Thank you very much.
Good day, and thank you for the opportunity to present to the committee.
My name is Mark Salkeld. As mentioned, I am the president and CEO of the Petroleum Services Association of Canada. PSAC is a national trade association representing the service, supply, and manufacturing sectors within the upstream petroleum service industry. We represent a diverse range of almost 260 member companies employing more than 65,000 employees and contracting almost exclusively to oil and gas exploration and production companies.
PSAC member companies represent over 80% of the business volume generated in the petroleum services industry. Our members cover 17 subsectors in the oil field services sector.
As mentioned, I am joined by two colleagues, Mr. Wally Kozak of Calfrac Well Services and Mr. Mark Bentsen of Cathedral Energy Services, who are experts in the fields of hydraulic fracturing and directional drilling respectively. Mr. Kozak is also chair of the Canadian Society for Unconventional Resources.
We appreciate the opportunity to speak to you today about a few of the technologies being deployed by Canada's oil and gas service industry. These very significant technologies have allowed a major resurgence in oil and gas resource development for Canada and for North America as a whole.
The oil field service sector in Canada is relatively young. It was just 60 to 70 years ago that hydrocarbon resources were discovered in significant quantities, owing to American-based producers bringing rigs and related services from the U.S. to wildcat wells in the Canadian west. Since then, the Canadian oil field services sector has evolved from steam-powered cable tool rigs to AC electric rigs controlled by programmable logic controllers and variable frequency drives. This is just in reference to the rigs.
There are now vast fleets of equipment deployed in the drilling and completion of oil and gas wells. The complexity of the wells and the drilling activity requires constant innovation, and Canada's petroleum services industry has become exceptionally specialized, which is a reflection of the technology innovation that is positioning many of our members as global leaders.
In 2009, just 36 of PSAC's Canadian-owned and Canadian-operated member companies, based in Canada and paying federal and provincial taxes, generated $12.8 billion in export revenues from energy services knowledge, technology, and manufacturing sales around the world. This is a significant factor for the increasing interest by foreign investors to tap into the technology we are developing, testing, and proving effective here, which can easily be adapted to work anywhere in the world.
Another significant underpinning of Canadian oil field innovation is the ever-increasing efforts and collaboration between the producers and the service providers. Well sites become the laboratories, and a recent report from the Standing Senate Committee on Energy, the Environment, and Natural Resources acknowledges that current measurement of R and D activity does not fully capture an estimated additional $1 billion spent annually by energy companies in their labs and in field experiments. Much of that activity is undertaken through collaborative efforts between service companies and the producers, because oil and gas wells do essentially become the testing grounds.
Earlier days saw producers spending a large amount of money on R and D internally or through academic institutions. This still occurs today, but so too do the ever-increasing efforts in R and D by PSAC member companies in their own labs and facilities as well as in the field on live wells. The technology behind the ever-increasing accuracy and real-time downhole data being provided to our customers is also supported through seismic data, an example of which is that when these two data sources—seismic and downhole readings—are combined and processed by geologists and petroleum engineers through computer simulation, you have a service that is as close to leading edge as you can get.
For instance, I am aware of at least five big screens housed by producers and PSAC member companies in their Calgary offices. Imagine a theatre-style arrangement where producers and PSAC member companies can witness three-dimensional and holographic imaging as technicians don special gear that allows them to virtually walk through a customer's formation 3,000 metres below the surface of the earth and position the drilling tools in the most optimal position for maximum production.
Once the well is designed, the drill bit can be steered from downtown Calgary offices by highly trained people skilled at directional drilling, with real-time downhole data communicated live to and from the rig in, for example, northeastern British Columbia. Directional drilling technology, in conjunction with other service technologies, continues to expand at a fast pace. The continuous buildup of computing power on downhole directional tools, as well as the expansion of sensor packages, is allowing us to develop real-time pictures of what is going on downhole.
The technology being provided to our customers today has significantly lowered surface environmental impact while increasing subsurface exposure to producing formations. The well site today can be home to multiple wells, drilled in relatively close proximity on surface, while reaching ever-increasing areas below the ground. The technology implemented to steer the bit into the optimal position, in conjunction with vastly improved real-time data readouts from downhole and seismicity recordings, allows for extremely accurate hydraulic fracturing stimulation and tracking in predetermined stages.
A third technological advancement I would like to point out today is with regard to wellbore integrity. The wells we are delivering to our customers today are thousands of meters below the surface, under layers of solid rock. Canadian service companies that cement these wells, like every other aspect of our industry, are highly regulated to standards that are—
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