SaskEnergy 'came close' to running out of natural gas last winter

This past winter was so brutally cold that the provinces natural gas supplier, SaskEnergy, was forced to cut back fuel to some industrial customers for the first time in its history.

A spokesperson for the provincial Crown corporation, Dave Burdeniuk, said the province came close to running out of gas.

We basically stared down Snowmaggedon," he told CBC Saskatchewan's iTeam.

Burdeniuk explained that the province's 26 storage caverns were pretty near empty" at one point as more gas was drawn during the winter than any other on record.

For up to six weeks some of Saskatchewans largest companies were denied part of their gas supply by SaskEnergys gas delivery subsidiary TransGas.

Burdeniuk says last winter was the coldestSaskEnergy ever expects this province to get.

We design for a one-in-thirty and we had a one-in-thirty winter," Burdeniuk said. "And that meant there was no spare capacity within the system."

Unpredictable weather is challenging

Saskatchewan was one of many jurisdictions across North America faced with a gas shortage this past winter.

For example, home owners inCalifornia were asked to cut back their use of electricity and some businesses in Ontario and Quebec were forced to cut back production.

Environment Canada meteorologist David Phillips said climate change is forcing corporations to rethink their approach to the weather.

The climate has changed so dramatically that its almost as if those planning tools that weve used in the past become no longer applicable, Phillips explained.

Nature is trying to tell us something," he added. "Its saying, Hey, its going to be wild out there and so youve gotta just change your whole strategy of having to deal with weather risk.'

Phillips pointed out this winter was one of the coldest on record and no one saw it coming.

I think its almost as if you cant count on the weather anymore, Phillips said. Its almost like a joker in the weather deck. And sometimes you pull that joker.

Interruptible gas flows interrupted

For the first time ever in Saskatchewan interruptible gas was interrupted on a wide scale.

Many large industrial corporations rely on a mix of firm gas supply which is guaranteed and interruptible, which comes at a lower price and higher risk. It can be cut off if the supplier is running low.

In Saskatchewan, 99.5 per cent of fuel moved by TransGas is firm. The rest is interruptible and is delivered to 37 businesses in the province.

Since SaskEnergy has been in existence, you havent had to curtail interruptible, Burdeniuk explained. There have been small, interruptible curtailments, maybe because of a maintenance issue or a small regional issue, but never have you had to take an entire region.

But this winter was different.Heres what happened:

• Jan. 6 - 26: Interruptible gas was cut to companies in the northern region of Saskatchewan, which includes Saskatoon.
• Feb. 24 - Mar. 11: Interruptible gas was cut off for the entire province, northern and southern regions. The south was restored on Mar. 11. The north was restored Mar. 18.

Most of the affected industrial customers rely on a mix of firm and interruptible supply, so they were able to make adjustments. Five of those companies rely entirely on interruptible.

In those cases, Burdeniuk said TransGas provided enough fuel so the customers' facilities wouldnt be damaged.

CBC's iTeam contacted a number of large industrial companies who use natural gas in significant volumes. None were willing to discuss the topic, on the record.

An expert in strategic management and the environment, the University of Calgarys Bob Schultz, told CBC News that most industrial companies opt for stability when it comes to key inputs, choosing a more expensive and more reliable energy supply. Some, however, attempt to save money.

"They got bit this time," Schultz said of those who went with an interruptible supply. "Thats what happens when Father Winter shows up and bites.

Brutal weekend creates near crisis

Things really came to a head for SaskEnergy during a record-breaking cold snap that hit the province on the weekend of Mar. 1 - 2.

During that two-day period, for SaskEnergy employees, the bitter cold meant it was all hands on deck" in order to ensure service to its residential customers continued.

You had everyone who had any role within the company working, [they were] working long hours, Burdeniuk said. You had people really rallying.

Technicians had to press old equipment into service that hadnt been used for some time, including compressors from the 1950s and 1960s.

We had four major industrial customers that did say We can do some adjustments."- Dave Burdeniuk

Other workers spent a night sleeping over at power stations in order to ensure nothing failed in the middle of the night.

The company even approached some large industrial customers and asked if they would voluntarily cut back their firm natural gas supply if the cold snap dragged on.

We had four major industrial customers that did say We can do some adjustments, Burdeniuk recalled.

SaskEnergy preparing for next winter

While next winter is still months away, the timelines are tight for SaskEnergy to get all of its preparations completed.

"We have to prepare for the worst," Burdeniuk said. "We have to prepare that. This winter that we just went through could be repeated and maybe were in a cycle for the next five years

Weather guru Phillips says that is the right way to think about the future of weather.

Weve grown up on this fact that the past is a guide to the future [but] the past is no longer a guide to the future," according to Phillips. "The new future is: expect more wildness.

Its not just the weather thats pushing SaskEnergy to act quickly.

Schultz points out that Saskatchewans booming economy is adding more demand for energy supplies to new or expanding industries. Demand that was not predicted in plans made a decade ago.

The demand was higher than what people thought it was going to be 10 years ago, Schultz explained.

The Saskatchewan economy has actually done really well," he added. "Housing prices have gone up. Thats the good news. The bad news is if you get a [harsh] winter, youre a lot more likely to run short on gas and thats kind of what happened.

Burdeniuk told CBCs iTeam the Crown corporation is taking a number of steps to ensure the province never again gets so close to running out of gas, including:

• As soon as temperatures warmed in the spring, SaskEnergy began a 200-day long process of refilling its 26 nearly empty storage caverns.
• The company expects to spend a record $100 million this year maintaining or upgrading gas systems.
• Five new mobile compressors are on order, machines which will allow SaskEnergy to quickly move gas around the province in the event of a crisis.
• Construction is underway for a new 130-kilometre natural gas pipeline for West-Central Saskatchewan, known at theBayhurst to Rosetown line, which is expected to be completed by the end of summer.
• Public meetings are being held about a proposed gas pipeline planned for 2015 to service the Saskatoon area.

Schultz said he figures SaskEnergy is not alone is learning a few lessons about the impact of a harsh winter. He said many natural gas users will likely be reviewing how they buy natural gas.

The fundamental issue here is whats going to happen next year and the year after," he said. "And I expect more companies will pay a little more to have a more secure supply of gas."