Home Top News Energy Construction The Transforming Energy Construction Sector

The Transforming Energy Construction Sector

The energy construction bottom line

Strike Group

In life, as in business, nostalgia is often a distant glance into the rearview mirror.

For generations, energy construction, especially in Alberta, usually meant oil derrick/sucker rod pumps dotting the horizon of gaping fields. And Jurassic draglines and bucketwheels, which eventually made way for cheaper and more efficient giant shovels, bulldozers and colossal trucks working in the oil sands. Eventually, energy construction morphed into massive machines trenching and laying enormous stretches of pipeline.

Times change. Trends change. Transformational and rising demands, emerging energy needs and the never-ending regulatory changes.

The energy sector diversified, and the energy industry transformed. Techniques changed. And energy construction changed, often dramatically.

Experts in the tremendously diversified, and diversifying, energy sector sing the chorus that Alberta’s (and the world’s) energy market is continually changing. Industrial construction is used in nearly every industry, from road and maintenance to building, bridge and forestry. That means that it will also play an enormous role in the changes that are coming to the energy industry.

The International Energy Agency projects the rapid growth of renewables, with solar at the centre of this new constellation of electricity generation technologies. Hydropower remains the largest renewable source of electricity, but solar is the main driver of growth, as it sets new records for deployment, followed closely by onshore and offshore wind.

Specifically in Alberta, a province that has been known for fossil fuels, where the southern part is seeing a shift as renewables become more of a player in energy production.

Industry insiders offer the disclaimer that the changes don’t necessarily signal a matter of hydrocarbons vs. renewables, against one another. Rather, it’s about all the available forms of energy and how they can complement one another in the context where Canada is transitioning to a lower carbon economy.

As energy choices are in-transition, the industry explains that energy construction is also in-transition. When the experts and insiders now talk about energy construction, the references usually cite shoptalk like renewable energy, the internet of energy, energy storage, blockchain, demand side management.

The highest profile changes, thanks to a tsunami of technical advancements, is the gradual shift away from traditional fossil fuel power, toward newer, greener and renewable alternatives. Technological advancement will continue to both shape and disrupt the energy industry, and, like dominos, impact the energy construction sector.

The cost of solar installation, for example, is continuing to drop as technology advances and becomes more readily available.

Sprawling wind farms, massive solar energy operations, geothermal projects, waste heat recovery facilities and power transmission projects.

Rows upon rows of solar panels stretch across 23 quarter sections of Alberta’s Vulcan County fields for the massive Travers Solar Project, the largest of its kind in Canada, blanketing a staggering 3,330 acres.

The drumbeats usually credit or blame “climate change” and “sustainability.” But the practical realities show that most industries, particularly the energy construction sector, need to adapt and embrace the gamut of energy production and demand.

Particularly in Western Canada, the future of oil and natural gas lies in unconventional resources, such as oil sands and shale gas, or in remote Arctic and offshore supplies.

With so many changes in today and tomorrow’s energy demands and impacting energy production, the energy sector, and particularly energy construction, also charts a course of significant changes. Calgary’s Strike Group is a dynamic example.

“With strong commodity prices, Strike’s core business of upstream, midstream and downstream oil and gas construction and maintenance has a strong outlook,” says the plugged-in and respected Tyler Pawsey, president and COO of the Calgary-based Strike Group, providing energy and industrial construction and maintenance services across the largest geographical area in Canada.

“However, energy transition and GHG emission reduction projects like carbon capture, bioenergy, geothermal, solar, wind and hydrogen are paving the way for future growth. I would classify the level of activity as steady, with a reasonable amount of optimism.”

From downstream oil to windfarms as far as the eye can see, and other conventional and renewable supply and demands, energy construction companies must now pick their focus and strategize about not only what to build, but where to build and when to build. The energy construction process gets more sophisticated but also more complicated.

The expectation from energy construction is often for turnkey solutions for the renewable energy sector, managing massive projects from the permitting stages, environmental baseline studies, stakeholder and public consultations, state-of-the-art design and design management services, all the way to major equipment specification and procurement and full operating phases.

For the Strike Group, new energy demands translate into busy times and loaded schedules. Strike has significantly expanded its integrity program services by over 700 per cent in the last 18 months.

Pawsey points out that pipeline integrity and maintenance provide Strike customers with protection and assurance against aging assets.

“And, in addition, as Canada enters the LNG market, Strike is planning to be an active participant, by leveraging its substantial experience with gas compression. As a prime / general contractor, the company has successfully installed over 300 MWs of compression power to Alberta’s midstream gas infrastructure.”

Despite all the industry changes, and since energy construction has similar speedbumps and challenges as conventional construction, for the business of energy construction, the bottom line still rules.

“Many companies are still focused on improving their balance sheet,” Pawsey notes. “Capital spending is growing but at a moderate pace. I believe the industry has learned from previous cycles and is approaching the upswing we are currenting experiencing with more restrained and balanced focus.”

One key difference which sets the energy construction sector apart from commercial and residential construction, is the availability of skilled labour. While it is a continuing big challenge for conventional construction, for various reasons, it does not seem to be such a big problem in the energy construction sector.

“Labour shortages have improved since this time last year,” he says. “Wages seem to have levelled off and are remaining competitive. Recruitment and retention are critical HR functions that have an enormous impact to the business.

“And no doubt about it. Companies must find ways to differentiate themselves beyond pay rates including flexible shift schedules, remote working options, benefit packages, development and training, opportunities for advancement, and most importantly company culture.”

Despite the increased demands and the diversification and growth in the energy industry, the energy construction is busy and getting busier.

“Specifically at Strike, we see the remainder of 2023 as staying at consistent levels. Many of the larger projects we are pursuing actually start in 2024 and beyond. So, this may be the calm before the storm.

All things considered, the future for energy constructions seems positive, although there is no energy construction ball.

“A provincial election looms around the corner, and that could introduce some uncertainty and hesitation,” Tyler Pawsey adds with informal speculation and optimism.

“I believe all political parties in Alberta must realize the enormous impact a healthy energy sector – all forms of energy – plays in our ability to be fiscally responsible, while ensuring we are providing the right social services to support our communities.”