Meridian Energy Group redefines LAER at the Davis Refinery WBI Energy gears up for Valley Expansion project in North Dakota UND installs new stimulator at its Collaborative Energy Complex
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Published by: DEL Communications Inc. Suite 300, 6 Roslyn Road Winnipeg, Manitoba Canada R3L 0G5
Message from the editor, Shayna Wiwierski – 6 Message from Senator John Hoeven – 8 Message from Senator Steve Daines – 10 Improvements and opportunities, Williston Area Chamber of Commerce – 12 GNDC looks to the future – 14 Keystone XL will move ethical oil safely – 16 Valley Expansion delivers warmth and supports growth – 17 Legislation impasse pulls plug on Colorado’s Energy Office – 18 The war on carbon is immoral – 20 Meridian Energy Group, Inc. redefines “LAER” – 22 Give employees the space they need – 24 Extracting value from waste – 26 University of North Dakota at the forefront of educating petroleum engineers – 28 The hydrogen sulfide house of cards – 30 Filling the employee pipeline – 32 Mesh-backed coatings: Why they work – 34 CNG power reduces construction costs for new gas plants – 36
President & CEO David Langstaff Publisher Jason Stefanik Managing Editor Shayna Wiwierski email@example.com Sales Manager Dayna Oulion Toll Free: 1.866.424.6398 Advertising Account Executives Gladwyn Nickel Mic Paterson Anthony Romeo Contributing Writers Deb Austreng Brandon Beyer Bette Grande James O'Dwyer Alan Olson Brent Robinson Michael Sandoval Jeffrey Tyson Production services provided by: S.G. Bennett Marketing Services www.sgbennett.com Art Director / Design Kathy Cable Advertising Art Dave Bamburak, Dana Jensen © Copyright 2017 DEL Communications Inc. All rights reserved.The contents of this publication may not be reproduced by any means, in whole or in part, without prior written consent of the publisher. While every effort has been made to ensure the accuracy of the information contained in and the reliability of the source, the publisherin no way guarantees nor warrants the information and is not responsible for errors, omissions or statements made by advertisers. Opinions and recommendations made by contributors or advertisers are not necessarily those of the publisher, its directors, officersor employees.
Slug flow mitigation in the Bakken – 38 Not your typical engineering firm – 40 Index to Advertisers – 42 PRINTED IN CANADA | 09/2017 4
BAKKEN OIL REPORT – FALL 2017
Message from the editor Shayna Wiwierski It’s been 66 years since a well drilled eight miles south of Tioga struck black gold. The rest, as they say, is history. Named after Henry Bakken, the farmer who owned the land where the formation was first discovered, the Bakken region has had a pretty storied history since. In 2013, the Bakken was the source of more than 10 percent of all U.S. oil production. Because of that, North Dakota was named the second-largest oil-producing state in the country in 2014. That same year, production in North Dakota and Montana exceeded one-million barrels per day. As we all know, the past few years have been tough on the region, however, according to the Star Tribune in April 2017, North Dakota oil production topped the one-million barrel per day mark once again. The price of oil may be down, but it’s certainly not out. Which brings us to the fall 2017 issue of the Bakken Oil Report. In this edition, we look at a few projects going on in the region, like WBI Energy’s Valley Expansion project, which will see the North Dakota company building a 38-mile, 16-inchdiameter pipeline connecting the WBI Energy natural gas system near Mapleton, ND with the Viking Gas Transmission Company system near Felton, Minnesota. We also take a look at the how the Meridian Energy Group is redefining lowest achievable emission rates in their Davis Refinery. I truly hope you enjoy this issue of the Bakken Oil Report, and I invite you to check out our official site, BakkenOilReport.com, where you can read a digital version of this magazine, as well as keep up to date on all the latest Bakken news in the area. Shayna Wiwierski @DELCommInc
BAKKEN OIL REPORT – FALL 2017
Ensuring the future of energy production in the Bakken By Senator John Hoeven Our energy production continues to become more efficient and cost-effective, with companies developing new methods to get more from their oil and gas wells with each passing day. These efforts are vital in the age of high global production, and the fact that oil production in North Dakota has remained near one-million barrels per day despite long-term, low oil prices is a testament to the innovation of our energy industry. As a member of the Senate Energy and Natural Resources Committee and Energy Appropriations Committee, I am working to empower the development of new technologies to keep our nation competitive and ensure that federal estimates for the Bakken oilfields reflect the realities of these improvements. That’s why I’ve invited and am hosting William Werkheiser, acting director of the U.S. Geological Survey (USGS), for a visit to North Dakota. We need him to meet with people who live and work in the region – the experts in their field – in order to make the case for updated estimates for the Bakken’s recoverable resources. I spearheaded a similar effort several years ago that resulted in the latest estimates from 2013, which more than doubled the estimates of technically recoverable oil at that time, from 3.65 billion barrels to 7.4 billion barrels. Updated estimates are vital to giving certainty to energy producers and encouraging investment in the region. We are bringing the latest data, production curves, recovery rates, and geological surveys to acting director Werkheiser, while also briefing him on all of the techniques and technologies that have been employed in recent years. This is the evidence the USGS needs to move forward on a new study for the Bakken. At the same time, I continue working to maintain our federal energy research programs. The Senate’s Fiscal Year 2018 Energy and Water funding bill includes more than $26 million for unconventional fossil energy technologies, a $6-million increase over last year. This will keep enhanced oil recovery on the cutting edge, making even more of our resources recoverable while continuing to shrink the environmental footprint of drilling. The expectations about the Bakken have always lagged behind the reality of what our producers are accomplishing. But our energy industry has proven time and again its resilience and creativity in finding solutions to reduce costs and remain competitive. By focusing on the two fronts of USGS estimates and energy research, we can help bolster their work and secure the future of energy production for the Bakken region. Doing so will ensure a continued robust energy production for our state and nation, and advance America’s energy security. w
BAKKEN OIL REPORT – FALL 2017
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The Wild, Wild West heads to D.C. By U.S. Senator Steve Daines In Western states like Montana, we know what it’s like to have blazing wildfires, ground-crumbling droughts, and an economy that’s largely reliant upon these resources. We work hard to raise cattle, develop energy, and better manage our lands. And in Western states, we work hard to get results from our labor. At the beginning of the year, I was honored to be selected by my colleagues to become the next chairman of the Senate Western Caucus. The Western Caucus is made up of senators from western and rural states who are committed to upholding the fundamental principles of the west and will help advance priorities important to western and rural states. As chairman, I am working with my western colleagues in the senate, house and the Trump administration to empower our communities to make decisions that best serve them and their families. We need commonsense western approaches to solving our nation’s most challenging issues, including energy development and balanced use of our public lands. That’s why I am so excited to see numerous westerners serving in key positions in President Trump’s administration. The secretary of the U.S. Department of Energy is former Texas Governor Rick Perry and the Environmental Protection Agency's new administrator is former Oklahoma attorney general, Scott Pruitt. The Department of Interior’s new secretary is Montana’s own former congressman, Ryan Zinke, and his deputy secretary is Colorado native David Bernhardt. These important positions are exactly the kind of positions we want westerners to hold. We need to have folks in place that understand what it is like to have the federal government as your largest neighbor. Recently I went on an energy innovation mission from Norway to Greenland to Alaska to gain insight 10
BAKKEN OIL REPORT – FALL 2017
into the importance of Arctic energy and American energy dominance. In Hammerfest, Norway, I visited the largest liquefied natural gas export facility in Europe. More than 600 miles above the Arctic Circle, at about the same latitude as Barrow, Alaska, we met with Norwegian officials to discuss the impact Hammerfest’s natural gas facility has had on the local economy. It was great to see the economic benefits of energy development reaching down to local residents. Yet in Alaska, as we visited the Trans-Alaska Pipeline System’s (TAPS) Pump Station 1, we heard about the challenges TAPS is facing due to limitations on access to federal lands and waters. Instead of pumping the abundant nearby oil resources, contributing to the economy and providing safe energy, TAPS is now just about 25 percent full. This was an important trip because we could compare similar environments, Norway and Alaska, and see the stark contrasts and similarities between them when it comes to access to energy. This issue is of critical importance to our nation. The United States leads the world in fossil fuel resources with Russia, Saudi Arabia, China, and Iran behind us. Energy security and energy dominance isn’t just a benefit to our economy, it’s a national security necessity. I look forward to working with my western colleagues in President Trump’s administration because I am confident that they understand the importance of balancing national security, energy independence and stewardship of our lands and resources better than anyone. And as the United States Congress considers important issues like infrastructure investment and tax reform, the Western Caucus will continue to be a strong voice for the west. w
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Improvements and opportunities
By Janna Lutz, President, Williston Area Chamber of Commerce This past year, numerous infrastructure projects in the Williston area caught up to our growing community. There have been major improvements in key areas: a new water treatment plant, more water/sewer lines, new streets to new neighborhoods, reconstructed streets to accommodate more traffic and a better traffic flow, and expanded emergency services. The city's second fire station is up and running, a third and an additional rural fire station being built enables a faster response time for our residents. From July 1 to August 8, there were 42 singlefamily house closings as more families seek to make our community their permanent home. Continued private investments matched with investments in economic development through sales tax supports our retail, commercial, and industrial growth. Workforce development, community enhancement, and quality of life projects are still top priority as the Bakken continues to improve. Not only have we seen new retail, new restaurants, and new manufacturing and industrial facilities in the Williston area, but more housing, service providers, and daycares as well. Again, all contributing to building a wellrounded community and a great place to live and work. But we are not done improving because we are not done growing. The population growth projections still point to rapid growth until 2020 and then indicate a steady population growth for the Williston Area through 2040. The projections range from 40,000 on the low side to close to 70,000 on the optimistic scenario. Either way, continued opportunity.
Willison, North Dakota. Photo courtesy of WCC member business Dakota Prints.
BAKKEN OIL REPORT â&#x20AC;&#x201C; FALL 2017
There are opportunities abound in the workforce as well. North Dakota continues to see a labor shortage and skilled labor is in high demand. Jobs in the Bakken continue to be strong and many companies host their own job fairs in addition to the ones put on by Job Service and searching the resume database for strong candidates on
Ribbon cutting at Fresh Palate, who recently expanded their business in Willison, ND.
Job Service of ND's website. In Williams County, the median income is around $80K, and the energy industry average salary remains $98K. The ingenuity and entrepreneurial spirit of the people here illustrate what it takes to cut costs and work more efficiently in the current market. The technology improvements are also incredible. The average number of days to complete a well went from around 30 to a record eight in just three short years! One of the biggest projects and one that is critical to our region is the XWA Airport project. The beginning stages of the project have already started â&#x20AC;&#x201C; the dirt work went well over the summer and they are looking to start vertical construction soon, if it hasn't already started by the
time this article is printed. The airport project slated for a Q4 2019 opening will be beneficial to those hoping for easier and better travel options. However, the existing airport redevelopment is quite possibly more thrilling. This redevelopment poses a rare opportunity very few cities ever see. The possibilities are exciting.
I have been with the chamber a little over a year and I have seen a lot: new retail and start-ups, existing businesses expanding, and various infrastructure improvements. More restaurants, more shopping, better roads and more housing: in short, a better place to live and work â&#x20AC;&#x201C; and we're still improving. w
BAKKEN OIL REPORT â&#x20AC;&#x201C; FALL 2017
GNDC looks to the future Lots of people are on the move. However, not everybody knows where they are going. Nothing could be more frustrating than expending energy without an endgame in mind. The Greater North Dakota Chamber (GNDC) Board of Directors – a prestigious group of business members from across the state – are cognizant that an endgame is necessary to be successful. As a result, they dedicated their June board meeting to review GNDC’s progress from the former year and set goals and objectives for the upcoming year. Jack Zaleski, the former editorial page editor for the Fargo Forum, once stated no other organization had consistently experienced the level of success at the state legislature as GNDC. Credit for this success belongs to our board members, who over the years have insisted on a strong directional plan. Our vision remains unchanged. We will continue to strive to make North Dakota’s business climate the best in the nation. Our mission is to champion the interests of and the success of North Dakota business. Our values are member engagement, which means we stand up for our members, advocate for the free enterprise system, strive to communicate both ideas and GNDC’s brand, and seek to be the best organization possible. Our number-one goal remains to be the state’s business policy development leader. It’s a role we’ve filled in various capacities throughout our 95-year history. At one point, GNDC provided leadership in the development of the Garrison Dam. During the 1950s we advocated for making sure the state had an interstate running north/
BAKKEN OIL REPORT – FALL 2017
By Andy Peterson, President and CEO, Greater North Dakota Chamber
south and east/west to enable manufacturers and farmers to get their products to market. At other times, we’ve led the way on lowering taxes and either promoted or worked to defeat any number of ballot initiatives. We judge each issue on the basis of its impact to the business community, whether or not it positively or negatively impacts our state’s ability to be competitive, and if it is in the best interest of the state. Our second goal is to expand our brand. This means we’ll work to improve the things we do well, such as our annual Policy Summit, or the CEO Roundtables. It also means we need to engage local chambers more readily, build a statewide leadership development program, and do a better job engaging members in government affairs and policy development. Other goals include value definition and promotion of the free enterprise system. Value definition means we fully communicate what we do, how it affects your bottom line, and explaining why we advocate on an issue which might not traditionally be top of mind for business owners or operators. We believe that the promotion of the free enterprise system involves helping people understand the good things it brings to the lives of all North Dakotans. To that end, GNDC will stay true to the vision of our founders in striving to be the best advocate and champion possible for both North Dakota’s businesses and for building a greater North Dakota. A copy of our complete directional plan is available upon request. w
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BAKKEN OIL REPORT – FALL 2017
Keystone XL will move ethical oil safely By Alan Olson, Executive Director, Montana Petroleum Association
First approved in Montana in 2012, the Keystone XL pipeline continues to face obstacles greater than those attributed to the regulatory framework intended to safeguard the environment. The business of stopping infrastructure and development projects has become just that; a business. More than an environmental movement, pipeline activism has become an industry of conflict. Built on false narratives, misinformation, and fear-mongering, the conflict industry exists to promote political goals and influence public policy. Less addressed when rebutting the claims made by those which seek to stop pipeline projects, is the humanitarian impact these protests are poised to have abroad. While we continue to import foreign fuels from hostile nations, our geopolitical influence has been strengthened around the globe because of our increased self-sufficiency with respect to crude oil and natural gas production. Projections on the future demand of oil and natural gas around the world continue to grow, as 1.3 billion people in the world are still without reliable forms of energy. Fossil fuels will be necessary long into the future as renewables continue to grapple with intermittency and cost hang-ups. The choice between renewables and non-renewables is a false choice. A more realistic choice, and one social justice warriors and those swayed by flashy anti-fossil fuel campaigns should consider, is whether we want to import energy from hostile nations, or trusted, North American trade partners.
BAKKEN OIL REPORT â&#x20AC;&#x201C; FALL 2017
Canadian oil is ethical oil. That which is produced safely and under strict environmental regulations by a country which respects human rights. The same cannot said of many OPEC countries, Venezuela or the Gulf States, all large exporters of oil to the U.S. Organizations like Vets for Energy exist to promote the domestic production of oil and natural gas to lessen our dependence on nations which harbor terrorism. The U.S. boasts the largest pipeline network in the world, however, the majority of pipe in the ground today was laid in the 1950s. Consider the technological advancements and regulatory changes that have been made in every sector over the last 60 years. Pipeline operators are now capable of 24/7, real-time monitoring to detect and respond to potential incidents immediately. Moving 830,000 barrels of oil a day, with an on-ramp to accept up to 100,000 barrels of Bakken crude, the Keystone XL pipeline will replace 4,150 tanker trucks â&#x20AC;&#x201C; or 1,185 rail cars â&#x20AC;&#x201C; a day. According to the U.S. Department of Transportation statistics, pipelines are 451 times safer than rail on a per-mile basis, with a 99.999 percent success rate of delivering crude safely to its destination without incident. The world will continue to run on oil long into the future. But protests may impede domestic production of affordable, reliable energy sources if the public and policy makers are misinformed. The impact of decisions which thwart production on North American soil could mean dire consequences abroad. Support for the Keystone XL pipeline is support for North American energy independence and ethical oil. w
Valley Expansion delivers warmth and supports growth
If you grew up on the Northern Plains, where the icy winter wind whips across fields of snow and down darkening city streets, where your cheeks burn from the cold even as you turn your back to the gale and lean your way toward the warm lights of home, then you know what it is to feel frozen.
win-win, and I think that’s why we’ve seen so much interest in it.”
And you appreciate the value of warmth.
future. The natural gas will be able to flow east or west to satisfy
Of rushing into a toasty house and slamming the door against the cold. Of feeling the frost melt off your eyelashes as you unwrap your scarf, pull off your hat and move toward the fireplace.
That reliable, dependable warmth is the business WBI Energy is in. The Bismarck, North Dakota-based company provides the infrastructure to deliver natural gas to heat homes and power businesses.
said Ryan Thorpe, chief operating officer of Tharaldson Ethanol
Starting next spring, the company will be building a significant new project in the Red River Valley of North Dakota and Minnesota. The Valley Expansion project will connect WBI Energy’s existing natural gas system near Mapleton, North Dakota, with the Viking Gas Transmission Company system near Felton, Minnesota. Construction of the 38-mile, 16-inch-diameter line is anticipated to begin in the spring of 2018. “This has been a great project from the start for a couple of major reasons,” said Dave Goodin, president and CEO of WBI Energy. “First, it’s going to enhance supply security during the winter heating months for our customers between Bismarck and Mapleton. And it also provides a source of natural gas to support industrial and commercial growth in the Red River Valley. It’s a
The project secured capacity commitments early on, both for residential use and from manufacturers. It’s designed to transport 40 million cubic feet of gas per day to the Valley and beyond, and through increased compression could be expanded in the
“Our plant runs on natural gas transported by WBI Energy, and the Valley Expansion will increase the reliability of our supply,” Plant I, LLC, in Casselton, North Dakota. “That’s important to us as we continue to expand. Our plant this year will produce about 185 million gallons of ethanol, and we employ 55 people. A dependable supply of natural gas is critical to our business, so we definitely support the Valley Expansion Project and look forward to a timely completion.” The project is scheduled to go into service in November 2018. It is being overseen by the Federal Energy Regulatory Commission. WBI Energy has submitted a proposed route to the FERC, has conducted civil, cultural, and biological surveys along the route, and has had multiple meetings with landowners and the public. The FERC anticipates completing an environmental assessment by the end of September and issuing it for public comment. “It’s been a good process and positive from the start,” Goodin said. “The work our team is doing is eventually going to heat people’s homes and support business development, which is very rewarding. We’re excited about the Valley Expansion.” w
BAKKEN OIL REPORT – FALL 2017
Legislative impasse pulls plug on Colorado's Energy Office By Michael Sandoval The Colorado Energy Office (CEO), for years a promoter of
was the office’s core function – the promotion of efficiency,
renewable energy policy and technology, often at the expense
renewable energy, and market-enhancing subsidies for favored
of the state’s abundant natural resources, faced its own political
technologies, like electric vehicles and rooftop solar.
reality on July 1: intermittent and unreliable political support.
The Denver Post’s Megan Schrader lamented in an op-ed the role
Not necessarily a bad thing.
CEO played to “prime the pump” on alternative technologies.
Though the agency did not face an immediate shutdown, as
“Many of these programs need fine-tuning. They are
many expected, the current mission for the state’s energy office
experiments, set up on a temporary basis to prime the pump.
has been put on pause, at least until the next legislative session
But that is not the debate that happened around the Colorado
beginning in early 2018. Even without reauthorization, however,
Energy Office. The conversation precipitating the office’s demise
programs like weatherization will continue since funding comes
was about everything but the validity of these individual
from federal grants.
programs and better ways to achieve the laudable goals of
State Republicans argued that the office had lost its way and had
efficiency and sustainability,” Schrader wrote.
become a mouthpiece only for wind and solar, ignoring nuclear
Without CEO, she argued, innovations would slow. “And that
energy and penalizing the state’s coal and oil, and natural gas
is too bad, because those of us who care about using less and
industries. Democrats resisted stripping away what they believed
conserving more will have to wait longer without these policies
BAKKEN OIL REPORT – FALL 2017
for the price to come down or the next big innovation to arrive.” Yes, without the Colorado Energy Office, the market would forget how to respond to customer forces without an agency to “guide” it, and customers themselves would be powerless to voluntarily use less and conserve more. Right. Technological innovation and the personal tastes of consumers don’t – and should not – rely on the political whims of unelected agencies. Do calls for conservation or good-for-business efficiency practices simply disappear if Colorado did not have an energy office? Federal funding for weatherization or natural gas stations will continue apace, with or without the office. And, given the state’s political leanings, as well as a bipartisan notion of responsible energy development of Colorado’s vast oil and gas resources, the debate over state energy policy will unlikely subside any time soon. What then, is the ultimate purpose of the Colorado Energy Office? Is it to simply administer federally funded energy programs, or promote state incentives, like the alternative vehicle tax credit? The political battle this past session over reauthorization focused on what the agency’s mission statement meant: “To deliver cost-effective energy services and advance innovative energy
solutions for the benefit of all Coloradans.” For many years poststimulus, the agency functioned as a funnel for efficiency block grants and other federal spending programs. Duplicative and unnecessary functions of the Colorado Energy Office, like the vague “promotion” of “innovative” energy production should raise eyebrows. The Colorado Public Utilities Commission regulates the state’s investor-owned utilities and resource planning. The Colorado Department of Public Health and Environment manages air quality. Federal taxpayers foot the bill for the National Renewable Energy Laboratory, whose entire mission is technological development. The Colorado Oil and Gas Conservation Commission handles the state’s oil and gas development. Coloradans should ask, as did the movie Office Space, “What would you say you do here?” If the state, oil and gas companies, renewable energy companies, consumers, and any other producer or end-user of energy can move forward, as was expected on July 1, without a state energy office, then do we really need one? w Michael Sandoval is an associate energy policy analyst with the Independence Institute and a consultant who advises pro-business groups.
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BAKKEN OIL REPORT – FALL 2017
The war on carbon is immoral Facebook founder Mark Zuckerberg recently visited my hometown, Williston, North Dakota, to learn more about oil and gas and the Bakken. While in Williston, Zuckerberg visited a drilling rig and spoke with workers in the industry. Here is a quote from his Facebook post speaking of those oil workers: “They believe competition from new sources of energy is good, but from their perspective, until renewables can provide most of our energy at scale, they are providing an important service
By Bette Grande
we all rely on, and they wish they’d stop being demonized for it.”
Even if the claims of man-made global
Hallelujah! It is great that a small solar-powered light bulb went off for Zuckerberg, but I will take it one step further: The war on carbon is immoral, plain and simple.
“if” – the cost to people in the United
Climate alarmists want to eliminate carbon-dioxide from our energy, food, and lives in general, and they do not care one bit about the cost, including the human cost of decarbonizing.
on the issue of carbon. Cheap and
warming are true – and that is a big States and throughout the world of eliminating carbon will far exceed any benefit. It is time to take the moral high ground abundant fossil fuels help us meet our basic needs, including obtaining food, clothing and shelter, and carbon is vital for plant life and feeding the
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world. Public policy and governmental regulations that drive up the cost of energy and food impact everyone, but they hit the poor and the elderly the hardest.
and others will leave the vast majority of
States, and especially the efficiencies
the world’s population cold and hungry
gained when OPEC pushed down
and in the dark, because despite all their
the price of oil, is a game-changer.
rhetoric, renewable-energy sources
Cheap and abundant oil and natural
aren’t nearly as affordable as fossil fuels,
gas from the continuing technological
Electrification, primarily from coal, is the single greatest engineering achievement of the 20th Century, according to the National Academy of Engineering, and it vastly improved the lives of millions. Kathleen H. White, with the Texas Public Policy Foundation, said, “The greatest gift of the energy breakthrough, on which the Industrial Revolution still relies, is the release of entire populations from abject poverty”.
pricing out many of the world’s poorest
advancements in horizontal drilling will
vastly improve the lives of people around
The war on carbon started with
the world. It is not just about electricity,
Despite these achievements, today, poverty caused by lack of access to cheap and abundant energy is a critical problem throughout much of the world, and is not necessary. Six out of seven people live in underdeveloped nations and the majority will remain in poverty without access to cheap and reliable energy. Climate policies pushed by the United Nations
coal. Costly regulations imposed by Washington, D.C. shuttered coal plants,
heat, and transportation, but also advancements in agriculture, medicine,
put workers out in the cold (literally, in
some cases), and drove up the price of
The shale revolution may turn out to be
electricity and heat. When energy costs
the greatest engineering achievement of
increase, those who suffer the most are the poor and elderly.
the 21st Century, and everyone involved, from engineers to roustabouts, should
In his book, Energy Keepers Energy Killers,
be proud of their role in improving the
Roy Innis wrote, “High utility bills are
lives of people across the globe. The right
the leading cause of homelessness. Just
thing to do is to praise these workers;
getting to work every day eats up more
suggesting they are somehow destroying
and more of our income. Higher energy
the world isn’t just incorrect, it’s immoral. w
costs force companies to lay off workers. Some must then choose between heating and eating.” But the shale revolution in the United
Bette Grande (Think@heartland.org) is a research fellow at The Heartland Institute. She represented the 41st District in the North Dakota Legislature from 1996 to 2014.
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BAKKEN OIL REPORT – FALL 2017
Meridian Energy Group, Inc. redefines “LAER” – Lowest Achievable Emission Rates The emission control technology of the Davis Refinery By Meridian Energy Group Partners, with contributions from Zia Engineering & Environmental Consultants; Vepica USA There is a company in the Bakken who has been on a search over the past several years to create something that will effectively change how an industry operates. Meridian Energy Group, Inc. is building a project with a level of comprehensive emission control technology never attempted before. The small start-up company, headquartered in Belfield, North Dakota, is scientifically engineering the Davis Refinery from the ground up – the first oil refinery of its kind to be built in the U.S. in more than four decades. The innovative design of Davis will achieve emission rates so low that it qualifies as a synthetic minor source, the first of its kind in history. Of the many advanced control solutions Meridian is employing, they have proposed the use of latest generation Ultra-Low NOx Burners (ULNBs) in each of its utility boilers and heater furnaces. And for the largest furnaces, Meridian will leverage Selective Catalytic Reduction (SCR) as a post-flue gas treatment to further reduce NOx emissions to single-digit ppm levels. This has been proven to be the most effective way to reduce 22
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NOx in a flue gas stream, with reductions up to 95 percent accepted by EPA since the early 2000s. In addition, the company has designed major aspects of the Davis Refinery systems to incorporate vapor capture to essentially eliminate major fugitive emissions from the plant. Again, the combination of these efforts resulted in the ability to pursue permitting of this facility as a synthetic minor source. These methods and calculations have been confirmed by both engineering and permitting teams responsible for making the Davis Refinery an operational reality. Several of the projected emission levels by Meridian have been specified based on manufacturer guarantees and commitments, and on current plant design and information for the Davis Refinery. In every instance, these values are further backed up by test data provided by the manufacturers, suppliers on other sites and sources. In other instances, it is backed up by data obtained from other permitted sources already in operation.
An example of how Meridian will ensure the required strict air quality standards are met, a comprehensive and enhanced Smart LDAR program will be used to monitor fugitive emissions throughout the plant. This innovative solution greatly exceeds the current minimum regulatory requirement, which mandates periodic (monthly or quarterly) walkthroughs of the facility to monitor each potential source of unintended leaks, leveraging a hand-held screening device, and for repairs to be completed within a certain timeframe. Unintended leaks usually account for a large percentage of hydrocarbon emissions at refineries. For this reason, and to minimize the potential for unintended leaks at the Davis Refinery, Meridian’s LDAR program will utilize OGI (optical gas imaging technology) to continuously scan the facilities. Given fugitive gases are normally invisible to the human eye, OGI cameras employ specialized infrared filters, enabling them to literally see gas should it ever escape. The Smart LDAR proposed by Meridian will allow automated early detection and notification of unintended leaks as they appear, and the visual confirmation provided by OGI will be extremely useful in pinpointing the exact source to begin the repair process immediately. Since 2015, OGI has been identified by the U.S. EPA as the “best system of emission reduction” for detecting fugitive emissions from new equipment installation, upgrades, and modified sources.
Once operational, current regulations and issued permit conditions will require Meridian to ensure that the Davis Refinery meets the emission standards set forth in the approved Permit to Construct application and modeling, via continuous monitoring of the refinery equipment. By law, Meridian will meet regulatory limits specified by the state and the EPA at all times during its operation, and will be monitored continually and reported annually to the North Dakota Department of Health, Air Quality Division. Technology and innovative solutions being employed will enable real-time monitoring of the Davis Refinery not only by Meridian, but also via remote dashboard access provided to the NDDoH. This planned monitoring will be available to the agency, and is a crucial aspect to the success of the Davis project in ensuring it remains the cleanest on the planet, and one Meridian fully embraces and is more than happy to comply with. The best available control technology that will be comprehensively utilized will allow for Meridian’s project to reach the lowest achievable emission rates (LAER) possible. Meridian is confident approval of its Permit to Construct from the North Dakota Department of Health Air Quality Division, will be granted early this fall. w
BAKKEN OIL REPORT – FALL 2017
SATELLITE SHELTERS, INC.
Give employees the space they need Satellite S-Plex Modular Building.
Satellite mobile office. Satellite Shelters, Inc. can help provide you with the space you need in order to protect and house your employees and equipment during your projects. From mobile offices, modular buildings, and blast-resistant modules, we are the only singlesource provider of safe space for your employees. Mobile offices Satellite’s mobile offices come in single-wide and double-wide sizes ranging from eight-feet-by-24-feet to 24-feet-by-60-feet. Our mobile offices come with standard and optional features such as coat closets, private offices, plan tables, rest rooms, and coffee bars. Mobile offices can be outfitted with additional products and services like furniture and appliances to make renting an office from Satellite Shelters easy and convenient.
an end-wall option with two private offices and an open middle. The A-unit can also feature two ADA restrooms and an optional coffee bar. The B-unit is the middle section unit which features two additional private offices or a completely open center. The D-unit is a second end-wall option with two private offices and an open middle. Every S-Plex Modular Building must be configured with A- and D-units, but combined with as many B-units as required, can flex in space as large as you need.
Uses include contractor offices, conference and meeting space, or small break rooms, etc.
Uses for the S-Plex Modular Buildings are endless: cubical office space, lunch rooms or break rooms, conference and meeting space, training rooms, and more.
S-Plex Modular Buildings
Blast Resistant Modules
S-Plex Modular Buildings from Satellite Shelters, Inc. are a modular building option that can flex in size and shape as your needs change or grow. These buildings are designed by assembling multiple 12-foot-wide units together to create a single cohesive structure. They can be as small as a double-wide created by assembling two 12-foot-wide units together to create a 24-footby-60-foot building or upwards of a 10-plex or larger created by assembling 10 or more 12-foot-wide units together.
For project sites and areas that have special safety requirements, including those in refineries, plants, and the blast zone, Blast Resistant Modules (BRMs) can be the perfect option to potentially save lives. Satellite’s BRMs are built to strict codes with reinforced steel walls that will protect and shelter workers that need to be in high-risk areas to perform their jobs.
Satellite carries three standard S-Plex office units to create a modular building unique to your needs. The three options are our A-, B-, and D-units, all measuring 12-feet-by-60-feet. The A-unit is
BAKKEN OIL REPORT – FALL 2017
Our BRMs come in different sizes and configurations to accommodate any size space requirement, including single-wide, tool-crib, multi-wide, and multi-level options. Single-wide BRMs range in size from eight-feet-by-20-feet
Satellite Blast Resistant Modular options.
to 12-feet-by-40-feet, with the 12-feet-by-40-feet module considered the industry standard. Single-wide BRMs give the flexibility to be scattered throughout a plant in areas with limited space or that require a minimal number of workers. Tool-crib BRMs feature two doors on one-side of the module and a countertop for the necessary tool check-in/out process. The walls of the BRM are lined with shelving, racks, and hooks to provide a wide variety of tool storage needs. Similar to the S-Plex Modular Buildings, multi-wide BRMs are designed by assembling multiple 12-foot-wide BRM units together. And in areas that have space restrictions, BRMs can also be stacked to double the square footage without doubling the footprint. Single-wide units can be stacked together in a quad
formation or combined with the multi-wides to create a two-story structure. Scaffolding is attached to the exterior of the building to allow easy entry to the second level. Uses for multi-wide and multi-level BRMs include lunch rooms, administrative offices, all-in-one on-site safety meetings, and more. Once you recognize your need for additional space, call on Satellite Shelters to help you determine how much you need and what products will be the best fit for you, your workers, and your projects. For more information on Satellite’s products and services, or to request a quote, visit www.satelliteco.com/products/ or contact us at (800) 453-1299 or firstname.lastname@example.org. w
Mobile Offices Modular Buildings Blast Resistant Modules
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(800) 453-1299 l www.satelliteco.com l email@example.com BAKKEN OIL REPORT – FALL 2017
Extracting value from waste By Jeffrey Tyson, Scott Energy Technologies LLC
A drilling pad built using Scott's Firmus® Process. Using the data it has collected to adapt, evolve and innovate, the E&P industry has made tremendous strides in well construction techniques to comply with ever-tightening specifications and requirements. Even with some wastes, there has been substantial growth and innovation in the methods the industry employs to manage some of its waste streams, such as conditioning and re-using drilling fluid and constructing end-to-end water recycling facilities and distribution pipelines. While the industry has made tremendous progress in many areas to improve production and lower break-even metrics, one area remains where the industry has yet to evolve: drilling waste. The management of this waste stream has not changed in years, which should cause some concern, considering how much the waste itself has changed. Drilling waste contains numerous chemical constituents that can impact the environment, including chlorides, 26
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Drilling cuttings that were used to build a Firmus® Process drilling pad. metals, organics (including hydrocarbons) and inorganic non-metals. Chlorides can be toxic to vegetation and aquatic life and can degrade soil structure. Currently, there is no natural process through which chlorides are removed from the environment. Metals such as arsenic, barium, cadmium, chromium, lead, mercury, selenium, and silver are toxic in sufficient concentrations and can accumulate in the environment. Hydrocarbons and other organic constituents can have a wide variety of impacts, depending on the compounds present in the drilling waste. Various proprietary additives are also present in drilling waste, which generates a certain degree of uncertainty in managing risks and impacts. When not properly managed, constituents in drilling waste can degrade soil structure, leach into groundwater supplies, run off into streams, adhere to particulate matter in the air and have toxic impacts to vegetation, animals and people (Source: Keller, P.R. “Evaluating Drivers of
Liability, Risk, and Cost While Enhancing Sustainability for Drilling Waste.” Paper AADE-17-NTCE-085 presented at the AADE National Technical Conference and Exhibition, Houston, TX, April 11-12, 2017). Drilling waste is a high-volume waste stream, particularly since the proliferation of unconventional wells. In 2014, 392,000,000 barrels of drilling waste was generated in the United States, enough to fill 25,000 Olympic-size swimming pools. Drilling waste from a single unconventional well may contain as much as 170,000 pounds of chlorides, 500,000 pounds of metals and 24,000 gallons of diesel (Source: Keller, P.R. “Evaluating Drivers of Liability, Risk, and Cost While Enhancing Sustainability for Drilling Waste.” Paper AADE-17-NTCE-085 presented at the AADE National Technical Conference and Exhibition, Houston, TX, April 11-12, 2017). There are three primary factors that affect why the industry as a whole hasn’t changed the way it manages its drilling
waste. First is the regulatory environment. Because E&P waste is exempt from federal hazardous waste regulations, each state has developed its own set of rules that operators must follow when managing drilling waste. For solid drilling waste, these rules vary – from allowing operators to simply bury the waste on-site, to allowing untreated waste to be spread over large portions of land, to requiring all waste to be disposed of at commercial disposal facilities, e.g. landfills. Each of these methods of disposal has its place and can be done safely if appropriate measures are followed to ensure the protection of the environment. Often, the rules do not account for the variability of the waste itself, or the specific contaminants that may be present. For example, operators may only be required to test for chlorides when landspreading the waste, even though water-based cuttings can contain a significant portion of hydrocarbons and heavy metals. Many of the state regulations were drafted decades ago, prior to many of the innovations in drilling fluid technology, and may not be sufficient to protect human health and the environment. It is the responsibility of each operator to do its due diligence to ensure that its waste is not only being handled in compliance with the rules, but is also protective of human health and the environment. History is riddled with cases of environmental issues that were caused by waste disposal methods that were legal at the time. Secondly, many companies are hesitant to step out on a limb to try something new, particularly if it is something outside of their wheelhouse. A tremendous focus is placed on being able to drill, complete and produce a well using methodologies that maximize returns. Unfortunately, little attention is paid to managing waste because E&P companies, which are not in the waste management business, are more risk averse when it comes to trying new things regarding waste management. The final and perhaps the largest factor is cost. If companies aren’t able to reduce cost, they won’t be able to remain
profitable. E&P companies are faced with a conundrum when it comes to costs associated with managing wastes. On the one hand, every company needs to control its costs while continuing to comply with regulations. On the other hand, it is still necessary to mitigate risks and limit negative impacts on the environment, regardless of what is legal or costly. Historically, either do the bare minimum to comply with regulations and use the cheapest disposal available or pay a premium to employ more responsible methods. Fortunately, there are ways to eliminate this dichotomy and save money, while also properly managing waste. The good news is that there is a different method to treat drilled cuttings based on sound scientific principles that involve
the sequestration of the environmental contaminants associated with drilling waste. This method uses solidification/ stabilization (S/S) technology to recycle drilling waste so that it can be reused to construct lease roads and drilling pads. This method is proven and has been refined over many years of engineering and innovation by a company that specializes in managing drilling wastes. When using this technology, operators can save money because of the construction benefits associated with recycling the waste. Additionally, operators save money on trucking because the S/S process occurs onsite. Operators can achieve these savings when compared with hauloffs, while reducing the risk and liability associated with cuttings. w
Jeffrey Tyson began his career with the Florida Department of Transportation as a professional engineering trainee, specializing in construction engineering and inspection. After completion of FDOT's Professional Engineering Training Program in 2013, Tyson moved to Longview, Texas to become the process controls engineer for Scott Energy Technologies LLC (formerly Scott Environmental Services, Inc.). As the process controls engineer, Tyson has been able to expand on and apply his expertise into waste management and environmental remediation technologies. His research is focused on the chemical and physical sequestration of constituents using solidification and stabilization technology in upstream oil and gas applications. Tyson earned a BS in Engineering from McNeese State University in 2009.
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w w w. l a t e c h e q u i p m e n t . c o m BAKKEN OIL REPORT – FALL 2017
Collaborative Energy Center exterior. Photo by David A. Olson.
University of North Dakota at the forefront of educating petroleum engineers By Deb Austreng and Brandon Beyer, University of North Dakota The University of North Dakota (UND), College of Engineering and Mines located in Grand Forks, ND, has just installed its first full-scale drilling and well control simulator in its new pioneering Collaborative Energy Complex (CEC), home to the UND Department of Petroleum Engineering and Institute for Energy Studies. The simulator provided by global simulator technology specialists Drilling Systems, will enable them to hugely expand their teaching capabilities in the field of oil and gas drilling operations and well control, a standard of knowledge and experience now expected of new students entering the industry. The new Drilling Systems 5000 ‘conventional’ drilling simulator replicates a real drill-floor environment in exacting detail, providing a real-life experience for students, researchers, and professionals alike. The simulator allows the instructor team to set up any drilling and well control scenario based on actual events experienced in the field. Learning within such a real-world environment will not only allow the students to experience and learn how to carry our day-to-day drilling operations, but also how to react and control stressful and potentially hazardous situations in complete safety. Additionally, 28
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companies in the Bakken can also utilize this simulator to train their workforce, allowing them to gain field experience right on the campus of the University of North Dakota. This is another exciting chapter in the story of the college’s Petroleum Engineering program, which didn’t exist in 2008. “Before I arrived at the University of North Dakota in 2008, I was still down in my Texas office when I received a phone call from Bob Solberg [in] Houston, TX. Bob, a retired Texaco executive, is well respected in the oil and gas industry worldwide and also happens to be a UND alumnus. He was curious about my plans to capitalize on the energy sector when I arrived on campus in Grand Forks as the new dean of the College of Engineering and Mines. The vision for a Petroleum Engineering program began with that phone call, even though I didn’t have a clear determination of what it would look like at that time,” says Hesham El-Rewini, UND senior vice provost and dean of the college. The undergraduate Petroleum Engineering program at UND began in 2010 with just four students. But in a matter of a couple years, the number increased exponentially to 300
Australian Consul-General Michael Wood receives a demonstration of UND's College of Engineering & Mines new drilling simulator. Pictured with the graduate student are Michael Wood, Hesham El-Rewini, and Tom Erickson, UND. Photo by David A. Olson.
students. As the price of oil began to fall over the program’s beginning years, intentions with the program never wavered. The administration quickly realized that at a time when industry professionals would struggle to find work, they would turn towards furthering their education in their field. Recognizing this, the college began offering graduate programs in the fall of 2016 to address the demand of these individuals. The expectations of the demand for these programs has quickly been confirmed, the college now expects over 30 students in its graduate programs for Petroleum Engineering just a year after they began.
industry, multiple study spaces and the Solberg Student Success Center. “The next great petroleum engineering breakthrough will someday be linked to the University of North Dakota,” El-Rewini confidently states. Visit their website at engineering.und.edu. w
“Much of the success that we have achieved in our Petroleum Engineering Department can be attributed to the partnerships that we have established over the past few years. Companies that operate in the Bakken have been able to find value in partnering with our college to ensure that the next generation of their workforce is prepared both technically and professionally. The generosity of industry leaders, such as Continental Resources and Hess Corporation, have assisted in laying the foundations for the program. Our Industry Advisory Council, made up of nearly two dozen different company participants, assists us in adapting and preparing our students with the skills and knowledge that companies are looking for in their future employees,” says El-Rewini. On January 1, 2017, the doors of the Collaborative Energy Complex opened to students. Funded primarily with private donations, this faculty has more than 37,000 square feet of research and teaching labs, active learning classrooms, the Big Ideas Gym (BIG - an idea generator from which innovation and creativity will emerge), space for interdisciplinary collaboration among faculty, students and professionals in the energy BAKKEN OIL REPORT – FALL 2017
The hydrogen sulfide house of cards By James O’Dwyer
In the definition of management of change (MOC), three fairly significant groups of standard changes have debuted for 2017, here’s a snapshot. The American National Standards Institute (ANSI) has updated their 2010 revision of the Z390.1, “Accepted Practices for Hydrogen Sulfide (H2S) Training Programs” for 2017. The Z390.1 revision committee, made up of industry stakeholders and subject matter experts, spearheaded the overhaul in part to the ongoing hazards with H2S that relate to significant risk and exposure. Beyond that, the former standard had a more industry-specific focus, a mixture of “mandatory” and “advisory” terminology and interpretable content often flexed to negate intent of this voluntary applied-standard practice. The updated performance standard institutes some specific requirements that the employer must meet to be able to verify that the student has competency beyond the former standard where it was largely upon the student to learn and apply. The change really reflects a closer correlation to the OSHA language for “demonstrated competency” of knowledge, training and with equipment (brand, type, size and style) within work conditions that match the application. The standard will include, but is not limited to, a mandatory student instructional contact time between three to four hours1 applying to initial and required annual retraining. An expanded requirement for visitors to areas where H2S may be present, and a more poignant lateral reference to ANSI Z88.2 – 2015, “Practices for Respiratory Protection”. Not excluding of course, the expectation that training program creation or retooling of current programs meet the updated 2016 version of the ANSI Z490.1 standard for “Accepted Practices in Safety, Health and Environmental Training”. Once you begin to fold in the ANSI Standard impacts that are enforceable under the General Duty Clause2, you cannot help but think in a downturn condition, I cannot hire anyone (yet) to assist with this and in the spirit of doing more with less, is there a more turnkey solution? Enter the Bureau of Land Management (BLM), who updated 30
BAKKEN OIL REPORT – FALL 2017
Onshore Order 3,4 and 5 in Q4 of 2016. Changes that took years in the making and not without some seriously spirited input from industry and regulatory groups alike. At least one of the changes was related to the acceptance surrounding remote tank gauging which could be impactful for tank gauging exposure potential3. Almost finally, the Occupational Safety and Health Administration (OSHA). The agency issued a memorandum for “Enforcement Guidelines for Upstream Oil and Gas Extraction Industries”. This was targeted to employers under NAICS Code 211111 for “Crude and Natural Gas Extraction”, NAICS Code 213111 for “Drilling Oil and Gas Wells”, and finally NAICS Code 213112 for “Support Activities for Oil and Gas Operations”, summarized as scopes of work for drilling, servicing and production operations. Within the memo, it identifies not only employers of those NAICS codes, but the contractor-performed work activities of those industries. Within the “Priority Hazard Items” listing4 for CSHO’s to target were A) Respiratory Protection and Hazard Communication for Hydrogen Sulfide (H2S) and VOC’s exposures, including tank gauging operations, B) Chemical overexposures to H2S for all upstream operations and to poisons (carbon monoxide), asphyxiates (carbon dioxide), and volatile organic compounds (VOC’s) (heptane, hexane, octane, pentane and propane) during tank gauging operations where exposures to substances listed in Table Z-1 and Z-2 must not be exceeded. C) Hazard communication (HCS) in upstream operations, including H2S exposures in all operations and chemical exposures during tank-gauging operations. Oh, it gets better – 1910.1200(d)(1) Hazard Classification, “Chemical manufacturers and importers shall evaluate chemicals produced in their workplaces”. I would encourage you to check out CPL 02-02-079, where it goes on to outline under “known to be present” that “oil and gas products; the producer are considered manufacturers under the HCS”5. Finally, let us not forget the DOT web of regulatory oversight. We’ll stay clear of the perpetual hot potato of produced water being transported on the road and focus on sub surface with the Pipeline and Hazardous Materials Safety Administration
(PHMSA). Recent events in the State of Colorado have great focus and regulatory inspection mandate on refuge gas, vintage supply lines for operating and P&A wells as it applies to their proximity of the continued developing urban sprawl with housing construction hammers still swinging in many areas that were formerly neighborhoods to only O&G wells and nature. Is our risk tolerance any different on new pipe construction installs versus tie ins versus O&M? How are your covered and non-covered tasks being identified for your scope of work and what inhalation hazards are being identified and how, in turn, are we identifying them? Even though PHMSA uses the term “sufficient concentration” as it applies for the purposes of determining whether petroleum sour crude oil must be marked as an inhalation hazard, it won’t commit to establishing what that concentration of hydrogen sulfide in sour crude oil is in order to determine if the vapors are an inhalation hazard6, so back to the producer and those of us working around it for due diligence because nobody wants to be deposed in a legal event and the “toughen up” response by itself may now land a potential retaliation claim. PEC Safety is part of your solution. With the only industry-wide accepted and ANSI Z390.1 compliant program for the academic training portion, making PEC H2S Clear a training requirement can significantly and consistently reduce the liability related to
this hazard and costs for re-training and hiring. Open the door to recordkeeping verification and consistency. Check us out today for a demo, www.pecsafety.com. w James O’Dwyer is a master PEC instructor and regulatory outreach business development for PEC Safety. You can reach him at james@ pecsafety.com, or by phone, 985-249-0353. Footnotes and Sources 1 – Verify with printed copy of standard for exact number. 2 – See OSHA 1910 General Industry Standards, 5(a)1 references, the OSHA Act and 1926 Construction Standards with any General Duty Clause reference including the process of application per OSHA Field Operations Manual (FOM) current version. 3 – See BLM issued onshore order revision content language for more. 4 – Not an exclusive list of OSHA Standard priority hazard items, see memo for inclusive list. Memo authored by Thomas Galassi, director, directorate of enforcement programs to regional administrators. 5 – OSHA Enforcement Guidance for Upstream Oil and Gas Extraction Industries, authored by Thomas Galassi, Appendix B, Priority Hazard Items, OSHA Standards, # 18, page B-7 and OSHA CPL 02-02-79 Effective Date July 09,2015, Inspection Procedures for the Hazard Communication Standards (HCS 2012), pg 9, Inspection Guidelines, B –Scope and Application, 1,j. 6 – LOI, DOT PMHSA, Ref # 12-0183.
GET SAFELANDUSA TRAINING FIND A PEC SAFELANDUSA INSTRUCTOR
PEC has hundreds of authorized professional trainers around the country that can supply your company with SafeLandUSA. To find a trainer in your area, visit www.pecsafety.com/map.
BECOME AN AUTHORIZED PEC TRAINER
For companies that have an in-house trainer, PEC offers a Train the Trainer course in our PEC Basic Orientation (8-hour) and PEC Core Compliance (24-hour). Both courses are accredited by SafeLandUSA. This option allows you to train on your schedule and at your own facility. For more information about PEC’s Train the Trainer, visit www.pecsafety.com/become-a-trainer.
HAVE YOUR IN-HOUSE SAFETY ORIENTATION ACCREDITED
As an accrediting organization, PEC has the ability to accredit your existing safety orientation as SafeLandUSA.
PEC Safety | Phone – 866.647.2338 | Email – firstname.lastname@example.org | Website – www.pecsafety.com BAKKEN OIL REPORT – FALL 2017
BISMARCK STATE COLLEGE
Left: Students can apply to JET after completing one semester in the process plant, power plant, or petroleum production technology at BSC. Above: Launched as a pilot program earlier this year, Job Experience Training (JET) lets students remain in their studies full time, while also spending one year on location at the Hess Corporation, a major player in the North Dakota oil industry since the 1950s. All photos provided by and used with permission from Hess.
Filling the employee pipeline Companies that have been involved in oil and gas in North Dakota for decades have been concerned with keeping their pipelines full: both with product and with future employees. As the technology involved in petroleum production has changed, so too has the skillset required from employees. That was the challenge faced by Hess Corporation, which has been a major player in the oil industry in North Dakota since the 1950s. The company turned to Bismarck State College to develop a high-quality pool of future hires.
"JET is an internship on steroids," Vetter says. "We'll be the learning
Just a few years ago, the oil boom had the company racing to keep up with demand, jobs and production. But now, things have changed, and training supervisor Julie Vetter says the company is using this period of time to focus on building their bench strength in I&E, reliability operations, and mechanical maintenance.
on location at Hess, where they engage in ongoing training and
"When I started, we had 135 employees in North Dakota. Over the course of three-and-a-half years we grew to over 500 which included both employees and embedded contractors. For us, this is an opportunity to sit back and look at what level of experience is missing. We have time to slow down and think about a long-term strategy for developing talent," Vetter says.
petroleum production technology. Her experience gives her a
One of Vetter's first thoughts was how to deepen ties with Bismarck State College (BSC) in order to build the company's talent pool. Over the years, BSC students have interned and job shadowed with Hess. The company has donated more than $250,000 in equipment and money to support BSC's energy programs. BSC has provided training to Hess's current workforce, many of whom are BSC graduates.
Energy Center of Excellence department chair Alicia Uhde. "We
"This is our fourth year working with BSC. On the journey, we've figured out how to be creative in partnering with BSC's offerings to achieve what we need," Vetter says. The latest result of that creativity is a pilot program launched earlier this year: Job Experience Training (JET).
BAKKEN OIL REPORT â&#x20AC;&#x201C; FALL 2017
lab for [BSC] students. We'll give them the hands-on experience needed to be successful, and then, if it's the right fit, keep them on. They'll have a career with a world-class organization." Students can apply after completing one semester in process plant, power plant or petroleum production technology at BSC. Those selected remain a full-time student while spending one year may be hired as openings arise. Michelle Slominski of Dickinson is one of the four students hired through JET in 2017. She was a truck driver in the Bakken for several years before enrolling online at BSC to earn a degree in good sense of what's needed in the industry. "Employers out here want the best people who know what they're doing," Slominski says. That's BSC's goal for students, too, according to BSC National want our students to be job-ready out of the gate. Working with Hess does that and more." Vetter says that Hess is in North Dakota for the long term. "We want to help support North Dakota, and we want to grow programs by embedding in the infrastructure of state. The oil is here and we have the technology to retrieve it. When we begin to ramp up again, we want qualified individuals working for Hess." To learn more about the energy programs at Bismarck State College or to discuss partnerships and training opportunities, call 701-224-5651, or email email@example.com. w
Bismarck State College is home to the National Energy Center of Excellence (NECE), a nationally-recognized leader in energy education. Our on campus and online degree and certificate programs give you the edge you need to remain competitive in a changing energy environment.
Programs offered through the NECE:
Visit bismarckstate.edu/energy or call 701-224-5651 for more information.
National Energy Center of Excellence
BAS in Energy Management Electric Power Technology Electrical Transmission Systems Technology Energy Services & Renewable Technician Instrumentation and Control Lineworker Mechanical Maintenance Technology Nuclear Power Technology Petroleum Production Technology Power Plant Technology Process Plant Technology Water and Wastewater Technology
Cathodic protection (CP) shielding occurs when a coating disbonds or loses contact with the pipe it is designed to protect, yet remains intact. The result is a gap between the coating and the pipe.
Mesh-backed coatings: Why they work Coatings that shield cathodic protection current continue to cause problems. Several recent pipeline incidents can be traced to pipeline coatings that have disbonded and shielded the cathodic protection current from protecting the pipe. There are many aspects to consider when selecting and applying pipeline coatings. One is to choose a coating that allows cathodic protection current to reach the pipe if there is a disbondment. This article touches on the selection and performance of the anti-corrosion coatingâ&#x20AC;&#x2122;s performance in conjunction with the cathodic protection system (CP). CP shielding occurs when a coating disbonds or loses contact with the pipe it is designed to protect, yet remains intact. The result is a gap between the 34
BAKKEN OIL REPORT â&#x20AC;&#x201C; FALL 2017
coating and the pipe, which may fill with moisture and electrolytes. A highly dielectric, solid film-backed coating that remains intact may prevent the CP current from reaching the surface of the substrate, thereby failing to mitigate any active corrosion cell. This can result in a thinning of the pipe wall, reducing the pressure rating of the pipe system. Meshbacked coatings however, may provide a path for the CP to reach the external surface of the pipe to mitigate any potential corrosion. Most external corrosion, stress corrosion cracking (SCC) and microbiologicalinfluenced corrosion (MIC) issues on external pipe surfaces are found under disbonded CP shielding coatings. Therefore with all coatings, proper
application is critical to ensure the best adhesion possible. When proper adhesion is combined with a nonshielding coating, a system that offers a path for protective current in the unlikely event of coating disbondment is created. For optimum performance, the coating system must be properly selected for the environment. Key elements include environmental conditions both during application and anticipated service life, operating conditions, pipeline installation method, soil, and backfill. The operator needs to follow the required surface preparation and employ rigorous, but fair inspectors who are experienced and qualified to inspect the chosen coating system. A thorough set of specifications that provide all parties the guidance
needed for proper coating performance will pay the end user back many times over. Proper training for applicators by manufacturer representatives is another critical step for each type of coating. Any time a new coating system is specified, proper training and demonstrations of proper application and use is important. Often, coating failures are the result of human decisions and actions, not the coating itself. The failure mode of the coating though, is a critical decision point for selection of the pipeline coating system. Understanding the performance properties and all the variables associated with a coating system are very important to providing many years of successful corrosion control for the pipeline. Proper evaluation of the in-service coating system through assessments provides valuable information about the coating’s performance during its in-service life and important information for making decisions about the type of coating to be used in the future. The end user must make the proper decisions about the selection, application
and inspection processes. When properly selected for the environment, with thorough specifications written and followed, professional experienced inspectors can inspect to ensure proper surface preparation
Above: Most external corrosion, stress corrosion cracking (SCC), and microbiological-influenced corrosion (MIC) issues on external pipe surfaces are found under disbonded CP shielding coatings. Therefore with all coatings, proper application is critical to ensure the best adhesion possible.
and coating application is performed, and many of the problems associated with field applied coatings can be eliminated. w
Cold temperatures affecting epoxy cure?
Users and Contractors are finding RD-6 to be their solution. Applied at temperatures as low as -40° F with no cure times and less installation problems. For more information, scan the QR code on the right with your smart device or call us at
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BAKKEN OIL REPORT – FALL 2017
CNG power reduces construction costs for new gas plants By Brent Robinson Far left: CNG was selected to fuel five 200 kW generators at one site and three 200 kW generators at the other site in British Columbia. Left: This case typifies the North American natural gas boom emerging in remote areas with limited grid access, providing opportunities for exploiting domestic natural gas-based power for environmentally compliant operation. The challenge In today’s tight margins climate, the onus on cutting construction costs for two new 200 MMscf/d sweet gas plants in British Columbia leads to consideration for a temporary power system capable of reducing fuel costs. Diesel generators were originally specified for these two remote sites where a natural gas supply was not available during the construction phase. Adherence to the midstream developer’s corporate goal of utilizing domestic natural gas assets provided an opportunity to evaluate other power options. The alternative clean burning power system needed to be fully redundant without technical issues or power interruptions. This would allow each project partner to remain focused on their respective areas of expertise for facilities incorporating complex compression and refrigeration process systems. The solution A temporary grid was designed for the construction phase around a parallel generation system using a line of smaller kW generators versus one or two larger diesel generators at each site. CNG was selected to fuel five 200 kW generators at one site and three 200 kW generators at the other site. Each site also had step-up transformers, distribution panels and neutral grounding resistors. The CNG equipment provided by Aggreko’s CNG partner, Certarus, was also fully redundant with two pressure reduction skids and two CNG trailers at each site. The impact This case typifies the North American natural gas boom emerging in remote areas with limited grid access, providing 36
BAKKEN OIL REPORT – FALL 2017
opportunities for exploiting domestic natural gas-based power for environmentally compliant operation. Overall, the CNG-based solution delivered the following benefits: • No fuel spill risks as seen with diesel generators • Use of CNG-fueled generators provide a market for the developer’s natural gas assets • National programs to reduce emissions from non-road diesel engines are imposing increasingly stringent upgrades to diesel gensets, favoring other cleaner burning options • Line of generators running in parallel offered full redundancy (versus original requirement for one prime diesel generator and one standby diesel generator); allowing construction to stay on schedule • Savings of up to $600,000 over 16 months at current market conditions (primarily influenced by gas versus diesel prices). In review of these benefits, the ability to quickly mobilize necessary equipment for the CNG-fueled temporary power grid is why this option delivered such high levels of efficiency. In addition, external factors such as projections for rising diesel costs in expectation of the 2020 IMO 0.5 wt% Global Sulfur Cap changes the paradigm for diesel-based power generation, favoring lowpriced natural gas. Knowing that the CNG power option selected for the two gas plants in British Columbia saved the contractor approximately $600,000 during construction merits, consideration for selecting CNG at other planned midstream expansions where diesel-based generation was originally considered. Against this backdrop, these validated savings can be duplicated for similar projects by selecting CNG over diesel. w
Push Those Pigs. When pushing pigs and drying pipelines to specs during testing and commissioning, use the most reliable turn-key equipment provider, Aggreko. With a wide range of 100% oil-free air compressors and desiccant dryers, we can help you finish the job ahead of schedule. Aggreko, Power, Heating and Cooling Specialists for pipelines. Call us to learn more. T: 800.AGGREKO E: firstname.lastname@example.org
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Slug flow mitigation in the Bakken Realize more production under tricky circumstances Horizontal wells in the Bakken fit a typical profile of deep,
The downhole mechanical system is made of three main
high-rate and gassy wells. Producers can find themselves
components with no moving parts (see Figure 1): HEAL Seal,
perplexed by the challenge to extend natural flow, transition
sized regulating string (SRS) and HEAL Vortex Separator.
to intermediate artificial lift, and shift to more cost-effective
Flow from the horizontal travels past the HEAL Seal and
rod pumping as quickly as possible. Bakken producers, in
through the SRS. The SRS has a sized internal diameter that
particular, encounter compounding issues resulting from
conditions flow and delivers it up to the vortex separator
casing configurations that place a high liner top above
where the cyclonic effect separates gas and solids. Smooth
the kick-off point, forcing higher pump placement, and
conditioned flow disrupts the solids transport mechanisms
resulting in a liquid loaded section below the pump.
leaving the majority of solids in the horizontal.
This producing environment sets the production engineer
The HEAL System is conducive to casing configurations that
in a predicament. For these types of wells, the production
demand higher placement and can lift fluids from the liquid
rate at the bottom end of the natural flow period is greater
loaded section below the pump. Higher placement allows
than the top end of rod pumping capacity which makes
for smaller lifting equipment, or provides more capacity
intermediate artificial lift inevitable. With the intermediate
from existing equipment, or effective use of long-stroke rod
artificial lift system in place, the greater the drawdown limits
pumping units. In the Bakken, HEAL System installations can
the reliability of the artificial lift system. Therefore, the goal
improve production and reserves opportunities by 30 to 40
is to extend natural flow as long as possible, while closing
percent (see Figure 2).
the gap for an intermediate artificial lift requirement as much as possible, to transition to rod pumping as quickly as possible.
allows for simple and cost-effective transitions from frack flowback, to natural flow and into the artificial lifting
This predicament along with the compounding casing
phase. These slickline features further allow simple and
configurations can convolute the root cause into an effort
cost-effective transitions between gas lift, plunger lift, and
of solution seeking by addressing symptoms. In response,
rod pumping. Lastly, slickline componentry provides the
HEAL Systems addresses the root cause of horizontal
benefit of low-cost frack hit protection from offset wells. The
production challenges by analyzing the nature of flow
slickline componentry has evolved the HEAL System into a
from the horizontal. Horizontal well fluid flow tends to be
well lifecycle solution that offers a single completion for the
inconsistent with rapidly fluctuating gas and liquid rates.
life of the well.
This intermittent, slug flow results in an environment of excessive gas interference and is the source of production challenges. The HEAL System is designed specifically to solve the root cause of horizontal well production challenges by mitigating slug flow and allowing artificial lift systems to be placed higher in the vertical by countering the three main mechanisms of cyclic flow: (1) multiphase flow, (2) well geometry, and (3) operational interruptions.
The HEAL Systemâ&#x20AC;&#x2122;s incorporated slickline componentry
BAKKEN OIL REPORT â&#x20AC;&#x201C; FALL 2017
Ultimately the HEAL System approach increases production and reduces operational and capital costs. The HEAL System has been adopted across North America with 250 installs in 35 formations. For more information, visit www.healsystems.com. w
Figure 1. HEAL System Component Figure 1. HEAL System components
Conventional Artificial Lift
HEAL Vortex Separator
Separated Oil/Water/ Solids
Fluids turn the corner
Conditioned Flow Solids to Sump
Sized Regulating String
re 2. HEAL System improves prod ormance in the Bakken Large Solids Sump
HEAL System Installed
Figure 2. HEAL System improves production performance in the Bakken
Initial Flush Production
BAKKEN OIL REPORT – FALL 2017
Not your typical engineering firm KLJ’s chief value office ensures exceptional experience For nearly 80 years, KLJ has been committed to planning,
of the most recent changes KLJ has made was adding the
designing, and supporting infrastructure such as roads,
role of chief value officer (CVO) to their organizational
runways, pipelines, and parks across the country.
“At KLJ, we love what we do, care about our communities
“We made active moves to position us to ensure we
and work together to improve quality of life for future
keep our promise of an exceptional experience to our
generations. We do this by living our brand promise —
clients, and fuel our growth strategy for the future,” said
an ‘exceptional experience’,” said CEO Dean Anagnost.
KLJ’s team of engineers, planners, and technical and
Barry Schuchard serves as KLJ’s CVO, a role dedicated
professional staff collaborate to positively change our
to promoting and evolving process-focused value
nation by engineering infrastructure that connects
advancement for the company’s clients.
and sustains society. “Our business model puts our
KLJ’s CVO guides and encourages everyone within KLJ
clients first, providing an exceptional experience that
to identify improvements to the client experience, and
truly reimagines what their project can become,” said
actively carry out the company’s brand promise of an
KLJ understood that to ensure a successful future,
“This role puts our clients first, listening to their needs
business practices and models must evolve, like any
and then taking action to better their experience,” said
natural organism does to remain in its environment. One
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BAKKEN OIL REPORT – FALL 2017
Want more Bakken news?
Meridian Energy Group redefines LAER at the Davis Refinery WBI Energy ge ars up for Valley Expan sion project in North Dakota UND installs ne w stimulator at its Collaborative En ergy Complex
Keep up-to-date 24/7 at
bakkenoilreport.com BAKKEN OIL REPORT â&#x20AC;&#x201C; FALL 2017
Index to advertisers Aggreko – Americas............................................................................................. 37 Bismarck State College........................................................................................ 33 Blue Cross Blue Shield of North Dakota..........................................................7 Cat-tek Cathodic Services Ltd................................................................... OBC CCI Thermal Technologies Inc.......................................................................... 20 Dixon...................................................................................................................... IFC Eide Ford Lincoln................................................................................................... 11 FracCure LLC...........................................................................................................15 Graham....................................................................................................................... 5 Heal Systems........................................................................................................ IBC Horizon Resources............................................................................................... 29 JMS Crane & Rigging Co......................................................................................19 KLJ..............................................................................................................................21 LaTech Equipment & Supplies.......................................................................... 27 Manger Insurance.................................................................................................21 Miller Insulation................................................................................................... 20 Minnesota Limited................................................................................................13 MSA – The Safety Company................................................................................3 North Dakota Petroleum Council.....................................................................15 PEC Safety................................................................................................................31 Polyguard Products.............................................................................................. 35 Riverbend Oil & Gas, LLC......................................................................................9 Satellite Shelters Inc............................................................................................. 25
BAKKEN OIL REPORT – FALL 2017
PP-17-014_ Bakken Oil Report-Ad.pdf 1 2017-09-01 5:05:24 PM
The HEAL Systemâ&#x201E;˘: The Foundation for Efficient Artificial Lift in Horizontal Wells Horizontal wells are known to have production challenges as a result of inconsistent flow, damaging solids, and gas interference. Maximizing drawdown through the lifecycle of these wells often requires complex and expensive artificial lift strategies.
The HEAL Systemâ&#x201E;˘ is a patent-pending downhole solution that easily joins to the horizontal as part of a standard well completion. It smooths flow from the horizontal, giving you the freedom to optimize your artificial lift strategy.
Install for the life of the well Offers frac-hit protection Simplify transition to artificial lift Accelerate transition from gas lift to rod pumping Improve performance in any artificial lift system Reduce capital investment and operating expense Proven technology in 250 installs in 37 formations
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