Chuck Fowler: Cautiously optimistic in a challenging environment

chuckfowler-fortstjohnNow that Christmas is but a distant memory and our New Year’s resolutions are in full swing, what does 2019 look like for the industry, or more specifically, Northeast B.C.? It’s a well-intentioned question with somewhat of a complicated answer.

As we enter the fourth year of the downturn, pipeline capacity and market access for products continue to hobble the industry and it’s hard for us to have a renewed sense of optimism. Depending on what segment of the industry you work in, be it drilling, completions, or construction, it could be a good year or just more of the same from previous downturn years. 

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The year 2019 seems to be the year of added capacity to our pipeline and plant infrastructure in the immediate area. Companies such as ConocoPhillips, Kelt Exploration, Petronas, Black Swan, and Tourmaline are all bringing plants online this year north of Fort St. John. This will make facility construction a significant driver in industry activity. 

The added plant capacity is to capitalize on “wet gas” and is the reason both major and junior producers get out of bed in the morning. It was the main reason in 2018 and it remains the same for this year. 

The continued construction of the North Montney Mainline, potential start of the Coastal GasLink pipeline, and various smaller pipeline projects is nothing to scoff at, and is the natural extension of all the plants being built. If you’re in the facility construction and pipeline segment of the industry, your year doesn’t look too bad. 

While the construction segment of the industry may do well in 2019, the same can’t be said for drilling and completions. 

Another year of flat drilling numbers, leading to fewer completions, is going to make for a tough year. Many of the areas are proven gas fields and without the plant capacity to process it, or the pipelines to ship it, there is no need to drill up your production. Unfortunately, a significant portion of our local service providers fall into this segment, so this is unsettling to say the least. If there’s a silver lining for drilling and completions in 2019 it’s that once these plants are built, they will start to drill up to fill them. Its befitting of the tired cliché: Build it and they will come.

We rekindled our optimism with the final investment decision from LNG Canada in 2018. If the embattled Coastal GasLink pipeline eventually gets shovels in the ground, the optimism will grow in the form of increased investment. It’s obviously a step in the right direction, but there’s a lag effect before upstream regions really start to see increased activity. This year is a prime example of that — we are gearing up for a bigger and better industry, but it’s going to take time. 

If I was to sum up this coming year in a few words, it would be “cautiously optimistic in a challenging environment.” The ups and downs of the industry is something we all come to expect, and this year will hopefully be the start of the building blocks to create a renewed industry for us in Northeast B.C. 

Chuck Fowler is a Fort St. John resident and employee of Peace Country Filtration. 

@ Copyright Pipeline News North


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