Three Views

In the course of the past month I have come across 3 different articles that discuss the communication of ideas through maps.  The strange part was that they all touched on the question of “what makes a good map?”.

First was the article  “Make Maps People Want to Look At”, is from ESRI’s ArcUser Winter 2012 issue.  The author covers off 5 primary design principles for cartography which can be applied by anyone when creating a map for any purpose.

The next article that I encountered was one on Slate.com.  “The Greatest Paper Map of the United States You’ll Ever See” is about the latest winner of the annual competition of the Cartography and Geographic Information Society.  The 38th annual Best of Show award went to a map created by one man and a computer over the course of over 6000 hours.  Amost all of the time was spent on painstaking attention to detail in the placement of labels, font choices and sizes, line colours and thicknesses, and literally thousands of other details.  The important take-away from this was that the only way to create an excellent map is to take the time to ensure that everything on the map is best placed to communicate the information that needs to be passed on to the viewer.  This is, in some ways, the most critical thing that I want to pass on.  Yes, geoSCOUT (and other applications that our competitors have) give you automated posting tools that make it very easy to place all sorts of information on a map.  But how many packages give you the ability to manually tweak the map presentation to ensure that the information is located in the best possible position on your map?  I know that geoSCOUT does.

The third article,“Design Principles for Visual Communication” in the April 2011 issue of Communications of the ACM.  The authors discusss their research into the creation of algorithms meant to enable the automated creation of effective visualizations.  As part of their research, the authors discuss the work they have done to identify the design principles that go into creating an effective visualization, “by analysing the best hand-designed visualizations within a particular information domain.” One of the information domains discussed is that of “cartographic visualization” (maps), although they focus on directional types of mapping there are some interesting gems that are exposed.  For example, in the case of a route map, the relative lengths of any road segment are far less important than the requirement that all turns are accurately represented.  And in the case of maps in general, and tourist maps in particular, the most effective maps are those which “include only those elements that are semantically meaningful (such as the home of a well-known writer), visually distinctive (such as an oddly shaped or colored building), or placed in a structurally important location (such as a building at a prominent intersection).” There is further discussion on other techniques which cartographers employ in the creation of “good” maps.

Artificial Intelligence Isn’t

geoSCOUT was designed from the very beginning as a tool that could help geoscientists illustrate what they thought was going on in their play.  To do that we essentially designed geoSCOUT to be a CAD package for geoscience.  That meant that we needed to make sure that there was a way to absolutely place any element on the map sheet, and to make sure that the geoscientist had full control of that placement so that it was where it needed to be without blocking any other important element.  And geoSCOUT needs to be able to print whatever you have decided to post to the map (assuming that your printer or plotter has enough memory to deal with the resultant print job).

While geoSCOUT does have the ability to automatically post data (and with more postable data, and more sophisticated posting algorithms than the competition), that does not mean that geoSCOUT knows the best place to post all of that data.  That’s why we give you the ability to move anything that we post, and also give you the ability to do your own free-hand drawing within geoSCOUT.

geoSCOUT Tricks

For example, did you know that you can post an image file in a map?  Sure you did.  But did you think about what else you can do?  How about using geoSCOUT to create your own pictures?  Two minutes and a new, handmade image for an avatar.

Click me to see some geoSCOUT "art"

A few years ago we started hosting a little party in July.  Maybe you’ve heard of it – the Spaghetti Western?  When we got to the site for the first version of the party (back in 2006) we realized that we did not have the banners printed for the party.  “No problem”, we thought, after all the site was a block away from the office and we had a brand new plotter that was capable of printing the banners out.  Only one problem – the image was a PDF and Acrobat kept crashing when we tried to print the file!  geoSCOUT to the rescue!  We grabbed a .JPG of the pdf and dropped it into a geoSCOUT project.  Then we turned all the layers of except for the image, resized the screen to fill it with just the banner image and sent that off to the plotter.  Problem solved!

Now, what about geoSCOUT as an infographic tool? Essentially, infographics means “graphic representations of information, data or knowledge”.  So how can we take this fairly pedestrian description and turn it into something flashy in geoSCOUT?

geoSCOUT Treats

What if I could give you a map that shows drilling trends for Western Canada over a 20 year span?  How about a map with information on Land Sale trends over that period?  How about a map with Production for those wells over the same period?  How about a map with a drilling breakdown by province?  How about a map with a drilling breakdown by productive horizon?  How about a map with a breakdown by current well status?  All of these are fairly basic tasks for geoSCOUT or, to be honest, for several other products.

But, what if I could give you all of the above on a single map sheet?  Now, that would be an infographic, and that is something that I (and you) can do with geoSCOUT and a little creativity.  Oh, and a few hours of work.

If a picture is worth a thousand words, what do you think this bad boy weighs in at?

If you would like a PDF copy of this, suitable for printing to a 36 x 56 plotter (or to a Tabloid sheet, although with a commensurate loss of detail) drop a line to our Sales department.  The file is about 50MB, so include contact information and they’ll figure out the best way to get the file to you.

Knowledge is Power

If you would like to learn how to do this yourself, consider some geoSCOUT training.  This course will give you the basic grounding on how to montage a variety of elements into your geoSCOUT maps.

I’m interested in what you do with geoSCOUT.  Send me a screen cap of your most interesting work.  If I get enough screen caps, I’ll do a follow-up post.

Last year back in April-May, when I visited family and friends in Hamilton, Ontario, regular gas was being retailed at the $1.37 to $1.45 per litre range. You could literally hear groans from motorists each morning as they saw the daily updated pricing posted at refuelling stations. During my three-week stay the upward trend was a sustained phenomenon.

 Some close friends — upon learning I worked for the oil and gas industry (sort of, that is) and being based in Alberta — bombarded me with questions about gasoline pricing in Canada. (As if I had something to do with the increases, or that I would know enough to help them understand what was happening).

 Truth was (and still is) the explanations I’ve heard from TV talk shows at that time have not greatly eased the clutter in my mind about the subject. I am still far from having a firm grasp of the relevant pricing mechanism.

 Most popular questions/observations I received were as follows:

 1.“We are a major oil-producing country, aren’t we? How come our gas prices are so high?”

 2.“Can you explain why gas is cheaper South of the border (U.S.A)?”

 3.“Is it true a major portion of the price is taxes?”

 4.“Can government not intervene and make gas prices more affordable especially for low-income families?”

 I tried to give them a lay person’s answer to some of the questions but, being as befuddled as they were, I didn’t think I made much headway. The most I achieved,  I think, was to make many of them understand  I was as much in the dark as they were about the issue.

 In the aftermath of this encounter with largely disgruntled inquisitors (disgruntled with the system, that is) I tried searching for answers and explanations.  What follows is the result so far of reviewing information at certain key internet sites, particularly the excellent pages devoted to the subject at the Natural Resources Canada website, and at the Department of Finance Canada website.

 Item #1:  Petroleum Products Rack Pricing and The Law of Supply and Demand

Source: Google Images - Shortage attributed to State price ceiling (leading to either artificially high consumption and/or supply tightening)

Let’s begin with the rack pricing system which, as in everything else — particularly in a free-market economy or, the very least, in a mixed-economy — is based on the operation of the Law of Supply and Demand.

 The rack price of petroleum products is of key importance to refiners because it determines viability of refinery operations. It is the product selling price available to the refiner at the loading rack (hence, “rack price”). And as any sensible product seller would do assuming product mobility — as is the case, for instance, of US and Canada — a refiner (either Canadian or US) would go for the best price available in a given choice of markets.

 Thus, to use the illustration at the Natural Resources Canada website – “…if the rack price for gasoline was lower in Toronto than it was in Buffalo, refiners in Toronto would choose to ship their product to Buffalo to sell at the higher price, as long as the cost of transporting it to Buffalo was less than the price difference. …” .

 [Translation: In a free-market economy (or a mixed economy with sufficiently strong market forces at work and not one run entirely or mainly by command or dictatorial fiats) refiners will always seek to maximize their revenue and profit by choosing the market with the best selling price. Profitability is the key determinant of such business decisions – not patriotism, not benevolence, or anything else one may consider a higher value or a loftier ideal than so-called “filthy lucre”.]

 But eventually, as more product is shipped to Buffalo due to the attractiveness of the rack price in that market the supply will soon build up and the price will soon drop until it is no longer advantageous for the Toronto refiner to ship his product over to Buffalo. Soon the two markets will be in balance.

Item # 2: Effects of North American Petroleum Products Market Integration and Global Market Conditions

It is not just the local supply-demand equation that comes into play when pricing petroleum products. Domestic refiners are “price takers” –  meaning (and using Canadian local refiners as an example) the price of imported petroleum products is used by local Canadian refiners as basis for their own competitive pricing even if Canada were not importing any such products at all.

 [Translation: Local or domestic pricing is affected by import pricing regardless of whether we (in this example, we, Canadians) are doing any actual importation of such products or not. The Natural Resources Canada website refers to this practice as exercising “pricing discipline”. Hence, even when a local refiner’s cost structure is very competitive and the supply-demand equation may indicate a lower domestic price is sustainable (or attainable), actual pricing will still be close to the higher import price available in the integrated market.]

Again, the so-called “profit maximization function” will lead a refiner to seek opportunities to exact a higher price to maximize revenues. To repeat the dictum –  for-profit-ventures, such as refining operations, are not driven by patriotism or benevolence: profitability is the moving force behind such a key business decision as product pricing.

 Item #3: Effects of Substitute or Alternative Products

Source: Wikipedia - "Porter Five Forces" Diagram showing, among others, substitute products affecting markets and price regimes.

 It may be difficult to understand but it is reality: petroleum products pricing is affected not just by the demand-supply situation for a given  petroleum product but by the equation and pricing as applied to alternative or substitute products. Take for example propane which is described in as follows:

 “Propane is a three-carbon alkane with the molecular formula C₃H₈, normally a gas, but compressible to a transportable liquid. A by-product of natural gas processing and petroleum refining, it is commonly used as a fuel for engines, oxy-gas torches, barbecues, portable stoves, and residential central heating.

A mixture of propane and butane, used mainly as vehicle fuel, is commonly known as liquefied petroleum gas (LPG or LP gas). …………………………. .” (Source: Wikipedia)

 Thus, for instance, automotive fuels (gasoline and diesel) directly compete with propane as far as its use as a vehicle fuel is concerned. The overall supply and demand equation for petroleum automotive fuels and resulting price regime are thus affected by the demand-supply-price behaviour of propane.

  Item #4: The Very Nature of the Petroleum Product and How It is Used Affect the Price Consumer Pays for  It

Source: Natural Resources Canada - As an illustration the price of diesel fuel, a highly flexible products with competing uses, is affected by how consumers actually use it.

 This point is still pretty much along the theme of demand-supply equations. The way consumers use (or consume) the product has a direct bearing on the demand-supply situation and, therefore, its price. One may even correctly say a given product may have competing “uses”; and the whole set of such competing or alternative uses necessarily affects the price consumers are willing to pay. A good example will illustrate this point more clearly and none can probably do it better than diesel fuel.

People who track economic activity – to determine whether it is waning or is on the rise – usually observe diesel demand and consumption patterns as a proxy indicator of economic activity.  A healthy, growing economy will have a strong demand for diesel fuel because goods and services need to be moved and distributed increasingly in such a robust economy. This translates to an increase in truck traffic which largely relies on diesel fuel to run the engines of such huge tractor-trailers and other freight trucks.

Add to this the fact that most agricultural machinery and equipment likewise use diesel fuel. Then also diesel fuel can be easily converted to furnace oil for heating purposes. So versatile is diesel fuel that it is used as a fuel of choice in transportation, agricultural, industrial, and residential applications. The whole slew of such competing uses (translation: demand) is a big factor to diesel fuel pricing.

Item #5: The Tax Regime Applicable to a Given Market Affects the Price Consumers Pay for Petroleum Products

Source: http://www.treehugger.com/corporate-responsibility/ - Comparative fuel tax rates of selected OECD countries.

 You must have heard the old cliché about the two things certain in this life: taxes and death. And in Canada automotive fuels are certainly subject to federal excise tax, GST and, depending on the province concerned, provincial tax.

The sum total of such taxes amounts to approximately $0.32 for a representative $1.00 per litre price of automotive fuels.

Item #6: Retailer’s Operating Costs Plus Any Retail Marketing/Promotion Strategy Affect the Price Consumers Pay

Source: http://www.roadtripamerica.com/roadside/ - The only Frank- Lloyd- Wright-designed gas station in the world!

 Retail operations entail costs that must be recovered and, to stay in business, such operations must give the operators a sufficient profit margin. Such considerations all affect the actual retail price offered to customers. Also, in certain instances, a retailer may opt to implement a promotion campaign to attract a bigger market share; price competition may be the best option. By offering a lower price they may drive more traffic to a particular retailer.

Summary

How these different key items affect pricing is summarized in the following graph from Department of Finance Canada using gasoline at an illustrative price of $1 per litre:

Approximate Price Components of Gasoline at CAN $1 per Litre (in cents)

Source: Department of Finance Canada (which is careful to note that “Values for crude, refiner and retailer are estimated and are for demonstration purposes only”). Click on image to have a clear view.

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I hope this post sheds some light on the subject of automotive fuel pricing in Canada. I will continue with this topic to touch on some other factors that affect the price customers have to actually deal with. Among the most controversial ones are the effects of a) speculative demand, and b) US $ fluctuation.

I must admit, though, this post hardly meets the challenge of explaining gas pricing in terms easily understood by a Grade Four student. I give up! But go to the Canadian government websites mentioned above. Also, at next post on the subject I will include non-government sites that I stumbled upon recently. They have a better way of reducing the complexity of information on this largely misunderstood topic.

In Alberta, and the Western Canadian Sedimentary Basin in general, we have long been producing oil and gas and our methods and rates for royalty calculation are under constant scrutiny. It’s no surprise then that North Dakota, Montana and other new oil and gas hot spots are facing the same issues.

In Comparing Unconventional Oil Tax Policy Across US States Headwater Economics, a non-profit out of the US, does some analysis with use of VISAGE and the gDC US data to better understand and compare royalty rates between some of the states.

“Applying data and assistance from VISAGE and geoLOGIC Data Center, Headwaters Economics has analyzed how North Dakota, Colorado, Montana, and Wyoming approach the collection and distribution of energy revenue in the context of the unconventional oil boom.  The goal of the research is to provide decision makers in each state with good information upon which to make better decisions. 
The following figure shows the type curve for an average Bakken horizontal oil well which produced 157,222 barrels of oil over the first 36 months of production”

I checked and Alberta royalties are 5% for the first year of production on horizontal oil wells;

Alberta Energy: Horizontal Oil New Well Royalty Rate Frequently Asked Questions

How do the other provinces stack up? Do these rates make Alberta competitive or not? Is it more or less expensive for us to get our oil to market; should royalty rates compensate for that? How can we use these same tools to make better decisions going?

Let me know what you think!

I have an older smartphone that is about due for replacement.  It’s a Samsung Omnia, a Windows Mobile 6.1 phone that I have had for almost 3 years. Before that I had always had a “standard” cell phone and I also carried around a Pocket PC for notes and such.  I’ve gone through 4 different Pocket PCs over the years, starting with a Compaq Aero 1500 running Windows CE 3.0 through to a Toshiba e830 running Windows Mobile 2003SE, and over that time I have built up a library of software that I’ve transferred from device to device all the way up to the Omnia, simply because the software was useful (in at least one case I would go so far as to call it “critical”) for me in my work.

10 years of Pocket PCs

I like the Omnia, but there are some limitations due to the form factor (it’s a little smaller than is always practical for a touch screen), the OS (WM6.1 is 3 years old and has some quirks), and the age of the hardware (the battery is nearing the end of life).  And now I have a dilemma.

We’re a “microsoft shop” and I have been using Microsoft-powered handhelds for a decade, so you could say that I have some loyalty to the OS.  But Windows Phone 7 (and beyond) doesn’t support the software that I have grown to rely on.  Which means that I don’t have a compelling reason to look at only the Windows Phone.  In fact, an equivalent piece of software for the one critical application that I use on the Omnia is available in the Android marketplace and is not available in the Windows Marketplace, so I now have a reason to consider Android.  And there is even a migration path.  The app on the Omnia can share the data files with an application that I have on my desktop computer, and the Android app will also share data with the desktop software, so I can actually migrate the data from one device to the other with just a little bit of fiddling about.

So, what does this teach us?

1. In this business, like so many others, there are always options.
2. If you change the environement enough, your customers will find that an alternate is not as painful as they thought.
3. Brand loyalty can only go so far.  If you want to have your customers remain loyal to you, you have to remain loyal to them (which means that you don’t abandon them – you always give them a way to move forward with you).

These are (hard) lessons that we learned a long time ago. What it means for us is that we always know that we’re not the only game in town.  It means that even though we roll out over 300 fixes and enhancements every 4 months, we try to do it without disrupting existing workflows.  It means that, if the solution can be created by extending an existing module or function, that we try to implement that new solution without breaking what already works.  It means that if the solution requires a change to the underlying data model, that we provide an automatic method to upgrade your existing version of the data to the new model.  It means that we anticipate the problems that the solution may create, and plan the mitigation before we release the solution.   We’re not always successful in this, but we have a better record today than we have had in the past.  And we’ll be better tomorrow than we are today.

We don’t take our clients, or our success for granted.  We work every day to provide the best solutions for our clients.  And it means that even if we’re not always successful in this, our goal is to be better tomorrow than we are today.  And we’ll always work to ensure that you do have a way to move your data into the new version with as little fuss as possible.

Updated Dec 12, 2011

Well, I made my decision yesterday.  Here is my new phone:

http://www.youtube.com/watch?v=GWnunavN4bQ

“ITS ADDICTION to oil drives the world capitalist economy to ever more devastating destruction. And the new oil rush in the Canadian province of Alberta is ripping up an area of land bigger than England. The prize is huge amounts of crude bitumen held in tar sands.” – Socialism Today, Issue 146

Item 1: Alberta’s oil sands operations are turning Northern Alberta into a vast toxic wasteland not fit for habitation by any flora and fauna; unfit, worst of all, to the even more fragile homo sapiens, the species to which you and I belong.

Item 2: The rate of this despicable violation of mother earth is such that if it continues unabated we will see, a few years from now, an area as big as England (plus, maybe, Wales) transformed into a yawning Arabia Deserta — a poisoned and poisonous Death Valley, unfit for life and human living.

Item 3: Reportedly, so massive is the pending disaster that the well-being of the soon-to-be-“Late-Great-Planet-Earth” (and its 7-Billion-to-date-humans) hangs in the balance. Of particular interest globally is the impending denudation of Canada’s boreal forest cover.

The three preceding paragraphs are my paraphrase  of  the contention of and argumentative claim by inveterate critics of Alberta oil sands. If one Googles ”oil sands” or “tarsands” they are bound to encounter quite a number of pages that will cite  so-called data, statistics, scientific views, insights and positions that have one conclusion: Alberta oil sands is the worst environmental disaster in the making — globally. But how much of this vitriol is fact; how much, balderdash?

Let’s start with incontestable official data and statistics relevant to the oil sands of Alberta and its impact, actual and potential, upon Canada’s boreal forest.

Alberta Oil Sands vis-à-vis Canada’s Boreal Forest Cover

The following table suggests a basic reply to the question of how big an impact will Alberta oil sands have on Canada’s boreal forest. Admittedly a more in-depth treatment is required to approximate, at the very least, the qualitative and quantitative impact of the oil sands on the boreal forest.

The tabulated data seeks mainly to put in proper perspective and gauge the accuracy of the introductory quote above which, to my mind, should be taken at best as a hyperbole rather than a statement of fact.

The preceding tabulated data shows that to-date 602 Km2 of surface-mineable oil sands land have been disturbed for open-pit bitumen extraction. This land area corresponds to 0.2% of Canadian boreal forest or 0.4% of total Alberta oil sands. Yet when images of strip mining on the surface-mineable part of the oil sands are circulated the incorrect message put across, wittingly or unwittingly, is that the entire 142,000 Km2 of oil sands (indeed an area bigger than England) would be subjected to such scarring, disturbance and “violation”.

The truth, however, is that IF all of the surface-mineable portion of Alberta oil sands were to be strip-mined the total area that would be subjected to land disturbance would amount to 4,800 Km2 . That would correspond to about 1.3% of boreal forest, or 4% of England’s total land area — not anywhere near the whole of England alone, much less with Wales combined.

The image below seeks to provide a visual perspective as to the size of Alberta oil sands in relation to Canadian boreal forest.

Source of basic image –  Alberta’s Oil Sands: Fast Facts  (Box and Connecting Arrow Supplied by Author)

Yet, to this day several internet pages and sites continue to perpetuate the misinformation. Take for example the quote given above, from the UK Socialist Party’s newsletter. Alberta oil sands critics with internet and social networking presence do routinely copy, twit, and re-publish the same at their own or some other aggregator sites without paying even lip-service to casual fact-checking and verification.

I do not by any means pooh-pooh or minimize the significance of 602 Km2 of oil sands land presently disturbed, or the projected 4,800 Km2 of surface-mineable Northern Alberta land in the heart of Canada’s boreal forest that stand to be strip-mined under current licensing agreements. Every square meter of such land is of high ecological importance; they should be subjected only to disturbance (such as fossil fuel extraction) for far more transcendent reasons than preserving pristine ecology. Moreover, such disturbance should only be made in a very judicious manner employing the most stringent measures available not only at the land exploitation phase but even more importantly at the land restoration and regeneration stage.

Open-pit Mining vs. In-Situ Extraction of Bitumen

Lost in the din and heat of controversy over the oil sands of Alberta is one glaring fact: a huge majority of the bitumen deposits, 80% by most reliable estimates, stands to be recovered NOT by strip mining. It will be recovered through the more eco-benign method known as in-situ extraction. Indeed, 20% of bituminous sands which lies very close to the surface will be recovered through strip mining. But hold your horses: even in respect of this most maligned extraction method operators in the Alberta oil sands continue to innovate and apply new and better technologies and systems for both bitumen extraction and land reclamation.

Just to restate the facts: two kinds of operations are used to extract bitumen out of the Alberta oil sands: a) open-pit mining and; and b) in-situ drilling. The former requires mine pits, tailings ponds,  and uses giant shovels and trucks and the more recent and less disturbing mode of slurry transport via a network of pipelines. Percent-wise about one fifth (20%) of oil sands would use this extraction method applicable to deposits lying less than 75 meters below the surface.

The other 80% that will rely on in-situ drilling do not need either mine pits or tailings ponds. In terms of land disturbance, this method produces a far softer impact than open-pit mining. In fact most reliable estimates put the figure at less than 5% of an in-situ lease area being subjected, typically, to land disturbance.

A related subject that tends to be glossed over, if not deliberately ignored, is the highly sustained and successful marshalling of new technologies for bitumen extraction and land reclamation (or land restoration and regeneration – my preferred terminology, if you would allow me). Right now I do not have the time and space to cite even just a few of such oil sands exploration, production and reclamation technologies. I will do so at next post.

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Post-Script: Family, friends, acquaintances, and even “long-lost” former classmates who have recently reconnected via social networking — and that includes the dwindling list from my elementary class of ’66 back in that small town at the foot of the Sierra Madre mountains in the province of Laguna, RP) — and now scattered across the globe (in Southeast Asia, Australia, Spain, Ireland, North America, etc.) have asked for more information about the oil sands and its global impact.

I profess no expertise at all on the subject; but as I search the internet, attend professional lectures, read reputable industry magazines, I must say one needs really to listen to and gain insights from sources on both sides of the fence: for or against the oil sands. Continuing with this series I intend to highlight remarkable insights even running cross-grain to my own opinions. I owe readers that much of a responsibility and accountability to give them a balanced view. At least that’s what I aspire to do.

 At next post, for instance, please expect to read some gleanings from the Pembina Institute whose site (despite well-meaning but very contrary advice from pro-oil sands friends) I consider an excellent cyber place to learn more about the oil sands, among others.

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Mention “Alberta oil sands” and you would probably evoke in most hearers’ or readers’ minds a negative image, maybe even a sinister one.

We may attribute this phenomenon to the proliferation of highly critical media coverage of the oil sands. Such media chatter has definitely approached very-high-intensity decibels even as North America (primarily) is engaged in the raging debate about Keystone XL Pipeline project.

About the use of the term “oil sands” — I just did a seven-page random sampling of Google pages on the subject of “Alberta oil sands” followed by a cursory contents review of entries on those pages. I classified the entry contents into:

• Positive (definitely supportive of the Alberta oil sands);
• Negative (overtly critical of the Alberta oil sands); and
• Neutral (being neither overtly for or against the Alberta oil sands).

The results of this, my  obviously non-scientific,  exercise are nevertheless very interesting and illustrative as noted in the following summary:

• Negative entries (overtly critical of Alberta oil sands) – 37 entries (50%);
• Positive entries (definitely supportive of Alberta oil sands) – 27 entries (36%); and
• Neutral entries (balanced content) – 10 entries (14%)

One interesting trend I noticed is that entries employing the term “tar sands” tend to have a negative position or critical content against the Alberta oil sands. On the other hand, the positive-content-entries and most of the neutral-content-ones consistently use the name “oil sands” (two words) or its variant, ”oilsands” (one word).

One may surmise persons and entities critical of the oil sands deliberately use the name “tar sands” as a politicized pejorative term (i.e., one that is likely to create a derogatory image). Conversely Alberta oil sands supporters are likely to be perceived as intentionally using the term “oil sands” as an equally politicized term — a politicized meliorative term (i.e., tending to create a pleasant or ‘admirable’ image).

What’s in a name?

As a person with no political agenda and/or being simply concerned with accuracy, how would one determine which name to use – “oil sands” or “tar sands”?

Source: CAPP Upstream Dialogue

Consider the following learned statements of opinion:

 ”The hydrocarbon mixtures found in northern Alberta have historically been referred to as tar, pitch or asphalt.

“ However, ‘oil sands’ (two words) is now used most often to describe the naturally occurring bitumen deposits. This helps distinguish it from the other terms like tar sands, which are associated with distilled or man-made products, such as the mixtures used to pave roads.

“Oil sands is an accurate term because bitumen, a heavy petroleum product, is mixed with the sand. It makes sense to describe the resource as oil sands because oil is what is finally derived from the bitumen.”

Source: oilsands.alberta.ca

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“Technically the product from the bituminous sands deposits is neither tar nor oil. Tar actually comes from trees (Look it up! I too did not know this) and oil comes from petroleum reservoirs.

“In fact the technically correct term is bituminous sands. It’s just not as easy to say as tar sands or oil sands.”

Source: David Finch,Calgary-based Oil Patch historian and author. http://davidfinch.blogspot.com/

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“Oil sands are a natural mixture of sand, water, clay and bitumen. ….Bitumen is oil that is too heavy or thick to flow or be pumped without being diluted or heated. Some bitumen is found within 200 feet from the surface but the majority is deeper underground.”

Source: Canadian Association of Petroleum Producers – http://www.capp.ca/getdoc.aspx?DocId=191939&DT=NTV

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It appears there is a strong scientific case to use the name “oil sands”. However, regardless of one’s preferred term for this proven oil reserve second in size only to Saudi Arabia’s (or third after Saudi Arabia, then Venezuela — depending on which ranking system you use), there exist other NPMs around the Alberta oil sands. I would like to address them here and in succeeding blogs as follows – if only for the sake of accuracy and fairness:

1. Alberta oil sands produce the dirtiest kind of oil;
2. Alberta oil sands tailings ponds are turning Northern Alberta into a vast toxic wasteland;
3. Alberta oil sands is polluting and draining the province’s main sources of freshwater;
4. Alberta oil sands is a main source of GHG (green house gas) emissions;
5. Alberta oil sands is responsible for a growing incidence of rare forms of cancer in Northern Alberta’s first nations communities; and
6. Alberta oil sands is the culprit behind cases of awful fish mutation in the polluted rivers.

Let me here take up the very first and the closely related fourth statements of NPMs, as shown above. Succeeding posts on the subject will progressively tackle the rest.

“Dirty, Dirtier, Dirtiest Oil”

A key NPM that is becoming a staple in the increasingly vociferous Keystone XL pipeline debate is that Alberta’s oil sands is the “dirtiest source of fuel available”, to borrow the words of Democratic Congressman Henry A. Waxman (30th District of California). He opines that building the pipeline would “…….heighten US’ dependence on this most unclean fuel source.”

First, let’s accept for the sake of argument certain tenets of conventional wisdom, viz.:

• “Energy from fossil fuel is dirty” (conventional oil and natural gas, unconventional oil and natural gas, coal);
•  ”Energy from renewable sources is clean” (wind, hydropower, marine energy, solar, biomass);
•  ”Geothermal energy is super clean”; and
•  ”Nuclear energy is supposedly clean”.

A corollary of the above set of generally accepted statements of conventional wisdom is as follows:

• “Natural gas is significantly cleaner than oil”;
• “Conventional oil and natural gas is cleaner than unconventional oil and natural gas”; and
• “Oil and natural gas (even unconventional sources) is cleaner than coal”.

Also, based on materials I have reviewed so far,  it would seem energy sources are adjudged clean or unclean on the basis of the following major criteria:

• GHG virtual footprint (greenhouse gas emissions – particularly CO2) — “from wells-to-wheels”;
• Virtual freshwater footprint (the amount of water used to produce and bring to end users the energy produced);
• Contribution to freshwater pollution;
• Contribution to air pollution; and
• Contribution to land disturbance and pollution.

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Let’s have some perspectives here concerning GHG emissions. As the chart, below, clearly indicates oil sands GHG emissions amount to 6.5% of total emissions coming from all Canadian sectors combined. (Please see  CAPP – Upstream Dialogue ).

Source: Canadian Association of Petroleum Producers

An ordinal distribution of the different sectors, by percent GHG emissions is an eye-opener, to wit –

Author came up with this GHG emissions distribution, by sector, using CAPP basic data

Out of the eight Canadian sectors monitored oil sands ranked second lowest emitter of GHG; the main culprit is “Transport” accounted for chiefly by passenger cars.

(Just an aside, and rather humorously , the book “Ethical Oil” by Ezra Levant, cites official statistics showing total oil sands GHG emissions being out-grossed by total GHG emissions from “enteric fermentation” — also-known-as flatulent gases being emitted by Canada’s livestock industry!)

And to continue with the discussion — it is interesting to note from the graph, above,  that oil sands total GHG emissions in 2009 (latest complete annual data) “ … is equivalent [only]to 3.5% of 2009 emissions from the U.S. coal fired power generation sector.”

The misconception or misinformation (call it what you like) that oil sands is “the dirtiest source of fuel available” — in terms of carbon footprint — which the good Congressman Waxman has publicly held onto was echoed by another high-profile American figure, U.S. Ambassador David Jacobson. National Post reported the American diplomat as having “… suggested repeatedly that Canada needs to ‘to do more’ to reduce the carbon footprint from the oilsands [sic], most recently in a Calgary speech July 19[, 2010].”

One thing for sure — the strides made by Alberta oil sands over the years to reduce carbon footprint are among the most remarkable continuing achievements of the industry. The dizzying pace of technological advancements is a reality in the Alberta oil sands. Right at this moment new ways to reduce the footprint are either being tested, developed, evaluated,  or are being emplaced. Sadly, however, such positive developments hardly get the same high-profile media treatment as the problems and challenges (and there a number of them, of course) in the oil sands.

I would assume these notable gentlemen have adopted the said publicly stated positions out of ignorance or as a result of having themselves been recipients of incorrect information.

Either way it seems ironic that the latest energy outlook report from US Energy Information Administration shows from 2008 to the present the US has relied, on average,  on coal-generated power for about 20% of its energy needs. In fact in terms of ranking, energy from coal which is at least 28 times dirtier than energy from oil sands ranks as the number three source of power consumption by the US. Which has led National Post contributing author W.A. Dymond to remark: “…in point of fact, this would appear to be a case of ‘Old King coal calling the oil sands black’ (or blacker).”[bold-faced and italicized fonts supplied].

Please see, also, table below which I excerpted from US EIA report, and enhanced by two columns I supplied to show calculated average share in energy production and consumption, by source.

Source: US Energy Information Administration

Even more ironically, based on more recent and very reliable reports,  the US may have to even intensify its reliance on coal-generated power. The same report, which I will touch on in a more specific manner at a subsequent post, has also quoted reliable sources that Germany, a leading light in Europe and the Western world in the drive towards a desired global shift to green energy, will also increase reliance on coal-generated energy.

What gives? Are you kidding — more coal-fired energy production and consumption? Well, that’s Realpolitik for you, mixed with a healthy dose of Realekonomiks (if there is such a word, BTW).

Tough decisions, I suppose, propelled among others by nuclear scare emanating from the unfortunate Fukushima nuclear reactor incident. But choosing between coal and oil sands, on the basis of which one is clearly less dirty (or more clean), which one would you rather have?

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Let me pick up this particular thread of discussion at next post. In the meantime I would be happy to get any comments and reactions from you on the topic.

Thanks, and I hope for now you will at least remember to use “oil sands” (two words) as the correct term – conceptually and even grammatically.

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 A recent 450-page study shows why it makes economic sense for investors to choose Canadian upstream oil and gas. As Petroleum Economist recently reported, “Canada has
systematically and significantly improved the attractiveness of its upstream terms compared with the US over the last 15 years,…”.

The study, World Rating of Oil and Gas Terms: Volume 1- Rating of North American Oil and Gas Wells, is a joint undertaking by Van Meurs Corporation, PFC Energy, and Rodgers Oil and Gas Consulting. Barrows Company and Ernst & Young provided technical assistance.

 This particular volume provides data, analyses and insights, i.e., “detailed investor-favourability ratings of 188 fiscal systems for oil and gas wells in 10 Canadian provinces
and 25 US states.”

 The authors’ conclusion: Canadian fiscal systems as applied to upstream oil and gas are way more attractive to investors than those in the United States.

A paired analysis of fiscal regimes of the two countries’ prime producing jurisdictions, namely the province of Alberta (Canada) vis-à-vis the state of Texas (US), is
particularly revealing. To quote the report – “The gulf in difference between the two countries’ regimes is truly remarkable considering Canada is the exporter and the US the importer – with a desire to wean itself of expensive imports.”

 Sliding-scale Royalties vs. Flat-scale Royalties

The province of Alberta has adopted a royalty system that enables a producer to pay lower royalties when the price of the commodity is low and/or when production from the well is correspondingly low. This sliding-scale royalty system has proved very attractive to investors who are able to avail themselves of downward adjustment mechanisms. Thus the applicable royalty payments range from a low of 0% and a high of 40% for oil; and a  minimum of 5% to a maximum of 36% for gas.

 The state of Texas, on the other hand, has opted for a flat scale for royalties, typically 25%, regardless of commodity price and/or well production fluctuation.

 Severance or Production Taxation

Alberta has earned very high investor favourability ratings in terms of severance or production taxes: the province does not – repeat– does not have a severance tax; same is true for all other Canadian jurisdictions. Contrast this to the state of Texas which charges a 4.6% severance (or production) tax rate.

 Property Taxation

The other significant point of differentiation is property taxation where Alberta and the rest of Canadian jurisdictions only charge minimal property taxes; compare — the state of Texas levies a 2.5% property tax “ ..based on the net present value of the well, which fluctuates with oil and gas prices.”

 Corporate Income Taxation

 A more telling disparity is in terms of corporate income-tax rates: Canada has significantly made corporate taxes more palatable to investors such that from a typical 45% federal-provincial tax rate (1997) it is expected that by next year (2012) the federal-provincial tax rate will plummet to 25.5%.

 How about the US? Well, they are maintaining the average combined federal-state income tax rates at 38.5% — a difference of 13.0 percentile points. Proportionately (and roughly), this translates to doing business in Canadian upstream oil and gas cheaper by 34% compared to the US!

 Overall “Government-Take” Burden

 The bottom line is that when combined altogether – royalties plus severance or production taxes plus property taxes plus income taxes plus the minutiae of all other payments to different  levels of government concerned – the configuration of comparative fiscal regimes leads investors to  a widely disparate set of  Canadian vs. US total-government-take-burdens.

The study shows that even in terms of a simple arithmetic average the
divergence in total government-take-burdens is highly noticeable: 42% for oil
in Canada, vs. 65% in the US; 61% for natural gas in Canada; 79% in the US.

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 In an earlier blog I echoed Ezra Levant’s main points in making a case for Canadian oil (and gas) being the ethical choice.(See his book for a very comprehensive but engagingly readable discussion on the subject).

 Also, I had previously noted in two other posts (PLENTY OF OIL: 1.4 TRILLION BARRELS, AND COUNTING, and  Why Policy is Important to Global Energy
Supply Stability)  that in many instances  the “ situation-above-ground” (namely,”…peace-and-order situation, socio-political climate, and of course the obtaining policy and regulatory framework..”, etc.) could turn out to be the decisive factor to bringing petroleum reserves to actual production.

 Now we know a very important element of that policy and regulatory framework is the obtaining fiscal regime.

 And truth to tell, I believe ordinary investors would be strongly influenced by the fiscal system leading them to choose to operate in a business environment that offers a lower total-government-take-burden; the lower the burden, the higher the rate of return.

 I daresay, subject to being proven wrong, that between ethics and economics the ordinary investor is likely to choose the latter — if they cannot have both at the same time. My own wish, however, as seems to be the clamor of the nascent “Occupy Wall Street” popular movement (and its variants) is for investors (particularly rich investors)to be more ethics-minded.

Notwithstanding,  the study shows that because the total government-take-burden is lower in Canada the attractiveness of its upstream oil and gas investment opportunities is significantly greater than in the US.

 So here in Canada, arguably, investors have the best of both worlds: its
upstream oil and gas is definitely the ethical and economic choice, hands-down!

 Is there a downside to this attractive fiscal regime, especially from the perspective of ordinary Canadians – not necessarily oil-and-gas investing Canadians? I bet there is. Let me hear from you even as I prepare a follow-up post on the subject.

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From the release of geoSCOUT Version 1.0 in 1993 to geoSCOUT Version 3.1 at the end of 1999 we introduced over 70 major features or modules.  Between 2000 and June 2006 we released 17 versions of geoSCOUT with over 230 major features or modules.  From the release of Version 7.0 in July 2007 until today, we have released another 97 major features or modules including the complete revision of the Map Window in Version 7.  With Version 7.11, which was released this past Friday, there are another 17 major features and a complete module re-write.

A History of Innovation

• 1993 – geoSCOUT introduces the ability to save queries for re-use, reducing the amount of time it takes to acquire necessary information.
• 1996 – geoSCOUT adds  Decline Analysis, which also includes the ability to post the Decline Analysis chart into a Cross Section or map – making the creation of presentation quality materials a “snap.”
• 1997 – geoSCOUT begins providing fluid analysis data and develops a quick search option (GoTo) that allows you to quickly locate wells, pipelines, facilities, environmental incidents, fields, pools, strike areas, land agreements, units and municipalities, as well as user-defined locations. geoSCOUT also creates the ability to contour and post using your own CSV file as a source.
• 1999 – geoSCOUT adds the option to view and export facility data allowing you to perform additional analysis using other specialized tools.  geoSCOUT begins providing the option to store cross sections in separate folders.  This means that you can store the cross sections related to a specific Area of Interest (AOI) with all the other files related to that AOI, which makes it much easier to manage the information associated with that AOI
• 2000 – geoSCOUT creates a Measure Tool for the map, so our users can figure out distances and area coverages on screen rather than by printing a page and using a ruler and the scale bar
• 2001 – geoSCOUT incorporates a right click datum shortcut option to quickly set or change a cross section datum and develops the ability to import shapefiles into project maps allowing users to integrate GIS-ready data into their mapping projects
• 2002 – The option to import aerial photos and satellite imagery into geoSCOUT project maps is created, allowing users to integrate even more GIS-ready data into their mapping projects
• 2005 – geoSCOUT implements a user-defined print order, which makes it quick and easy to get a presentation quality map print-out
• 2006 – geoSCOUT integrates a direct connection to CS*Explorer, making it quick and easy to get access to the most current data in the CS*Explorer database without having to deal with clumsy import/export processes. In addition. geoSCOUT adds the ability to export maps and the associated data as  shapefiles, giving users the power to create GIS-ready data for use in other applications
• 2007 – geoSCOUT applies a layer manager which makes it quick and easy to arrange map components to see exactly what you need to in your project area – it also makes setting the user-defined print order even easier than it was before. This same year, geoSCOUT develops a scale-dependent feature display, ensuring map elements are easy to read at any scale
• 2008 – geoSCOUT begins providing fully integrated US directional surveys
• 2009 – geoSCOUT begins utilizing a Microsoft “Ribbon” interface, making it easier for users to navigate the software

Windows!

Of course, geoSCOUT has been a completely Windows-based program from the very beginning, so this is something we’ve had since 1993.

In fact, since 2009, geoSCOUT has been tested to meet all of the technical requirements to be Compatible with Windows ® 7 for both 32 and 64-bit versions of the operating system.

Heck, I’ve even run geoSCOUT on the Windows Developer Preview of Windows 8 (on a netbook tablet, yet!).

In addition, geoLOGIC is a Microsoft Gold Certified Partner and has achieved a Microsoft Competency in ISV/Software Solutions.

Onward!

Of course, we have not been standing still over the past 15+ years, and I do thank our competitors for their efforts in trying to catch up – it forces us to continue developing innovative solutions to the problems that industry brings to us.

Clearly, in this industry there are leaders and there are followers.  As the record shows, geoLOGIC truly is the innovative leader.

It’s certainly a tough transition, one that takes time to get used to. While you may acquire knowledge about the things you will be up against in the workplace, you will seldom experience exactly the situations you will be up against in the workplace – when your employment, reputation and salary are on the line.

One thing I am proud to say I get to be a part of is helping university students make the transition. How you ask? Well, by providing them direct access to the tools that they will encounter in the workplace, live and with the same training and support our corporate clients are accustomed to.

Since 2001, we have donated nearly $40 million dollars worth of software and data to educational institutions across Canada and the United States, to help make the transition from school to work a little less daunting, as well as to make students more readily employable.

We were recently provided the honor of entrance to the University of Western Canada’s prestigious 1878 Societies, reserved for donors making notable cumulative donations. For more on this honor please view the geoLOGIC and UNIVERSITY OF WESTERN ONTARIO Press Release.

We believe our company’s success comes from giving back to the community and supporting the development of individuals entering into our industry, and as such are committed to providing them with all of the tools we have to make their transition as seamless and successful as possible. We are proud to be able to give back in this manner.

If you would like to enquire about having geoSCOUT made available at your institution, please contact us at sales@geologic.com and we would be happy to get in touch with your school.

Had a good (or bad) experience with geoSCOUT or geoLOGIC at your university? Tell us about it!

Take care, and happy learning!

1.  Speed –> Timely data; it’s no good to know about a competitor well being abandoned after you have started drilling your own. You need to have that information when it comes off confidentiality and you need to trust that it will be there.
2.  Reliability –> Consistent data; now you see me, now you don’t. Great game if you are playing it as a 3 year old; not so much if you are an oil & gas knowledge worker.
3.  Quality –> Accurate data; we have all heard the folk tale of G&G staff spending anywhere from 1/3 to 2/3 of their time validating or finding data. Well, when you have an inherent built-in quality or trust level, then you move mentally from challenging the data to incorporating the data into the play.
4.  Engagement –> Full data; when a play is being worked on, the G&G staff must know that all components are available. Logs, Cores, Analysis, Tops, Tests, IP, Reserves, Seismic, Pipelines, etc.
5.  Innovation –> FACT based data; having all of the facts and then being able to challenge the status quo with sound information that is able to show opportunity.

Okay, we have defined a basic tenant around building up data quality. What’s the next step? Well, some review of existing websites is never a bad thing. It’s always easier to build on the shoulders of others than start from scratch. Sites or blogs that I like are:

•  http://dataroundtable.com –> a series of blog postings from IQ or information quality thought leaders
•  http://tensteps.gfalls.com –> a great site that has digital examples of what’s in her book, Executing Data Quality Projects. I have a copy of this book and it’s getting dog-eared. ‘Nuff said.
•  http://data-governance.blogspot.com –> Anything by Steve Sarsfield is gold. His latest articles on the root causes of data quality are great. As always, it’s easy to identify a problem, it’s harder to suggest a solution. And Steve does not shy away from providing solutions.
•  http://bardess.com/blog/?p=202 –> Yet another article on what bad data is and what it is costing your organization. What’s interesting about this one is the five key data standards mentioned; Completeness, Accuracy, Timeliness, Uniqueness and Consistency. They match up with what I put forward earlier (Full, Accurate, Consistent & Timely) except I am missing Uniqueness. Why? Well, being a data vendor, I know that we create that single record of the truth (well) and why would you go anywhere else for public data?

Data Quality, what does it mean to you?