long as you are looking through his rose coloured glasses. And of course, provided you have unfettered access to borrowing countless billions of dollars to spend our way to a new economy. Which he does! Did we all ask for this? Well a whopping 39% did indeed. You know, I can live with this outcome, but when businesses are falling down all across Canada, perhaps it is time for our federal government to take off their rose coloured glasses and put on some safety glasses and gloves.