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March 2006 - The Logging and Sawmilling Journal

cONTRACTOR PROFILE

PURE oil patch PLAY

Alberta logging operation Gideon Contractors is doing very well indeed these days, working with a variety of harvesting equipment—and working exclusively in Alberta’s oil patch.

By Tony Kryzanowski

Wayne Gideon is very comfortable both in the driver’s seat of his Edson, Alberta-based logging business and the racecar he drives as part of the Northern Provincial Pipelines Late Model Stock Car circuit. It helps to have experience with speed considering that he logs almost exclusively on right-ofways, oilfield leases and pipeline easements for Alberta’s oil and gas industry. It’s rare to find a logging contractor that
has purposely avoided working for any length of time for forestry companies.

Wane Gideon with the Waratah HTH 622B head on a John Deere 753G carrier. The Waratah head gives his business more versatility and, as for the carrier, he describes it as “bulletproof.”

However, his company, Gideon Contractors Ltd, has earned its bread and butter creating access in the bush for the petroleum industry for over 40 years. In fact, his parents, Ray and Violet Gideon, established the business in 1963. At that time, it consisted almost entirely of hand fallers. Over time, Wayne became a business partner and the company evolved to the mechanical harvesting operation it is today, offering its services to a steady clientele from junior oil and gas companies to the who’s who of the industry.

While most logging contractors appreciate longer term contracts with guaranteed income, Gideon rarely knows more than two days in advance exactly where his equipment will be put to work. “Lots of our calls come in this afternoon for a job tomorrow morning,” he says. “I have no signed contract saying that I have a
job to go to tomorrow morning.”

However, he maintains close contact with his list of a dozen or so regular clients, keeping his black appointment book and cell phone close at hand. That includes whenever this NASCAR fan happens to be attending a race event somewhere in North America.

Gideon has no illusions about how well his business is positioned and why. He knows that Gideon Contractors is in the centre of the oil and gas exploration boom that is now blowing across the West, being fueled by the high prices currently being paid for petroleum commodities. The issue for many energy companies at the moment isn’t so much how much the logging service will cost, but how fast it can get done.

Gideon says the opportunity to supplement forest company contracts with oilfield work is definitely creating more competition in his neck of the woods.

The attraction for a growing number of logging contractors seeking work from the petroleum sector is the ability to charge either by the hour or by the cubic metre of fibre harvested, as circumstances would dictate.

Lighter weight logging equipment, such as the Deere 753G with a Waratah head, is well suited for logging in the Alberta oil patch, leaving a light footprint.

Logging for the oil and gas industry also provides contractors with the ability to work with a variety of clients, rather than being hamstrung by an exclusivity contract often demanded by forestry companies. In fact, that is the main reason why Gideon has tended not to work with forestry companies. He doesn’t want to be exclusive to anyone when it comes to hiring out his equipment or be held back by the constraints of a cubic metre rate.

While the company has experienced its share of ups and downs given the volatile nature of the oil and gas industry, Gideon believes that the long-term prospects for his niche business are extremely positive. “Oil and gas is a nonrenewable resource,” he says, “and when there is growing demand for that resource, the price is only headed in one direction over time, and that’s up.”

Right-of-ways, oilfield leases and pipeline easements typically exist within the Forest Management Areas (FMAs) owned by local forestry companies in Alberta. “There is a lot of timber that comes out of these FMAs that is logged as salvage timber in the oilfield,” Gideon says.

He only looks after the logging aspect of the operation and leaves it up to the forestry company to organize the transport of logs to the mill. However, he has built a working relationship with a few log haul contractors working in the area that have also found a niche market in offering log transport services from petroleum leases to local sawmills. So the process now tends to run quite smoothly, despite the fast-paced nature of the activity.

“Very often, the oil or gas exploration company has to have a drill bit going into the ground by a certain date and it might be a week from when they contact us,” he says. “So it’s a real push situation. Normally we can get to it in a day or two.” The company has 22 employees, and the work schedule is typically a 10- hour shift. However, putting in overtime is not uncommon. It offers its services seven days a week, about 363 days a year. Winter is normally a busier time, but given the intense level of exploration activity, the company has had steady work in the Edson area throughout the year for the past five years.

This style of logging is quite different than logging a typical forest cutblock. In a cutblock, the contractor will normally clearcut a defined area. With right-of-way access logging, the objective is to log all timber from one end of the flagged area to the other, which includes crossing everything in between, such as creeks, hills and muskeg. Part of the job includes using non-merchantable wood as corduroy and installation of rip wrap for the equipment to walk across. Skidding distances can also be quite a lot longer.

Since his equipment needs to be available at a moment’s notice, Gideon tends to purchase forestry equipment that has a good track record for uptime. He also employs his own mechanics because he can’t afford to wait for non-warranty service from the dealership. It also needs to be lighter weight equipment so that it can be transported from site to site with a minimal amount of weight restriction hassles.His fleet consists of two Timberjack 608 feller bunchers, a John Deere 753 feller buncher, and a new John Deere 753G carrier equipped with a Waratah HTH 622B harvester/processor
head.

Although Gideon Contractors does most of its work in the Rocky Mountain foothills, the company has opted not to purchase harvesting units with tilting cabs. “We like to keep them simple,” says Wayne Gideon.

The Waratah head gives his business more versatility. “It can help us with our delimbing if necessary, because that process tends to be the bottleneck in the operation,” Gideon says, “or it can work as a full service unit on smaller jobs because it can both harvest and process the timber. We don’t need to transport a delimber out to the site.”

While 95 per cent of its logging is tree-length, the harvester/processor package also gives the company the ability to produce cut-to-length wood, if needed.

The majority of the company’s harvesting units are zero tail swing because oilfield projects typically are confined to a rather tight space where damage to adjacent trees is highly discouraged. That is becoming an even bigger issue as Alberta’s forestry and petroleum industries move more toward following the principles of a land management system called Integrated Landscape Management (ILM). The thrust of ILM is to leave a
smaller industrial footprint on the environment.

“It is impacting on our operations somewhat,” says Gideon, “because in some cases, it is squeezing in the area where we are allowed to work. For example, where a right-of-way may have been 15 to 20 metres wide, now it might be 10 to 12 metres. It’s an ever changing world, and we’ve learned to adapt.”

When it came to purchasing his harvester/processor, he was quite certain about the John Deere carrier because it is essentially a hybrid of the older Timberjack 608 feller buncher, which he described as quite “bulletproof” in terms of overall performance. After speaking with other cut-to-length logging contractors, they concluded the Waratah processing head is a real workhorse that was reliable and relatively easy to maintain.

Although Gideon Contractors does most of its work in the Rocky Mountain foothills, the company has opted not to purchase harvesting units with tilting cabs. “That system adds a whole bunch more weight and a whole bunch more moving mechanical parts,” he says. “We like to keep them simple.”

Rounding out his equipment fleet are three John Deere 648G-III skidders and two Denharco telescopic stroke delimbers. One is a Denharco 4400 mounted on a John Deere carrier, and the other is a Denharco DT3000 mounted on a Komatsu carrier.

An interesting recent addition to his fleet is a RotoSlasher mulcher attached to a Caterpillar D6R dozer. Equipped with its own 550 horsepower drive motor, the Oklahoma-built mulcher was adapted from a grinder used in quarries to grind up rocks. It was retrofitted with cutter bars so that it can grind up stumps and leftover debris on a harvest site.

“One of the reasons why mulchers are becoming so popular is because of new environmental regulations,” says Gideon. “Government regulators would like to see less burning, and especially with the warmer and drier winters we’ve been having, we can’t burn. Furthermore, having the mulcher gives us the ability to offer a complete service in one pass.”

If he had his way, Gideon says he would prefer to see better use of underutilized species like birch and tamarack.

At present, about 90 per cent of it is either burned or mulched. There is also considerable waste of tops from merchantable timber that he’d prefer to see used as chips rather than burned in brush piles. However, he says one of the biggest challenges is navigating the bureaucracy to gain permission to make better use of these fibre sources.

For his part, he has established a sideline business selling firewood and also uses waste wood to heat water in an outdoor boiler that heats his company buildings using hot water.

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