Ron Vermeulen, Founder & Advisory Board Member, LandSolutions LP
The Land Profession Has So Much More to Offer
Since moving into retirement mode from the land industry, I have often thought about what the land business and the discipline itself has done for me personally. I truly believe that being a landman and having started my own business has helped shape my personality and provided me with skills that help me in all aspects of my life. In business, my personal life and especially when I travel to sometimes off the beaten path type places, flexibility and resourcefulness as well as some aspect of leadership skills has helped me get through difficult situations and I attribute those special skills to my career in land. With that in mind, I am convinced that those of us that can change our approach taking into consideration the personality we are dealing with or the specific situation we are in will have greater success than those that approach all people, situations and even challenges the same way with no deviation.
As professionals, I feel we need to approach our business and industry and the potential opportunities in the same way. We need to adapt and be actively involved with changes that are happening in the energy industry especially.
When I first founded LandSolutions in the year 2000, I saw an opportunity to provide land services with a different approach having worked “in-house”. Whether viewed as entrepreneurial or opportunistic it was really just recognizing a need with respect to a changing industry environment that I felt was not being addressed. I saw an opportunity to provide a service using a broad understanding of oil and gas development gained from working for major oil and gas companies. Our company focused on land acquisition services of course but also on how the work was being done and how the service we provided in land could contribute to a greater extent. We offered a service to our clients that could help recover costs, create greater efficiencies for them, lower G&A and reduce cycle time which was well received.
Making the change to the service side also provided an opportunity to adapt to the highs and lows associated with our industry. Establishing a bench of seasoned individuals to provide Acquisition and Divestiture services for example was a way to adapt to the changes in workloads and have a service that was often needed in times of both high and lower commodity prices. This ensured employment for many of our staff especially on the administration side of the business.
In the early 2000’s when natural gas prices were high, and most service providers were focused on that part of the industry, our company was approached to provide land acquisition services for wind energy projects. We saw this as an opportunity to diversify and expand our service offering. Oil and gas related companies like Shell, Suncor, TCPL, Enbridge, and AltaGas just to name a few, were investing capital into the renewable sector which validated the idea of renewables complimenting oil and gas and not being a competitor to it. This also diversified our business and provided additional employment. To date we have been involved with well over a 150 wind projects alone from optioning lands to due diligence work through to the development and commissioning of operating wind farms. We have expanded to solar as well as geothermal and in all cases, we use our expertise gained from oil and gas and apply that knowledge to these other growth industries.
In early November 2018, the National Energy Board (NEB) announced their forecasts whereby over the next 20 years, oil and gas production will continue to grow but so will renewable sources of electricity to a great extent. This is mainly because of population growth even as we all learn to use less energy. While we in Canada continue to be world leaders in the ethical and environmentally conscious development of our oil and gas resources, we also need to make way for other forms of energy that will be developed in parallel with oil and gas.
This leads me to the opportunity for the land industry which has the ability to add a great deal of value to the renewables sector. Our professional land associations especially have a proud history and a proven track record of working with regulators to create efficiencies along with professional approaches and excellent precedence documents and processes when developing our resources. We have established relationships where the regulators often come to us for input. There is still a great deal of opportunity to assist of which I am convinced would be welcomed. Land negotiators, administration and contracts professionals have skills that are fully transferable to renewables.
Case in point. Acquisition of land for possible wind development is not unlike acquiring proprietary rights for minerals. Surface Land or Option to lease agreements are acquired from landowners which allow for the preliminary steps in a renewable project’s lifecycle, including the measurement of a viable wind resource and collecting geotechnical information which would ultimately lead to surface lease agreements for wind farm development. Contiguous parcels of land are required, testing is completed, royalties negotiated, and leases need to be paid. Land Negotiators are critical to contract review with both Developers and Landowners, to support Acquisition and Divestitures, Joint operating agreements and to provide strategic advice to optimize windfarm design and layouts and the list goes on. Think of the excellent work done in oil and gas with respect to land systems that could take care of these agreements and tie it all to accounting databases to ensure commitments are made. International companies are coming to Canada and Alberta especially without any prior local knowledge or expertise in energy development and knowledge of the already established precedence in place as far as land related agreements relative to oil and gas that could be leveraged.
Foreign developers have been taking notice of our wind resource for a few years now. American as well as domestic developers are hiring local corporate Real Estate lawyers who are not versed in energy development on agricultural land. Often surface agreements for wind are onerous because of project financing rules. It is intimidating and onerous when landowners are sometimes handed a 70 plus page surface lease agreement that is meant to satisfy the wind developer’s financier. In Alberta especially, there is no requirement to have licensed professionals under the Land Agent’s Licensing Act to acquire large tracts of land for this type of development ensuring ethical and professional dealings with landowners.
The increasingly competitive environment in the renewable energy industry has strengthened the need for qualified land professionals. Like many jurisdictions, Alberta recently experienced a highly charged, government driven renewable energy procurement program that required effective land negotiation skills and expertise to satisfy RFP (Request For Proposal) application processes. There are so many opportunities not just in Alberta but Canada wide to offer up our expertise to create value through precedent agreements and standard processes. The value of relationship building for any renewable project cannot be underemphasized.
Relative to solar there will be a sharp increase in solar development especially in Alberta given the ideal conditions relative to hours of sunlight. Paula McGarrigle of Solas Engineering authored a report recently where they identified the Alberta Solar Market to be $4.1B increasing solar power production from the current 45 MW per year to 3,261 MW by 2030. In her report prepared for the Alberta Solar Association, she and others address both the need and the opportunity for the transfer of skills from oil and gas especially, to disciplines required to meet the demand for solar growth. In her report she identifies land acquisition, public consultation, contract administration, permitting and of course, legal given the various contracts involved.
As an added note. Paula was instrumental earlier in her career in the development of the Renewable Energy group at Suncor where oil and gas related skills were transferred to the Renewable Energy Group. I also spoke with Karen Reiman who came from an oil and gas background in a land contracts/A&D position role to Suncor’s Renewable Energy Group. Karen added to and confirmed much of my thoughts. In Karen’s words….
“My land experience and the expertise gained in various positions in Oil and Gas companies over a period of 20 years ultimately led me to work on Suncor Energy’s Renewable Energy Team. My skills transferred very easily. and it was obvious that land knowledge and expertise was a critical component to successful development of a windfarm. Through construction and into operations, land personnel are guiding both the commercial and engineering teams to ensure site plans are accurate, regulations are followed, and landowners are taken care of.” – Karen Reiman
As professional land associations let’s take this opportunity to proactively get involved with the professionals in the renewable sector. Reach out to the Canadian Wind Energy Association as well as the Canadian and Alberta Solar Energy Associations and the subcommittees and caucus groups within. Reach out to all other related renewal energy groups and offer our expertise and make developers projects easier and much more streamlined. Opportunities are not limited to wind and solar. There is geothermal power, helium exploration and development and much more relative to resources in general.
This is a time where the skills that are inherent in the land discipline and the leadership we have always shown can be used to expand our influence and ensure we continue to add value where ever we can and ensure jobs and careers for individuals in our discipline. While I’m not advocating a name change with our associations, there is merit to using the word Energy versus Petroleum as the world changes and we adapt ourselves to those changes that are coming if not already here.
Simply put and as I used to say to landowners that would outright object to a proposed project, I would suggest that they step up and be involved providing input and influence rather than sit back and have others determine outcomes without their input. Why, as professionals, would we not do the same? Let’s not sit on the sidelines but rather take the initiative to be a part of the change versus being a spectator.
The professional land community’s ability to always adapt, be resourceful and even inventive are attributes that assist in defining skill levels and ultimately, success for all involved.