Industry Overview & Recent Performance
The oilfield and industrial waste disposal industry is an established industry with significant upside opportunity. In 2012, the energy industry generated $80 billion in revenue and that is expected to expand in 2013. Canada itself is the world’s third largest producer of natural gas and 80% of that is produced within the providence of Alberta.

Key Drivers and Industry Constraints

The disposal industry is primary driven by the international supply and demand of natural resources, with a large exposure to the coal, oil, and natural gas industry. Historically, the price of natural gas and oil has been a major driver for the industry. While prices are directly related to the expansion or drilling of new wells, the industry depends much more on the operation of existing wells. The reason for this is that wells in operation produce a consistent source of waste and that is priced at a higher rate for disposal.

The industry itself is heavily monitored by the Alberta Energy Regulator (AER), which is the Canadian equivalent to the U.S. EPA. While the rules and regulation are established, the agency has announced potential changes to current regulation that could hamper the classification process of specific substances.

The industry is also under a lot of pressure right now because many gas producers in Alberta have suspended production on some of their gas heavy assets because of lower gas prices since the US Shale gas boom in the past 5 years. These wells have been suspended but not abandoned so the AER is now mandating that they are either produced or abandoned immediately. The AER has also modified the Liability Management Rating (LMR) in the past few months which is putting a lot of pressure on smaller producers to activate suspended wells in order to lower their liability deposit requirements from the AER. These are outside influences that are not particularly favorable for the producers themselves but will be a positive catalyst for disposal facilities, especially facilities in gas heavy regions that have been impacted most by lower production recently. Disposal facilities only exist to manage waste from production and exploration thus if production increases revenue increases.