The last eight years have not been easy for Alberta’s energy industry. From the plummeting price of oil to antagonistic government policies to negative popular opinion to the COVID-19 pandemic, oil and gas companies have had to cope with enormous, unpredictable and volatile challenges unlike ever before. For many, it has proved too much. For others, surviving through the dark times – by whatever means – has meant thriving on the other side.
So is the case with SECURE Energy, a Calgary-based energy services company. Founded in 2007 (about a year before WTI peaked at $99.06), SECURE started out as a midstream infrastructure services company with 10 employees, including current CEO Rene Amirault, who still holds the post. Its first project was an oilfield landfill south of Grande Prairie.
Today it has over 2,100 employees and roughly 70 per cent of the business remains in midstream infrastructure. The other 30 per cent is in the environmental and fluids management business. Last March, SECURE completed a merger with Tervita Corporation, predicting a significant estimated annual integration cost savings of at least $75 million within 12 to 18 months of closing.
In December, SECURE was added to the S&P/TSX Composite Index, the flagship index of the Canadian stock market which tracks the performance of the largest companies listed on the Toronto Stock Exchange and serves as a benchmark for the performance of Canadian equities.
“Every month the business seems to get stronger, better,” Amirault confirms. “Our customers on the energy side are very focused on disciplined growth and we are focused on lowering the cost structure, even in light of major inflationary pressures, becoming more efficient and lowering our emissions to ultimately have a higher ESG score.”
The higher price of oil has, of course, helped a lot. “A more fair and reasonable price for oil and natural gas (which drives a lot of the industry west of Edmonton) is important,” Amirault concurs. “I think both are now being priced at a more reasonable and fair price for both the consumer and the producer. And I think there’s a common understanding around the world that too high of a commodity price is a bad thing but too low is also a bad thing.”
The optimum – Goldilocks – price is one, he says, where all parties (producers and consumers) are comfortable and where energy security can be ensured over the next 20 to 30 years.
Larger market capitalization with liquidity and access to capital is also very important, hence the merger with Tervita. “Part of the reason to put the two companies together was to drive efficiencies, but the other part was access capital and liquidity for our shareholders,” Amirault explains. “Entering into the TSX Index helps everybody because a lot of money now goes into passive funds that invest in indexes, as opposed to individual companies. So it’s important for our shareholders.”
“Both boards recognized that together we would be stronger than two smaller companies,” he continues. “And ultimately if we’re going to drive down the cost structure for our customers, we have to be more efficient. So far, we’re well on our way to achieving that $75 million a year in efficiencies.”
SECURE’s midstream infrastructure business is focused on helping its customers safely process and transport water and oil. Most of its processing facilities are in that division, ranging from North Dakota all the way to Fort Nelson. “It’s quite an extensive network,” Amirault says. “Ninety-five per cent of our customers are oil and gas companies. The top 10 producers in Western Canada would be our top 15 customers.”
The environmental and fluids management division performs remediation and reclamation work – cleaning up environmental liabilities – and includes metal and water recycling. “About half of the revenue in that business unit comes from industrial sources,” he notes. “We have operations in Vancouver, Winnipeg, all over Western Canada. They’re non-energy.”
As an environmental company, SECURE takes its commitment to ESG metrics very seriously. “We do a ton of water recycling and metal recycling,” Amirault says. “We’re extracting hydrocarbons out of the waste. We’re taking trucks off the road by putting in gathering pipelines so that we not only reduce emissions but we make it safer. We’re doing a lot of automation and energy efficiencies at our facilities so that we use less energy and are ultimately less carbon intense. Then we’re looking into the future: wind, solar, carbon capture.”
Safety is the top priority for the company and so is Indigenous relationships. SECURE has over 12 partnerships across Western Canada with First Nations groups. “We want them to be meaningful partners,” he says. “We want them side by side with us as we take on new projects and opportunities. And we want to show these partnerships to our customers, so they can see this is a better solution, a better way to do business.”
The focus for 2022 is to optimize what SECURE has and gain greater efficiencies, Amirault explains, and to work with customers to advance some of the ESG projects. The effort to build gathering lines in order to replace truck transportation with pipelines will also continue. “There may also be some expansions to our existing facilities,” Amirault adds.
One big issue SECURE faces is the available labour for industry to continue to grow. In order to add more drilling rigs, frac crews and construct new pipelines, workers are needed. “There’s a shortage,” he says, “so that’s a big issue for a lot of companies. And that will feed itself into inflation, by wages going up. Wages are anywhere from four to five times higher in the last 12 months.”
When it comes to industry-wide issues, he laments the fact that the rest of Canada and the world don’t realize that the Canadian oil and gas industry has the best ESG standards in the world: “That’s an issue for us. So I think you’re going to see this year a lot more involvement by my fellow CEOs to get the word out that Canada is head and shoulders ahead on every metric than everyone else in the industry, and we still want to get better. We’re not resting on our laurels.”
He’s confident that some of the pipeline egress issues are being solved but notes an LNG export terminal should already be up and running today. “It’s being built, so that gives us optimism,” he notes.
“There’s just so much more that Canadians could do to lower CO2 emissions around the world,” Amirault opines. “So every Canadian should be trying to become the biggest cheerleader of the industry. To make sure that Canadian energy gets exported around the world because it’s got the highest ESG standards.”
A survivor to be sure, SECURE, under Amirault’s leadership, has many reasons to look up in 2022. Perhaps the years of misfortune are behind it and the industry, but then, perhaps they’re not. Either way, SECURE has demonstrated the ability to withstand very difficult times. When the good times do arrive, it will be set.
