Darcy Spady, the 2018 SPE president, is the first Canadian to have been elected to this position. Spady, who works with Calgary-based Broadview Energy, has been an active SPE member since graduating from university. Most recently, he served on the SPE International Board as regional director for Canada; he is also a member of the Vancouver and Calgary sections. Spady has held officer positions in the Calgary, Illinois Basin, and Appalachian sections. In 2012, he won a Regional Service Award for his work in the Canada region.
Spady has an extensive background in the natural gas, oil, and heavy oil segments of the industry, having worked a decade for Schlumberger across North America in its wireline and pressure pumping segments, as well as with Columbia Natural Resources/Triana Energy group in the Appalachians, and Atlantic Canada. He has also served as CEO of Calgary-based Contact Exploration and more recently as head of sales for Sanjel Corporation.
He is an active independent director, serving as board chairman for Green Imaging Technologies, Crestwynd Exploration, and as a board member of MNP Petroleum. He previously served on the boards of Edge Resources, Contact Exploration, Guildhall Minerals, and Poplar Point Exploration. Spady holds a BS degree in petroleum engineering from the University of Alberta.
What are the main goals you would like to accomplish?
I have five main goals:
The first one is revising the SPE Strategic Plan, which has not been updated in 5 years, and which charts the course of SPE. Times have changed dramatically, and it is a different industry and a different SPE.
The second comes from my background in the industry and the company I am with, Broadview Energy. I have a special interest in heavy oil technology and would like to promote the importance of that.
The third goal is something I have been talking about in the past year since I was nominated: the importance of increasing awareness about the need for community consensus and corporate social responsibility. Previous SPE presidents have talked about it, but my flavor is a little different. I am actually a farmer and do field work around wellheads, so I look at the issue from a landowner point of view.
The fourth is to ensure that SPE’s new sections and sections that may be in remote areas receive the same quality of programs and services that the larger, better-established sections receive. I think equality in what SPE delivers is very important. We need to grow equitably in a global sense as well, making sure we are a diverse organization that reflects our membership.
The fifth is to represent and support the independent and small producers around the world. My experience on the producer side has been with small companies, and I sit at some board tables with small companies, so I feel an obligation to ensure better attention from SPE to this group.
How can SPE promote community consensus?
We need to continue to increase awareness of the importance of community consensus and turn that back to the individual member. How can “I” be a better SPE member? Number 1, think of what you are doing to others—the old golden rule. Look in the mirror and be the best possible corporate citizen you can be, as if you were the user of your products or services or engineering. Number 2, be better technically. Both of those things fit completely back into community awareness and the idea of social responsibility.
I spend many hours in the spring and the fall on the seat of a tractor or combine, and have wells and pipelines on the land that I work. So as I am driving over a pipeline or nearby a well, I think, ‘Okay, how do we as an industry treat the blade of grass, the moose, the fish that is next to our operations and have we forgotten that little guy in the process?’ If I were an engineer with 5 years of experience, how would I design a pipeline or wellhead or what type of drilling string would I use and how would that impact the environment? Our industry has moved to such a technical area of expertise that sometimes we forget we are partners with people and nature. Every now and then, in the more traditional oil and gas areas, we are surprised when folks stand up with placards protesting what we do; we think we have done a great job but we have failed to talk to the community and let them be part of the process.
Recently, I was in Surgut in Siberia and Surgutneftegas is the big oil company there. The oil industry staff work in Surgut, they live in Surgut, their dachas, their summer homes, are on the outskirts of Surgut, and all the wells are nearby. I think this is a great example of people who live, work, think, and understand what the industry does and how it affects the environment around us. In many places, there is a corporate decision maker, say, in Houston or London or Calgary, and the field they are in charge of might be hundreds or thousands of kilometers away. Sometimes we isolate ourselves in our little glass towers and don’t ever think about that farmer, fish, blade of grass in our day-to-day work. Maybe we need a moment of silence at the coffee pot every morning and every afternoon to think about how what we do affects people. We have safety moments—why not a community moment?
Regarding the SPE strategic plan: to the average member, what is its importance?
SPE has not done one in 5 years and industry conditions have changed dramatically. Put yourself back 5 years ago: SPE was in growth mode, adding new programs and services, and the oil price was $100/bbl. Contrast that to today where oil is at $40–50/bbl. Prioritization of staff time and prioritization of program spending has become critical, and members have strong opinions about whether SPE is serving the right areas. So the strategic plan amounts to efficiency planning in a down market, and planning our programs and services in a way that best serves our membership. The plan should be rolled out in early 2018.
How has the downturn affected SPE?
Membership retention has been solid, which signals that SPE remains of great value to our members. On the other side, the downturn has been tough from a services-provided point of view. SPE did a very good job of quickly reacting to the downturn, but we have had to make tough decisions at the board level and SPE staff was reduced, which was very difficult.
In mid-2014, SPE management put out a document titled, “What do we do at SPE if oil hits $60/bbl?” And I would like to highlight the fact that SPE was at least 6 months ahead of most of the industry on that. I put that document on the side table in my office, and people came in and looked at it and had a funny look on their face like, could it be that oil could fall to $60? But SPE was proactive in being ready for the downturn, much more than a lot of oil companies and service companies. So membership wasn’t hit that hard, and we were quick to carefully and strategically cut costs. So we have thus far weathered the downturn well.
One thing that has changed over the past several years is SPE’s demographics. How will that affect SPE and the types of programs and services it offers?
The Great Crew Change is over, and how it will affect us is that the younger generation is more involved in SPE, which is awesome! This change, which is throughout the industry, means that a younger group is part of the decision making and they are the future.
The geographic demographic is really fascinating because the Western petroleum countries are increasingly under a magnifying glass; there are protests about resource industries in countries that we would not have expected. But the “newer” countries involved in oil and gas are rushing ahead with the understanding that the world needs hydrocarbons and technology is going to quadruple in hydrocarbon-extraction industries, and they are proudly embracing the future. That shift will change the demographic of the industry and will affect SPE as well. The fact that we now have more than 20 SPE sections in Russia, growing rapidly and embracing SPE and new technology, says something very strong to me.
One thing we certainly are in this industry is cyclical. We should never be surprised even though every single time we are. This is a resource industry and that is inherently the way resource industries go. Thank goodness we have both national oil companies and forward-thinking companies that balance the publicly traded ones that have a very short window. This industry will see more downturns, although this one has been particularly steep. But we have weathered it and that means we have younger incoming decision makers in the industry now but that excites me. That doesn’t scare me in the least.
What is your current position in the industry?
I am a managing director at Broadview Energy Asset Management in Calgary, a small, independent, private oil and gas producer, where I run the energy asset management part of the company, doing third-party consulting work from the framework of a heavy oil producer, not a third-party consultant. Broadview has been around since 2011 and I was one of the initial shareholders of the company and rejoined them about a year and a half ago. Broadview’s primary area has been producing in western Canada, in Alberta and Saskatchewan, but we have developed and sold one heavy oil prospect in Saskatchewan and we are now working full speed ahead on a second small footprint SAGD project in Saskatchewan.
I also sit on corporate boards, including Green Imaging Technologies, Crestwynd Exploration, and MNP Petroleum. Green Imaging specializes in cutting-edge nuclear magnetic resonance imaging for special core analysis, which is valuable in reservoir characterization. By sitting on boards and doing advisory work, it allows me to be a consensus builder. And that is what I will try to do at the SPE international level.
How did you get involved in SPE?
Ironically, my first SPE card said that I was a member of the non-section section. So I had no privilege and no rights and no section, because at the time the Canadian Institute of Mining (CIM) was the owner of the space in Canada parallel to the American Institute of Mining, Metallurgical, and Petroleum Engineers (AIME), which was SPE’s original parent organization. I joined in 1976 as a member of the non-section section based in Alberta. I had just graduated with a degree in petroleum engineering, oil was $9.80 a barrel, my future was bleak, and I had the warm hug of not even being part of a section.
One person influential to me was S.M. Farouq Ali, who has won many SPE awards and was a key professor when I was at the University of Alberta. He signed me and other students up as SPE members upon graduation, and he and a number of us started the SPE Edmonton Section a few years later.
I joined Schlumberger Wireline and worked in various places in western Canada, and eventually wound up in Mount Carmel, Illinois, which was part of the old Illinois Basin. There was a small section there and I was asked to become the section chair. This was my start in getting involved in SPE.
After transferring to Charleston, West Virginia, I joined the Appalachian Section board, and then one day, because I was the publicity chair on the board, spent the day with this Italian guy who happened to be SPE president (2005 SPE President Giovanni Paccaloni). It changed my life! I came away thinking, “Wow, this is a really big organization and it’s really international. I’ve now been on the board of the Edmonton, Mount Carmel, and Appalachian sections, this is really neat.”
Because of a slowdown at our company, I had time to write my first technical paper, on coiled tubing, which was later referenced in other technical papers. So for the young SPE members out there, if work is slow or you want to influence a promotion or be known technically, don’t just think of SPE as a place to socialize. Get involved on the technical side. Write a paper. Present a paper. That teaches all kinds of skills, from presentation and editing to good writing. And these papers, if written early in your career, can spawn into multiple papers because they are referenced.
So here I was stuck in this pre-shale environment, with not-so-great oil prices, wondering where on Earth I’d be working next. Things were not good from a career point of view, but from an SPE point of view, they were great.
In 2005, Chesapeake came and bought our little company, and I moved back to Calgary. We had just sold 8,000 shale wells and the industry thought we were geniuses because shale was so popular. I became chair of the Calgary Section and eventually became the Canadian Regional Director on the SPE International Board and then was nominated for SPE president. Half my career has been on the service company side and half my career on the small operator side, so I represent a large part of the SPE membership in that regard. I hope I can represent the average member who may not know if their job is going to be there next year, who isn’t sure which way is up or down, and needs SPE to provide them with the best technical information.
Mine is a bit of a story of hope. Every time I turned the corner there was hope, and a lot of the hope came from participating in SPE.
As you talk to members around the world, both professionals and students, what issues are they most concerned about?
The first thing that comes to mind is that a lot of people are unsure about the future direction of the industry because of oil prices. Most technical people, younger members especially, know that there are years and years of need on the hydrocarbon consumption side and it is a matter of keeping the technology ahead of the need. So there is a lot of optimism about the long-term existence of our industry. But the oil price is always at the forefront of everybody’s thoughts.
One thing that is pleasantly surprising is how engaged our members are over this theme of community consensus and corporate social responsibility. It is now part of the DNA of our industry. I’ll quote Prime Minister Trudeau, who said that Canadians will “no longer choose anymore between economy and environment.” That message is now global. It is not a matter of choosing economy or environment, we now choose both. We are in an era in which the public is going to watch our environmental habits as much as our economic successes.