Bakken Oil Report - Fall 2014

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Jay Treaty opens doors for First Nations workers in the Bakken Putting industry’s water use in context: Western Energy Alliance

Greater North Dakota Chamber: Business community lines up against Clean Water, Wildlife, and Parks Constitutional Amendment NDIC gears up to enforce new gas flaring regulations coming into effect PHMSA proposes stringent standards for rail transport of flammable liquids New North Dakota refinery on track for year-end completion deadline

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Message from the Honorable Steve Bullock, Governor of Montana 10 Business community lines up against Clean Water, Wildlife, and Parks Constitutional Amendment, Greater North Dakota Chamber explains 12 Putting industry’s water use in context: Western Energy Alliance 16 Williston, North Dakota: A chamber of commerce in transition 20 ‘Kicking the can’ on fracking in Colorado – Policy storm poses wider implications 24 Waiting for Keystone XL means more rail and truck transport of crude 30 NDIC gears up to enforce stringent new gas flaring regulations coming into effect 36 New North Dakota refinery on track for year-end completion deadline 42 PHMSA proposes stringent standards for rail transport of flammable liquids 46 Grace Unplugged: Keeping faith in the Bakken 54 Enerplus and innovation: Ideas delivered with energy 60 Jay Treaty opens doors for First Nations workers in the Bakken 62 Pecking orders: Much at stake as groups debate alleged sage-grouse endangerment 66 Nuverra Environmental Solutions CEO Mark Johnsrud builds vision in the Bakken and beyond 74 Bakken well depths now reaching 27,000+ feet 76 Salvation Army stays strong in its mission and role in the Williston area 80

Published by: DEL Communications Inc. Suite 300, 6 Roslyn Road Winnipeg, Manitoba Canada R3L 0G5 Need a hand? Ask Oilfield Helping Hands 148 Bakken bound: Manitoba companies find new opportunities in the Bakken region 150 Is there a ‘War on Oil’? 154 Blue Cross Blue Shield of North Dakota helps members, employers adjust to health insurance changes 156 Lynden’s green practices at work in Bakken region 160 A water-transfer company is only as good as their last water-transfer job 166 Integrity Viking funds helping investors cash in on Bakken’s explosive growth 168 Explosion-proof lighting and power distribution by Larson Electronics 172 Oasis Petroleum continues to grow production profile in the Bakken 174 On technology’s cutting-edge: Cirrus Systems, LLC 178 ATEX-certified power tools = Safety in explosive atmospheres 180 Wait less for liners: Brawler 184 Wanzek Construction, Inc. positioned to support Bakken oilfields through roustabout services 186 GeoLok spray foam and MaxGuard elastomeric coating products proven Demilec assets for Bakken play 188 Lithia Ford of Grand Forks unveils free vehicle delivery to the Bakken area 190 Making customer service a priority: Mi-T-M 192 Full-speed ahead: Devils Lake attracts business and visitors alike 194 Lite-Check: How to improve your CSA score 198 BWFS Industries celebrates 25 years 200

REAL Montana’s two-year program equipsemerging industry leaders for dialog with other sectors 90

CanElson Drilling (US), Inc. – A leading provider of oilfield services

Growing pains: How to survive with very little support 98

‘Pack Higher Expectations’: Visit Bismarck-Mandan 204


KEMTRON: A smarter approach to solids control 206

ACHP Applicant Tool Kit provides federal regulatory assistance before issues arise 108

Solving soft-soil site-access challenges in oil-producing regions 208

Education your way: Grow your career with the University of Mary 114

Inland Tarp & Liner Advanced Containment SolutionsTM 210

Disruptive environmental solutions for the energy industry 120

Unit Liner Company introduces Enviro-Guard temporary containment system 214

Resirkulere offers unique mobile wastewater filtration system for the oil industry 126

Stephens Marine proud to offer Custom Weld and Wooldridge product lines 216

Williston Basin API chapter reaches new highs in giving back to communities 130

Oreco – Novel PROH2O technology for treating produced water 218

Answering the call: Miller Architects & Builders 132

ESI Staffing, Inc. – Feeding the hottest job market in the country! 222

Financial focus – Free yourself from cycle of emotional investing 136 Long water transfer in booster situations: Sizing the right pump for the right job 138 Accurate boiling point distribution via gas chromatography for the entire crude range 142

Publisher Jason Stefanik Managing Editor Katrina A.T. Senyk Sales Manager Dayna Oulion Advertising Account Executives Corey Frazer Gladwyn Nickel Mic Paterson Anthony Romeo Colin James Trakalo Cover image courtesy Oasis Petroleum

Maximizing natural gas vapor recovery 86

Transforming a transient city into ‘home’ takes community 102

President David Langstaff

Lessons learned from Bakken facilitate Encore Energy’s growth 226 Central Dakota Water Works LLC provides hot and cold water in the Bakken 229

Production services provided by: S.G. Bennett Marketing Services Art Director / Design Kathy Cable Advertising Art Joel Gunter Dana Jensen Sheri Kidd © Copyright 2014 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.


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Index to advertisers 230 PRINTED IN CANADA | 10/2014



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A message from the Honorable Steve Bullock, Governor of Montana Last April, in conjunction with my Main Street

Make no mistake: bonding is the most fiscally

Montana Project – a business plan for Montana,

prudent means by which to get the needed

created by Montanans – I proposed an aid

resources to impacted communities. As the

package for eastern Montana communities

mayors of Glendive, Sidney and Miles City

impacted by oil and gas development in the

explained in a recent guest column:

Bakken region of Montana, entitled the “Eastern Montana Impact and Infrastructure Project.” The package has three main initiatives: • Reduced cost of borrowing from the State

in reality, it costs Montana more in the long run. Here’s why: Montana has a sterling bond rating, which means the state is able to borrow

including reductions in short- and long-

money at a rate of roughly 2.5 percent. At the

requirements and reduction in the reserve requirements; • Local access to expert technical assistance –

same time, the state has an incredible track record by making smart investments, returning approximately 13 percent this year alone. So, spending a dollar saves us 2.5 percent in

dubbed “Rapid Response Teams” – in the areas

interest payments, but costs us 13 percent in

of land-use planning, affordable housing, and

potential investment income – a net loss of 10.5

grant application processing; and • A $45,000,000 grant program to cities, towns, tribal governments, and water and sewer districts, financed through state bond proceeds. The reduction in the cost of borrowing from the SRF is already saving local jurisdictions millions of dollars in infrastructure construction costs.


infrastructure improvements saves money,

Revolving Loan Fund (SRF) programs, term interest rates, reduction in coverage


“While it may seem that paying cash for

percent overall. “Bonding is how long-term infrastructure investments are generally made by Montana cities and counties, as well as most municipalities across the country. It’s worth noting that it’s how the Montana Legislature does it, too.”

Last June, I announced the changes to the SRF

Montana was recently named the most fiscally

loan program, saving ratepayers an estimated

prudent state in the nation, due in part to

$29 million in the next year, alone. As additional

our commitment to making smart financial

communities move into the construction phase

decisions – like bonding instead of paying cash

of their projects, similar savings will benefit

when it makes sense. It clearly makes sense in

ratepayers on those systems.

this instance. Eastern Montana, and our state’s

The grant program and its bonding component

financial well-being, needs our legislature to set

will require legislative approval during the 2015

aside partisan politics and pass this bonding

legislative session.

proposal next session. w


Business community lines up against Clean Water, Wildlife, and Parks Constitutional Amendment Greater North Dakota Chamber explains Why is the business community lining up against the Clean Water,

Of course, they fail to mention that virtually every agriculture-

Wildlife, and Parks Constitutional Amendment?

related group in the state are members of North Dakotans

The Greater North Dakota Chamber is opposed to the Clean Water, Wildlife and Parks (CWWPA) Constitutional Measure. At

for Common Sense Conservation, the coalition opposing the CWWPA.

first glance, you may wonder why, considering there’s potentially

If farmers and ranchers would benefit from enhanced CRP

billions of dollars in hunting and fishing revenue at stake. While

payments through CWWPA funding, why do they firmly oppose

the business community supports conservation, hunting,

it? Because the out-of-state groups funding the amendment have

and protecting what makes North Dakota “North Dakota”, this

a history of being hostile to the ag industry, and there’s no way to

measure isn’t about that. It’s about the money, and much of what

make sure the money will be spent how CWWPA supporters claim

you may see from the supporters of this measure is misleading –

it will be spent. We believe that when North Dakota’s farmers and

if not downright false.

ranchers – the backbone of our state’s agricultural heritage – take

To begin with, supporters assume that without CWWPA funding,

a stand against something, it’s important to take notice.

our state’s great outdoor resources will diminish and eventually

While the advocates for this measure promote it as “hunting

disappear. They fail to mention, however, that North Dakota

friendly”, the track records of Ducks Unlimited and the Nature

currently spends almost $70 million per year on conservation and

Conservancy – which donated $237,000 to this campaign –

related efforts; not to mention the more than $300 million that is

tell a different story. Both organizations restrict hunting and

directed at conservation, in local spending and federal programs.

fishing on their acquired lands in other states. In fact, the Nature

For those keeping track, it adds up to over $370 million allocated

Conservancy bans hunting on all of their lands.

for conservation projects in North Dakota every year.

Instead of giving money to outside groups that restrict access

Supporters also often mention the decline of the Conservation

to “their” land, why not support increased funding to the PLOTS

Reserve Program (CRP) and suggest that CWWPA funding could

program through the legislature? This ensures local control of

be used to bolster it; they rightly point out that farmers and

our resources and provides a fair opportunity for everyone to

ranchers are the state’s greatest conservationists.

have access.

They fail to mention that virtually every agriculture-related group in the state are members of North Dakotans for Common Sense Conservation, the coalition opposing the CWWPA. 12


MESSAGE continued

If farmers and ranchers would benefit from enhanced CRP payments through CWWPA funding, why do they firmly oppose it? Because the out-of-state groups funding the amendment have a history of being hostile to the ag industry, and there’s no way to make sure the money will be spent how CWWPA supporters claim it will be spent. Supporters often quote an unnamed “reliable source” that told them visitation to TR National Park is down because it’s so dangerous, and suggests a polluted landscape of oil spills. My “reliable source” called the National Park Service’s Monthly Public Use Report for June 2014. They report visitation in the park is actually up by 26 percent over the same time last year. But, for the sake of argument, let’s pretend for a moment that our other criticisms of the CWWPA don’t exist. Let’s pretend that the amendment isn’t being funded by out-of-state specialinterest groups. Let’s pretend that the CWWPA is going to do all the great things the supporters say it will (even though they, like the amendment itself, are skimpy on the details of exactly how that’ll happen). Let’s pretend the CWWPA is the “golden ticket” its supporters claim it to be… The Greater North Dakota Chamber and North Dakotans for



Common Sense Conservation would still oppose the amendment. Why? Because enshrining any special-interest spending in the state constitution is bad policy, regardless of the issue. It says that your issue is more important than any other funding priority in the state – education, infrastructure, health, human services, law enforcement, etc. The coalition of organizations, including the Greater North Dakota Chamber, opposing this proposed measure believe it is essential to have a balanced approach to funding for all the state’s needs. From conservation and education to infrastructure and public safety, utilizing our vast resources to benefit all North Dakotan’s is essential in this time of dynamic change. That’s why we don’t support the CWWPA. And neither should North Dakotans. w

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Putting industry’s water use in context By Ursula Rick, PhD, Manager of Regulatory Affairs – Western Energy Alliance Water is essential to the development of oil and natural gas resources and, as with many other industries, it represents a critical component of the supply chain. So when discussion turns to the amount of water used in the oil and natural gas industry, context is key to understanding reality. According to a western water study recently released by Western Energy Alliance, oil and natural gas activities use significantly less than agricultural, municipal, other industrial and recreational activities. Our report, entitled the Oil and Natural Gas Exploration and Production Water Sources and Demand Study1, provides state-bystate volumes of water used by the industry, as well as points of comparison to other industries. The study was conducted by global engineering and environmental consultancy Golder Associates and tracks water usage in the six major western production states of Colorado2, Montana3, New Mexico4, North Dakota5, Utah6 and Wyoming7. Since most states track water very differently, there is not one easily discernable number for the West as a whole. But the report provides details by state to help put our industry’s water use in perspective. For those states that track state-wide water use – Colorado, New Mexico, and Wyoming – oil and natural gas activities use much less than one percent of the total water use. Our study shows industry also has a very low water use in North Dakota, Montana and Utah.



In North Dakota, state officials do not track total water use. Instead, they track consumptive water use. Consumptive use is water removed from the available supply and not returned to the immediate water environment. Because consumptive use by its nature tracks a small proportion of the total water used in a state, the proportion from oil and natural gas will appear larger than in those states which track total water use. Water used by oil and natural gas activities in North Dakota is categorized under industrial water use, which is further subdivided as fracking and non-fracking. Fracking includes water specifically used for hydraulic-fracturing activities. The nonfracking sub-category includes all other industrial uses, such as manufacturing, mining, processing and non-fracking oil and natural gas use. Of the total consumptive water use, industrial fracking water use is four percent and all other industrial non-fracking is six percent. Data provided in the study show that agriculture, recreation, and municipalities use significantly more water. For instance, in North Dakota, the municipal share at 48 percent dwarfs industry’s share. For context on fracking, in North Dakota fracking water use is slightly less than in Colorado – 12,629 acre-feet versus 14,000 acre-feet, respectively. Yet in Colorado, the amount of water used for hydraulic fracturing is about 0.07 percent of all water used statewide. In contrast, 56.1 percent was used in agriculture. Similarly, data in other parts of the West show the oil and natural gas industry uses less water than others. In New Mexico, oil and natural gas used 0.06 percent of the state’s total in 2010. Even the



For those states that track state-wide water use – Colorado, New Mexico, and Wyoming – oil and natural gas activities use much less than one percent of the total water use. water evaporating off reservoirs dwarfs the oil and natural gas industry’s use, at 6.9 percent. Taking all of this into consideration, for industry, stakeholders and the public to engage in a constructive dialogue on water management and to make sound public policy, we must start with a baseline understanding. The Western Energy Alliance commissioned this water conservation study to provide that baseline.

We hope that contribution will help provide context when those opposed to responsible oil and natural gas development exaggerate the water usage as an argument for stopping continued growth. The study is available on Western Energy Alliance’s at www. w



WEA Colorado study online:


WEA Montana study online:


WEA New Mexico study online:


WEA North Dakota study online:


WEA Utah study online:


WEA Wyoming study online:


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Williston, North Dakota: A chamber of commerce in transition By Scott J. Meske, President, Williston Area Chamber of Commerce One of my favorite quotes comes from 19th century British author Lewis Carroll, who said, “If you don’t know where you’re going, any road will get you there.” That quote should remind us as individuals, and as organizations, that you must know where you’re headed before you can start on your journey. Real-life evidence of this principle can be found in the Williston Area Chamber of Commerce, and its transition from small-town meeting planners to big-city political business advocates. Just as the city of Williston is in transition, so too is the Williston Area Chamber of Commerce. So how do we know we’re on the right path? When speaking to groups, I like to dip into a bit of history to help us answer the question, “What exactly IS a chamber of commerce?” The Chamber of Commerce Idea The chamber of commerce as a wholly volunteer institution in the United States is actually eight years’ older than the Declaration of Independence. The New York State Chamber, the



first in America, was organized in 1768, and five years later, the first local chamber was formed in Charleston, South Carolina. Most chambers have their basic roots in the “town booster” type organization, competing with neighboring communities for trade, tourism and economic development. In the 1950s and 1960s, chambers placed a major emphasis on industrial activities, believing that new industrial jobs would solve all community problems. Chambers entered the 1970s with huge problems of inadequate housing, schools, community services and high unemployment. The role for chambers expanded to include local and regional socioeconomic concerns. They came to understand that the health and vitality of the business sector are affected by the health and vitality of the community – or as we say here in Williston, the quality of life. It has been generally accepted that the role of the modern chamber is two-fold: 1) to promote, with its maximum resources, the development of new and expanded payrolls (an economic development responsibility); and 2) to work for a

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MESSAGE continued

In these past 240 years, the chamber has grown from a single-purpose federation of trade to a broad community development association that believes when men and women of high purpose work unselfishly on common problems, progress will result. continuous upgrading of the “product”, which is the community it serves. In another more visible role, chambers are more active in political affairs, realizing that challenges in the business community can most effectively be addressed within the legislative process. The strength and influence of the U.S. Chamber of Commerce is evidence of this premise. As a united federation of business and professional firms within the community, chambers have great power and influence through the factual information they provide and the ability to help individual chamber members communicate regularly with their elected officials. In these past 240 years, the chamber has grown from a singlepurpose federation of trade, which was organized to promote trade and cut costs by cooperating in certain operations, to a broad community development association that believes when men and women of high purpose work unselfishly on common problems, progress will result.

The right place, right from the start It all started in the Williston Basin. When we launched Legacy Oil + Gas in 2009, this was our land of opportunity. The area has delivered on its promise ever since, helping Legacy evolve from an upstart junior to a premier intermediate producer. Today, we are a company of over 100 people, with a development drilling inventory in excess of 2,000 net locations and 2014 exit production of 27,350 Boe per day. Technology-driven light oil resource plays continue to steer our success, with the Williston Basin as a core operations region. Our Bakken, Spearfish and conventional assets have driven our strong growth and plays like the Midale ensure this pace continues into the future. And with our dedicated people, high quality light oil assets and extensive development inventory, we know we are in the right place for a story that is just beginning. 22


Clear Mission The mission of the chamber of commerce is to promote a favorable business climate for our membership and community: to work on issues of community interest and provide business leadership for improvement of the economic, political environment and quality of life. During its strategic planning process last year, the Williston Chamber leadership adopted what I believe to be a very direct and understandable mission statement: The Champion of Williston’s United Business Community. Currently we have more than 730 members of the chamber, from all sectors of industry and business. Our revamped standing committee structure, a thorough review of the bylaws and board structure are all crucial building blocks upon which the organization will grow. The chamber works closely with the Williston Convention and Visitors Bureau, Economic Development Office, the City and County, the Downtowners Association and other organizations to make Williston a great place to live and a desirable place to work. For those of us who are here, whether it’s by birth or by choice, the Williston story can’t be told with just studies, statistics, projections, and Google. The Williston story is made up of people. People who care about their heritage and history, and also people who care about the future. I’m grateful to be here because there are so many communities around the country, so many regional economies, so many local officials who would give anything to have a fraction of the challenges we have in Williston. There are challenges. There are no easy answers. It will take some time. If we acknowledge those things, and if we continue to cooperate and work together as a community, these challenges will pave the way for incredible long-range, sustainable opportunities for generations. So the next time your family, friends, or distant cousins in Paducah, Kentucky, ask you “How’s it going in Williston, North Dakota?”, you can tell them we have some challenges… but the opportunities far outweigh the challenges. Come see for yourself. w

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‘Kicking the can’

on fracking in Colorado

Policy storm poses wider implications for the industry at large By Michael Sandoval New state-based fracking regulations will not be on the Colorado ballot in November, but that does not mean the raging debate over the traditional extraction method will die down anytime soon – for this state, or our neighbors to the north in the Bakken region.

initiatives had been filed by opponents of fracking, including at

In fact, the last-minute “compromise” brokered by Democratic Gov. John Hickenlooper, which resulted in the withdrawal of four ballot measures by their proponents in exchange for an 18-member blue-ribbon commission, ensured a shift in the acrimonious battle from this year to the 2015 legislative session. Or even back to the ballot in 2016, with no guarantees that any legislative solution offered by the commission and introduced next year will produce a satisfying outcome for the industry, antifracking environmental groups, or Colorado residents alike.

extended the state regulation to a 2,000-foot setback for new

How Did We Get Here?


The success of anti-fracking activists in a handful of municipal ballot questions across Colorado in 2013, which included “time-out” bans on hydraulic fracturing, emboldened local grassroots citizens and their out-of-state backers to shift gears for a statewide offensive in 2014. By May, more than a dozen

By early summer, a festering policy storm looked increasingly



least nine supported by Rep. Jared Polis (D-CO) and his group, Coloradans for Local Control. By early August, two Polis-backed measures had appeared to clear the final hurdle for November. Initiative 88 would have oil and gas operations. Initiative 89, a so-called environmental bill of rights to “conserve Colorado’s environment,” would have amended the state constitution to permit “more restrictive and protective” local laws and regulations to supersede those at the state level. In addition, at least three of the cities that voted to ban fracking in 2013 – Boulder, Lafayette, and Longmont – were facing mounting legal bills as they faced state challenges to their new

likely to develop into a full-blown political hurricane. Industry spending could jump into the tens of millions of dollars, according to analysts like Floyd Ciruil; dark money from wealthy foundations backing out-of-state anti-fracking efforts like

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With Colorado as the experimental testing grounds for not just politics, but also policy over the last decade, a significant win here for anti-fracking activists will only embolden efforts elsewhere in the United States, particularly in the Bakken region. Water Defense, extensively documented in a July 2014 report from the Senate Environment and Public Works Committee, ensured that local groups fighting for “local control” would not be left inadequately funded for outreach necessary to pass the measures. But the issue was not merely one of rabid environmentalists and local control advocates pitted against deep-pocketed oil and gas developers. With much of the financial and earned media support for the anti-fracking ballot measures coming from a millionaire member of Congress in Polis, the matter and the urgency took on an increasingly political tone. It not only gave rise to bipartisan ads in support of oil and gas to Colorado’s economy by two former governors – Republican Bill Owens and Democrat Roy Romer – but also to the possibility that the issue might have rather stiff repercussions up the ballot, particularly for members of Polis’s own party. Adding to the high-stakes face-off, two measures sought to push back against the anti-fracking onslaught: by making local governments enacting prohibitive rules on oil and gas development to be ineligible to receive any state tax revenues derived from such activities elsewhere in the state, and by requiring a fiscal note – a cost to the taxpayer – for any citizen ballot measure. Though rumors of a possible special session in the Colorado legislature to avert a November showdown persisted throughout the early summer, Gov. Hickenlooper’s July decision not to call the legislators back to address the growing entanglement that threatened the state’s $30-billion oil and gas industry, tens of thousands of jobs, and billions in tax revenues. State of the State – Did Colorado Dodge a Bullet? With just hours to spare on August 4, the deadline for signature submission for the ballot measures, Gov. Hickenlooper announced plans that he had finally brokered a deal. In exchange for the withdrawal of both of the Polis-backed measures, the State of Colorado would drop ongoing litigation over the rules passed by the City of Longmont, and the two industry counter-measures would be dropped, as well. For the time being, a “scorched earth” campaign from both sides had been averted, homebuilder Pat Hamill told the Denver Post. Polis defended dropping his initiatives to a cacophony of criticism from anti-fracking activists, who felt betrayed by the move, in a guest commentary at the Post. 26


“This deal represents progress. For the first time ever, citizens will be directly at the negotiating table, on equal footing with the oil and gas industry. They will have their voices heard about the impacts of fracking on their health, their property values, and on Colorado’s landscape. With this agreement, they now will have a forum to continue pressing for the common-sense reforms that Colorado needs,” Polis wrote. “To those who say this deal doesn’t go far enough, I respond that that is up to us. We need to make sure that the voices of Coloradans impacted by fracking are heard. We have a real opportunity for progress. However, if we dismiss this commission before it even convenes, we will have given oil and gas companies a platform to push watered-down policies that put profits before people. We need the environmental community, local officials, and all Coloradans to stand up and fight for this commission. The time for criticism and condemnation is over. We must be united in solving this problem because the people of Colorado are worth it,” Polis concluded. “You feel used,” Therese Gilbert, an anti-fracking proponent, responded. Gilbert was not alone. Shane Davis, an outspoken anti-fracking activist, took to Change. org to voice his condemnation. “What you and the Democratic Party have done in this state is hijack our democratic process,” Davis wrote, according to the Colorado Observer. “Your actions prove that we not only have an environmental crisis, but also a democracy crisis,” the petition said. “We are not bargaining chips in some sort of game of ‘Chicken’ with the Democratic Party and Governor [John] Hickenlooper.” “This deal only strengthens our resolve to work in our communities for real citizen initiatives that will ensure a safe and healthy future for all Coloradans,” said Russell Mendell of Frack Free Colorado, in a press release at the Food and Water Watch website. “It’s time for Coloradans to stand up take back our democratic rights.” Meanwhile, Hickenlooper outlined an 18-member taskforce drawn from three groups: six citizens directly affected by oil and gas development, six representatives of the industry, and six “respected Coloradans.” To lead the group, Hickenlooper named two co-chairs: La Plata county commissioner Gwen Lachelt and XTO Energy president Randy Cleveland. Lachelt acknowledged the charged climate, and that the fate of any proposals would rest not only with the legislature, but

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Lessons learned in the Colorado battle over natural resource development can surely be put to use by all interested parties, and residents and developers alike in Montana, North Dakota, and southern parts of Canada should stay tuned in over the next several months. also one that might find a different composition than the Democratically-dominated one currently in place come January 2015.

“What I said was legislation,” Hickenlooper told the CCM reporter.

“I’m not naïve,” Lachelt told the Durango Herald. “It’s certainly my hope that whatever legislature convenes ... that they will take these recommendations seriously ... But we could spend a lot of time developing the best protections possible and have it fall on deaf ears.”

But whether any regulation emerges from the possible legislative

In addition to her role as county commissioner, Lachelt, a longtime environmental activist, also served as project director for the Earthworks Oil and Gas Accountability Project. In 2010, Lachelt delivered these remarks at an Earthworks conference in Pittsburgh:

And a deadlocked legislative session in 2015 will only mean

“Back in the day, we used every trick in the book to block drilling, stop drilling, slow drilling, regulate drilling and we’ve fought to put new laws and regulations on the books where they didn’t exist before. We’ve blocked bulldozers, filed restraining orders, filed lawsuits, received death threats and been put on trial.”

for anti-fracking activists will only embolden efforts elsewhere

XTO Energy operates across three Colorado counties – Las Animas, La Plata, and Rio Blanco. In 2013 the company paid $24 million in taxes to the State of Colorado, and gave an additional $1.5 million to education, civic, and cultural activities in the state, according to its website.

and southern parts of Canada should stay tuned in over the next

With approximately 200 applications received by August 19, the actual composition of the commission will not be available until after this publication’s deadline. Sorting through the applicants could take weeks, as Hickenlooper and his staff handpick the selections. It is unclear whether geographic diversity will play any part in the committee makeup, given the concentration of hydraulic fracturing in a handful of counties. In any case, the first meeting will likely occur in September.

local coffers, as an already heavily regulated industry complies

“People ask me, ‘Who’s gonna pick ‘em?’ I am,” Hickenlooper said, according to Colorado Community Media. “The buck stops here and I guarantee you we’re going to have everybody pissed off again. The one criteria is that everyone who is going to be on that list is someone who believes we can get to a yes (on a compromise).”

“Go back and look at the quotes. I never said we needed more regulation.”

proposals will be determined not only by the prospective content, but as Lachelt noted, by the makeup in the Colorado legislature when it reconvenes next year.

more efforts, locally in the off-year election, and statewide come 2016. With Colorado as the experimental testing grounds for not just politics but policy over the last decade, a significant win here in the United States, particularly in the Bakken region. But lessons learned in the Colorado battle over natural resource development can surely be put to use by all interested parties, and residents and developers alike in Montana, North Dakota, several months. Meanwhile, thousands of Coloradans will get to keep goodpaying jobs and millions of dollars in taxes will flow to state and with state regulations. The situation in Colorado remains fluid, but like a shaken can of soda, has only been kicked down the road. REFERENCE: GwenLachelt_OpeningRemarks.pdf About the Author: Michael Sandoval is energy policy analyst and investigative reporter for the Independence Institute in Denver, Colorado. Michael was most recently an investigative reporter for the nation’s leading conservative think tank, The Heritage Foundation, where he specialized in coverage of green energy

But prospects of the taskforce reducing the contentiousness surrounding the issue stumbled out of the gate when Hickenlooper felt the Associated Press had misquoted him.

issues, government waste, and social media strategies. Michael’s

“Its success is dependent upon it ending in regulation,” the AP quoted Hickenlooper.

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Waiting for Keystone XL means more rail and truck transport of crude By Chris Faulkner, President and CEO, Breitling Energy Corporation The transport of crude oil by rail and truck, while we wait for the Obama administration to make a decision on the final sections of the Keystone XL pipeline, is undergoing strong scrutiny both in the U.S. and Canada after several small incidents and a major one in Quebec in 2013 that took the lives of 47 people. The announcements in mid-August that there isn’t enough current pipeline capacity to handle all the crude that is being produced in the Texas/New Mexico Permian Basin, as well as a consideration by North Dakota officials that Bakken crude be partially refined before shipping by truck or rail to lessen volatility, have oil producers scratching their collective heads, wondering how to safely and efficiently get all this new crude to refineries. Without a pipeline, there really aren’t any other viable alternatives to truck or rail, so producers are forced to settle for one or the other. This has caused an extra burden on refiners since, according to a recent report by Reuters, oil production from the Permian Basin is outpacing pipelines’ ability to transport the crude to U.S. Gulf Coast refineries, causing the refiners to pay an additional premium to acquire the oil. Add to that the fact that between the 30


Bakken, Permian, and Eagle Ford, there will be almost four and a half million barrels per day being produced, and you can see the dilemma being faced. That oil needs to get to the refiners, especially with refinery maintenance season almost upon us. In the case of the Bakken, things took an interesting turn in mid-August, when it was revealed that North Dakota officials are considering a requirement that drillers and producers partially refine their crude before being loaded and shipped by rail to refineries on the West Coast, East Coast and Gulf Coast. Their proposal would require separating the natural gas liquid from the crude, which in turn would reduce flammability as well as vapor pressure. Of course, this can’t be done for free, and will add supplementary costs to the product being pulled from the Bakken. That doesn’t sit well with drillers in the area, who would be forced to foot the bill, and eventually down the line, it would be passed along to the end-users. It also makes new drillers a little more wary of entering the area when it may be easier and more profitable to go to the Permian or Eagle Ford plays in Texas. To understand fully what is going on with the pipeline, there first needs to be some clarification about what the

Keystone Pipeline actually is, where it goes (and will go), and what’s holding up completion. There are five sections to the pipeline, which in its entirety stretches from Canada to the Texas Gulf Coast. Three of the five sections are complete and have been transporting oil in many areas since 2010. Phase 1 of the pipeline went online in June of 2010 and is actually the longest section of Keystone, at 2,147 miles. It runs from Hardisty, Alberta, Canada, to Patoka, Illinois, with pumping stations and terminals in Regina, Saskatchewan, and Steele City, Nebraska. Phase 2, which began pumping oil in February 2011, actually branches off Phase 1 in Steele City, and runs south for 300 miles to Cushing, Oklahoma. There are two parts to Phase 3. The first, called Phase 3a, went online in January of this year and runs the 487 miles from Cushing to Nederland, Texas, just outside of the Beaumont/Port Arthur area, and serves refineries in those cities. A 47-mile extension of that section, which is called Phase 3b, is currently under construction and runs from Liberty County, Texas to the Houston refineries. But it’s the 1,179-mile section of the pipeline known as Phase 4 that is being held up by the Obama administration,

and in turn, creating logjams along the way. That section, when approved, will also begin in Hardisty, Alberta, but will take a more western route through Baker, Montana, the Bakken region, and eventually merge with the other sections in Steele City. So why is it being held up, when threequarters of the pipeline is already carrying oil, and the most critical part (the one that would carry a majority of Bakken oil safely underground) is in limbo? Let’s start with the environmental issues. Environmental groups have convinced the Obama administration that the Phase 4 extension of the pipeline would lead to increased extraction of Canadian oilsands than is now being done, which, according to the environmentalists, would lead to about a 15 percent increase in greenhouse gas emissions. Guess what? Canada is going to continue to extract oil from their tar sands, pipeline or no pipeline, and if the U.S. is no longer a viable market, it will be sold to the Chinese or somewhere else overseas. The other major argument that the environmentalists use is the fact that the proposed path of the pipeline crosses

the Ogallala Aquifer, which traverses

drinking water for millions of people

several states. They are concerned that

in the region. But the truth is that

a potential leak could contaminate the

thousands of miles of pipelines already

water from that aquifer, which supplies

exist over the aquifer, and they have for


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MESSAGE continued

Until the administration moves into gear on giving the go-ahead for the last section of the Keystone XL pipeline, oil from that region will continue to be hauled by rail and truck, burning fuel along the way... decades. These pipelines carry both

one might expect, House and Senate

crude and refined hydrocarbons and

Republicans, almost to a T, are in favor of

have never had an incident.

the pipeline, because they see how much

And just a side note on that issue: Pipelines are underground and pretty

and how fast it would expedite American and Canadian energy independence.

much stay where they are placed. You

Strangely enough though, many Senate

can’t say that about railcars going

Democrats are also in favor of the

through the middle of cities, or trucks

pipeline, and even went so far as to

going 70 miles per hour through your

write the President a letter, urging him


to approve the pipeline and remove

So that brings us to the political issue. And that, in many cases, goes hand-inhand with the environmental issues, because environmentalists vote in large numbers, and this is an election year in

the roadblocks that have kept it from proceeding. The letter was written back in May of this year, but so far, no action has been taken by the Obama administration.

the U.S. Keystone has become a major

And that brings us back to our original

election issue in virtually all of the

dilemma. Until the administration moves

states that the pipeline would cross. As

into gear on giving the go-ahead for the

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last section of the Keystone XL pipeline, oil from that region will continue to be hauled by rail and truck, burning fuel along the way, adding costs to the process, slowing delivery times, and causing backups in stockpiles much like the ones we are seeing now in West Texas. It’s been said that politics moves slowly. But now it can be safely said that Canadian and American oil is going to be moving slowly as well, thanks to inaction on behalf of the administration. About the Author: Chris Faulkner is the chief executive officer, president and chairman of Breitling Energy Corporation1 (BECC), an oil and natural gas company based in Dallas, Texas. Author of The Fracking Truth – America’s Energy Revolution: The Inside, Untold Story2 and producer of the fracking documentary Breaking Free3, Faulkner was named Industry Leader of the Year in 2013 by the Oil & Gas Awards for the Southwest Region, Oil Executive of the Year in 2013 by the American Energy Research Group, and recognized in the Dallas Business Journal’s “40 Under 40” in 2014, as well as the “Dallas Who’s Who in Energy” in 2012 and 2013. Breitling received the 2013 Aggreko Award for Excellence in Environmental Stewardship from the Oil & Gas Awards for the Gulf Coast Region, was named 2013 E&P Company of the Year by the Oil & Gas Awards for the Southwest Region, “Best North American Operator” by World Finance Magazine in 2011, 2012 and 2013, and to the “Dallas 100 List” in 2013, ranking fourth among the top 100 companies in the Dallas-Fort Worth area. w References: Online: Online: 3 Online: 1 2



The new Hellfighters NDIC gears up to enforce stringent new gas flaring regulations coming into effect Photo courtesy: Hess.

By Rebecca Colnar Gas flaring in the Bakken has been making worldwide news.

What industry has to say

Everyone is concerned about it, from industry and mineral

Ron Ness, president of the North Dakota Petroleum Council,

owners to environmental groups and politicians. The Ceres

provides background. “North Dakota and Montana have been

Group shows a map of the U.S. at night with the Bakken lit up

oil states, not gas. In the past, we have seen associated gas in

like Minneapolis and New York, due to all of the flared gas. Those

the oil, but historically it’s been dry gas in minimal amounts.

bright lights aren’t good in anyone’s opinion. To combat concerns

As we developed the Bakken, however, there was associated

about gas flaring, the State of North Dakota has embraced and

gas coming at about a thousand cubic feet to a barrel, and we

established tough new regulations that the oil/gas industry must

discovered that Bakken gas is extremely liquid-rich.”

comply with by October 1st.

Oil companies originally believed they could use their standard Photo courtesy: Dan Larsen.

field-processing units to strip out the natural gas byproduct and use it for home heating. Then the realization came that liquidrich gas was going to take unique processing. This resulted in a change in the approach to managing the gas and in the case of the state’s largest fractionating gas plant, it searched worldwide for technology to expand gas processing to the full capacity; but ultimately, had to design a new technology to handle this liquidrich natural gas. “We have a situation where the technology has rapidly grown for oil production, but the natural gas infrastructure is too small,” explains Ness. “We need to build substantially more gasprocessing infrastructure. We will likely need to keep building well into the future as our gas production continues to grow… We also realized that we needed to explore and develop new markets for natural gas liquids in the state or region.”



Photo courtesy: Northland Securities Inc.

He says big contributing factors in the lack of rapid infrastructure growth are the natural challenges. Winter are long, the ground freezes hard early, and the construction season is short, limiting the time new gas-processing facilities and pipelines can be constructed. Another dilemma: gas can’t be trucked; it has to be transported in a pipeline.

to get better at producing the resource. We are at the point where

Ness explains that industry doesn’t want to flare the resource, but that they are in a learning curve. The resource the Bakken produces is about 98.5 percent oil versus the other shale plates that are gas. “We’re the learning curve for the next oil shale plate.”

infrastructure. I believe the infrastructure capable of handling this

Ness explains that the Bakken is strikingly different from other basins, such as the Permian Basin in Texas. “There, you are close to liquid-gas markets, there is a huge infrastructure network and the weather conditions are favorable for laying pipelines most of the year. “We’ve struggled with some Indian reservations to get easements for pipelines. So it’s a lot more difficult in this part of the country to build infrastructure. However, our goal is to capture that gas and hopefully we continue to move in the right direction.” One other contributing factor is the amount of production of oil/ gas in the Williston Basin. “A company would go into the Bakken and thought they would have one or two wells per site. But there was so much oil, you’d then have four, then eight, then 14 wells,” Ness states. “It’s not like the industry hasn’t done anything. We’ve spent $6 billion trying

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we need to find sufficient markets for liquids.” “Nobody wants that gas more than the operator and mineral owner,” notes Ness. “It’s valuable. If you can strip the liquids and sell the dry gas, there is tremendous potential. We just have to get a market for the liquids. But first, of course, you have to have the gas is coming. The new rules will certainly tighten the noose on the ability to flare and that may have an impact.” What about those regulations? “Last year on September 11, Governor Jack Dalrymple came to our meeting. He said that flaring rules need to change and industry could be part of the process or one would be developed by government agencies,” Ness relates. Thus the North Dakota Petroleum Council Flaring Task Force was formed and met over a four-month period, where members developed a workable plan to curb gas flaring and presented their findings to the North Dakota Industrial Commission (NDIC). On July 1, 2014, the North Dakota Industrial Commission announced the new rules. The basics: a company needs to meet the new regulation standards for flaring or their production will be curtailed. Ness noted that the commission used many of the taskforce’s suggestions, but laments the rule is front-loaded with production

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“It’s not like the industry hasn’t done anything. We’ve spent $6 billion trying to get better at producing the resource. We are at the point where we need to find sufficient markets for liquids,” Ness states.

Hess’s Tioga Gas Plant expansion in Tioga, North Dakota. Photo courtesy: Hess.

curtailment, versus the phase-in options approach the taskforce had suggested. “We don’t believe in curtailing the production, which in turn curtails investment. But that’s what they said: production will be curtailed if you don’t meet the targets.”

The goal of the NDIC is to reduce the number of wells, the total

“If we can get some value-added energy facilities built in North Dakota, they can benefit our farmers and citizens in the state and add diversity. At the end of the day, I’m hoping all of this rhetoric about flaring in North Dakota proves that there was value to it in the end,” Ness states.

Justin Kringstad works directly with the industry to increase

Bruce Hicks, assistant director, North Dakota Industrial Commission, commented on the rule. “On July 1, the North Dakota Industrial Commission signed an order that set the allowance for the Bakken wells that were completed. We believe it’s realistic. All the companies need to be in compliance by Oct. 1st. We are at the point now where operators are infield drilling, so it was a good place to reduce the amount flared and start putting in more infrastructure.”

order to ensure those targets are met.

By complying with the new rule from the NDIC, 74 percent of gas will be captured by October 1, 2014; 77 percent by January 1, 2015, and 90 percent by October 1, 2020. Hicks says if a company can capture the gas production by 74 percent in some manner by Oct. 1, then their production won’t be restricted. “If a company can’t meet it, there are other ways to determine the capture, either on a countywide basis or by the field that would allow the well to produce at the maximum effective rate,” explains Hicks. “But if those numbers are too high, the well will be restricted.” 38


volume being flared, and reduce the duration so they aren’t flaring as long. The commission will look at the results and see if that order should be modified or not.

understanding of production levels, pipelines needed, and serve as an independent source of information for the industry and the public. He will be working with the industry to help them meet the new flaring reduction targets and help with new tools in

“This associated gas, as it’s called, has to be handled differently. There is tremendous value to capture it from an operator, owner and environmental perspective,” says Kringstad. “It’s in the best interest of the operator, mineral owner and environmental perspective to capture this resource and get it to market.” Kringstad lists three components to address challenges caused by the natural gas: gathering, processing and transmission. “We need to gather the natural gas from the well, then get it to the processing facility, and we need to expand our gas processing capabilities. We expect the amount of gas will continue to rise over the next 10 years, which means it’s crucial to put additional infrastructure in place for capturing gas,” explains Kringstad. He explains the real challenge is that oil and water can be moved by truck; natural gas has no other option but a pipeline to get gas from a well-site to a processing facility. Some companies are studying alternatives to compress or liquefy the gas until a

“ Nobody wants that gas more than the operator and mineral owner,” notes Ness. “It’s valuable. If you can strip the liquids and sell the dry gas, there is tremendous potential. We just have to get a market for the liquids. But first, of course, you have to have the infrastructure.” pipeline can be constructed, but according to Kringstad, those models are only in the development phase.

2012, North Dakota produced roughly 25 billion cubic feet of

Kringstad says in 2013, North Dakota had more than 2,500 miles – that’s Seattle to Orlando – of new pipeline set in one year. “There is a very active pipeline industry in North Dakota, and they are getting the pipe in the ground as quickly as they can. But it will take a lot more infrastructure going forward. Systems built several years ago have proven to be undersized for the current drilling activity. They thought the pipeline would be adequate but as more wells are developed, they have to put in second pipes alongside the original or add compressor stations to move more product.”

gas was captured and sold to consumers, while 29 percent of

Two-thirds of the gas flared is from wells that have a pipeline connected to them, but it’s still not enough to handle the growing volume of gas. So companies not only need to build new pipe to new wells, but also enhance existing infrastructure in order to keep pace with new drilling techniques.

“Industry is working to make investments in pipelines and meet

According to the Natural Gas Facts (http://northdakotapipelines. com/natgasfacts/) from North Dakota Pipelines: “In December

systems to keep pace with rapidly evolving production

natural gas. That month, 71 percent of North Dakota’s natural the natural gas was flared due to a lack of pipelines or space on existing pipelines. According to the most recent data available from the U.S. Energy Information Administration and World Bank, North Dakota accounted for 27.6 percent of total U.S. flaring and only one percent of world flaring.” Kringstad believes the industry is working hard to meet that goal of 90 to 95 percent of natural gas captured by the last quarter of 2020, and to meeting the benchmarks prior to that date. the targets set by the rule. Companies certainly don’t want to see a reduction in their well production. We expect natural gas production to continue to increase for many more years. The increase requires expanding existing pipeline and processing techniques,” concludes Kringstad. w



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New North Dakota refinery on track for year-end completion deadline

Dakota Prairie Refining implements unique water system The Southern Idaho Division of Knife River Corporation installed the water pipeline last fall before the North Dakota winter could take hold. With more than 500 workers on site, the parking lot looks a lot like the asphalt surrounding a shopping mall during the peak of the Christmas shopping season. The difference is the higher ratio of pickups to four-door sedans. We’re talking about the parking lot outside of Dakota Prairie Refining, a new refinery being built just west of Dickinson, North Dakota. Dakota Prairie is the first greenfield refinery to be built in the U.S. since 1976, and construction is on schedule for a late December in-service date. As of mid-July, construction was more than 70 percent complete, and 73 of the 90-some full-time, professional positions had been filled. Dakota Prairie Refining is a joint project between MDU Resources Group and Calumet Specialty Products Partners. The facility will process 20,000 barrels a day 42


of Bakken crude oil delivered principally to the plant by pipeline. From this input, the plant will produce approximately 6,000 barrels a day each of naphtha, atmospheric bottoms and distillates, mostly diesel. The plant also will produce a small quantity of natural gas liquids. The plant’s water system is one of its more unique aspects. The system will solve two problems at once: providing enough water for refinery purposes, while giving neighboring communities an expanded water system.

the refinery under construction near Dickinson, North Dakota, and Dickinson’s new $30-million wastewater treatment facility. “Using this system means that the water we will use is continually recycled, resulting in a very little net loss of water from the city’s wastewater treatment facility as a result of our operations,” Stumpf explains.

“I doubt if there’s another system like this anywhere in the country,” says John Stumpf, WBI Energy’s senior vicepresident of business development and midstream. WBI Energy is the subsidiary of MDU Resources that is responsible for the refinery project.

The story of how this system came about is a tale of creative problem-solving, enhanced by effective collaboration and full cooperation. Stumpf led the planning discussions through several meetings he called “water summits” involving refinery officials, the cities of Dickinson and South Heart, Stark County, the Southwest Water Authority and the North Dakota Industrial Commission.

In the simplest terms, the system represents a closed loop between

Water is an important resource for the refinery process and is used in a number

Bob Mooney, left, Knife River’s pipe superintendent, and Matt Abrams, Knife River’s project manager for the pipeline project, led a crew of about 25 employees to install the water pipeline and related infrastructure at the refinery.

of applications, including corrosion control, boiler feed water and the desalting process. And, it’s needed for an indirect steam-injection process that is necessary to help separate the various petrochemical components found in crude oil. Additionally, water storage is necessary on the plant site for fire control. Stumpf says the refinery needs enough water on site to fight a fire for eight hours. As a result, the refinery has a 40,000-barrel firewater tank supplemented by a 25,000-barrel holding tank to feed the various plant systems. Should the water be used for fire control, the site needs infrastructure in place to replenish these volumes within 24 hours. Once operating, the refinery will use 150 to 200 gallons per minute from the system. This water will come directly from the Dickinson wastewater treatment plant. Construction on this facility began in late 2012, with completion expected by late 2014. But, here’s where the “creative problem-solving” part of the story comes into play. The treatment plant is about 10 miles from the refinery, and a water pipeline and other related infrastructure was needed to implement the plan. Dakota Prairie Refining contracted with the Southern Idaho Division of sister company Knife River Corporation to install the 10 miles of 16-inch water pipeline. “We started the work in late September and wrapped it up by November,” says Matt Abrams, Knife River’s project manager for the pipeline. “At the peak of construction, we had about 25 employees working on the pipeline.” Further infrastructure was necessary to move the wastewater from the refinery back to the treatment facility. In total, about five miles of pipeline was built from the refinery back into Dickinson’s system.

The plant’s water system will solve two problems at once: providing enough water for refinery purposes, while giving neighboring communities an expanded water system.

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As of mid-July, construction on the refinery was about 70 percent complete and marching toward commercial production by late December 2014. Dakota Prairie Refining is located on a 350-acre plot in Stark County, North Dakota, about four miles southwest of Dickinson.

administrator, agrees, saying his city was excited to partner with the refinery on this project. “The new wastewater line will also allow service for new developments along the pipeline and also allow South Heart to connect to Dickinson’s treatment facility,” Kessel states.

Both of these pipeline systems were purposely overbuilt, beyond the needs of the refinery, to accommodate higher water usage from population growth in the area.

pipeline system will be recovered in short order from the agreement with the city to provide water to the refinery free-ofcharge until the value of the pipeline investment is returned.

The result is the closed-loop system between the wastewater treatment plant and the refinery. The new Dickinson wastewater treatment plant will produce between 2,000 to 3,000 gallons per minute that will flow through the water pipeline built and funded by the refinery. From these volumes, the refinery will take up to 200 gallons per minute for plant processes, returning to the system approximately 150 gallons per minute that eventually will go through the treatment plant again.

What both Dickinson and South Heart receive from the project is an expanded water system. “During the planning and construction of the pipeline, the efforts focused immensely on the needs of the county, and we are now able to tap into the line to water roads when an emergency presents itself, as well as provide much-needed firefighting assistance,” says Al Heiser, Stark County’s road superintendent. “It has been a positive experience working with the refinery and its contractors.”

The refinery’s investment in the water

He says the new production water line will allow a water vendor to be created near the new Interstate 94 interstate highway exit. “This water vendor will allow users, including oil drillers, to replace potable water with production water and be in a location that is closer to their needs.” Stumpf says the project was a rare “winwin.” “This system presented a solution for our water needs, but it also worked out to serve the needs of the neighboring cities and counties,” he says. “It was a lot of gymnastics to get this done, and I want to thank the visionary leaders of both Dickinson and South Heart, along with the others involved in this project. The result is a unique system that essentially recycles most of the water we use while providing significant benefits to the growing needs of the area.” w

Shawn Kessel, Dickinson city


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PHMSA proposes stringent standards for rail transport of flammable liquids

Eva Fromm O’Brien.

Bob Greenslade.

Jenn Caplan.

Alan Harvie.

Jean Piette.

On July 23, 2014, the Pipeline and Hazardous Materials Safety Administration (“PHMSA”), an agency within the U.S. Department of Transportation (“DOT”), issued a Notice of Proposed Rulemaking (“NPRM”) and an Advanced Notice of Proposed Rulemaking (“ANPRM”) intended to improve the safe railroad transportation of large quantities of flammable liquids (primarily crude oil) at a projected cost of between approximately $2.63 and $6.02 billion.

new tank car standards and alternative breaking measures, to be

Oil and gas production in the United States and Canada has increased dramatically over the past decade, in large part due to the development of unconventional hydrocarbon resources. Because the growth in pipeline infrastructure has not matched production, there has also been a corresponding increase in rail transport of crude oil and condensate liquids. According to the PHMSA, there were 10,800 carloads of crude oil transported by Class I railroads in the United States in 2009 – in 2013, there were over 400,000 carloads.

spill planning requirements to the railroad transport of crude oil.

Over the past year, several significant incidents involving derailments of trains carrying crude oil from the Bakken shale formation, along with a tragic accident in Lac-Mégantic, Quebec, Canada, have led to both voluntary efforts by industry and increased federal oversight on both sides of the border. DOT, PHMSA, and the Federal Railroad Administration (“FRA”) have issued various emergency orders, safety advisories, safety alerts, and other announcements in an effort to increase awareness about this issue and to encourage voluntary commitments to new safety initiatives. The NPRM is the latest and most comprehensive regulatory effort to date. If finalized as proposed, the rules would impose stringent 46


aggressively phased in between 2017 and 2020. The regulations would also impose speed restrictions, route assessment requirements, and material sampling and characterization enhancements. Finally, the NPRM would formalize an Emergency Order requiring certain railroads shipping Bakken crude oil to notify State Emergency Response Commissions (“SERCs”). The ANPRM requests comments on expanding comprehensive oil-

The standards proposed by the PHMSA are in line with comparable recently-enacted regulations by the federal government of Canada, although depending on which option the PHMSA chooses, the final standards issued in the U.S. may be more stringent than currently imposed in Canada. This briefing provides a discussion on the proposed PHMSA standards and on the ANPRM, as well as a discussion on the Canadian standards. NPRM for Enhanced Tank Car Standards and High-Hazard Flammable Trains The bulk of PHMSA’s proposed regulations would apply to what the agency is calling “high-hazard flammable trains” (“HHFTs”), which would be defined as any single train carrying 20 or more tank carloads of Class 3 (flammable liquids) materials. The proposal would phase-in new tank car standards and alternative breaking measures and impose speed restrictions, route assessment requirements, and material sampling and characterization enhancements. The agency is also proposing to require notification to SERCs by each railroad transporting one million gallons or more of Bakken crude oil in a single train.

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Except for the SERC notification provisions, the text of the proposed regulations would apply to the rail shipment of any flammable liquid. However, it is clear from the rule preamble that the proposal stems from the dramatic increase in crude oil railway shipments and a significant, but lesser, increase in rail shipments of ethanol. In fact, the PHMSA states that only the transportation of crude oil and ethanol would be affected because they are the only materials transported in trains of 20 cars or more.

The phase-in would begin on October 1, 2015, with a two-

Phase-out of DOT Specification 111 Tank Cars

of tank cars meeting the new DOT standards would have to be

Currently, DOT Specification 111 tank cars (“DOT 111”) carry the vast majority of flammable liquids shipped by rail. According to the PHMSA, there are approximately 80,500 DOT 111 tank cars and 17,300 CPC 1232 tank cars in flammable liquids service. CPC 1232 tank cars are DOT 111 tank cars meeting specifications established in 2011 by Casualty Prevention Circular (“CPC”) 1232, which was issued by the Association of American Railroads (“AAR”). CPC 1232 tank cars include a thicker shell, head protection, top fittings protection, and higher-flow capacity pressure-relief valves. Under the proposed regulations, the use of DOT 111 tank cars in HHFT service would be phased out beginning in 2017. The phase-out would proceed according to packing group. Specifically, the phase-out would ban the use of DOT 111 tank cars for Packing Group I flammable liquids transported by an HHFT beginning on October 1, 2017. The ban would be extended to Packing Group II on October 1, 2018, and Packing Group III on October 1, 2020. As the phase-out progresses, HHFTs would use DOT Specification 117 (discussed below) and equivalent tank cars for the transport of flammable liquids. DOT 111 tank cars would not need to be retired, but service would be limited to non-HHFT shipments. Braking Systems

an emergency break command from the controlling locomotive to the emergency air valve at the rear of the train, allowing the rear cars to receive the break signal more quickly. way EOT device requirement for HHFTs. DP systems would be required by October 1, 2016. Tank cars manufactured after October 1, 2015, for use in an HHFT would have to be equipped with ECP brakes. After October 1, 2015, HHFTs comprised entirely operated in “ECP brake mode.” New DOT Specification 117 Tank Cars The PHMSA is proposing a new tank car specification (“DOT 117”) and an equivalent performance standard (“DOT 117P”) for use in HHFTs. Three options are being proposed for DOT 117 cars. From the most stringent to least stringent, the options are as follows: • Option 1 (PHMSA and FRA Designed Car) – These cars would feature increased wall thickness (9/16 inch), thermal protection (including a reclosing pressure relief device), a minimum 11-gauge jacket, a full-height ½ inch head shield, features to prevent unintended actuation of bottom handles, ECP brakes, and rollover protection for top fittings. • Option 2 (AAR 2014 Recommended Car) – These cars would be based on the most recent standard recommended by AAR. This tank car would feature many of the same features as the Option 1 car, but would not require rollover protection or ECP brakes. • Option 3 (Enhanced Jacket CPC-1232) – These cars would be based on the CPC-1232 standard, but would have improvements to the bottom outlet handles and the pressure relief valve. There would also be no option to use a weaker steel type or to exclude a jacket. Option 3 would require a shell thickness of 7/16 inch, compared to the 9/16 inch thickness for Options 1 and 2.

In the preamble, the agency discusses several types of alternative breaking measures and proposes phase-in of these measures for HHFT trains and new DOT Specification 117 Tank Cars (discussed in the next section). A brief description of these measures follows:

In conjunction with establishing DOT 117, the PHMSA is

• Electronic Controlled Pneumatic brake systems (“ECPs”) send an electronic command to the breaking systems for all cars in the train, thereby reducing the time before the pneumatic brakes are engaged.

to meet an equivalent level of safety, and must meet the exact

• Distributed Power (“DP”) is a system that provides control of a number of locomotives dispersed throughout the train. DP allows the lead locomotive to control the rearward locomotives and increase breaking rates.

The preamble indicates that these tank car provisions will be

• Two-way end-of-train (“EOT”) devices communicate (via radio)

Option 1, $2.59 billion for Option 2, and $2.48 billion for Option 3.



proposing performance requirements pursuant to which tank cars constructed under other standards could be used in HHFT service. Tank cars meeting the performance standard would be designated DOT Specification 117P. New cars would need requirements specified in the new rule. Existing cars would need to meet the same requirements, except for those associated with top fittings protections. among the most expensive portions of the proposed rule, depending on which of various options are ultimately adopted. The PHMSA estimates approximate costs at $3.03 billion for



Speed Restrictions Currently, rail operators are abiding by a voluntary 50-mph speed limit for crude oil shipments and the AAR has recommended that such trains limit speeds to 40 mph if they have one or more non-CPC 1232 tank cars or are within the limits of any high-threat urban area. The PHMSA is proposing to codify the voluntary 50-mph speed limit and is also proposing three options for 40-mph speed limits. Option 1 would limit HHFTs to 40 mph in all areas. Under Option 2, the speed would be limited to 40 mph only in areas with more than 100,000 people. Option 3 would limit HHFTs to 40 mph only in high-threat urban areas. The preamble indicates that speed restrictions could also be among the most expensive portions of the proposed rule, depending on which of the various options are ultimately adopted. The PHMSA estimates approximate costs at $2.87 billion for Option 1, $260 million for Option 2, and $27.4 million for Option 3.

security risk to transport security-sensitive hazardous materials.” These materials did not include crude oil. The route selection must be made after an assessment of at least 27 factors specified in the 2008 rule. PHMSA is now proposing to extend to all HHFTs these route assessment and selection requirements for transport security-sensitive hazardous materials. Written Sampling and Testing Program PHMSA’s Hazardous Materials Regulations (“HMR”) require that offerors classify and describe hazardous materials prior to shipment. However, the HMR does not provide specific minimum requirements for characterization tests. Given the variability of mined gases and liquids, the PHMSA is now proposing to require a written sampling and testing program for these materials, including crude oil. The program must address “key elements,” such as: • Frequency of sampling and testing to account for appreciable variability of the material.

Rail-Routing Assessment

• Methods that ensure that a representative sample is taken, as well as sampling at various points along the supply chain.

In 2008, the PHMSA published a final rule requiring rail carriers to “select a practicable route posing the least overall safety and

• Testing methods to enable “complete analysis, classification, and characterization” of the material.





• Statistical justification for sample frequencies. Although the regulatory packing group classifications (I, II, and III) for flammable liquids are based only on flash point and boiling point, the rule preamble and recent PHMSA orders indicate that other critical parameters should be assessed for crude oil. These include corrosivity, vapor pressure, specific gravity at loading and reference temperatures, and the presence and concentration of certain compounds, such as sulfur. Also of note, the PHMSA has recently collected crude oil samples via a closed syringe-style cylinder to ensure volatilization does not occur prior to analysis. The agency may expect offerors to employ similar methods. Notification to SERCs for Crude Shipments On May 17, 2014, DOT issued an Emergency Order requiring each railroad operating trains containing one million gallons or more of Bakken crude to notify SERCs about the operation of these trains in their respective states. The PHMSA is now proposing to codify, clarify, and possibly expand this requirement and is requesting comments. The core issues under consideration appear to be whether: (1) the notification requirement should be expanded to all types of crude oil; and (2) the one million-gallon threshold is appropriate, or should be replaced by an alternative (such as the 20-car HHFT threshold). Also notable, the PHMSA is requesting feedback on confidentiality issues, including whether notifications should be designated as Sensitive Security Information pursuant to 49 CFR Part 15. ANPRM Regarding Oil Spill Response Plans for High-Hazard Flammable Trains Concurrent with the NPRM, discussed above, the PHSMA published an ANPRM to seek public comments and information regarding a possible expansion of Oil Pollution Act of 1990 (“OPA”) comprehensive oil spill response plan (“OSRP”) requirements. Under current regulations, most crude-by-rail shipments are only subject to basic OSRP requirements, due to per-tank car regulatory thresholds. The ANPRM seeks comments on whether the threshold should be applied based on the total volume carried by a train.

Both basic and comprehensive OSRPs must address a range of foreseeable response scenarios, identify individuals and personnel who are qualified to play a role in spill response, establish employee training, list equipment necessary for oil spills, institute notification procedures for oil spills, and list procedures to follow during a response. However, comprehensive OSRPs must be submitted to the administrator of the FRA for review and updated to reflect significant changes. Comprehensive OSRPs also have more stringent requirements for: • Communication with federal officials; • Incorporation of national and local contingency plans; • Contractual assurances of sufficient equipment and personnel necessary to handle a worst-case scenario oil spill; and • Training procedures for employees. The typical rail tank car has a capacity of 30,000 gallons. Each rail car is viewed as a single packaging unit for purposes of triggering basic or comprehensive OSRP requirements. Thus, almost all rail carriers shipping crude oil must have a basic OSRP, but are not required to meet the more stringent requirements for comprehensive OSRPs and are not required to submit their OSRPs to the FRA. The Advanced Notice of Proposed Rulemaking In the ANPRM, PHMSA states that it is considering whether it is more appropriate to consider the train in its entirety when setting the threshold for comprehensive OSRPs, instead of basing applicability on the volume of each individual tank car. PHMSA comments that the increasing reliance on HHFTs poses a risk that was not contemplated when RSPA made its threshold determination. This new rule stems from Safety Recommendation (R-14-5), which was issued to PHMSA by the National Transportation Safety Board (“NTSB”) in January 2014 after several recent train accidents. In the Safety Recommendation, NTSB stated that “[b]ecause there is no mandate for railroads to develop comprehensive plans or ensure the availability of necessary response resources,

Background on Current Regulations

carriers have effectively placed the burden of remediating

In 1996, PHMSA’s predecessor agency, the Research and Special Programs Administration (“RSPA”), published a final rule establishing requirements for OSRPs pursuant to OPA. Under this rule, there are two types of OSRPs: (1) a basic OSRP, which is required for oil shipments in packaging having a capacity of 3,500 gallons or more; and (2) a comprehensive OSRP, which is required for oil shipments in a package containing more than 42,000 gallons.

communities along their routes.”



the environmental consequences of an accident on local

The ANPRM seeks comments on a variety of topics regarding the appropriate thresholds for comprehensive OSPRs. Among these topics are questions of cost-effectiveness, changes in OSRP requirements as it applies to trains carrying large volumes of crude oil, and estimated costs of compliance with any new requirements.

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Canadian Efforts to Upgrade Regulations for Rail Transport of Flammable Liquids The Government of Canada has recently adopted Regulations Amending the Transportation of Dangerous Goods Regulations (Update of Standards) which have come into force on July 15, 2014. The new amendments formalize into regulation: • the requirements of consignors of crude oil to properly classify the crude oil by a test or lab report, to certify that shipping documents fully and accurately describe the crude oil and to keep shipping records; and • the new design and construction standards for DOT 111 rail tank cars carrying crude oil and other dangerous substances. Proof of Classification The classification of flammable liquids such as crude oil is based on the flash point and boiling point of the liquid. Since crude oil is a naturally occurring mixture of various substances, the representativeness of a given sample can vary greatly, based on many factors. Hence, there can be difficulties in classifying crude oil for the purpose of meeting the requirements of the Transportation of Dangerous Goods Regulations. Consignors must now keep a record of how they classify crude oil for transportation purposes. This addresses a gap in the information available to inspectors to validate the classification. It also addresses a recommendation from the Transportation Safety Board of Canada, made on September 11, 2013, to review classification procedures and processes. The proof of classification is to be available from the consignor of crude oil, and carriers are able to ask consignors to provide such proof to them. The amendment eliminates confusion and uncertainty about what actually constitutes proof of classification. Consignor’s Certification A consignor’s certification is a statement that is added to the shipping document certifying that the consignment of crude oil has been prepared in accordance with the applicable regulations. The International Civil Aviation Organization’s Technical Instructions for the Safe Transport of Dangerous Goods by Air, the International Maritime Dangerous Goods Code and the United States Code of Federal Regulations, Title 49 already require consignor’s certification. Therefore, adopting this certification requirement harmonizes Canadian rules with international regulations. New Tanker Car Standards The new standard for rail tank cars (Standard TP14879) includes a requirement for all new tank cars used for the transport of dangerous goods in packing groups one and two to implement 52


features for increased safety. These features are already in place for new tank cars carrying some dangerous goods, including those for crude oil, and as under the Association of American Railroads rules, all DOT 111 tank cars ordered on or after October 1, 2011, for petroleum, crude oil and ethanol service included in packing groups one and two must have the additional safety features that are now being added in the Canadian regulations. They include top-fitting protection, half-head shields, increased thickness of the heads and the shell for non-jacketed tank cars and the mandatory use of normalized steel. Summary The regulations that are proposed for the U.S. will impose a significant financial burden on those offerors who own or lease railcars that are used for the transport of crude oil and ethanol, and it will be a challenge for rail car manufacturers to keep up with the ever-increasing demand for these railcars. Ultimately, however, the proposed changes should have a positive impact the safe transportation of flammable liquids by rail. Authors’ contact information: Eva Fromm O’Brien, Houston Bob Greenslade, Denver Jenn Caplan, Houston Alan Harvie, Calgary Jean Piette, Montreal and Quebec REFERENCES: 1

T he NPRM is published in the Federal Register at 79 Fed. Reg. 45,016 (Aug. 1, 2014), available at The ANPRM is published in the Federal Register at 79 Fed. Reg. 45,079 (Aug. 1, 2016), available at fdsys/pkg/FR-2014-08-01/pdf/2014-17762.pdf. Total estimated costs range between approximately $2.63 and $6.02 billion. The most significant cost categories are tank car standards ($2.48 to $3.03 billion), speed restrictions ($27.4 million to $2.87 billion) and enhanced breaking systems ($517 million).



High-threat urban areas are defined in 49 CFR § 1580.3.


See 73 Fed. Reg. 72,182 (????).


49 CFR § 173.22. See Operation Safe Delivery Update, available at: gov/pv_obj_cache/pv_obj_id_10B6171B1F17B07B32E437ADB3AC37F61 DD70400/filename/07_21_14_Operation_Safe_Delivery_Report.pdf.



This corresponds to approximately 35 tank cars of crude oil. w

Grace Unplugged Keeping faith in the Bakken By Rebecca Colnar The Bakken, and the towns that make up the sprawling oilfield, are often painted with a broad brush of decadence. However, spirituality and hope are alive and well, note the leaders of local churches. Father Jim O’Neill has been a priest at St. Matthew’s Catholic Church in Sidney, Montana, for more than four years. He understands the community is going through a change. “I see a mixture of both sides of the spectrum. On one end are the people who have lived here for many years who are frustrated. They don’t know how to deal with the stress of the traffic and the challenges that go along with living in a boom town,” O’Neill says. “There are people who left Sidney because of those changes, which is unfortunate. At the same time, I have seen some young men 54


who might be living in man camps, and might not even come to mass, ask me to hear their confession. I make time for any of those guys who want to do that. Even for the weekday masses, we will see two or three men we haven’t seen before. I always try to introduce myself to people after mass and say, ‘welcome, please come again’.”

everyone find lodging. We just don’t have the budget for that sort of thing,” O’Neill says. “However, the parish has invested in a number of $25 debit cards so when someone comes asking for help and their story seems reasonable, I will give them a debit card. It’s not a lot, but it might buy a meal or fuel. Most of the people who receive the cards are grateful.”

O’Neill recalls many times when there are new families coming to mass whom he hasn’t seen before. “There was one African American family who told me they were here from the East Coast and only here for a couple of months before they head back.”

The parish provides coffee and rolls after Sunday mass so the congregation can visit. The parish encourages parishioners to head to a local coffee shop after weekday mass for continued fellowship, and scripture groups are always inviting new people to join. St. Matthew’s Church also hosts a Halloween dance for children from all over the area.

St. Matthew’s Church was able to help some people with motel rooms when the boom first started, the priest recalls. “Right now, there is such an incredible influx of people, we really can’t help

Although there is a lot of money now in the community, “Not everyone in the community has money,” Father O’Neill

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Left and above: New Hope Church in Williston, North Dakota.

St. Matthew’s Catholic Church in Sidney, Montana.

explains. “People need to understand that. As far as our parish, it seems when we have a need with something like maintenance or refurbishing, people step forward and are generous.”

and ranchers from the outlying areas,” explains Pastor Marty Mock. He explains that the congregation is getting older (there have been an average of 40 burials per year for the past eight years).

He estimates there are 350 to 400 families registered, but plenty of new people are showing up to mass. “We try to get our new people registered, but many of them are only here temporarily. However, our congregation has a wide range of ages, from young to elderly.”

“My older, faithful parishioners have been around here forever. Some of these people came for the oil boom in the 1970s and 1980s and they remained. Now, because the industry has gotten better at extracting oil, the next boom is here,” Mock says.

O’Neill likes Sidney and finds it to be a welcoming town. “I don’t think it’s said enough, but this is a good community. People want to reach out with a helping hand. Everyone is welcome – not just at St. Matthew’s, but at all the parishes here,” O’Neil explains. “We want people to know they do have a place here, they are welcome here.”

Pastor Mock acknowledges the boom is not only bringing in money to the area, but has also increased revenue to a second industry. “Places like the biker bars and strip clubs are certainly growing. Alcohol is the drug of choice,” he says.

“The first year I was here was before the boom, so I was here at the initial start of the growth. In my 30 years of being a priest, I have never experienced anything to this extent before. These issues are new to me. But, we manage. We try to see things in a positive light.” Across the state line in Williston, North Dakota, the epicenter of Bakken growth, stands the First Lutheran Church. The venerable church was established in 1904 and currently has 1,850 baptized members, with 400 to 500 attending service regularly. “We were the first church in Williston, with our congregation consisting primarily of professional people plus retired farmers 56


The pastor, who has been in the area for 10 years, says the church, too, is changing. “The growth in the area has changed what we are as a church. We are no longer a country church, but a town church. There are about 128 homeless children and as far as homeless adults, we don’t know. The Bakken has created a bigger split in the community between the haves and have-nots. I now have service people who come to the church who are the working poor. They can’t afford housing so they live in their cars. That’s what it’s brought. I don’t want to put blame anywhere. Everyone was just ill-prepared for the rapid growth.” Mock laments a real challenge of workers coming to town who aren’t ready for the cold climate. “They don’t realize how cold it gets here. We feed them and clothe

First Lutheran Church in Williston, North Dakota. them, and I’ve given away most of my survival gear,” Mock says. “In addition, we have a culture of men here, but I think the women really struggle. Some men bring their families. The companies take care of men, but we need to help the women. I believe, though, things are getting better.” Despite the changes and challenges, Mock embraces the diversity growing in the town. “We now have people from African and Asia coming, more Hispanics. People are coming in from Australia and Hawaii. I have at least two or three new people from Africa coming into our church every week.” Mock says the church has increased its community outreach, holding a free Sunday-night dinner, with First Lutheran’s parishioners serving the meal. For long-time members of the community, Mock acknowledges they have lost the “small town” feeling of safety and inexpensive food. He has given sermons about grieving and looking forward instead of looking back. “We have a lot of work to do. You have to change with everything going on. I truly hope our church members stick with it and look forward. It’s been an interesting ride.” New Hope Wesleyan Church, which compared to First Lutheran is newer, is also striving to become not only a community church but also a community center. “New Hope is about 54 years old,” explains Mike Skor, lead pastor. “I love this church

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because they are constantly working to make sure we’re reaching people who currently aren’t going to church or thinking about God. We give them a chance to do that.” Pastor Skor explains that although the church’s core message about God hasn’t changed over the years, their methodology has changed with the times. The church has an amazing website, they’re on Facebook, and have blogs and sermons posted online. As the Bakken has expanded, so too has the New Hope Church in Williston. “We have doubled our building’s square footage and built it with the changes in our community in mind,” notes Skor. “In addition, we looked around to see what was missing. We decided we needed a safe place for the guys without families or new families to come, and so partnered with the Meg-A-Latte Coffee Shop. They started a beautiful coffee shop that’s open seven days a week. It is a nice gathering place and a good place for hanging out. If you’re away from family, you can meet

other people and not be in the bar scene.” In addition to partnering with a coffee shop, the church has constructed an indoor playground. “Whether you’re trying to avoid too many mosquitoes or 30-below temperatures, moms and dads can put their children behind glass to have some fun, and the parents can have an actual conversation,” Skor explains. “We’ve put in a lot into technology, as well. We’re also going to offer a concert series and work with the local arts community.”

community events such as sponsoring hot chocolate in the fall light parade in town, and simply let people know the church is there to serve. Skor says the congregation continues to thrive and grow. “I’ve been here for three years and in that time, we’ve doubled in size with weekend attendance. We’re seeing our congregation get younger and more ethnically diverse. A lot of young couples with young children see great opportunities in the Bakken. I believe it’s a great area in which to raise your

Skor praises the other churches in town, and explains they each have their own styles and methods. “New Hope has really targeted those people who aren’t thinking about God or church. We had one man come here who hadn’t been to church in 41 years. We realize that if we can meet some of their other needs, like providing a safe place to go, they might realize we have something credible and relevant.”

family. I understand some people who are

A core of the congregation at New Hope is active in Williston. They help with

thinking the move will fix their problems,

long-time residents have chosen to live elsewhere, because they miss what the town was like before this boom, but we also have people here taking advantage of the extra income one can make.” Pastor Skor explains that problems of addiction, whether drugs, alcohol or bad relationships – and the challenge of recovery – is everywhere. He believes sometimes people come to the Bakken but it doesn’t. “We have linked up with an incredible national organization called Celebrate Recovery. It’s for anybody dealing with any addiction or recovery. These people can sit in the same room and can all be helped together. We have really seen our ministry take off by offering this help,” Skor says. Like St. Matthew’s Church and First Lutheran, New Hope tries to help those unprepared for the bitter winter of North Dakota. “We have partnered with The Salvation Army to provide emergency shelter November 1st through the end of March. We provide a safe, warm place and a local business offers showers. We’re very excited about that as it fulfills a huge need and can help someone get on their feet,” Skor explains. Skor hopes the church is fulfilling the spiritual need of the community, as well. “The name of our church is New Hope. We can offer new hope in a new area and new hope for spirituality.” w



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Enerplus and innovation: Ideas delivered with energy

Dust abatement results on BIA 14 road on Fort Berthold Indian Reservation.

One of the Enerplus temporary piping systems on Forth Berthold.

Innovation is the lifeblood of the oil and gas industry. For nearly 30 years, Enerplus has been a producer of oil and gas. Throughout this time, they have striven to produce oil and gas efficiently, while minimizing their footprint by continually innovating across their business. Enerplus is a significant player in the Williston Basin, producing about 27,000 BOE/day from its oil properties in North Dakota and Montana. With an ever-changing regulatory environment and ongoing interest in its operations from stakeholders, Enerplus is finding ways to deliver the energy that consumers need within its framework of responsible development. This work is backstopped by a series of innovative approaches, particularly in the Fort Berthold Indian Reservation, where the company produces more than 75 percent of its U.S. oil. Small Changes, Big Results Enerplus acquired a strong initial position in the Williston Basin about 10 years ago and since that time, has built a rich knowledge base in the area. The company has been achieving record results by experimenting with higher-density drilling programs and new completions techniques. Enerplus recently announced that such efforts had increased its drilling inventory by 125 percent and its estimate of economic contingent resource by 250 percent, all while achieving a 50 percent improvement in capital efficiencies within the play over the last year. Education and Inclusion are Part of the Innovative Approach As the company continues to perfect its technical work, it has not forgotten about the importance of community outreach. Through its “Adopt-a-Well” program at the Mandaree School on the Fort Berthold Indian Reservation, students are learning about the process of drilling an oil and gas well, and how innovative solutions can overcome challenges along the way. The interaction with Enerplus professionals has sparked an interest in youth in the disciplines of engineering, math and science … especially when 60


students learned that drilling technology interfaces were similar to those of a video game! Less Trucks, Reduced Costs, Less Traffic Hydraulic fracturing is the process of inserting water and sand into a reservoir. Both are typically trucked to well sites. Enerplus has successfully innovated on this front as well, by laying temporary pipe from an approved water source directly to its operations. This has reduced truck traffic and noise, which were key stakeholder concerns, and created a “win-win” scenario for everyone involved. Building Made Easier A lot of time and energy goes into building well-site components economically and in a way that can withstand tough operating environments. Enerplus is successfully innovating here too – by using pre-fabrication techniques in the assemblage of its storage tanks. The company is working with a Montana firm that manufactures pre-fabricated well-site systems that only require the bolting-on-to-pipe work and skid work to be completed on site. All the preliminary work can be done at the factory. “Pipe rings and pipe supports are integrated right into the skid itself, further cutting down on disturbance and construction time,” says Enerplus facilities engineer Ryan McLaughlin, who likens the new set-up to an erector set. The company has also seen fringe benefits, as eliminating on-site welding not only reduces Enerplus’s costs and weather-related complications, but also enables much easier access to valves and pipe adjustments needed for yearround maintenance work. Enerplus intends to continue innovating across all facets of its business and sees it as part of their culture. The company recognizes that over the long-term, a series of smaller incremental improvements can be just as impactful as one revolutionary idea. It is a philosophy that continues to serve Enerplus’s neighbors and shareholders well, and it energizes their employees. w

Bakken, eggs… and Bannock? Jay Treaty opens doors for First Nations workers in the Bakken By Lisa Fattori Canadian companies seeking new opportunities in the Bakken are looking to a 220-year-old agreement between Great Britain and the U.S. that enables Canadian First Nations workers to freely cross the Canada/U.S. border. Signed in 1794, the Jay Treaty provision is available to American Indians born in Canada who have at least 50 percent American heritage. Those who qualify are admitted into the U.S. without requiring a Visa, for the purpose of employment, study, retirement, investing and immigration. The Jay Treaty allowance makes Canadian Aboriginals an attractive employment pool that companies can draw from, in catering to the Bakken oilplay and the region’s growing communities that require infrastructure and services to support oilfield workers and their families. From equipment manufacturers and consultants to housing contractors, mechanics and professionals in the recreation and entertainment industry, there is tremendous need in North Dakota and Montana, which creates new business opportunities for Manitoba and Saskatchewan companies and their employees. Since 2013, the World Trade Centre Winnipeg (WTC Winnipeg) has implemented a Bakken Market Access Program (MAP), organizing

a series of events and trade missions to raise awareness and provide information about Bakken opportunities. In June, the organization offered “Bakken and Eggs... and Bannock?”, a breakfast meeting and a special presentation on the Jay Treaty and doing business in the U.S. Guest speakers provided a history of the Jay Treaty and the documentation requirements for First Nations workers crossing into the U.S. “We had a great turnout, with attendance by approximately 85 people from a broad spectrum of industries,” says Derek Earl, director of International Trade at the WTC Winnipeg. “The event raised awareness that there is an avenue out there for Canadian companies and for Aboriginal communities who want to do business in the U.S. We feel there are some niche opportunities there that are not very well-known, and this event was about helping companies get information that can help them enter the Bakken market and have success.” Conditions of the Jay Treaty fall under section 289 of the U.S. Immigration and Nationality Act. Individuals who meet the requirements of Section 289, and who maintain their principal residence in the U.S., may make a claim to Lawful Permanent

Signed in 1794, the Jay Treaty provision is available to American Indians born in Canada who have at least 50 percent American heritage. Those who qualify are admitted into the U.S. without requiring a Visa, for the purpose of employment, study, retirement, investing and immigration. 62



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“There’s probably about 30 percent of business that we could increase, just in the service end, in North Dakota, South Dakota and Montana,” says Ron Lavallee, northern sales and service manager for Ford Garry Fire Trucks. “There is tremendous opportunity for our products in the Bakken region and we already have our foot in the door. We’re only three hours to the Bakken, so we could easily send in mechanics to do service work for one or two weeks. It’s a win-win, for us as a company and for the companies that could use our services.” Residence status. According to U.S. Citizen and Immigration Services (USCIS), since 1990, an average of 200 Canadian Aboriginals obtain Lawful Permanent Residence status each year in the U.S. At the U.S. border, an applicant must present a quantum letter from his/her band verifying that the applicant is at least 50 percent American Indian. An ‘American Indian’ is defined as a member of a legally recognized Canadian or U.S. Indian tribe, group or band. Other required documentation includes a birth certificate, tribal status card and legally recognized photo ID or passport. The individual is then issued a temporary Permanent Residence card by USCIS. Unlike a work permit that is issued to the general public, with certain restrictions attached, American Indian workers who are issued a temporary Permanent Residence card are free to work and travel anywhere in the U.S.

Canadian First Nations communities situated along the border can pursue entrepreneurial opportunities to service the booming Bakken market, thus creating new business ventures with spin-off benefits. “People in First Nations communities may not want to leave their families for too long, but those living in the Swan Lake or Long Plain bands in southern Manitoba can work in the Bakken and be home every weekend,” says Darren Courchene, research coordinator with the Treaty Relations Commission of Manitoba. “There is an opportunity for First Nations communities to create their own businesses and companies in the oil and gas sector or U.S. companies can recruit First Nations workers directly. Many of these companies don’t even realize that Canadian First Nations are an employment pool that can be tapped into.”

“An employer might have a worker who would qualify under Section 289; however, unlike employment immigration categories, it is the worker who must make the claim,” says Lisa Bell, adjudication officer with the Office of Policy and Strategy for USCIS. “An employer can provide information and guidance, but we deal directly with the claimant.”

Canadian companies setting up satellite offices in the U.S. should be cognizant of the fact that the Jay Treaty doesn’t allow for the free flow into Canada of U.S. First Nations. Under Canadian immigration law, certain U.S. First Nations living in border communities may be allowed to enter Canada in a manner similar to that of Canadian First Nations entering the U.S. Also, the Jay Treaty only covers the movement of people, with cross-border deliveries of equipment and materials subject to regular customs protocols.

Winnipeg-based Ford Garry Fire Trucks is looking to expand both its product line and servicing of equipment on the U.S. side of the Bakken. Rather than hand-off servicing to U.S. third-party firms, the company can leverage the Jay Treaty to provide the aftersales service of its fire trucks, water-delivery trucks and septicvacuum trucks directly to customers. Given that the majority of its service employees are First Nations, Fort Garry Fire Trucks is wellpositioned to grow the service side of its business.

“Preparation is key, so the best thing to do is to speak to border officers well-ahead of a planned project,” says Reis Pagtakhan, partner and immigration lawyer with Aikins, MacAulay and Thorvaldson LLP in Winnipeg. “You don’t want to send people down and get refused because of a misunderstanding, or have your people in place, but equipment delayed at the border. Immigration takes care of people, but equipment and materials must be arranged separately.” w




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Pecking orders Much at stake as groups debate alleged sage-grouse endangerment, restrictive land-use policies and other matters By Rebecca Colnar The question on many Westerner’s minds, especially those involved in the natural resource industry, is whether the Greater Sage Grouse is going to be listed as a threatened or endangered species by the U .S. Fish and Wildlife Service (USFWS) by September 2015. Comments abound that the Greater Sage Grouse could well be the “Spotted Owl of the West on steroids”. As many may recall, the listing of the Spotted Owl decimated the logging industry in the Northwest, leaving behind a trail of lost jobs, shuttered houses and dying towns. (Disturbingly, it was discovered years later that the Spotted Owl was not even close to being endangered.) Take a look at the USFWS maps of where sage grouse exist today. Eastern Montana, the area with the most potential natural resource development, has heavy nest and lek densities. (A lek is an area where male birds gather to engage in competitive displays to attract visiting females birds.) In 2013, Governor Steve Bullock wisely determined that before federal agencies make the decision to list the Great Sage Grouse, Montana needed to develop a sage-grouse management plan, a move that was applauded by industry leaders. Thus the Sage Grouse Advisory Committee was formed with stakeholders from the natural resource industry, agriculture, environmental groups, the Montana Legislature and state agencies. Although some organizations weren’t on the committee, many became deeply involved, like the Montana Petroleum Association (MPA). “When you study the map, you’ll notice the sage grouse habitat covers the bulk 66


of the oil- and gas-producing areas, with the exception of the northeastern corner of the state, which is where all the Bakken development is taking place,” notes Dave Galt, executive director, MPA. “The worry is that oil and gas development will be hamstrung by a listing. Most of the birds’ critical habitat is right there on our best places are for oil and gas exploration and development.” Galt explains the oil and gas industry has been at the table discussing conservation strategies with government agencies and stakeholders. “It was discouraging that the previous administration in Montana did not take a proactive initiative when there was talk about the bird possibly being listed. However, Governor Bullock has responded to our and other stakeholders’ requests [to] take a look at the Montana plan for the conservation of sage grouse. It’s currently on his desk,” notes Galt. The plan identifies what’s called the Core Population Area and General Habitat and discusses what kind of development and activity could be allowed. In the core area, you are only allowed to disturb five percent of the surface, but in addition, there are also buffer zones to consider around the breeding grounds. Montana Fish, Wildlife and Parks (FWP) has said Greater Sage Grouse populations in Montana are stable and strong. There is still a hunting season for sage grouse, Galt explains, which means it can’t be at that great a risk of becoming endangered. Cary Hegreberg, executive director for the Montana Contractors’ Association, also sees irony in the fact that the

USFWS would like to list sage grouse as an Endangered Species, yet hunting is permitted. “In industry circles, one of the one of the common observations is the fact that hunting is still a part of the mix in the plan submitted to the governor. I personally am an avid upland bird hunter, but I find it hypocritical to impose massive land-use restrictions, yet still let people hunt them. You can bag two birds per day. There has to be some inside politics involved in those discussions.” Hegreberg points out that predators – such as ravens (they love the chicks and eggs), coyotes, etc. – are a huge problem. “Minimizing the predation problem seems to be a relatively easy solution,” he says. “From the outset, it appears that land use has gotten an unfair burden in sage grouse stabilization and/or recovery efforts.” For contractors, extremely restrictive land-use plans would greatly affect the ability to have open cut (gravel) mines. A number of MCA’s members have sand/gravel business as part of their construction enterprises. “Sage grouse management constraints being suggested would impact sites, and restricting noise levels is of great concern to contractors,” Hegreberg notes. “You have to disturb the land when you mine, and crushing gravel is a noisy enterprise. It remains unclear how those noise restrictions would impact specific gravel operations, but safe to say it would be severe in some cases.” Mark Lambrecht is executive director

of the Treasure State Resource Industry Association (TSRIA). Many of his members – TSRIA represents oil and gas, hard rock and coal, transportation and construction, as well as and other industries – were involved in the development of the plan. They collected comments from their members and found common themes which they highlighted for the Sage Grouse Advisory Council. Those themes include: No Surface Occupancy: In Wyoming, one can operate 0.6 miles from an active lek; the Montana plan has no surface occupancy as one mile from an active lek. “We believe the USFWS recom­ men­dation that the no-surface occupancy limit be expanded in Montana was based old research and data. A study in 2013 determined a 2011 report (which USFWS referenced for its recommendation) made an erroneous assumption that a temporary disturbance can cause a permanent decline. The nosurface occupancy expansion will significantly impact natural resource development –particularly for oil, gas and coal. Mine development would need to leave significant mineral reserves in the ground to avoid core areas. This has the potential to completely eliminate new mining activity.” Density disturbance: The Wyoming plan has a density disturbance limit and provides a clearer definition. The Montana plan has a five percent disturbance limit in those areas, but doesn’t determine how it’s calculated. Noise limits: There is a 10-decibel limit over ambient between 6 p.m. to 8 a.m. during breeding and nesting periods. (Keep in mind a whisper is 15 decibels.) It’s very difficult to not have noise when doing business, whether it’s construction or mining. It’s thought the noise would 68


prevent successful nesting and breeding. Grouse Oversight Team: The Montana plan calls for a grouse oversight team to implement its provisions. The MPA

Department of Environmental Quality, the Montana Department of Agriculture and the Montana Natural Resources and Conservation.

believes this team should consist of those

Gary Forrester, who handles government

who have the authority to implement the

affairs for MDU Resources, says the energy

plan, including the governor, his natural

industry has hundreds of millions of

resource advisors and the permitting

dollars invested in resource development.

agencies, including the Montana

MDU’s resources include wind turbines

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“ When you study the map, you’ll notice the sage grouse habitat covers the bulk of the oil- and gas-producing areas, with the exception of the northeastern corner of the state, which is where all the Bakken development is taking place,” notes Dave Galt, executive director, Montana Petroleum Association. and oil and gas wells. Stringent restrictions on noise and land use would harm their ability to provide affordable energy to their customers. “One of the greatest problems will be the noise limits that may be imposed,” Forrester explains. “The noise limit is supposed to be 40 decibels above ambient. Ambient is taken at sunrise before the wind starts, and there is a lot of wind all the time in eastern Montana. So if you take a reading in the morning, then you can’t exceed 40 decibels above that. If the wind is 20 decibels and you’re operating heavy equipment and a crusher, it’s going to be tough to not exceed 40 decibels.” He explains that so far, 975 leks have been identified, and even if industrial activity is taking place more than a quarter of a mile from an active lek, it doesn’t take long to meet 40 decibels above ambient, causing activity to be very limited. Other restrictions include a reduction in hours or operation from March 15 to July 15 – one can only operate between 8 a.m. and 6 p.m., but a typical gravel operation runs 24-hours per day. “You will only be able to have one 10-hour shift. You can’t disturb a lek, nest or brooding area, which completely reduces the time you can work. These hourly restrictions make it tough for anybody to operate,” Forrester says. Forrester notes the Wyoming Sage Grouse Plan looked at the industrial areas prior to drawing core boundaries and drew those boundaries outside of those core areas. However, the Montana plan did not take into account any of the industrial areas. “Our Cedar Creek Mine is now in a core area, and that should have been excluded as it was already in operation,” says Forrester. “We have more than 1,000 oil and gas wells, windmills, natural gas 70


storage fields. It’s really tough that these existing activities weren’t excluded in the Montana plan.” Forrester notes that the plan is restrictive for all industries, but with oil and gas, the footprint is smaller than with mining. “This is going to be particularly troublesome for mining and construction, too.” Great Northern Properties is not a mining company, but it owns 20 billion tons of mineable coal reserves in eastern Montana and western North Dakota; therefore, stringent restriction in mining would greatly affect the company, which was formed in 1992 when BNSF sold off its minerals. “A representative from our company attended many of the Sage Grouse Advisory Council meetings, visited with members and filed comments, so we have been active,” says Rich Southwick with Great Northern Properties. “We have kept our finger on the pulse, offered constructive input and now we’re waiting to see what the governor’s office issues.” Similarly to Forrester’s observations, Southwick indicates that the no-surface occupancy requirement the sage grouse council developed around the leks would make developing a coal mine very difficult. “Even Montana FWP has indicated they’ve only inventoried 60 to 70 percent of the leks, and they are expecting the lek density to be even higher than the maps show.” Southwick says one component of the Montana sage grouse strategy should be mitigation banking. “The Western Association of Fish and Wildlife Agencies (WAFWA), in cooperation with affected energy interests, developed a conservation plan to forestall listing of the Lesser Prairie Chicken (LPC) in the five-state area it inhabits. That plan is similar to the plan developed for sage grouse in Montana but

includes a mitigation banking component, which provides for offset mitigation where development would impact LPC habitat. Under the LPC conservation plan, if those interested in energy development propose to develop oil, gas or pipelines, this program provides offset mitigation with a 2:1 ratio. That’s an excellent template,” he says. Great Northern Properties supports the conservation efforts to support sage grouse in Montana, and the population in Wyoming and Montana, which have 60 percent of the sage grouse population, are stable. “If the U.S. Fish and Wildlife Service feels that the sage grouse is worth protecting, they need to talk about how to make sure that occurs. That means we need to start compensating private surface owners for growing sage grouse,” he says. According to Wyo-Ben’s vice-president of resources, Richard Brown, the sage grouse issue is a runaway train heading down the tracks with a train wreck at the end of it, and most folks understand it’s going to happen. “Montana has been told by the U.S. Fish and Wildlife Service that if they have a good plan, perhaps listing won’t be necessary, but that is not necessarily true,” he says. “It’s hard to imagine a scenario where listing the Greater Sage Grouse as threatened or endangered will not occur by 2015.” “Sage grouse are everywhere; the Wyoming plan was created eight years ago under Wyoming governor Dave Freudenthal. The current Wyoming governor, Matt Mead, signed an executive order to continue the plan. The Wyoming sage grouse implementation team has been fine-tuning the plan to make sure it works over a period of time,” adds Brown. “In Wyoming, there was a diverse group

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“ What is most concerning is there is no flexibility with the listing to have a species as threatened in one place but not another,” Brown states. “For instance, there is no luxury of saying sage grouse populations are strong in the Malta area, but not Powder River Basin; they can’t split the listing thanks to a lawsuit brought on by environmental groups.” of interested parties who came together with the primary intent of making this work, with the goal of conserving sage grouse while at the same time not destroying the economy of the state. That’s a critical component that’s often missed,” Brown states.

“What is most concerning is there is

One unfortunate recent example of the

no flexibility with the listing to have a

agencies not listening to people is the

species as threatened in one place but

Lesser Prairie Chicken – which is now

not another. For instance, there is no

listed as threatened – despite significant

luxury of saying sage grouse populations

hard work on a conservation plan across

are strong in the Malta area, but not

the board. “The state governments, non-

Powder River Basin; they can’t split the

governmental organizations, private

Brown believes although the Montana plan is unique to the Treasure State, it contains good elements from the Wyoming plan; however, despite the hard work of all of the states on their plans, he believes that the sage grouse will still be listed as either a threatened or endangered species.

listing thanks to a lawsuit brought on by

industry and others interested in keeping

environmental groups.”

the Lesser Prairie Chicken from being

“The three choices they have are basically not listed, threatened or endangered… with, of course, endangered being the most restrictive,” Brown says.

grouse. As studies first start coming

Brown says the decision made by Judge Molloy said the USFWS has to make the determination of all or nothing. “It’s too bad because data is just coming out of Wyoming after eight years on how their conservation plan is working on sage out, you can’t use just one study. No one researcher will get entire story; the research takes a while to do.”

listed spent a lot of time and money to form a plan,” Brown explains. “They came up with a plan, floated it past the USFWS, and just about the time they did that, the USFWS listed the bird. The indications are they will use the same plan this group developed in order to manage this ‘threatened’ species, then instead of local control, it’s managed out of D.C.” Industry leaders have expressed consternation that although representatives from the USFWS sat at the table through all of the advisory council meetings and heard from the all of the concerned parties, they waited until the last minute to come up with 13 objections

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to the Montana plan. “These should have been raised much earlier,” states Lambrecht. “We don’t believe Montana should be treated any differently than Wyoming because the USFWS already approved the Wyoming plan, which is less stringent than Montana’s. Why does the Montana plan have to be more stringent when we share the same border and the same sage grouse population?” Forrester believes that no matter what decision is made, the whole thing will be headed to court. “If the sage grouse is listed and business is threatened, it will end up in court. If the bird isn’t listed, the environmental groups will take the decision to court. Either way, sage grouse are headed to the court room.” w




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Roots run deep Nuverra Environmental Solutions CEO Mark Johnsrud builds vision in the Bakken and beyond For North Dakota native Mark Johnsrud, the Bakken shale region is not only a place where business opportunities lie, it is also the place he calls home. From his ancestors’ settlement of Western North Dakota ranch land at the turn of the century to his leadership of a national environmental services provider to the oil and gas industry, he has never lost sight of his roots. Johnsrud’s entrance into the environmental services business began in 2004, when he left his longtime career in banking and acquired LandTech Enterprises, LLC, a Watford City-based company that specializes in handling fluids disposal for oil exploration and production (E&P) operators in the burgeoning Bakken shale region. Within a year, the LandTech business had grown substantially, and Johnsrud’s vision for an environmental services company with an integrated service model began to materialize. In 2005, he expanded his company’s footprint with the acquisition of Badlands Power Fuels, LLC. He and his team successfully grew that business, adding fluid delivery and collection services, equipment rentals, solids collection and solids disposal services, to become one of the largest and most-respected regional providers in the Bakken. In late 2012, Power Fuels merged with what is now known as Nuverra Environmental Solutions, Inc. Today, as Nuverra’s chief executive officer and chairman of the board, Johnsrud 74


guides the vision and strategy of the enterprise with an objective to provide E&P operators with the most innovative, cost-effective options for managing environmental fluids and solids. “We are successful when we bring our customers the most advanced, environmentally responsible options for delivery, collection, treatment, disposal, recycling and reuse,” Johnsrud explains. “With the tightening regulatory controls and heightened environmental sensitivities, it’s important for Nuverra to bring innovative solutions and the right resources to our customers.” Nuverra is a leading environmental solutions provider to the U.S. oil and gas industry and is publicly traded on the New York Stock Exchange under the ticker symbol NES. The company employs more than 2,200 employees nationwide, with a presence in many of America’s largest shale oil and natural gas basins, including the Bakken, Marcellus, Utica, Eagle Ford, Haynesville, Mississippian, Tuscaloosa Marine and Permian shale regions. “We are experiencing an energy revolution in America, and we don’t see an end in sight to the growth opportunities,” Johnsrud says. “We believe the vision for energy independence is not only achievable, but [also that] it will happen in our lifetimes. Nuverra is proud to be a part of that.” U.S. Energy Information Administration (EIA) estimates the U.S. will surpass Russia

Mark Johnsrud, Chairman of the Board and Chief Executive Officer, Nuverra Environmental Solutions and Saudi Arabia as the world’s top oil producer by 2015, and be close to energy self-sufficiency in the next 20 years, due largely to the booming oil output of America’s shale formations. The EIA also projects oil production to rise to 11.6 million barrels per day in 2020, compared to 9.2 million barrels per day in 2012, as operators employ technology of horizontal drilling techniques and advanced hydraulic-fracturing technologies to the shale formations of North Dakota and Texas. In April and May of this year, crude oil production in North Dakota alone surpassed one million barrels per day. Nuverra has taken significant steps to advance its business model, not only to adapt to the rapid evolution of U.S. shale development, but also to meet the needs of its customers. “In the past two years alone, the shale industry has changed dramatically, with more wells producing increased volumes of water in relation to completion and production activities. Multi-well pads are adding to on-site well density, which also contributes to a growing volume of fluids and solids to manage,” Johnsrud explains. To meet that need, Nuverra recently introduced pipeline and solids recycling solutions to its suite of comprehensive services in the Bakken. “Fixed pipeline systems make more sense than ever,” he says. “Once a well has been drilled, it produces hydrocarbons, as well as water, over its life span. A fixed pipeline network that can efficiently move this produced

Nuverra Environmental Solutions provides well-site support to encompass all aspects of fluids 2295 - ONEOK handing, including the collection, treatment and disposal of flowback and produced water.

Workers at Nuverra’s Environmental Treatment Center for solids weigh, test and 1 7/17/14 inspect an incoming9:24 load ofAMdrill cuttings.

Bakken Oil Report Ad_HR PDF_7.17.pdf

water from the well sites to disposal or recycling sites is a rational progression of the logistics chain when we consider the long-term future of these basins.” Increasing well density also means substantial growth in the volume of solids generated from the drilling process. As a result, Nuverra entered into the E&P landfill business in the Bakken last year and has subsequently expanded to include a new process for handling and treating wet cuttings solids that will be available for customers in the Bakken this fall. “We look forward to introducing this solution to operators who seek an efficient and reduced-risk alternative to drying and disposing of solids, either at the well site or off-site,” Johnsrud states. Nuverra’s vision for integrated environmental solutions that efficiently and effectively serve the needs of the oil and gas industry has never been more relevant. “I have never lost sight of what drew my family to settle in North Dakota. It was the opportunity to build a better life by living off the land and the abundant natural resources available to farmers and ranchers of that era,” Johnsrud states. “We are just beginning to understand the magnitude of North Dakota’s shale formations and the influence they will have on America’s ability to achieve energy independence,” he continues. “Today, the land provides yet another source of abundant opportunity – and another chance for generations of North Dakotans to build a better life.” w

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Bakken well depths now reaching 27,000+ feet

By Heather Siegel, © DTC Energy Group, Inc. 2013 Photos courtesy: DTC Energy Group.

Oil and gas operators are now able to drill to depths of 27,000 feet or more in the Bakken shale, thanks to significant advances in drilling technology and techniques over the past few years. This is a tremendous increase over a very short period of time, with maximum total well depths being 21,000 feet with 10,000foot laterals just three years ago. Today, total well depths are reaching up to 27,000 feet or more with 16,000-foot laterals. On-site drilling supervisors working for DTC Energy Group, Inc., a Denver-based oilfield consulting firm, have been instrumental in the success of these types of extendedreach horizontal wells, drilling for a number of operators in the Williams, McKenzie, Divide, Mountrail and Dunn counties. The main drivers for such enhanced drilling capabilities have been the utilization of top drives, the higher experience level of drilling teams, and advancements in drillstring design, drilling fluids and lubricants. TOP DRIVES With extensive rig upgrades that have taken place in the Bakken over the past few years, the addition of top drives has been one of the primary reasons operators are able to drill such extended-reach laterals, explains Luke Clausen, DTC Energy Group chief operating officer. 76


“Top drives make the drilling process much faster and more efficient,” Clausen states. “They cut out a majority of the problems associated with making connections and are a solution to many of challenges associated with extendedreach directional wells.” Some of the key benefits of using top drives include the enabling of longer drilling intervals, better steering of the bottom hole assembly, the ability to handle higher amounts of torque, and a significant reduction in the frequency of stuck pipe. “With a top drive, you’re able to drill with three joints per stand, 90 feet at a time,” Clausen explains. “With a Kelly rig, you’re only able to drill 30 feet, one joint at a time.” He continues, “A top drive also gives you a greatly enhanced ability to steer the bottom hole assembly, making drill pipe connections just a few feet from the bottom, versus 45 feet with a Kelly rig.” This ability to drill 90 feet at a time while making significantly quicker and fewer drill pipe connections allows for a much faster, more efficient process. A way to quantify the efficiency of using a top drive over a Kelly rig is to compare the total distance the drill bit travels throughout the entire drilling process

– including lifting up and down while making connections. “On a 27,000-foot well, for example, a drill bit will have to travel an extra 3,000 feet to make connections,” he says. “With a Kelly rig, that number is 54,000 feet.” A top drive will have to make 300 connections on a 27,000-foot well, or one connection every 90 feet. During each connection, the drill bit will lift up and back down five feet, for a total travel distance of 10 feet per connection. Traveling 10 feet for each of the 300 connections equates to a total of 3,000 feet of connection travel for the drill bit. On the same well, a Kelly rig would require 900 connections, or one connection every



30 feet. During each connection, the drill bit would lift up 45 feet and lower back down 15 feet, for a total travel distance of 60 feet per connection. Traveling 60 feet during each of the 900 connections results in a total of 54,000 feet of connection travel for the drill bit.

applying what they’ve learned to improve

“When you do the math, the difference is surprising,” Clausen states. “It really shows how much more efficient top drives are.”

As the experience level of oilfield workers

Top drives are also able to handle higher amounts of torque. “Greater depths require much greater torque to get the bit to start turning,” he says. “Top drives let torque in and out much more easily. And they allow you to hold the direction and angle you need for a longer period of time than with a Kelly rig, keeping you better on target.”

the drilling process.

DRILL-STRING DESIGN Advancements in drill-string design

Having an in-depth knowledge of not only

have also played a significant role in

the capabilities, but also the liabilities of

the ability to drill longer laterals. Better

your drilling equipment, is essential to a

understanding of the conditions that the

successful drill,” Clausen says.

pipe experiences has led to a much better product.

continues to increase, so too will drilling

“New drill-pipe connections that are


high torque and utilize double-shoulder

Recognized Leader

Top drive efficiencies also help reduce the frequency of stuck pipe, saving time and reducing costs. “Top drives enable shorter drilling times and 51,000 feet less travel distance for the bit,” Clausen states. “There are twothirds fewer connections, and they offer the ability to quickly engage the pump or rotate the string at any time during tripping operations.”

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connections have enabled the ability to reach lateral lengths that, just a few years ago, would permanently damage a drill string,” explains Clausen. “In addition, new hard-banding techniques and materials have enabled tool joints to be laid on their side, and thus not experience the catastrophic wear that would otherwise occur.” DRILLING FLUIDS Recent changes in drilling fluids are helping to increase tool life and productivity, thus contributing to the ability to drill longer laterals. One of the biggest changes has resulted from the realization that low-gravity solids, which were previously commonplace in drilling fluids, not only slow the drilling process by not cleaning the hole correctly, but also significantly reduce the life of MWD assemblies and mud motors. While not a significant issue with shorter

laterals, it is essential to address the issue

to cuttings beds, filter cake, hole instability,

of low-gravity solids in drilling today’s

doglegs, keyseating and bit balling.

extended-reach laterals. DRILLING LUBRICANTS

SUMMARY With economic and environmental

The utilization of drilling lubricants,

demands as the driving factor, continued

whether liquid or solid, has helped reduce

advancements in technology will lead

frictional issues that affect well design

to the development of new drilling

and operations. Mud lubricants are greatly

techniques, progressively longer laterals

enhancing the management of torque due

and better production. w

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A shining light of hope Captain Joshua Stansbury of the Williston Salvation Army.

Salvation Army stays strong in its mission and role in the Williston area “I heard there is work in Williston. I arrived here last night with the clothes on my back and slept in my car. I spent my last dollar getting here. What do I do next? Where can I stay until I get on my feet?” That statement is heard almost daily at The Salvation Army of Williston. People are flocking to western North Dakota in hopes of making it big … or, for once, just making it. They hear of wealth and job opportunities in the Bakken. They leave everything and everyone because, for so many, starting a new life in the Williston area is their last chance. Unfortunately, many of the newcomers to the area are unaware of the challenges involved in showing up in the Bakken without pre-arranged accommodations. They don’t realize that it is not likely they will be able to walk in to a new job the day they arrive. They aren’t aware of the high cost of living and the reality that there is not a homeless shelter for them to lay their head until they get on their feet. Or maybe they have heard rumors about the high cost of living and lack of a shelter, but simply do not believe it to be true. So many good, hard-working individuals quickly become disillusioned after arriving in Williston when they realize that their situation is not much better here than it was where they came from. As a result, last year the Williston Salvation Army provided 161 bus passes to individuals who were unable to “make it” in the Bakken. For many, returning home to a place 80


Williston Salvation Army food shelf.

where they have family or a network of support is the best possible thing for them. This year, the Williston Salvation Army took things a step further. After several years of struggling to find a solution to provide emergency shelter to homeless people in Williston, a partnership between New Hope Wesleyan Church and The Salvation Army resulted in a temporary cold-weather shelter named “Project Heat.” The program ran February 10th to March 31st at a local man-camp that leased 10 beds per night, getting men off the streets and into a safe and warm environment. The Williston Salvation Army has heard from several men who took part in Project Heat. These men shared that the cold weather shelter helped them find work and get on their feet. The first year of Project Heat was a success, but details are still being ironed out for what it will look like this fall and winter. It will take over 100 volunteers to run the program appropriately. Even though there are many stories of discouragement and defeat that the Williston Salvation Army hears every day, there are many testimonies of victory and triumph because of the “hand up” they received when they had nowhere else to go. Here are a few examples: • This past winter, there was a gentleman who showed up on a day that was freezing cold. One of the Salvation Army case workers noticed that the man was wearing only thin rubber boots. He commented that the boots only fit because he was

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A mother and child receive assistance at the Williston Salvation Army.

curling his toes. Remembering that a nice pair of warm work boots was donated just that morning, the case worker handed over the boots to the guest. He immediately fell to his knees, wept and praised God for the provision, which would allow him to work outside in the cold weather. This gentleman never returned to The Salvation Army, which leads us to believe that a pair of boots really was all he needed to stay warm and secure a job. • Another guest moved to Williston from Los Angeles after being promised a job from an employer he found online. When he arrived at the location he was given for the company, he found a vacant warehouse with nobody around. With nowhere else to go, he had been living on the streets for three days until somebody told him to go to the Williston Salvation Army. As soon as he arrived, he was greeted with a smile, food, and an offer to be put up in a hotel room for a few nights while he looked for employment. The Salvation Army agreed to provide him a bus ticket home at the end of the week if he was not successful in his job search. Less than four hours after leaving The Salvation Army, the gentleman called to say that he had found a job that included housing. The support and encouragement he received from The Salvation Army was what he needed to persevere and not give up.

• Recently, Captain Joshua Stansbury of the Williston Salvation Army was at a local coffee shop when someone came up to him, patted him on the back and placed a napkin in his hand. Stansbury opened the napkin and discovered these words: “God used you to shelter me when I came to town. Thank you. I received my degree from Bismarck State in Energy Transmissions, and still have a great career with the electrical utility. God Bless you!”


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Captain Joshua Stansbury of the Williston Salvation Army received a napkin that said: “God used you to shelter me when I came to town. Thank you. I received my degree from Bismarck State in Energy Transmissions, and still have a great career with the electrical utility. God Bless you!”

The Salvation Army chapel also serves as a waiting room and place for individuals to get out of the cold. Every day, the Williston Salvation Army is presented with challenges and triumphs. Sadness and joy. Brokenness and faith. Each morning, there is a line at the

front door of people who are struggling through the difficulties and challenges of the oil boom; at times it can seem overwhelming. In the mix are local

Guests arriving at The Salvation Army in Williston.

families who no longer can afford rent in their hometown, and new residents who are still clinging to the hope that they will be able to make it. No matter what the situation is, one thing remains: The Williston Salvation Army will continue to keep its doors open and fulfill its promise to “do the most good.” The organization has been a central figure in the Williston community since 1908, and its mission has remained the same ever since. Captain Joshua Stansbury’s response to The Salvation Army and its mission in Williston is, “It’s a great blessing for my wife and I to be leading the Williston Salvation Army. We’re excited about the unique opportunities that this economy provides for us to be a shining light of hope for those in need. We look forward to sharing many more success stories of people whose lives have been influenced by the ministry and work of The Salvation Army.” For more information and encouraging stories of lives that are being changed, please go to: Williston. w



Proud To Call North Dakota

! e m o h


Maximizing natural gas vapor recovery New vapor-recovery regulations challenge oil and gas producers to optimize operations; Blackmer® NG, HD and HDS Series oil-free reciprocating gas compressors can assist By Glenn Webb (SO2) emissions from storage tanks at tank batteries that are used to temporarily hold liquids produced during the production of oil and natural gas. More specifically, Quad O includes a requirement that VOC emissions be limited to less than six tons per year (tpy) – a daily equivalent of 33 pounds – from storage tanks that contain crude oil, condensate, produced water and other unrefined petroleum liquids.

The new Quad O mandate requires that 95 percent of storage-tank vapor releases be contained, or either flared or reclaimed. Blackmer® Oil-Free Reciprocating Gas Compressors help ensure that that threshold is met.

Per the edicts of the Quad O regulation, the storage-tank universe was divided into distinct two groups: •G roup 1: Any storage vessel constructed, reconstructed or modified after Aug. 23, 2011, but before April 12, 2013.

Introduction There has always been an economic rationale for oil and natural gas producers to capture or recover as much product as possible in the oilfield – namely, that any vapors vented to the atmosphere or flared off during the production process were no longer saleable, or not worth the time and labor needed to reclaim them. Now,

In August 2011, the U.S. Environmental Protection Agency (EPA) introduced New Source Performance Standard 40 CFR, Part 60, Subpart OOOO, which quickly became know as the “Quad O” regulation. In October 2012, Quad O became law and began affecting oil and gas storage facilities, natural gas processing plants and gas wells across the country.

there is an even more important

Basically, Quad O establishes emission

reason for these producers to optimize

standards and compliance schedules

their operation’s vapor-recovery

for the control of volatile organic


compounds (VOC) and sulfur dioxide



•G roup 2: Any storage vessel constructed, reconstructed or modified after April 12, 2013, or within 60 days after startup, whichever is later. On April 15, 2014, all Group 2 storage tanks had to be fully compliant with Quad O, while all Group 1 tanks have until April 15, 2015, to attain Quad O compliance. This has led to a rush by oil and natural gas producers to upgrade their vapor-recovery abilities so that their tank batteries will emit less than the allowable six tpy of VOCs and SO2. This white paper will demonstrate how a specific type of compressor technology – oil-free reciprocating gas


Far left: The amount of vapors from liquids that are produced during oil and gas production that will be allowed to escape from storage-tank batteries will be greatly curtailed thanks to the Environmental Protection Agency’s new “Quad O” regulation. Blackmer® stands ready to help oil and gas producers and handlers meet the edicts of Quad O with a complete family of innovative, reliable oil-free reciprocating gas compressors. A vapor-recovery unit featuring a Blackmer® NG, HD or HDS Series Oil-Free Reciprocating Gas Compressor is one of the most reliable ways to control the amount of vapors that are lost to the atmosphere at a crude oil tank battery.

compression – can be used to maximize the performance of vapor-recovery units at storage facilities, all with the ultimate goal of satisfying the emission limits of the EPA’s Quad O regulation.

and discharge pressure), a particular

The Challenge

where discharge pressures are around

Crude oil storage tanks have always had issues with gas vapors escaping, even though most tanks do have various types of door hatches, gaskets and low-pressure pop-off vent valves that have been designed to control and limit the amount of product vapors that are escaping the tanks. With no real strong environmental regulations restricting this venting, many tanks were, and are, in poor shape, with faulty hatches and safety valves that leak badly. In some cases, operators do not even close the hatches, or the tanks have faulty gaskets that allow vapors to leak uncontrollably. In many instances, releases would occur simply due to the build-up of vapor pressure in the tanks, which would cause the tank’s relief valves to open and release the excess vapor pressure. The Quad O mandate requires that 95 percent of vapor releases now be contained, or either flared or reclaimed. For the reclaiming process, several types of compressors have been popular for this operation. Rotary vane and rotary screw compressors, as well as reciprocating piston compressors, are all used. Depending on the overall operating conditions (required flow rate

compressor technology would be selected. However, oil-free reciprocating gas compressors are ideal for applications 50 psig (3.4 barg), and in some extreme cases can be as high as more than 500 psig (34.4 barg). Typical discharge pressures from crude oil storage tanks are usually less than 200 psig (13.8barg). The challenge for the compression equipment is that traditional lubricated piston compressors and some rotary designs do not have leak-tight sealing and the ability to handle the

small amounts of condensed liquids (condensate) that can form in the compressor. This condensate collects in the crankcases on some reciprocating compressors and contaminates the lubricating oils, causing extremely frequent nuisance oil changes and, in many cases, significant power-frame damage to bearings and shafts. In many cases, frequent complete compressor replacement is considered “acceptable” when the damage is considerable. Oil-free reciprocating gas compressor technology with a distance-piece design provides operators a unique feature that allows the condensate to be collected and controlled at the compressor’s


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While single-compartment distance-piece designs will generally satisfy most design requirements, Blackmer also offers triple-packed (two-compartment distancepiece models) for applications where leakage control is extremely critical. additional contamination to the gas being handled or recovered.

Blackmer® HD Series Oil-Free Reciprocating Gas Compressor. distance piece, keeping it out of the critical power-frame area where damage can occur. The added bonus of the oilfree design is that it has two sets of rod seals that seal the gas at the distance piece, reducing the amount of gas vapors that can escape to the environment through the crankcase, which is typical in most styles of reciprocating machines. The Solution Recognizing the untapped potential for an improved vapor-recovery technology in the oilfield, Blackmer®, Grand Rapids, Michigan, U.S.A., a member of Dover Corporation’s Pump Solutions Group (PSG®), Oakbrook Terrace, Illinois, U.S.A., offers a full range of compressor products that cover a broad range of markets, including oilfield vapor-recovery applications. Blackmer’s NG, HD and HDS Series oil-free reciprocating gas compressors were born to handle hazardous, toxic or flammable gases. Their oil-free design provides truly unique features that were at one time considered unneeded and unimportant in the natural gas market. These features have a very strong environmental appeal, while offering the best vapor-recovery mechanics and sealing technology. •O il-free designs do not add any 88


• Maximum control of gas leakage from the compressor is achieved because of the compressor’s full distance piece compartment and piston-rod seals. The two sets of rod seals create a compartment between the process gas and the lubricated crankcase, which provides leakage control and minimizes any leakage to the crankcase or the atmosphere. • Ductile-iron construction of all pressure parts results in greater resistance to harmful thermal and mechanical shock. • High-efficiency PEEK Valves are specially designed from a self-lubricating material that provides superior sealing characteristics, high efficiency and durability. • A heavy-duty, precision-ground crankshaft features roller bearings and integral counterweights to ensure smooth, quiet operation. All of these design advances mean that Blackmer HD compressors are an environmentally friendly and safe method to move and recover gas vapors. In today’s highly regulated tank vaporrecovery applications, these important features help deliver peace-of-mind to the oilfield operator and producer. The distance-piece design feature of the NG, HD and HDS Series compressors is critical because condensate can form inside the compressor due to the wide mix of hydrocarbons that can often be

found in the gas stream. Formation of condensate inside the compressor is never good. When the gas is compressed, heavier hydrocarbons and small amounts of water vapor can form. Compressors that do not have a distance piece will let the condensate leak directly into the crankcase. This condensate can damage the quality of the lubricating oil and will lead to significant bearing damage or a complete failure of the power frame. Blackmer oil-free reciprocating gas compressors help control condensate that may form inside the compressor. Blackmer’s oil-free compressor designs do provide a means to control small amounts of condensate by collecting the condensate in an area of the compressor called the distance-piece compartment. Easy operator access to this compartment allows the user to empty the distancepiece compartment regularly. The distance piece can also be vented to a safe disposal area when available. This design gives the distance piece the ability to provide an effective means of controlling condensate. While single-compartment distancepiece designs will generally satisfy most design requirements, Blackmer also offers triple-packed (two-compartment distance-piece models) for applications where leakage control is extremely critical. These proven designs have been used in industrial and chemical plant applications for many years. Blackmer’s single-stage NG, HD and HDS models, which are recommended for


use on low to moderate compressionratio applications, are available in seven sizes with piston displacements up to 125 cubic feet per minute (212 m3/hr) at working pressures up to 1,000 psia (69 bara). The three two-stage HD and HDS models, which are available for higher compression-ratio requirements, offer piston displacement up to 53.7 cubic feet per minute (91.2 m3/hr) at a working pressure up to 615 psia (42.4 bara).

in many tank-battery applications, the

pumps and compressors, go to www.

VRU equipment will have a very lucrative Blackmer is a member

payback period.

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About the Author: Glenn Webb is a

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Conclusion In January, the North Dakota Petroleum Council’s Flaring Task Force reported to the North Dakota Industrial Commission that it felt that the state’s oil and gas industry can increase natural gas capture to 85 percent of total volume produced within two years, to 90 percent by 2020 and up to 95 percent within the next decade. To reach those levels, however, will require full buy-in from a number of entities, most notably the oil and gas companies operating in the state.

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Process-system designers and environmental-compliance managers at those oil and gas companies – and at others around the country – will improve their chances of 95 percent capture of natural gas by continuing to incorporate improved vapor-control technology that minimizes the amount of vapors and VOCs that are released to the atmosphere at tank-battery locations. Oil-free reciprocating gas compressor designs like those offered by Blackmer provide a safe and effective method to control potentially dangerous vapor emissions. In addition to their environmentally friendly benefits, oil-free reciprocating gas compressors provide economic advantages to operators due to their ability to efficiently recover gas from a variety of storage tanks, which leads to a higher amount of saleable end-product while simultaneously protecting the atmosphere. When used

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REAL Montana’s two-year program equips emerging industry leaders for dialogue with other sectors Inaugural class shares gleanings from industry tours, media relations training, and D.C. trip By Anika M. Hanisch Striving to build connections between the wide range of natural resource industries in Montana, the new Resource Education and Agriculture Leadership (REAL) Montana program is half-way through its inaugural two-year seminar series. Twenty community leaders enrolled in the current class have been attending threeday seminars and industry tours every other month. The goal is to empower emerging industry leaders with knowledge about other sectors, their economic interconnections, and the true complexity of policy-making decisions. REAL Montana program director Janelle Booth described the training. During one of their first in-state seminars, the group traveled to Great Falls and toured the Malteurop malting plant. “Not everyone is a barley farmer, but everyone had a stake in it,” Booth says. “Everyone in the class could identify with some aspect of that building – the logistics of the rail system, the energy input of running such a large facility – just seeing how all these individuals come together and become an economic driver in a region like Great Falls.” Such tours spark dialogue between the classmates. “Everyone knows that all natural resources are connected, but [in daily life] everyone seems to be content working in their ‘bubble’ and not interacting much,” says REAL Montana participant, Kate Vogel, an agronomist with North 40 Ag in Ballantine. The seminars are set up to foster interaction between those industry “bubbles”. During multi-day seminars, leadership students room with each other and share meals. Whatever the participant’s background, friendships between different industries form quickly.

The class spent a day discussing natural resource issues with Congressional staffers at the U.S. Capitol. 90


“REAL Montana allows leaders from different sectors get to know one another and learn the ins and outs of a different industry,” states Andy Matakis, operations manager at the Northern Ag Research Center in Havre and REAL Montana Class 1 president. “This has happened for me by learning more about the construction, engineering, and mining sectors and struggles those industries face on a daily basis.”

Above: The class poses at the KTVQ studio in Billings, Mont. Right: Class members Tara Becken and Bruce Wright are interviewed by Russell Nemetz on the KTVQ noon news.

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“REAL Montana allows leaders from different sectors get to know one another and learn the ins and outs of a different industry,” states Matakis. Class members discuss trade issues with diplomats at the Embassy of Japan during the Washington, D.C., seminar.

Class 1 toured the Calumet refinery in Great Falls, Mont., during the second seminar. Participant Whitney Klasna, a farmer and rancher in the Bakken north of Lambert, shares similar feedback. She’d heard of leadership programs that had more of a single-industry focus. “But never has there been an educational leadership program that focused on both agriculture and natural resources together,” she says. “Where else can you learn about wheat genetics and oil refining in one seminar?” In addition to industry tours throughout the state, the program provides mediarelations training, a trip to Washington D.C. to wrestle with policy-making matters, and an international trip. Class 1 will head to China in 2015 to learn

more about international trade and connections to Montana industries. When traveling far from their home communities, the students often uncover far-reaching economic connections and decision-making effects. While on their D.C. trip, the class visited NASA’s Goddard Space Flight Center in Greenbelt, Maryland. Booth commented how on the surface, one might ask, “What does this have to do with us?” It turns out, quite a bit. “Data from satellites – temperature of the oceans, weather patterns, soil moisture – this is information that can affect policy.” According to Matakis, emerging leaders,

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whatever their stance on an issue, need to get actively engaged with such topics. “The most important lesson I have taken home is that sitting back and watching something happen is not going to help any issue,” he says. “We, as leaders, must be willing to stand up and take an active role in our industries and be willing to help others in other industries.” Whether in-state or far from home, participants have been impressed by the topic diversity and practical tips. Vogel appreciated a media seminar they attended in Billings, where the students had a chance to practice live interviewing with TV and radio news broadcasters. “[It taught us] how to prevent mistakes, stay calm during interviews, and get our message out,” Vogel says. “I immediately applied this to my professional career and have subsequently had articles published that, before, I would not have known how to submit.” Booth is excited to see how much the current class is already benefitting from the program. “These are people who will fill leadership roles, who will ease gridlock in policy-making,” she says. “We’re not pushing an agenda. What is best for everyone is having strong leadership skills. We put a lot of emphasis on communication.” Booth adds that, while the current class is comprised predominantly of emerging ag-sector leaders, they’re welcoming

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The class toured NASA’s Goddard Space Flight Center and interacted with NASA scientists during Seminar 4 in Washington, D.C.

more diversity in the participant list of the next class. Vogel resonated with that sentiment. “One of the biggest benefits of the program are the learning experiences we gain from our classmates,” she says. “The more people who apply from different sectors, the stronger the program will be.” REAL Montana, which operates under the wing of the Montana State University Extension Service, has already gleaned multi-industry support, as evident in a broad sponsor list that subsidzes approximately 80 percent of each experiential learning,” she concludes.

student’s tuition. “It’s a great example of

Klasna was also quick to encourage other

public-private partnership,” Booth says.

industry leaders to apply for the next

“Sponsorship and involvement from all

two-year class. “REAL Montana has far

these industries is really important to the

exceeded my expectations by providing

success of the program, and they are the

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Growing pains How to survive with very little support By Reed Reimer, Vice-President of Business Development, R&R Contracting Last year, I wrote about how R&R Contracting had grown through the development of the Bakken oilfield, and the things the company did to meet that demand. This year, as opposed to rehashing much of the same, I’m going to tell you a story about what happens when you try to overreach. To start off 2013, we had acquired a large company and moved to a different bank, The PrivateBank, to get the loan. Also, our new software ERP system was supposed to go live January 1st. Well… the software didn’t go live until July 1st, and to make matters worse, our CFO left the company during tax season. Also, at the beginning of 2013, we were wrapping up one of the toughest projects we’d worked on over a two-year period; a lightrail transit project for the MET Council in St. Paul, Minnesota. All of these things would be manageable – until you start to consider the fact that the software that was due to be live Jan. 1st is supposed to be helping us track project costs and evaluate our profitability. After the CFO left the company, the new bank (with very little faith, as they were unwilling to accept much risk at all) gave R&R a few options from which to choose. The options were our choice of three different financial consultants who would report back to the bank and hold the purse-strings. Having the consultants wasn’t the worst thing in the world, because they did help to initiate and improve a couple different processes, but having them took us out of the driver’s seat. This became apparent as we started getting the software up and running, and discovered that our acquisition was costing us roughly 1.5-times its earnings. When this was discovered, the consultants began to stretch our accounts payable and the vendors started calling… never a good thing. I like to think of 2013 as our “perfect storm”. With so many 98


variables that could go wrong actually going wrong, it made being in business a struggle. Pile on to those things the severity of the winter and its record-setting cold spells – things continued to get tougher and tougher. So even with all of that, how does a company like ours keep their head above water? Luckily for us, we kept moving forward because our core business continued running strong throughout the winter. Added to that, we completed a large project ahead of schedule while overcoming some obstacles; this led to the customer giving us a significant completion bonus. Even with the core business running and the project completion bonus, there were still hurdles that we had to surmount. The harsh winter prevented any new construction projects from taking off, and a couple of our backlog projects with mid-winter start dates were getting pushed further back. Anyone with experience in the construction industry can tell you that the construction season is cyclical; in the north, it slows down in the winter, and in the south, it can slow down in the summer. Our bank must not have known that, because they weren’t prepared to weather the winter with us. Before the winter had begun in earnest, we decided to cut our losses and scaled-back the acquisition to almost nothing, putting our attentions on the core business; but even that didn’t stem the flow, and by late winter, the bank was ready to call the loan – but only after they put one more barb in our side: they saddled R&R with a “chief restructuring company” in hopes that they might find a way out. The direction that this new consultant was leading us towards was going the wrong way. They would stand to make more money working us out through bankruptcy, versus survival. They called vendors and assured them that they wouldn’t get paid.


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MESSAGE continued

Jeff and Bill set up a deal with a contact from Security First Bank and the Bank of North Dakota to provide R&R Contracting with a line of credit, and we refinanced our equipment company-wide to buy out the loan from our old bank.

They also spread rumors within our tight-knit industry that we would be in bankruptcy soon. They went against the wisdom and direction that our president (Jeff Schake) and our CEO (Bill Reimer) offered, much like the consultants before them and the bank this entire time.

Of course, we aren’t just sitting still. We have the capability to

In the end, multiple factors came in to play. Jeff and Bill set up a deal with a contact from Security First Bank and the Bank of North Dakota to provide R&R Contracting with a line of credit, and we refinanced our equipment company-wide to buy out the loan from our old bank. All of this was an uphill battle, as the restructuring company wouldn’t share any financials with the Bank of North Dakota, and they continued to tell our old bank that R&R had nothing going for it.


The PrivateBank didn’t need convincing, though, as they had already given up on us.

us work, and if we didn’t have a handful of vendors that stuck

Jeff was so frustrated with The PrivateBank at a meeting we were required to attend, he bet everyone around the table that within 60 days, R&R would be out of that bank and in with our new bank.

self-perform civil dirt work now in addition to the track work, and we have opened a location in Houston, Texas. The new southern location should help to at least minimize the pain during the next winter that decides to throw wrenches into our well-oiled

I never went to business school. Nor did the CEO. My boss and my peers never went to business school, either. Instead, we were given experiences this last year that were painful, but that also taught us there are still many things to learn. We are getting our business degree from the “School of Hard Knocks”. We couldn’t have made it if our customers didn’t continue to give with us through the painful times. Most of all, we couldn’t have made it if our team hadn’t stuck with it and continued to work hard and put out a quality product. I have confidence that we won’t repeat those lessons, but more

Even though the problems of 2013 dragged on in to 2014, we got into our new banking relationship around May, just as the construction season started getting into full-swing.

than that, I feel confident that the next hurdles we find will be

Our backlog continues to be on par with our projected revenue, and our core business is strong.

Jeff is still waiting to receive half of the bet money from The



overcome because we are good at what we do; and as long as we keep doing those things, it’ll be hard to count us down.

PrivateBank people around the boardtable. w

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Transforming a transient city into ‘home’ takes community Left: B&G employees volunteer to raise money at The Color Dash race to build a public pool in Tioga. Photo credit: B&G Oilfield Services.

Below: Pat Bertagnolli (right), director of human resources for B&G Oil Services, talks to a potential hire at a job fair. Photo credit: FNS Amy Dalrymple.

Life in the Bakken area once had the

the ’70s and ’80s, when drought and low

reputation of a desolate and isolated

prices negatively impacted the farming

existence, one that is miles away from

and energy sectors of North Dakota. While

the comforts of home, family and friends.

other oil service companies were shutting

Its lure had been a bittersweet song that

their doors in the ’90s, B&G Oilfield

pulls in adventurous souls, trading off

Services expanded their service areas to

little luxuries for long hours and a lonely

include Montana, Wyoming and Colorado.


Since December 2013, the sudden

The Bakken oil boom that is sweeping

explosion in oil-related work doubled

the North Dakota frontier is shattering

the company’s workforce. Pat Bertagnolli,

the lifestyle of solitude for thousands of

the official recruiter for B&G Oilfield


Services, is responsible for bringing in

The attraction of countless jobs, high

new blood into the fold. He recognizes

wages and royalties for landowners is

that the sudden boom has created a new

bringing in a variety of people from

set of needs for the once isolated city of

across the country. One company in the

Williston, N.D.

spotlight that is riding the wave of North

“We like to say that we are in the business

Dakota’s spawning economic explosion is B&G Oilfield Services.

of people and creating a strong company culture,” Bertagnolli shares. “We’ve realized

Established in 1966, B&G Oilfield Services

that once you look after your people,

originally caught oil fever during the

the happiness of the community, your

boom of the 1960s. The company

customers and shareholders naturally

endured the industry-wide lull during




As the director of human resources, Bertagnolli is quite familiar with the concerns of job-seekers. He recalls the concerns of a nervous 30-year-old he interviewed earlier this year. When asked if he had family in the area, the potential recruit answered that he was moving to Williston without his wife as a result of rumors that the area was not safe for women. Bertagnolli chuckled and proudly said that his wife and daughter both live and work in the city. “When the young man I spoke to told me that his wife was boarding the next train into town, it made my day. Given the work we do out here, I can not imagine moving here without my family,” Bertagnolli says, For Bertagnolli, being surrounded by his family has played an important role in making Williston feel more like home. He incorporates this into his approach when he hires new recruits – Bertagnolli makes it his goal is to move the entire family out to the city so that employees of B&G

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B&G Oilfield Services at a jobsite setting up tank batteries. Photo credit: Nathan Davis.

Oilfield Services have encouragement and support from their loved ones.

company, but also on a broader scale. In June of this year, employees of the

Recognizing the importance of

company took time out of their schedules

community, B&G Oilfield Services has

to participate in a fundraising event on

invested their resources to build a strong

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Employees actively take part in fundraising events to build a culture of generosity and compassion, Bertagnolli explains, adding that, “We’ve been lucky with the people we bring in. Our people are hardworking and enjoy giving back to the community when they can.” At this year’s vibrant 5K Color Dash race, volunteers joined together to raise funds to finish building a public pool in Tioga. The people at B&G Oilfield Services are a motivated group that takes their work and community seriously. For Bertagnolli, the core of the company’s success is the people who work there. “It’s because of people like them that the city of Williston is no longer a lonesome worksite experiencing an oil boom. The community is finally growing roots and has families that are ready to call it home,” Bertagnolli concludes. B&G Oilfield Services, founded in 1966, has grown to become a multi-service, multi-basin oilfield service provider with

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ACHP Applicant Tool Kit provides federal regulatory assistance before issues become problems The National Historic Preservation Act (NHPA) and its impact on your organization as you navigate the federal application process may be unfamiliar to many in the oil and gas industry, but being aware of its provisions can save you serious time and money. The Advisory Council on Historic Preservation (ACHP) is here to help you as proponents of projects that require reviews under Section 106 of the National Historic Preservation Act (NHPA) avoid unnecessary delays and make your dealings with its requirements more efficient. Using these reviews to ensure that your projects are designed from the outset to respond to and respect the values and interests of affected communities will likely earn greater

Section 106 training. Image courtesy: ACHP. 108


By Milford Wayne Donaldson, FAIA

support from these communities and enhance your organization’s reputation and effectiveness.

permitting a transmission line, or funding

It is worth noting that the NHPA was created and enacted in 1966 – in large part due to the sustained efforts of the U.S. Conference of Mayors and private citizens – because of massive federal infrastructure programs, namely creation of the Interstate Highway System and urban renewal in the 1950s and 1960s. The legislation’s purpose was to create a place at the table for communities, organizations, and individuals who were concerned with the sometimes heedless destruction of heritage sites that were important to local interests. Under the NHPA, a federal agency proposing an action such as building a road,

Today this process also gives companies

a redevelopment project must consider potential impacts on historic properties.

and applicants a place at the table to discover ways, in concert with affected parties, to design projects so that their immediate objectives succeed while promoting the overall health and vibrancy of communities and the nation’s heritage. It’s not a perfect process and we are continually improving it, but it’s a valuable and proven process and of fundamental importance to our republic. With the boom in energy transmission and pipeline corridors, traditional and renewable energy development, and demographic and population changes,


Corporate 406-433-8290 • Field Yard 406-482-4927



Where you want to be.

Project participants check their maps while consulting parties are out in the field. Image courtesy: ACHP.

Tool Kit” to assist those who need to understand how Section 106 of the NHPA functions in the application process. It can be found at apptoolkit.html.

being aware of the NHPA and its requirements is vital for those planning projects that can potentially impact historic places. It’s important to know what the NHPA requires before you make plans that involve federal permits, funding, or direct participation in projects. These requirements extend to projects both on and off public lands. The NHPA also created the Advisory Council on Historic Preservation (ACHP) to oversee the Section 106 process and we appreciate this opportunity to share our experience and increase your understanding of the NHPA. As for being here to help you, that’s actually taking up a good amount of the agency’s time and resources these days and underscores an important trend within the federal government. President Barack Obama issued Executive Order 13604 on March 22, 2012. The text of the entire order can be found at http:// pdf/2012-7636.pdf but for our purposes in this article, the critical information is as follows: “The quality of our Nation’s infrastructure depends in critical part on Federal permitting and review processes,

including planning, approval, and consultation processes. These processes inform decision-makers and affected communities about the potential benefits and impacts of proposed infrastructure projects, and ensure that projects are designed, built, and maintained in a manner that is consistent with protecting our public health, welfare, safety, national security, and environment. Reviews and approvals of infrastructure projects can be delayed due to many factors beyond the control of the Federal Government, such as poor project design, incomplete applications, uncertain funding, or multiple reviews and approvals by State, local, tribal, or other jurisdictions. Given these factors, it is critical that executive departments and agencies (agencies) take all steps within their authority, consistent with available resources, to execute Federal permitting and review processes with maximum efficiency and effectiveness, ensuring the health, safety, and security of communities and the environment while supporting vital economic growth.” As part of our response, the ACHP created and posted what we call the “Applicant

The ACHP developed this toolkit to provide information and guidance on the Section 106 process for parties who seek federal licenses, permits, assistance, or approvals that require such reviews. While the federal agency is directly responsible for conducting Section 106 reviews and making ultimate decisions, the ACHP oversees the process and provides assistance to its users. Our decades of experience in administering Section 106 can be of great assistance to applicants, improving their understanding of the law’s provisions. It is also important that applicants know how the ACHP and other federal agencies are working to improve coordination between Section 106 and other environmental reviews that may be necessary to complete a federally approved or assisted project. In the past, where Section 106 was improperly applied or where the process began too late, the result was too often unnecessary delays and costs to applicants. We don’t want that to happen to you. Applicants often shoulder the burden of complying with the initial steps of the Section 106 process, and they can benefit from being informed and involved at the earliest possible stage. By better understanding Section 106 requirements, applicants can make informed decisions about project design, resulting in improved outcomes and avoiding delay.

Section 106 Applicant Toolkit Contents: • Section 106 of the National Historic Preservation Act • Defining an Undertaking for Section 106 Review • Role of the Applicant • Major Participants in the Section 106 Review • Four Steps in the Regular Section 106 Review Process • “Authorization to Initiate Consultation” and Applicants 110


• Coordinating Section 106 With Other Federal, State, and Local Reviews • NEPA and Section 106 • Section 106 in Emergency and Disaster Responses • Section 106 Training for Applicants • Helping Section 106 Go Smoothly • Section 106 Applicant Toolkit Checklist

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Mountainview Energy Ltd’s mission is to explore, drill and develop for oil and gas in the Williston Basin Bakken/Three Forks Resource Play and the South Alberta Bakken Resource Play. By acquiring these properties we have the opportunity, through exploration and development drilling, to increase our daily production. Our strategy will allow Mountainview Energy Ltd to build an oil and gas company based on solid fundamentals. To accomplish our goals Mountainview will reply on Management’s proven record of over 50-years of developing oil and gas fields, both in private and public companies. TSXV: MVW.V 33 First Ave S.W. P.O. Box 200 Cut Bank, Montana 59427-0200

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Mountainview Energy Ltd is a Canadian public company traded on the TSX Venture Exchange

The toolkit provides an overview of the Section 106 process and its four-step process, complete with information on consulting with states and Indian tribes, engaging stakeholders, and avoiding inadvertent actions that may harm historic properties. The essential player in the Section 106 review process is the federal agency that is responsible for the ultimate decision on the federal action. The applicant is the party that requires a federal approval, license, or permit or seeks federal funds for a project. The nature of applicants

varies widely, from individual property owners to large corporations; they may also be local or state government entities. Regardless of their status, the ACHP’s regulations give applicants the right to participate as a consulting party throughout the process if they so desire, a status applicants generally greatly appreciate. The agency and the applicant generally take the lead on stakeholder outreach. In doing so, they engage other parties, including the respective State Historic Preservation Officer (SHPO); Tribal Historic

Preservation Officer or representatives of a federally recognized Indian tribe and Native Hawaiian organizations; local governments; and, occasionally, the ACHP. Other parties that should be involved include local organizations like neighborhood associations, preservation organizations, and the public. It is critical that applicants understand the Section 106 process and the nature of their potential participation and responsibilities. They should be prepared to actively participate with the involved federal agency. To do so, applicants should contact the appropriate federal agency early in their project planning to determine the procedures they must follow and which actions they may carry out on behalf of the agency. In some cases, the agency may delegate initial steps of the Section 106 process to an applicant. Early awareness of historic preservation responsibilities is the key to successful navigation of the Section 106 process. While compliance with NHPA may seem opaque to the uninitiated, its requirements are straightforward and follow a logical order. The purpose of EO13604 and related measures is to create greater transparency and efficiency to federal permitting processes without jeopardizing good environmental outcomes. Our applicants’ tool kit is the ACHP’s contribution to achieving that. The national historic preservation program has provided exceptional economic, environmental, cultural and educational benefits to the country and we are eager to see those benefits not only continue but also increase. Understanding the Section 106 process and the important role that they play in it is essential to project applicants meeting their own objectives while contributing to that national goal. About the Author: Milford Wayne Donaldson is the presidentially appointed chairman of the Advisory Council on Historic Preservation, a former California State historic preservation officer, and a distinguished architect. w



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400 & 500 Barrel Fiberglass Tanks

Pro Tank Products, Inc. announces that our new, state-ofthe-art, 70,000 square foot manufacturing facility is now open and producing 400, 500, 750 and 1000 barrel steel tanks. Located on the NW side of the Bakken Oil Play in Plentywood, MT our new shop can meet all of your Oil Storage Tank needs and save you thousands on shipping! We also manufacture 100, 200, 300 and 400 barrel steel tanks, coated steel tanks as well as Walkways and Walkovers in our Minot, ND facility. Ask about our inventory of 400 & 500 barrel fiberglass tanks available for resale to meet your needs. Visit or contact Butch Hensley – Production Manager at (406) 239-0916 or Sales Rep Lee Vander Vorste at (605) 484-4258 for all your needs.”

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Education your way: Grow your career with the University of Mary Dr. Warford (foreground) with Monsignor Shea. As dean of the Gary Tharaldson School of Business at the University of Mary, Dr. John Warford’s vision for the future includes nurturing mutually beneficial collaborations and partnerships with businesses and industries, including the energy industry. During Warford’s 12 years as mayor, for example, Bismarck experienced its largest continuous period of economic development, created 15,000 new jobs and saw its sales tax collections jump from $8 million to $17 million during his tenure. “Business is the engine of our economy,” Warford states. “Business should (also) be a force for good in society.” Warford’s vision for the future for the Gary Tharaldson School of Business at the university includes creating and nurturing mutually beneficial collaborations and partnerships with businesses and industries, including the energy industry in North Dakota. When Dr. John Warford, former three-term mayor of Bismarck, was appointed in January as the new dean of the Gary Tharaldson School of Business at the University of Mary in Bismarck, he became its latest faculty member to exemplify the University of Mary “scholar-practitioner,” the university’s belief in the tremendous value to students of faculty with real-world experience.

When Dr. James Long, chairman of Graduate and Distance Learning at the University of Mary, talks with leaders in North Dakota’s oil industry, they tell him their number one concern is the struggle to attract and retain the employees they need, to do the many jobs required to manage North Dakota’s energy boom. Long says that many of those employees businesses discover are hard to find and hard to replace, want to develop an upward career path for themselves, and are looking to enrich their lives, support their families and build their futures. For those who want to groom themselves for management and leadership in the energy industry, the University of Mary offers education solutions that will adapt to their work schedules, Long says. “When organizations align and partner with us, they get a discount, but also provide their employees with a career path, a reason to stay around.” Long points to what he calls the university’s “big three” – the features that make it different from many schools: quality, affordability and flexibility. “I was able to successfully achieve my degree while serving as a husband, a father, accepting a new supervisory position at work and serving part-time in the National Guard.” — Art Bakke, BS: Organizational Leadership, Bismarck, N.D.



Raise Your Expectations at the University of Mary

I have a passion for educating people. I want to help the working professional receive the most comprehensive educational experience on an international level. As former mayor of Bismarck and an experienced businessman, I will connect our students with world-class businesses like KLJ and others around the globe. Dr. John Warford Dean, Gary Tharaldson School of Business

Niles Hushka, PE CEO of KLJ

Dr. John Warford

Take your career to the next level! A Masters degree from the University of Mary will teach you to be more effective in your current job or even open new employment opportunities for you. n

Master of Science in Business


Master of Business Administration


Master of Project Management

The Gary Tharaldson School of Business at the University of Mary is bringing masters degrees to students around the world through a rigorous, innovative, collaborative online format. Keep your job, attend classes from anywhere and earn an ethics-based individually-tailored graduate degree. 800 408 6279 ext. 8128

If you are considering advancing your career through graduate education, take the first step by requesting more information. Begin your conversation with the University of Mary’s staff, who can provide you with details about the program’s curriculum, platform and admissions.

university of mary

Far left: “The accelerated program at the University of Mary helped create the perfect opportunity to pursue two degrees while still keeping focus on my family, job and daily responsibilities.” — EmaLee Dressler, BS: Business; Master of Project Management, Bismarck, N.D. Left: “The University of Mary’s online option allowed me to balance my professional and personal life, and the classroom option allowed for interaction with other business professionals.” — Justin Askim, MBA, Bismarck, N.D. Left: Dr. James Long, Chairman of Graduate and Distance Learning at the University of Mary.

When Dr. James Long talks with leaders in North Dakota’s oil industry, they tell him their number one concern is the struggle to attract and retain the employees they need. To meet the needs of people already working in the energy industry, classes are offered “asynchronously,” meaning on the student’s own timeframe, he says. Individual needs might include people wanting to finish their bachelor’s degree but who aren’t able to take a full load of classes; they have the option of taking individual classes as they can fit them in, Long explains. Others may already have a bachelor’s degree, but want to advance further in their careers. For them, “We have great graduate programs with a concentration in energy management, a great combination of classroom work and practical application taught by people actually in the industry,” Long states. Instead of being insulated in an “ivory tower,” the University of Mary uses the “scholar-practitioner” model such as Dr. Warford’s, he says. Faculty with actual work experience in their field offer great networking and good practical knowledge, he adds. At Dr. Warford’s appointment, Monsignor James Shea, president of the university, noted, “For our faculty and students, John brings the experience of a successful businessman, keen insight, strong relationships and faith-filled integrity.”

flips that around to put the needs of the student first, Long explains. “We ask them, ‘what are you passionate about?’” Whether it’s capturing natural gas, or coal, or oil, wind power, solar power, even horsepower in businesses such as communitysupported agriculture (CSAs) – that’s all energy management, he emphasizes. “Whatever they’re passionate about, we apply to the curriculum for them,” Long states. “Very deliberately, every class until graduation will include that as a focus of your studies. At the end, a student produces a big research project, a beautiful deliverable product that integrates the concept all along the way.” The big difference the University of Mary offers students is the “no cookie-cutter” model. “We work with you. We’re concerned about the student and his or her progression. Students are always applying what they are learning,” Long says. “That’s what makes us different.”

Warford will bring his mayoral legacy of economic development to the university’s formation of the next generation of ethical and hard-working business leaders. “This is wonderful news for our booming state,” Monsignor Shea stated.

The University of Mary offers three master’s degrees for those in the Gary Tharaldson School of Business. After taking a series of core courses, students may choose a Master of Science path or a Master of Business Administration path, each with its own choice of concentrations such as project management, energy management, executive, health-care or human resource management. A Master of Project Management degree is also available.

Most MBA programs take students through a set schedule that students must fit into; the University of Mary very deliberately

For more information on the University of Mary, please visit w



Fund invests in companies benefitting from or participating in the development and production of oil, gas, and related industries of the resource-rich Williston Basin and Mid-North America region.

ND is currently the 2nd largest oil producing state.

Top 25 holdings as of 6/30/2014:

Halliburton Company MDU Resources Group Inc. EOG Resources Inc. Fluor Corp. Pioneer Natural Resources Oasis Petroleum Baker Hughes Inc. National Oilwell Varco Inc.

Cameron International Corp.U.S. Silica Holdings Inc. Phillips 66 Superior Energy Services Trinity Industries Inc. Canadian Pacific Railway Ltd. Quanta Services, Inc. Schlumberger Ltd.

Kinder Morgan Inc. Williams Companies Inc. Enbridge Inc. Whiting Petroleum Corp. Cimarex Energy Co. Exxon Mobil Corp. Helmerich & Payne Inc. Lyondellbasell Indu. Class A Union Pacific Corp.

LEARN HOW YOU CAN INVEST TODAY! Contact Your Financial Advisor

Or call us at 800-276-1262 or visit *The portfolio may or may not hold and is not restricted to the companies listed above. Because the Fund normally invests in common stocks of companies engaged in natural resources-related activities in a limited geographical region, the Fund’s performance largely depends on the overall economic condition of that industry and geographical region. Additionally, diplomatic, political or economic developments in foreign countries could adversely impact the Fund’s investment in securities of foreign companies. The Fund is sold by prospectus only. An investor should consider the investment objectives, risks, and charges and expenses of the investment company carefully before investing. The prospectus contains this and other information about the investment company. You may obtain a prospectus at no cost from your financial adviser or at Please read the prospectus carefully before investing.

Integrity Funds Distributor, LLC 1 Main St. N • Minot, ND 58703 800-276-1262 • Member: FINRA

Dragon is here. Man u factu r i ng • Akron, IN • Alvarado, TX • Beaumont, TX Hwy 90 & Tilson St. • Center, TX • Corpus Christi, TX • Jacksboro, TX • Liberty, TX • Lamar, CO • La Porte, TX • Lathrop, CA • Los Fresnos, TX • Odessa, TX • Provo, UT • Silsbee, TX North & South • Springer, OK • Victoria, TX • Wooster, OH

Parts & services • Alvarado, TX • Beaumont, TX • Dilley, TX • Edmond, OK • Houston, TX • Midland, TX • Odessa, TX • Red Deer, Alberta Canada • Victoria, TX • Wooster, OH • Williston, ND


Dragon has the high-quality pump parts and service you need, ready to go, in your area. We have fully stocked, expertly staffed Service Centers located in every major hydrocarbon-producing region. That means when you call Dragon, day or night, the parts you need are right down the road and only moments away from being loaded onto one of our delivery vehicles and sent out to you. We can also set up a custom parts consignment program to meet your needs.

When you need pump parts now, we’ve got you covered.

Dragon provides the full range of frac spread parts and service for virtually all makes of pumps. Complete fluid ends and consumable parts, equipment rebuilds, power-end and fluid-end pump rebuilds – we’ve got you covered. And like all Dragon equipment, our pump parts are made in the U.S. and severe-duty engineered to perform in the harshest production environments. The parts, service and support you need, right now. Make it happen. • 800-231-8198 U.S. owned and operated for over 50 years. © Copyright 2014 Modern Group Inc. All rights reserved.

DRAKE WATER technologies, INC.

Disruptive environmental solutions for the energy industry Drake Water Technologies, Inc. By Vivian Drake, COO, Drake Water Technologies, Inc. and C&E Reclamation, Inc. Demand in the Bakken continues to grow, as well as in the Permian and other oil and gas plays, for new technologies to address the myriad of treatment and disposal issues. Over the past 15 years, Drake Water Technologies, Inc. (DWT) has developed a number of technologies that specifically target produced and frac flowback waters. DWT recognizes that a “one size fits all” treatment is not feasible to address these waters because different geologic formations produce water of varying composition, and every E&P operator has their own “secret sauce” for their fracking fluids which ultimately impacts the chemistry of their frac return flows. Instead of declaring that we can treat and clean any water, DWT first obtains a water chemical analysis and then designs a treatment system to fulfill the ultimate treatment goals. Rather than treating to remove all species, which is costly and unnecessary, DWT targets specific organic and ionic species for removal by application of an appropriate suite of technologies. This approach greatly reduces cost of treatment and consumption of resources. DWT’s flagship technology, dubbed “IonFlo”, was originally developed to remove sodium from coal bed methane-produced waters in the Powder River Basin. Over the past decade, IonFlo has been further refined and adapted for selective removal of ionic species and general total dissolved solids (TDS) reduction from brackish and saline waters. IonFlo systems are designed to be modular, mobile, scalable, simple, robust, and fully automated. Systems feature high throughput for a very small footprint, and use less than 10 percent of the ion exchange resin in process when compared to conventional ion exchange systems with equivalent throughput. Systems are fabricated from FRP and PVC pipe, exhibit low empty weight and low capital cost.

DWT’s full-scale IonFlo pilot plant module. Mike Drake stands behind what the company affectionately calls “Lake Drake”, a stock tank they use for demonstration.



Unlike conventional ion exchange technology, IonFlo doses ion exchange resin to water in a predetermined stoichiometric ratio, and limits resin/water contact time so that the ion exchange reactions are controlled by kinetic rather than equilibrium behavior. This allows selective removal of ions and real-time control of the amount of ionic species removed. The result is a dramatic increase in the flexibility of ion exchange, accompanied by substantial reductions in cost of operations.

DWT’s CuttFlo pilot unit, shown cold (far right) and hot (right) with thermal imaging.

One of the issues facing the oilfield service industries’ salt water disposal (SWD) facilities is scaling and plugging of equipment, piping, and wells. In the past, disposal of heavy brines did not pose a problem as the main constituent of those waters was sodium chloride, almost infinitely soluble in waters. However, in recent years, disposal of frac flowback waters has proven to be problematic since those waters contain scaling-ionic species such as calcium, magnesium, silica, and sulfates. Operated on the IonFlo platform, the IonFlo technology can be used to soften low-to-moderate TDS water by selective removal of divalent alkaline earth species. Likewise, by using sodium-form weak-acid resin, high-TDS waters can be softened using IonFlo. Similarly, strong base anion resins may be employed by IonFlo to selectively remove sulfates from produced waters. Selective removal of scale-forming constituents enables repurposing and recycle of produced waters and flowback waters from hydraulic fracturing operations. Removal of scale-forming constituents facilitates deep-well injection of produced waters, and greatly extends the lifetime of membranes used for reverse osmosis, forward osmosis, and nanofiltration. Again, based on the IonFlo continuous ion exchange platform, the IonFlo Desal system may be used for economical bulk TDS removal from brackish or saline waters using thermally regenerated and recycled ion-exchange reagents. Adverse selectivity of commercially available resins for thermally regenerated ionic constituents prohibits thermally regenerated reagents from being used in conventional equilibrium-based ionexchange systems. IonFlo Desal enables economical production of large volumes of “Smart Water” for enhanced oil recovery operations. When coupled with C&E Reclamation’s ThermFlo unit (see next

page), ion-exchange reagents can be recovered and recycled by combustion of waste fuels such as field gas, tank bottoms, rag layers, and other organic wastes, whereby clean water is produced by the energy associated with waste destruction. C&E Reclamation, Inc. In 2012, DWT spun-off a partner technology company called C&E Reclamation, Inc. (“C&E” standing for cuttings and emulsions), which specializes in solids treatment from E&P operations. In late 2011, DWT was approached by a company operating in the Bakken that was taking shaker-table drill-cuttings and adding fly ash for stabilization and disposal in pits. The company owner was of the opinion that the North Dakota regulations for cuttings disposal would become more stringent, and he was seeking a technology that would treat the cuttings, recover the organic fraction, and produce clean solids and water. As it turned out, Ron and Mike Drake had developed a technology to do just that in the early 1990s while addressing organically contaminated soils from leaking underground storage tanks (recall the EPA LUST program). With some slight modification to the technology, DWT constructed a pilot plant in which they have successfully treated over 30 different petroleum contaminated solids, recovered an organic product with the chemical profile of diesel, including H2S destruction, and produced clean solids and waters with a TDS less than 500 ppm.

With some slight modification to the technology, DWT constructed a pilot plant in which they have successfully treated over 30 different petroleum contaminated solids, recovered an organic product with the chemical profile of diesel, including H2S destruction, and produced clean solids and waters with a TDS less than 500 ppm. BAKKEN OIL REPORT – FALL 2014




Syris Trahan and Doug Hahn at a Montana Chamber of Commerce event with Montana Governor Steve Bullock. Based on the successful pilot tests, C&E was incorporated, and the CuttFlo technology patent was assigned. A full-scale alpha CuttFlo unit has been constructed and successfully hot tested at a fabrication facility in Missoula, Mont. The CuttFlo technology uses thermal desorption and hot filtration to recover the valuable organic product, produce clean solids, and clean water from mixed wastes such as drill cuttings, spent invert fluids (emulsions), slop oils, tank bottoms, rag layers (from disposal of flowback waters to SWD facilities), and contaminated soils. The initial hot test recovered organic exhibiting an API gravity of 34.9 (0.85 sp. gr.) and was translucent amber in color. Processed solids were dry, hydrocarbon-free, and exhibited low (0.793 g/ cm3) bulk density. Product solids were comprised of friable agglomerates of the feed (barite, clay, and lime) fines, with sparing precipitated salt (halite) when viewed under the microscope. Water recovered from the product aqueous surge tank exhibited EC values of 0.345 and 1.002 dS/m, respectively. The commercial-scale alpha CuttFlo unit is slated to be moved to a site in Canada for full-scale operation at an energy company’s site in fall 2014. C&E principals are also in discussion with U.S. oilfield services companies to enhance commercialization efforts in the States. C&E also offers a second technology, ThermFlo, to treat large quantities of oilfield waste solids that do not have economically recoverable organics. ThermFlo was derived from technology developed by the U.S. DOE during the early ’80s for the U.S. weapons demilitarization program. The objective was to render safe soils and other materials that had been contaminated by very refractory chemical weapons and nerve agents. The 122


Graph of the recovered organic product from DWT’s most recent hot test, which shows the profile of No. 2 diesel fuel.

technology was subsequently further developed and used to clean up hazardous waste sites contaminated with halogenated hydrocarbons such as dioxin, DDT, PCB, and pentachlorophenol. By the mid-1990s, the company operating the technology ran out of hazardous waste sites to clean up, and decommissioned their equipment. At that time, hydrocarbon discharges into the landscape were largely unregulated and there was no market for thermal clean-up technology. Times have changed. DWT principal Ron Drake led the team that developed and designed the original demilitarization equipment, and DWT has now adapted that technology as ThermFlo for clean-up and reclamation of hydrocarbon waste pits, spill sites, refinery brown fields, and remediation of cuttings and E&P residuals exhibiting low organic content.





Proud distributor of products by:




When coupled with C&E Reclamation’s ThermFlo unit, ion-exchange reagents can be recovered and recycled by combustion of waste fuels such as field gas, tank bottoms, rag layers, and other organic wastes, whereby clean water is produced by the energy associated with waste destruction.

Ron Drake with DWT’s first mobile IonFlo system in Wyoming.

Vivian and Ron Drake and Syris Trahan with former ambassador P. Michael McKinley at the 2012 Oil and Gas Expo in Bogota, Colombia. ABOUT THE DWT TEAM Ron Drake, P.Eng., is DWT’s and C&E’s president and CEO. Ron graduated in 1972 with a B.Sc. in chemical engineering. As

and operated a service business which required project and construction management and worked as a private consultant in development of new technologies.

an inventor, with patents for several new technologies, Ron

Doug Hahn is DWT’s senior staff technician. Doug holds an A.S.

researches, develops, and demonstrates environmental solutions

in water quality technology and environmental health. Doug

for difficult industrial applications, especially those in the energy

has over 12 years’ experience as a water and wastewater plant

industry. Ron is also a member of Montana’s Board of Professional

operator and is skilled in machine operation, welding, and

Engineers and Land Surveyors.


Vivian Drake is the chief operations officer for both companies.

As DWT’s latest addition in 2012, Syris Trahan was hired as DWT’s

With degrees in civil and hydrogeological engineering, and

second staff engineer. Syris is a graduate of Montana State

land resources and environmental sciences, Vivian is project manager for DWT and C&E, with expertise in groundwater flow, contamination and clean-up, water rights, and permitting.

University with a B.Sc. in physics, and a graduate of Heriot-Watt University, Edinburgh, Scotland, with a M.Sc. in renewable energy engineering. Syris is the resident expert in phosphate removal

Mike Drake is DWT’s senior staff engineer. Mike is a graduate

using ion-exchange media and is well-versed in the engineering

of the Navy Nuclear Power School. He previously owned

of refractory used in the CuttFlo process. w



BAKKEN OIL REPORT – FALL 2014 BakkenOilReport_HalfPageAd_7x4.265.indd 1


9/15/14 2:54 PM


Reuse, reduce, recycle: Resirkulere offers unique, mobile wastewater filtration system for the oil industry

For every barrel of oil or gas produced in the world today, approximately three barrels of non-recycled water are produced with it. It’s time for change. Balancing the disposal and/or reuse of all this water and access to fresh water in a way that is environmentally acceptable and economically feasible remains a challenge to the oil and gas industry. With socioeconomic and geopolitical concerns compounded by the effects of climate change and natural shortages of water (in certain regions), access to freshwater is increasingly difficult to secure for operators around the world. 126


The Resirkulere Wastewater Filtration System uses a physical separation process that has the capacity to remove suspended solids, including frac gels and proppant, from the water to a level where filtration is possible. When contaminated water (as returned during coiled tubing drillouts, rig-assisted plug drillouts or other clean-out operations) passes through the specialized separator, the process mimics the retention time equivalent to “flocking” the water hundreds of times. This allows the chemical gels that suspend the sand and other proppants enough time to “break out” of suspension. This


When contaminated water (as returned during coiled tubing drillouts, rig-assisted plug drillouts or other clean-out operations) passes through the specialized separator, the process mimics the retention time equivalent to “flocking” the water hundreds of times. increase in retention also allows oil and other hydrocarbons an opportunity to separate from the emulsion, and be saved (while also eliminating the tendency for these materials to plug the filtering medium). In this way, water is prepared for filtering and reuse for physical applications (such as during plug drillouts), while retaining the valuable sellable oil. Heavier coagulants and sand sink to the bottom of the specialized separator where they pass through sock filters (generally 25 micron) leaving clear water, suitable for reuse in drilling and production operations. Reduced Environmental Footprint Resirkulere’s focus with the specialized separator filtration service is to treat produced and flow-back water to a standard suitable for reuse in fracturing or drilling fluids. In doing so, the volume of wastewater sent for disposal is minimized. Water acceptable for use in fracturing or drilling fluids

with any other services where suspended solids need to be removed from emulsified “trash” water. Key features: • 99 percent reduction in Total Suspended Solids (TSS) • Breaks emulsions • Fully portable • Maintenance-free • Scalable • Operator-supplied Most effective at treating the following contaminants: • TSS • Total Petroleum Hydrocarbons (TPH) • Turbidity • Resirkulere water treatment effectively removes oil from noncontaminated water For further information, visit w

is returned to the operator, thus reducing their demand for fresh water. Additionally, the specialized separation system can result in significant reduction of truck use in water management. On average, each specialized separator unit working daily would eliminate 4,320 bbls of fresh water and 4,320 bbls of disposal (assuming operations at three bbls/min) per day, or roughly 72 truckloads of water (at 120 bbls/truck), 8,640 miles of truck traffic (at 60 miles each way) and 144 hours of road time and emissions. Another area of savings is trucking and the safety factor associated with trucks entering and leaving locations. On average, Resirkulere USA has found that the cost to the customer for using this system is offset in retained oil alone, much less the enormous savings for trucking, disposal, and fresh water acquisition.

Claim Post Resources is an emerging company in the oil and gas services sector. The company is focused on becoming a leading provider of premium white silica sand proppant to oil and gas operations in the Bakkens, Montney and Horn River basins.

Operational Benefits Resirkulere’s mobile filtration system will generally operates as high as 18 to 20 bbls per minute but is easily scalable for any size project to quickly treat the large volumes of water “on the fly”

Tel: 416-203-3776 | Fax: 416-203-1254 903 - 141 Adelaide Street West Toronto, ON M5H 3L5

during plug drillouts, coil operations or other field applications. The specialized separator technology was designed to remove suspended solids, oil and other insoluble organics from the water. The technology works extremely well during coil operations, but

may be applied as a first rendering for clarification in conjunction BAKKEN OIL REPORT – FALL 2014



Williston Basin API chapter reaches new highs in giving back to communities

President Ken Callahan, past president Brent Eslinger from Halliburton, and committee member Monte Besler hand out door prizes at the 2014 API Golf Tournament.

Several tables of items purchased and donated totaled over $30,000 for the 2014 API Golf Tournament’s door prizes.

The Williston API has increased its visibility in the Bakken over the past three decades. The Williston Basin chapter of the American Petroleum Institute (API), which has three core values (to participate, educate and engage), has two annual events, including the API Chili Cook-off the first week in February and a golf tournament in July. From these two fundraisers, the chapter raises around $30,000 to $40,000 to give back to the community.

owner of DAWA Solutions, started the WPB in 2011 and in 2012, added awards to it and also asked API to sponsor those awards. Zarling and DAWA invested time and money into the WPB to get it off the ground and once it was successful, offered to have the API Williston chapter take control of it. In 2013, the Williston chapter took over the event and was able to add $25,000 to its budget to help fund the many requests from charities.

In 2013, Williston API took their events to another level in order to try and meet the numerous requests for funds; all in all, it was a great year for the chapter, which normally gives away between $20,000 to $30,000 to non-profits and local charities. Somewhere back in 2010, the Williston API chapter noticed a sharp increase in funding requests from charities and the fact that those requests were for increasingly larger funds. Over the last decade, the chapter has moved its priority from providing events for its members while creating value, to now placing more emphasis on fundraising, in order to help the many much-needed groups in the Bakken.

2013 was the most successful year the chapter has seen in decades. The leadership of Brent Eslinger, region manager from Halliburton, and Kathy Neset, owner of Neset Consulting, helps mentor the new board for the next decade, communicating the importance of participation, engagement, and education as its core values.

In 2013, the Williston API chapter added an event, the Williston Petroleum Banquet (WPB), to thank the many individuals, groups, and businesses that have made the Bakken a better place in which to live. This banquet recognizes the oil and energy industry for outstanding achievement, industry innovation, and community services. Jeff Zarling, past API board member and 130


Neset, who is chair of the Williston branch’s education and scholarship committee, helped start the scholarships at the Montana Foundation eight years ago. She guided the committee and started the dialog to have two more scholarships, but this time at the University of North Dakota. The chapter then looked at both universities and instead of writing checks for two students each year, decided to set up endowments at each university. “By doing this, we created a legacy for our children for generations to come,” Neset says. Though Eslinger and Neset left the board at the end of 2012, they stay heavily involved in the chapter. In addition to the education

Cecil Fielder, N.Y. Yankee Hall of Famer, gave a signed bat for the longest drive on a hole at the Links. and scholarship committee, Neset also sits on the bylaws committee, and as an advisor to the chapter. Eslinger sits on the golf committee, bylaws committee, and as an advisor to the club. Recently, he passed his duties of the chili cook-off committee to another employee of Halliburton. Past treasurer and secretary JoAnn Callahan also volunteers for both the chili cook-off and golf tournament committees, and lends a hand with the frontdoor duties at the chapter’s monthly meetings when called upon. Many other past board members have stuck around over the years to help make the Williston API chapter the success it is. The chapter has an awesome board, with Russell Rankin from Statoil as VP; Ronica O’Dwyer from Triland Holdings, LLC, as the treasurer; Brandin Foos from FMC Technology as the club’s secretary; Jonathan Isblings from Halliburton; Dolly Ramsey from Nabors; and Ken Callahan from Montana-Dakota Utilities serving as the president. The latest chili cook-off raised $27,000, which included an extra $10,000 above the amount the chapter usually raises. The new, motivated board took the golf tournament to an entirely new level by averaging $20,000 to a record $90,000. By adding the $27,000 from the WPB, the club was able to meet all the requests of the communities and non-profits and write two $25,000 checks, one to the Montana Foundation and one to UND. “The chapter issued over $75,000 in funds and plans on doing the same in 2014, with a chance of surpassing $100,000,” Callahan says.

Left to right: JoAnn Callahan, Ken Callahan, Scott Tinker, and Russell Rankin. Tinker was API Williston’s keynote speaker last year. Photos courtesy: Ryan Murphy Photography.

Industry Innovation Award. Last but not least, Target Logistics was rewarded for their efforts in community services for all their work and donations to the community. “In 2013, we had the winners from 2012 present the awards as they passed the torch,” he says. Winners included Tervita, who received the API Industry Innovation Award for their work on the Blue Buttes project in Keene, N.D. Centennial Resources received the API Outstanding Achievement Award for all their effort in the oil and gas industry. Williston Energy Outreach, which is made up of six local oil and gas-related companies (Statoil, Halliburton, Baker Hughes, Nabors, Oasis and Schlumberger), put in $100,000

“What some people may not realize is the time and effort the board of directors, past board members, and committee members each put into the chapter so that we can become so successful and give so much back to the communities,” he says. “This group of talented individuals created additional sponsorship opportunities at all of our events. Now with three major fundraisers each year, as one event ends, the next event starts – it’s becoming a well-oiled machine.”

from each company, totaling $600,000; the pot was divided up in

At the 2012 WPB, the chapter bestowed awards on three people or companies, including Buck Scheele, who received the chapter’s API Outstanding Achievement Award for all his efforts in the oilfield industry. Stuart Vachal from IESS received the API

different with the current team. “We’re reaching higher highs and

the community, where the needs were the highest. “We decided to issue both individual and company outstanding achievement awards. This year’s Williston API Outstanding Individual Achievement Award goes to Monte ‘FracN8R’ Bessler. Monte has been working in the oilfield for decades and has been known as the local expert!” Over the years, the board has continued to shine and it’s no we’re able to give back more to the community than ever before,” enthuses Callahan. “This is a sign of a great board and I’m proud to be part of making history!” w BAKKEN OIL REPORT – FALL 2014



Answering the call By Jillian Mitchell

Eagle Crest Apartments. Workers in the Bakken region’s booming oil industry are certainly familiar with Miller Architects & Builders’ handy work – in fact, they may even be living there. Regularly touted a one-stop shop, the design-build company out of St. Cloud, Minnesota, has spent the last few years constructing multi-family housing units and hotels to help satisfy the Bakken’s ever-increasing housing demands. Across from the Williston Airport in North Dakota, the Candlewood Suites is a prime example of the firm’s efforts. Constructed in 2008, the 80-unit extended-stay hotel totaling 47,480 square feet offers spacious rooms larger than the norm: granite-top, fully equipped kitchenettes; flat-screen TVs and high-speed Internet; a fitness center and free 24-hour laundry service; a locker room; and a fully-stocked Candlewood Cupboard (where meals, snacks, and sundry items are sold). As president Joe Seifert shares, the Candlewood project ignited a new chapter for the Miller team. “That first project we did in 2008 kicked off a firestorm of hotels in the area,” he says, “and [the client] knew it was going to be necessary to bring in some construction firms from outside the area.” Seifert adds that his company was glad to answer the region’s call. “We’re feeling pretty fortunate that we’re able to go out and do this work,” he says. “We’re regional and we can help out our neighbor to the west.” Following the Candlewood project, the design-build company’s portion of the aforesaid firestorm included 132


MainStay Suites in Tioga. subsequent activity in the Williston area – the nearby HomStay Hotel of 2009 featuring Big Willy’s Saloon and Grill, and the Holiday Inn Express of 2011, as examples. Naturally, work has begun to span the state with projects such as the HomStay Suites in Dickinson and the MainStay Suites in Tioga. The latest project on the books is a 180-unit, four-story hotel dubbed the Oak & Iron Hotel in Williston. Seifert is encouraged by the amount of work offered by the region. “We’re pretty fortunate that in central Minnesota, we have a great group of talent, and they’re willing to travel,” he says, adding that people in planning and zoning have been very pleased with how the team has been supervising jobsites. “We have at least one, sometimes two, superintendents working a job.” All told, the Miller team imports around 200 workers from the St. Cloud area (a total nine-hour drive to the east) to meet the region’s housing and subsequent retail needs, which is the firm’s next phase of development in the Bakken region. Among these projects is a 32,000-square-foot commercial office and retail development complex dubbed the Watford Business Center in Watford City, North Dakota. Located off of Highway No. 85, the new two-story commercial development has been designed to meet the high demand for quality office and retail space in the Watford City market. Miller Architects & Builders celebrates a five-generation lineage in St. Cloud, Minnesota. As Seifert confirms, approximately 80 percent of the projects built by the team are


Above: New apartment construction. Left: Across from the Williston Airport in North Dakota, the Candlewood Suites is a prime example of the firm’s efforts.

Never ones to mess with a good thing, Miller Architects & designed in-house. “We’ve had our own architects on staff since the ‘70s. The generation before us had the foresight to work hand-in-hand with the architecture and design side, to figure

Builders will continue to proudly answer the call of the Bakken, as well as that of their home state and surrounding states. Theirs is a focus of collaboration.

projects out from the preliminary stage all the way through,” he

“It’s relationship-driven,” Seifert says of the company’s past,


present and future. w

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In many areas of your life, you’re probably

markets are rarely static – they are always

aware that it’s useful to keep emotions

moving up and down, at least in the

out of your decision-making – and

short term. (Over the very long term, a

that’s certainly the case with investing.

period of many decades, the markets

However, it can be difficult to keep your

have trended up.) But these short-term

feelings from influencing your investment

movements, while perhaps appearing as

decisions. But you may find it easier to

investors tend to feel optimism, excitement

“zigs” and “zags” on a daily basis, actually

invest with your head, rather than your

and even euphoria. But once a bull market

form a pattern, or a cycle, that can last for

heart, if you know a little something

ends and a bear market begins, investors

months or years. These cycles are known

about two different cycles: the market

start getting nervous. And the longer and

as bull (up) or bear (down) markets. Going

deeper the bear market, the greater the

back to the Great Depression, the average

depth of emotion felt by investors. These

Let’s start with the market cycle. If you’ve

bear market has lasted 21 months, while

emotions can begin as anxiety and then

been investing for a while, you’re aware

the average bull market has extended for

progress to denial, fear, desperation and

(probably highly aware) that the financial

57 months, according to research from


cycle and your emotional cycle.



These market cycles greatly influence investors’ attitudes and behavior. In fact, they lead to the formation of investors’ emotional cycles. During bull markets,


Furthermore, market cycles and emotional cycles don’t really align. For example, investors may well experience euphoria when the market has reached its high point and a bear market has just begun. For a while, then, these investors – fueled by their euphoric feelings over the big gains they’ve achieved – may

During bull markets, investors tend to feel optimism, excitement and even euphoria. But once a bull market ends and a bear market begins, investors start getting nervous. And the longer and deeper the bear market, the greater the depth of emotion felt by investors.

continue pouring money into the market, even as it’s declining. This type of behavior, though, is probably better

suited for when the market is already at a low, when investors’ dollars will buy more shares. Conversely, investors may reach

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the peak of their fearfulness at the end of a bear market, just when things are about to turn around. At this point, their fear may hold them back from investing – even though, with prices low, it can be a good time to invest. Clearly, basing investment decisions on emotions can lead to poor choices. So don’t get caught up in this pattern. Instead, strive to follow a disciplined approach to investing. Build an investment portfolio that reflects your

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than as a reaction to the current market cycle. Our emotions are powerful, and their power can increase when applied to such a meaningful aspect of our life as our finances. But if you can detach yourself, as much as possible, from the emotional cycle of investing, you can avoid considerable angst – while helping clear the path to pursue your goals. This article was written by Edward Jones for use by your local Edward Jones financial advisor. w

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Long water transfer in booster situations: Sizing the right pump for the right job By Andy Fitzhugh, Montana/North Dakota Branch Manager, Godwin, a Xylem brand

The rapid expansion of domestic oil production from tight shale

2. How far does the water need to be pumped?

formations such as the Bakken and Three Forks plays in North

3. How great is the elevation change?

Dakota has been driven, in part, by technological advancements in the drilling and completion of wells. This same trend has been mirrored by service companies, vendors and equipment providers servicing exploration and production (E&P) companies. Over the past 12 months, the water management and transfer industry has responded with an ever-increasing array of solutions that have allowed service companies to quicken response times and drive down costs in order to better serve the industry. The hydraulic fracturing process requires the movement of millions of gallons of water at a cost that could represent up to 10 percent of the total cost of the well to E&P companies. As infill drilling and multi-well pads become more common, companies have shifted toward centralized water supplies and pumping stations to maximize efficiency and minimize the relocation of pumps and piping systems. At the same time, there has been an increased acceptance of long-distance, temporary pipelines as a means to move water efficiently, reduce trucking costs and drive total well completion costs down. This industry shift has forced pump companies to respond accordingly.

Armed with this information, pump companies are tasked with balancing the selection of pumps and pipe or hose systems to minimize installation time, maximize the capabilities of the pumps, and minimize the amount of labor required to operate the system. While finding this balance, the companies must also ensure water is delivered to the well site when it is needed, at the rate it is needed. Consider this example: A typical application in North Dakota to move water from its source to the well-completion pad may involve a required flow rate of 40 barrels per minute (1,680 GPM) for a distance of six miles with an elevation gain of 250 feet. In this scenario, the piping selection and associated friction losses will have the greatest variable impact on pump selection. The total dynamic head (TDH) in this application could vary from as low as 680 feet, when using 10-inch high-pressure hose, to 1,035 feet using 10-inch HDPE (high-density polyethylene) piping, or higher when using eight-inch piping systems. High-volume, high-pressure single-stage centrifugal pumps, such as the Godwin Dri-Prime HL200M and HL160M pumps, allow service companies to maximize the capability of piping systems and

The mechanics of pumping water long distances come down to

minimize the number of pumping stations. The HL160M pump

three basic questions:

is capable of the example target flow of 40 barrels per minute

1. How much water is needed?

at a maximum TDH of 450 feet and, in this scenario, could be



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coupled with 10-inch high-pressure hose to offer the well owner a two-pump station. This setup would minimize the labor and operating costs associated with multiple pump station systems. Two Godwin HL160M pumps, each operating at 1,750 RPM, offer an efficient and reliable solution to this application. As recently as 2012, the above scenario would usually be achieved by trucking water from source to well pad instead of pumping. The dramatic increase in the usage of temporary hose systems and high-pressure, single-stage, diesel-driven pumps has forced E&P companies to look closely at every job for the most cost-effective way to deliver water. The trucking and installation costs of hard piping systems, such as aluminum irrigation pipe and fused HDPE pipe, made long-distance pumping cost-effective only in scenarios where the pump system would be in service for a significant length of time. The shift to high-pressure hose has dramatically decreased

previously required several days to install. The hose system can

shipping costs and installation times, making short-term,

be pigged and cleaned just as quickly, spooled on reels and

long-distance pumping an economically viable solution to the water transfer industry. Service companies are able to ship several miles of hose on a single truck and install in a day what

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The shift to high-pressure hose has dramatically decreased shipping costs and installation times, making short-term, long-distance pumping an economically viable solution to the water transfer industry. Service companies are able to ship several miles of hose on a single truck and install in a day what previously required several days to install. will be to streamline the labor associated with operating and monitoring the pump system once it is installed. Traditionally, this monitoring has been accomplished by positioning a technician at every pump station 24 hours per day, which is costly and creates communication issues in areas with limited cellular service. Xylem has led the shift to more advanced pump operation and remote monitoring with its PrimeGuard control pane equipped with Field Smart Technology (FST). Technologies like this, which feature cellular and satellite connections, offer remote monitoring of pump stations via any Internet-enabled device. This allows service companies to streamline labor and troubleshoot pump problems remotely. FST also allows a single operator at a well site to remotely start and stop a remote pump

station immediately, based on the needs of the site manager and completion company. The industry will begin to see tremendous labor savings and increased efficiencies for the service company and the well owner. As the U.S. domestic oil industry continues to evolve and expand, service companies and manufacturing companies will need to demonstrate continuous innovation to keep their services viable and valuable. The combination of more efficient piping systems and robust, high-pressure portable pumps equipped with sophisticated controls from companies like Xylem is already dramatically changing the industry. These innovations and new opportunities will only continue to enhance the domestic oil industry. w




Accurate boiling point distribution via gas chromatography for the entire crude range Determining the boiling point distribution for crude allows refineries to estimate and quantify the amount of each end product, such as diesel, gasoline, jet fuel, etc., present in the crude. Accurately determining the boiling point distribution for an entire crude oil range plays a key role in determining crude oil value and cutpoint optimization, which is imperative for decision-making during the refining process. This enables refineries to improve yields and also enhance the quality of the final product. In addition, refineries are using this information to ensure that

incoming crude gets transported to the refinery best able to process that crude, depending on its makeup. For example, if a certain refinery is better equipped to process heavy products and the crude is made up of mostly C100 to C120, from which asphalt is produced, it would be routed to that facility. High-Temperature Simulated Distillation (HT SIMDIS) is one of the most frequently used techniques to determine the boiling point range of crude. When performing SIMDIS analysis, a sample is introduced into a gas chromatography column that separates hydrocarbons in boiling point order. The column temperature is raised at a reproducible rate, and the area under the chromatogram is recorded throughout the run. Boiling temperatures are assigned to the time axis from a calibration curve obtained under the same conditions by running a known mixture of hydrocarbons covering

the boiling range expected in the sample. From this data, the boiling range distribution is obtained. This technique is a very good fit due to being a robust chromatography technique that requires minimum operator involvement and a very small sample amount, compared to other techniques for boiling point distribution determination. In addition, high precision and automated operation make HighTemp. SIMDIS an easy method for refineries, independent testing labs, transportation companies, and pipelines to analyze and obtain an accurate and precise assessment of their crude boiling range. However, HT SIMDIS on its own presents a challenge, since it only analyzes crude from C5 to C120. It is unable to accurately measure the front part of the chromatogram where the light distillates reside. When diluting the crude samples with CS2, as is needed, a “quenching� effect occurs in the region with the lighter distillates, causing less precise boiling point data around C2 to C8 (see Figure 1).

FIGURE 1: Quenching effect in the light end of the crude. 142

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Even when refineries utilize cryogenics to ease the quenching effect, it can still occur and skew the data.

FIGURE 2: HT SIMDIS report from the AC Analytical Controls SIMDIS analyzer.

With traditional crude that normally only consists of a small percentage of light distillates, this didn’t present much of an issue since HT SIMDIS works well with the heavier hydrocarbons found in traditional crude. Since these light distillates weren’t as prominent in traditional crudes, most refineries did not even process them. However, with Bakken light crude, there are a higher percentage of light distillates, which include everything from C1 to C9. Due to the increased presence of these light distillates, refineries have found them to be a profitable part of their business and now need accurate measurement for the full hydrocarbon range. The HT SIMDIS technique, as discussed, is not enough by itself to measure the full boiling point range of Bakken crude. The report shown in Figure 2 has been generated by a HT SIMDIS analyzer. From the report, we can clearly see that the sample has an initial boiling point of 36°C, which is the boiling point of the first N-Paraffin calibrating the system. It also determines a recovery of 96.3 percent. At the same time, in the front portion of the Chromatogram, it appears there is some sample eluting below C5, but it is hard to analyze with just HT SIMDIS. To accurately measure these lightend distillates, a technique known as DHA Front-End (DHA-FE) is used. With DHA-FE, the entire crude is injected into a gas chromatography unit with a pre-fractionator. The role of the prefractionator is to retain the heavies and allow the light compounds to pass through and be subsequently analyzed into a 50-meter-long capillary column, where all the light components are separated and individually identified and quantified using a flame ionization 144


FIGURE 3: Merged Report – HT SIMDIS and DHA-FE – from the AC Analytical Controls Crude Oil Analyzer.

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As mentioned previously, HT SIMDIS is excellent for measuring C10 to C120 and DHA-FE provides accurate data for C1 to C9. For the most accurate true boiling point (TBP) analysis, software is used to combine the results of DHA Front End (FE) and HT SIMDIS analyses into one boiling point report. As seen in Figure 3, the merged data shows that there are a significant amount of light hydrocarbons present in the sample below C9, giving an initial boiling point of -0.5°C versus 36°C shown in Figure 2.



detector. Columns with different dimensions can be used, especially when running similar DHA-Combi systems that are equipped with a pre-fractionator.

This data of lower boiling feed becomes very valuable for refineries, as it directly impacts the yield and therefore can alter decisions on final products. In this specific case, about 22 percent of the total crude is eluting below C9, which would roughly translate to about 44,000 barrels per day in an average 200,000 barrel per day refinery. Determining characteristics of the whole crude oil by combining High-Temperature SIMDIS and DHA-FE data into a single report improves the accuracy and the precision of the data. This allows for modeling the end product closer to specs and ultimately less product giveaway, while still meeting stringent product specifications. w

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Need a hand?

A little over a decade ago, a handful of Halliburton Baroid employees organized a fundraising event in Houston, Texas. The friends raised roughly $24,500 for a fellow employee whose family savings had been drained as a result of several expensive surgeries. That one gracious gesture sparked an idea: “What if we did this regularly for families in need?”

Colorado, Wyoming and Utah regions. The organization will raise

That’s when the idea of Oilfield Helping Hands (OHH) became a reality.

president. “Everyone has been extremely gracious and ready to

Today, the non-profit organization has raised approximately $2.6 million in funds to assist individuals and families in the oilfield community who are in financial crisis through no fault of their own. What started out as one clay shoot has now grown into a dedicated team of members, volunteers and corporate sponsors who manage nine annual fundraising events throughout four chapters.

organization that prefers to distribute chapter funds locally. So

“Our events range anywhere from clay shoots to golf tournaments,” says OHH president Gary Brooks. “We’ve hosted fishing tournaments, car shows and nights at the ballpark. We couldn’t do anything without the support of our sponsors, member volunteers and corporate members. We currently have 23 corporate members who are dedicated and committed to providing what we need in order to help the communities in which we serve. With their support, we have helped 235 families in need. And we’re looking forward to helping many more.”

hear first-hand stories of where OHH funds are being distributed.

The original OHH chapter began in Texas. Individuals in Oklahoma and Acadiana soon started chapters in their regions, and in early 2014, the Rocky Mountain chapter was launched.

money through corporate memberships and fundraising events. The chapter members are already hard at work organizing a clay shoot for this fall. “We launched our chapter in the spring and we already have 250 members,” says Jessica Sloat, OHH Rocky Mountain vicehelp out in any way they can. It’s nice to be a part of a national many individuals working in the Rocky Mountain oilfield are eager to give back to the community any way they can. This is a perfect opportunity to get involved in a major way.” Individual OHH membership is free. Active members participate in fundraising events and attend monthly luncheon meetings. Not only are members updated on upcoming events, but they “What I like about OHH is that we meet people where they are in life,” says Sloat. “Hardship has many faces, including medical issues and natural disasters. If we can offer some sort of relief in a time of turmoil, it’s worth it.” In order to qualify for financial assistance, the recipient must live and/or work within the OHH chapter area. The applicant must be nominated by an OHH active member, and 75 percent of the applicant’s family income and a minimum of five years of verified employment must be derived from the exploration and production side of the oilfield.

“We are excited to announce to the oilfield community that OHH officially has a Rocky Mountain chapter,” says Jamie Dandar, OHH Rocky Mountain president. “Being a part of the oil and gas industry is a great privilege. Sometimes our industry is misunderstood. I’m honored to be a part of something that may only be perceived as positive energy! While no one expects crises to occur, they do happen. It feels good to be a part of something that can help those in need and further strengthen and support the character and integrity of the people in the industry.”

“We know that it’s sometimes hard to ask for help,” says Dandar.

The Rocky Mountain chapter is based in Denver and covers the w



“We are a tough industry full of strong individuals. But sometimes it’s important to remember that you have to let people in when it’s too much to handle on your own. That’s where we come in. We encourage you to reach out because OHH will be ready to lend a helping hand.” To learn more about how you can join the Rocky Mountain OHH chapter as an individual or corporate member, or to become a sponsor, please visit the organization’s website at

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Bakken bound:

Manitoba companies find new opportunities in the Bakken region By Lisa Fattori to support the region’s population boom of recent years. Just six hours from Winnipeg, Manitoba, Canada, and only three hours from Brandon, Manitoba, the U.S. side of the Bakken is a close, untapped market that offers tremendous opportunities. From mechanics and IT professionals to new housing, rec centres, daycare facilities, retail complexes and roads, the need is enormous and requires products, services and expertise to meet current demand and sustain future growth. “Winnipeg and Brandon are closer than Minneapolis and even Billings, Montana, so Canadian companies have a competitive advantage,” says Arnold Sherman, executive director of the Montana World Trade Centre (WTC). “Manitoba companies are familiar with this type of oil and are already dealing with Bakken-related issues. The Bakken needs everything, everywhere. Williston has $625 million worth of infrastructure projects and a $250-million oil refinery is being constructed in Dickinson. Over the next several years, we’ll see three new powerplants, and Williston is building a new airport to be open in 2017.” In February, the Brandon Chamber of Commerce partnered with WTC Winnipeg and the Manitoba Chamber of Commerce to host a one-day seminar, “Manitoba to Montana: Business Opportunities in the Bakken.” The conference highlighted business opportunities in Manitoba’s oil sector as well as those in North Dakota and Montana. The event included an afternoon “how to” seminar, to show Manitoba companies how they could access opportunities in the U.S.

Ideally situated close to the Montana and North Dakota hub of the Bakken oil play, Manitoba companies are well-positioned to service not only oil-related activity, but also the myriad of infrastructure needs and professional services that are required.

“We had over 200 people attend the seminar, including a number of our members and a lot of businesses outside of the Brandon area,” says Carolynn Cancade, general manager for the Brandon Chamber of Commerce. “We had a great slate of speakers. Everyone knows that there is oil and gas in the Bakken, but it was an opportunity to educate attendees about new technologies that are being used in the industry and growth plans for the future.”

“Winnipeg and Brandon are closer than Minneapolis and even Billings, Montana, so Canadian companies have a competitive advantage,” says Arnold Sherman. executive director of the Montana World Trade Centre (WTC). 150


Baranko Bros., Inc. began as a partnership in 1967 doing primarily soil conservation work. We expanded into the oilfield in the 1970s and were incorporated in 1979. Baranko Bros., Inc. is owned by Glenn Baranko. The company is based in Dickinson, North Dakota, with yard and shop facilities in Center, and Fairfield, North Dakota. The company continues to expand into all types of earthwork, including: underground, concrete, material hauling, construction of landfill facilities. We have experienced estimators and job supervisors that can give quotes and perform supervisory duties. We also maintain a regular safety program and employ a fulltime safety coordinator.

As part of its Bakken Market Access Program (MAP), WTC Winnipeg has hosted events, similar to the Brandon conference, to increase awareness about the business potential of the Bakken. “To put it into perspective, Manitoba is producing 50,000 barrels per day, whereas North Dakota is pumping out about a million barrels per day,” says Derek Earl, director of International Trade for WTC Winnipeg. “There is some opportunity

in southwest Manitoba, but a lot of the need is on the U.S. side. Winnipeg is the largest urban centre close to the Bakken, with a good manufacturing and supply base. Manitoba companies are culturally similar and have the cold weather and technical expertise that’s needed.” In June, WTC Winnipeg hosted a breakfast meeting, “Bakken and Eggs... and Bannock?” to give a presentation on The Jay Treaty, a 1794 agreement between Great Britain and the U.S. that allows for the free travel of First Nations across the U.S./Canada border. The treaty is a solution to providing the Bakken with an easily available workforce from Canada, without any border delays. Custom brokerage houses, however, can assist Canadian companies with getting the proper paperwork in order, so that they can move staff back and forth across the border, without any issues. While the opportunities in Montana and North Dakota are enormous, Manitoba companies need to do their market research and seek out proper introductions to appropriate Bakken firms that are potential customers. The World Trade centers in both Winnipeg and Montana, as well as Montana-based Global Development Services, are excellent sources that provide trade missions and other networking opportunities to help Manitoba and Bakken businesses connect. “Our advice is to do your homework and look at the Bakken oilfield in a systematic way,” Sherman says. “You can’t just go down one day and start knocking on doors. A lot of folks have an

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Is there a ‘War on Oil’?

By Wayne M. Kovach

The “War on Coal” is alive and well under President Obama’s administration. In early June, the Environmental Protection Agency (EPA) announced a 30 percent reduction1 to the carbon pollution levels emitted by the country’s power plants by 2030. With nearly 1,000 power plants in the United States, intense regulations could cripple many of the nation’s biggest energy producers. Those in the industry are clearly nervous about the ramifications of this rule, especially when it comes to job security.

result of a grain-hauling train that had slipped off the tracks and

How does this relate to the oil industry? Since approximately 37 percent of the United States’ total annual energy consumption is supplied by petroleum (the leading source, by far), it resonates soundly. Fracking and horizontal drilling allowed the U.S. crude oil output to peak in May at a 28-year high, but not everyone is convinced that fossil fuels are economically viable. And most are doing everything in their power to stop their continued use.

commodity. Drilling for, and production of, oil would not be

The Plight of Keystone XL The Keystone XL pipeline is poised to bring crude oil from Hardisty, Alberta, to Steele City, Nebraska, then down to oil refineries on the U.S. Gulf Coast. Since the project was proposed in 2008, the Canadian government has been lobbying Washington each year for approval of it. Seeing that it would cross an international border, TransCanada, the company in charge of the project, needs a presidential permit. A decision on the pipeline, last delayed in mid-April by the State Department, still has not been made and likely won’t be made under the current administration. Which raises the question, why? The department claimed in a January report2 that the pipeline would not worsen carbon pollution. However, they admit they won’t move forward with a decision until after a pipeline-siting lawsuit in Nebraska is rectified, which they appear to be putting off until late 2015, conveniently after the fall elections. Railcar Safety

blocked a neighboring section of the railway. In Lac-Mégantic, an unattended train3 rolled downhill for 6.8 miles at highway speeds, exploding in the small town after sparks flew from the wheels. The Bottom Line While oil is, and always will be, an easy target for environmentalists, it’s also a very practical and economical growing at such an amazing rate were it not for its demand. Case in point, the following graph from the EIA4. Despite needing constant and updated regulations on railcar safety and ensuring Keystone XL’s safety if it’s built, it’s naïve to think oil is going away anytime soon. And despite constant negative press about oil and its drawbacks, everyone uses it in some form or another. Whether it’s deodorant, antiseptics, umbrellas, lipstick, shampoo, toothpaste, or a myriad of other things, oil is engrained in our daily lives and existence. Until renewable energy technologies become reliable (if they become reliable), oil and other fossil fuels are the only choice. Instead of condemning the industry, we should be embracing it and working to improve it, instead of trying to shut it down. REFERENCES: Online:


emissions-changes-everything/ Online:


may-ease-way-to-approval-of-keystone-pipeline.html?_r=3 Online:


launch-unprecedented-criminal-investigation-into-lacmegantic-train-disaster/ Online:


Railcars deliver oil through residential areas within the United States. Their safety is constantly questioned, however, especially after the derailments and explosions in Casselton, North Dakota, and Lac-Mégantic, Quebec. Newly proposed rules include speed limits through urban areas, thickening of the tank walls, pressurerelief valves, and complete phasing-out of old cars altogether. It’s important to note that both of these recent tragedies were not caused by railcars or oil. In North Dakota, the explosion was the 154


About the Author: Wayne M. Kovach has worked as the SEO specialist for Energy Curtailment Specialists since 2012. The company is one of the highest-demand response providers in North America, offering energy-reduction strategies such as demand response programs, energy procurement, utility bill management, and energy monitoring services. Wayne’s writing interests include coal, natural gas, oil, and new products. w




blue cross blue shield of north dakota

Blue Cross Blue Shield of North Dakota helps members, employers adjust to health insurance changes By Tim Huckle, President and CEO, Blue Cross Blue Shield of North Dakota Our company’s roots date back to March 1940, when North Dakota’s first health insurance company opened its doors with a staff of three in Fargo’s First National Bank Building to help provide North Dakotans with affordable health coverage. Much has changed since then, but our devotion to delivering affordable solutions to improve the care and health of our members and to serving North Dakotans has remained strong. Blue Cross Blue Shield of North Dakota (BCBSND) is a not-forprofit mutual insurance company governed by a 13-member board of directors who are elected by BCBSND members. As an independent non-profit, our focus is on serving our members and working together with the state’s largest network of participating doctors and hospitals to provide members with coordinated, cost-effective care. We are a North Dakota-based company, with nine North Dakota offices and award-winning customer service, ensuring that members and employer groups can talk with a real person – possibly one of their neighbors. Much has changed in North Dakota during the last 74 years. The pace of change appears to be accelerating as the energy boom in the western part of the state helps to fuel North Dakota’s booming economy. BCBSND has been working with employers in the state’s oilpatch and throughout the state to help them adjust to changes in the marketplace. We understand the challenges businesses operating in the state’s booming oilpatch face because we also operate local offices in western and central North Dakota. We also understand the geographic challenges of the region, with workers not only

moving to the state to work, but also traveling back and forth while supporting family members in other states. Since BCBSND is an independent licensee of the national Blue Cross and Blue Shield Association, BCBSND members and their families (if they have family coverage) receive coverage that extends throughout the United States through BlueCard agreements with other Blue Cross and Blue Shield health plans. Members and covered family members also have coverage that extends across the country and worldwide, thus providing coverage while on vacation or traveling away from home. We also pride ourselves on providing world-class customer service to our members and employer groups. During the second half of 2013, we led all Blue Cross and Blue Shield plans in quality assurance rankings in customer service, customer satisfaction and claims accuracy. In 2013, roughly 93 cents out of each premium dollar we collected from members was used to pay for medical care and services used by our members. We continue to look for ways to become more efficient, better serve our members and reduce our administrative expenses, which are already among the lowest in the nation. We continue to work with doctors and hospitals in the state and other stakeholders to help improve the coordination and quality of care provided to our members and to search for North Dakota solutions to improve the state’s healthcare system. We are also working to encourage our members and all North Dakotans to live healthier lifestyles. We offer employers a number of worksite wellness initiatives to encourage healthy habits. Many BCBSND

Much has changed in North Dakota during the last 74 years. The pace of change appears to be accelerating as the energy boom in the western part of the state helps to fuel North Dakota’s booming economy. 156



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members can also receive a rebate on health club memberships if they exercise a minimum amount per month at a participating health club.


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As the state’s oldest and largest health insurance company, we have also taken a leadership role within the state in helping to inform members, employer groups, and others, about the impacts of the Affordable Care Act (ACA), the federal health reform law. BCBSND has held a number of forums and meetings across the state to educate members and employers on healthreform changes, and we continue to inform employers about health-reform requirements. Do you have any health insurance questions? If you’re a BCBSND member, you can call the phone number listed on the back of your BCBSND ID card. If you’re an employer group leader, you can contact your local BCBSND representative. If you’re looking for health insurance for yourself or your employees, visit www. or call 1-800-280-BLUE (2583). The next health insurance open enrollment period begins on November 15, 2014, for coverage starting in 2015. During my nearly 29 years at BCBSND, I have witnessed many changes. Through it all, BCBSND has been there, providing care to North Dakotans and employers. We remain a stable, financially strong company with local roots in communities throughout North Dakota. We have been here for nearly 75 years – and we intend to be here for many more years to come. w


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Lynden’s green practices at work in Bakken region By Tami Kinney

At Lynden, green is much more than the corporate color; it is

at project sites throughout the world. “We are now committed to

part of the corporate identity. Green not only reflects growth and

working as clean and green as possible while transporting goods

vitality, but also Lynden’s efforts to protect the environments

to the Williston Basin,” Grimaldi says. “Lynden’s sustainability

where it does business. That includes the Bakken oilfields,

policy calls for meeting or exceeding environmental regulations,

underlying parts of Montana, North Dakota, Saskatchewan and

maximizing fuel efficiency, and monitoring and guarding against


accidents, emissions, and avoidable pollution. Small changes in

Lynden Transport’s green and white tractor-trailers are a familiar sight on the highways linking Texas, Oklahoma, Montana, North

the workplace and on the road can add up to big savings for the environment.”

Dakota, Canada and Alaska. Trailers are loaded with everything

This summer, Lynden received word that it made the Top

from oversized compressors to spare parts for drill rigs and

Green Supply Chain Partner (G75) list for yet another year. The

refineries to support the booming oil industry and swelling

prestigious Logistics Management magazine award considers a

population in the Bakken region.

company’s involvement in three areas: participation in public-

Lynden’s oilpatch experience, customer service and on-time performance are legendary, but just as impressive is the company’s commitment to safeguard the Bakken area’s rugged and pristine beauty by applying eco-friendly practices.

private partnerships, corporate sustainability initiatives, and collaborative customer-driven projects. According to the magazine, “Lynden has continued to improve its equipment with more efficient engines; aerodynamic side skirts, tanker, and trailer design; wide-base single tires; and idle-reduction equipment.

“Lynden was working green before it became the thing to

The improved use of routing software has similarly improved fuel

do. Our culture of innovation and efficiency is completely in

savings, as well as on-time delivery.”

harmony with our commitment to protect the environment,” explains Lynden Transport president Paul Grimaldi. “It stems from a common-sense desire to be efficient and to do things right. Almost 10 years ago, we launched a corporate ‘Green Initiative’ to make sure our people, equipment, processes and technology all focus on the best use of resources and sustainable operations.”

Clean and Efficient Operations Lynden’s truck fleet is among the most fuel-efficient in the nation, and its maintenance and repair team is continually refining its processes and equipment. “Maximizing fuel efficiency requires that we look at everything from modern equipment, driver

Lynden Transport is truly an environmental trailblazer among

behavior and idle time, to route planning, aerodynamics and

transportation companies. It was the first trucking company in

payloads. Better fuel economy, smarter routing and higher

Alaska to earn the Green Star Award and the first Alaska-based

payloads have greatly reduced our fuel consumption per ton of

transportation company to be recognized by the Environmental

freight moved, while at the same time provided our customers

Protection Agency’s SmartWay Transport Partnership in 2008.

with improved service,” Grimaldi explains.

Other Lynden companies, such as Alaska West Express, have followed suit and are now members of the Green Star and SmartWay programs.

More than 90 percent of Lynden’s equipment is less than five years old and is equipped to meet new EPA emission standards. The newer, more efficient tractors and ultra-efficient diesel

Lynden has a long history of operating safely and responsibly in

engines have dramatically improved fuel economy and reduced

the sensitive and challenging lands, air and waters of Alaska and

air emissions.



Only pay for the speed you need... Dynamic Routing!℠ At Lynden, we understand that plans change but deadlines don’t. That’s why we proudly offer our exclusive Dynamic Routing system. Designed to work around your unique requirements, Dynamic Routing allows you to choose the mode of transportation — air, sea or land — to control the speed of your deliveries so they arrive just as they are needed. With Lynden, you only pay for the speed you need! 1-888-596-3361


provide visibility, accountability, and motivation for drivers to idle their engines as little as possible. • Trucks transmit to highway scales electronically to save time and fuel. • Forklifts switch off automatically after five minutes of idle time. Propane forklifts are being phased out in favor of cleaner, more efficient electric models. • Barcodes on loads maximize loading efficiency and forklift idle time.

“Our RoadNet Route optimization software helps dispatchers plan the most efficient routes for pick-up and delivery so that we can cut travel time and fuel use,” says Sherri Culpepper, regional manager for Lynden Transport’s Houston Service Center, the origin point for the majority of Bakken freight. “We have refined our equipment, lightening trucks and increasing carrying capacity to maximize payloads and minimize the number of trips and fuel needed.” In addition to routing software, Culpepper listed the following ‘green’ practices Lynden follows: • Drivers pull dual loads whenever possible and piggyback tractors to eliminate empty backhauls. • New tractors are 2,500 pounds lighter than previous models. • Idle time is minimized with a low-idle time policy. Trucks are equipped with on-board computers that monitor idle time and

• A tire-pressure monitoring system allows the driver to spot and correct any inflation issues while periodic laser alignment helps reduce tire wear and improve fuel efficiency. • On-board lube systems grease the truck while in motion to keep fifth-wheel and other points lubricated reducing tire friction. • On-board oil filtration system increases the interval between oil changes to 100,000+ miles. • Paperless processes, such as EZ Commerce, allow Lynden’s customers to track shipments, pay bills, and receive invoices electronically, thus saving paper, postage, time and money. • Electric rather than diesel reefers are used on ship, rail, and truck. Lynden’s marine transportation company, Alaska Marine Lines, recently invested in 200 of the world’s most energy-efficient refrigerated units. The Star Cool reefers match the compressor speed to the required heat load of the container rather than running a single constant speed. But equipment is only part of the efficiency equation. “Our drivers are a key component,” Grimaldi says. Speed governors and policies ensure drivers operate at safe and efficient speeds and an on-board computer monitors a driver’s performance and builds a little friendly competition for best fuel economy and lowest idle time. “We are extremely proud of the job our drivers do in this lane, especially with the heavy, oversized equipment we often haul to support oilfield development.” All Lynden locations are designed to leave the smallest environmental footprint and to streamline operations where possible. A new service center opened this fall in Tulsa to better serve customers in the Bakken oil and gas industry. “We hope to build loads faster and deliver them more efficiently from this new location,” Culpepper says. “We are trying to take some miles off the freight, so to speak.” A leader in Recycling

Lynden employees charge an electric forklift in the warehouse. 162


Lynden recycles at all locations and backhauls items from locations where recycling is limited. The company backhauls tires via barge from Anchorage to Seattle for recycling, cardboard

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Lynden Transport’s Houston Service Center, a hub for oilfield freight destined for the Bakken region. and plastic wrap from Cordova to Seattle, and paper and other

An employee program, the Green and Fit Challenge, rewards

recyclables from Prudhoe Bay to Anchorage. These efforts were

employees for using alternative transportation in their work

recognized earlier this year by Alaskans for Litter Prevention and

commute. In 2013, participants traveled over 137,000 miles on

Recycling (ALPAR), when the organization named Lynden its

foot, bicycle, carpool and using mass transit.

Contributor of the Year (see photo below). Some of Lynden’s most innovative and practical ideas come

Giving Back

from employees on the front line. A recent employee survey

“Environmental stewardship extends to valuing and investing

asked what the company could do to improve its environmental

in the communities in which we operate by making charitable,

performance. From lighting upgrades to more recycling bins in

educational, and civic contributions,” Grimaldi explains. “We fully

the workplace, Lynden has implemented many of the employees’

intend to support the communities in this new area as the need

energy-saving ideas. Converting from paper to electronic reports,

arises. Along with the energy opportunities in the Bakken oilfield

replacing individual printers with a single central printer that

come responsibility for preserving its integrity. The people living

prints on both sides, and lowering the speed on trucks and

and working in this region can count on Lynden to treat the

marine vessels to conserve fuel were among the many ideas

environment with respect as we provide superior service to our


customers.” w

ALPAR past-president George Lowery (left), Lynden Logistics vice-president Jeanine St. John (center) and ALPAR executive director Mary Fisher. 164




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A water-transfer company is only as good as their last water-transfer job By D. Gordon Buescher/Sterling Hose, Reel & Supply, LLC Some incidents of lay-flat hose failure will never be made public for several reasons. The service companies that bought inferior products do not wish to tell the world about their mistakes, and the companies that sold it to them are surely in the same boat. Anyone operating in the water-transfer industry has seen the failures and the rapid deterioration of these inferior hoses.

An example of hose from an inexperienced manufacturer who used inferior materials to construct the hose. There has never been a faster moving trend in the oil and gas industry than the move to lay-flat hose for high-volume water transfers. Gone are the days of leaking aluminum pipe and laborintensive plastic pipes. This revolution is saving water, reducing labor costs and leaving a smaller environmental footprint compared to other methods. Progress is always accompanied by many challenges and these challenges have certainly come from every direction. Using layflat hose can be a simple task if the right equipment is available. Companies not only need to purchase high-quality hose, but they also need to ensure their equipment is capable of handling and protecting this valuable investment. Hose-handling systems will vary greatly between operators and environments. Removablereel systems offer great economic advantages over fixed-reel systems and can handle 500 feet to over 2,640 feet of hose per reel. Once you have chosen the proper handling systems for your environment, you will then need to choose the proper hose, as well. All lay-flat hose is not created equally. There are many companies that had never manufactured any hose larger than six inches until just a few months ago. This lack of experience has led to many significant failures in the field, and these failures have had significant environmental impacts. Buyers should research and understand fully who they are buying hose from and what experience the company’s lay-flat hose supplier has in manufacturing lay-flat hose. 166


There is much more to a hose than just passing an initial burstpressure test. By testing many hoses from different companies, you can see the wide variance in qualities. Just because a hose says extruded through the weave, you should not consider it better or of high quality. There are many extruded through the weave hoses that are hitting the market which have adhesion rates that are 30 percent of an acceptable value. This poor adhesion rate is due to the low-quality materials used in manufacturing and the lack of experience in constructing or manufacturing large diameter lay-flat hoses. When truly testing a hose, there should be a series of tests conducted and these include abrasion, UV, and real-world pressure testing. After testing, several of the hoses from new and inexperienced manufacturers failed miserably and their hoses could be peeled like bananas. The rubber or TPU could be pulled away from the woven jacket without significant effort. Other important components that help to maintain the integrity of a lay-flat hose system are the couplers and fittings. Pressed-on fittings are the cheapest route and a buyer can save up to $0.50 per foot. Many of the hoses are failing at the coupler in less than one year when using pressed-on fittings. The lay-flat hose is cut every time the hose is moved or pressured up with this type of fitting; it is not a matter of if, but when, the hose will leak or fail at these points. The best solution is a segmented binding on the hose coupling; this allows the hose to bend and move around smooth edges, and also allows the hose to reach maximum working pressure without inflating around a sharp edge. There are many styles of these couplings and they can easily be installed in the field if necessary. How does a manufacturer make a cheap hose? Typically if a company outsources to China, it is for products that are laborintensive or toxic to manufacture. The process for manufacturing extruded through the weave hose is neither toxic, nor is it labor-

sterling hose

Far left: Premature cracking on hose that is only 10 months old, from a new hose manufacturer. Left: Black hose with metal pressed-on coupler is only 10 months old and yet has already experienced failure.

Everyone wants a piece of security, but what is a warranty worth? We have talked with several companies that have had real warranty issues, but the one-year, fiveyear or 10-year warranty they were sold with their hose seems to be gone already. intensive. This leaves only one alternative for making a cheaper lay-flat hose product, and that is to use cheaper materials, such as lower-grade rubbers or TPU; UV inhibitors will be eliminated and inferior yarns will be used in the weave. This cheaper product will be inconsistent in quality and there will be visible imperfections at times. The true question becomes how long it will last. We have already seen these hoses lasting less than six months to 12 months in the field before there are significant failures. Everyone wants a piece of security, but what is a warranty worth? We have talked with several companies that have had real warranty issues, but the one-year, five-year or 10-year warranty they were sold with their hose seems to be gone already. Hoses that are manufactured by companies with experience do not show signs of aging for many years, although the pictures shown here of cracked hoses are less than one year old. Beware of any company offering no warranty, and also consider the reputation of the company offering a warranty over one-year into the oilfield. A very high percentage of hoses will fail within the first year if they are ever going to fail due to a manufacturer’s defect. When searching for the best deal, it is important to remember that there are no bargains when buying hose. Right now, 10inch TPU is priced between $20 and $26 per foot, with couplers for the best hose in the world that is manufactured by the most experienced manufacturers. A buyer can also find 10-inch TPU from companies that did not know how much would fit in a container in 2012 for $15 to $20 per foot with couplings. Now, it is time to consider the mathematics behind the

purchase of these hoses. A hose from the leading established manufacturers is costing an average of $23 per foot while the hoses from inexperienced manufacturers cost $17 per foot. This means that when looking at only the initial purchase price, the higher-quality European hoses are 35 percent higher. When you purchase the cheaper hose, it is at least 48 percent higher when you have to purchase hose twice. When buying a hose, the buyer must also be aware of the environmental impact. What will a leak or failure cost? Unfortunately there are very few failures with hose that are going to be less than five gallons, so the failures will be reportable in most states. The environmental cost and damage can be significant when any failure occurs and companies should minimize their exposure to these risks as much as possible. There should be a constant inspection policy in place with any hose that you purchase. If part of the woven jacket is ever visible, then there is a serious chance of failure. These sections should be thoroughly inspected and the outside covering should be repaired if possible. It is always a good idea to keep these areas marked on a hose for future inspections. Watch for any blemishes, bubbles, or cracks, as these can all lead to significant failures if they intensify. Lay-flat hose can be one of the best and most profitable investments a company can make. Buyers have many choices available for hose, fittings and handling equipment. When considering the purchase of lay-flat hose, remember that there are no bargains, only cheap imitations. w BAKKEN OIL REPORT – FALL 2014


integrity viking

Integrity Viking funds helping investors cash in on Bakken’s explosive growth

Mike Morey.

Shannon Radke.

Monte Avery.

By Nancy Kessler There’s more to making money in the

Williston Basin/Mid-North America Stock

manager Mike Morey, but to its focus on

Bakken than just drilling for oil. Just ask

Fund is long-term capital appreciation. It

more than just extraction. Based in Minot,

the folks who have invested with Integrity

has earned continuing recognition from

N.D., Integrity is helping investors across

Viking Fund’s Williston Basin/Mid-North

the prestigious Lipper® Fund Performance

the continent cash in on the explosive

America Stock Fund.

Awards, including two in 2014: “Best Fund

growth in the Bakken and other basins

This fund in the energy sector isn’t with

over Three Years” and “Best Fund over Five

stemming from the “Shale Revolution,” in

a major Wall Street firm, though. It’s part

Years” in the Natural Resources Funds

the use of innovative drilling techniques

of a small investment-fund company

category. It won the same awards in

to extract natural resources from shale

based in the heart of the Bakken. With

2013, and in 2012, it also was named the

deposits, and the resulting boost in

just 44 employees, Integrity Viking Funds

Natural Resources “Best Fund over Three

related industries such as transportation

operates only three equity funds and


and infrastructure in support of that

eight fixed-income bond funds. The investment objective of Integrity’s

The fund’s success isn’t due only to its proximity to the oilfields, says co-portfolio

production. In 2003, the company purchased the Integrity Small-Cap Fund, and in 2008, changed the fund’s name to better reflect the resource potential found through the middle of the North American continent and a thematic approach of focusing on the shale boom. “It was a strategic benefit to acquire an existing fund that


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had a track record,” Morey explains.

refineries, pipelines, utilities and

“That’s important when selling the fund


to clients.”

They also invest in the materials sector,

Its diversified stock holdings include

such companies that use natural gas

not only oil exploration and production

to produce chemicals, because they

companies, but also other industries that

and others benefit when gas prices are

benefit from the boom, such as oil and

depressed, and in large-scale industrial

gas field services and field equipment,

engineering and construction projects


An ESCO® Oil & Gas Company

Behind every bit is a company that knows every bit about it.

linked to energy extraction. They also seek out a variety of companies affected by swings in oil prices, since refiners, explorers and producers benefit from fluctuating prices at different times. Generally, they don’t invest substantially in the major integrated energy companies because those don’t have the growth potential of the independent exploration companies. Currently there are 53 holdings in the fund, but the number has fluctuated between 37 and 78, depending on what companies the co-managers deem have long-term growth potential. The strategy has paid off. Not only is the Williston Basin/Mid-North America Stock Fund highly rated among energy equity funds by Morningstar, an independent investment research firm, its total returns consistently beat the Dow Jones Oil & Gas Index. In fact, since 2008, the fund’s assets have grown from just over $1 million to approximately $1 billion. “We pride ourselves with what we’ve done so far,” Morey says. “And we’re very optimistic about the future of the fund. We think it’s very bright.”

As a true drilling-focused organization, we direct all our resources, expertise and technologies to deliver the ultimate PDC bit solution to lower your drilling costs. Period. Contact an Ulterra drilling expert When Every Run CountsTM | 420 Throckmorton Street | Suite 1110 | Fort Worth, Texas 76102 | 1-844-ULTERRA © Copyright 1998-2014 Ulterra | All Rights Reserved. | Ulterra is a registered trademark of Ulterra.



With his co-portfolio managers, Viking Mutual Funds founder Shannon Radke, and Monte Avery, who previously served as portfolio manager for Integrity Money Management Inc., Morey spends much of his time researching potential investments and talking with other energy analysts. Raised on a farm near Minot, Morey puts his lifelong fascinations with the stock market and geology to use in his job, and often has “his boots on the ground,” visiting field sites and attending investor conferences. They also carefully watch the very important regulatory environment. While there are pros and cons to regulation, Morey says, regulators need to find a healthy balance between encouraging energy production and keeping communities safe. Three areas


in particular affected by regulation are of concern: fracking, flaring and transport of crude by rail.

or protect against loss in a declining market.

and do not take sales charges into account.

North America Stock Fund was ranked first out of 44 funds for the three-year period and first out of 42 funds for the five-year period ended December 31, 2013; first out of 48 for the three-year period and first out of 47 funds for the five-year period ended December 31, 2012; and first out of 47 funds for the three-year period ended December

Morey believes current fracking regulations are good, and that the technique “is great in what it’s done for our country” in terms of energy selfsufficiency. With flaring, he says, “it’s quite ridiculous regulators have taken this long to come up with a plan” to eliminate the waste of natural gas burned off during oil extraction rather than captured for energy use. At one point, 36 percent of natural gas was flared off, but new regulations will limit flaring to 10 percent by 2020, and Integrity is seeking out companies that will help make that happen.

delivering consistently strong risk-adjusted

Of the qualifying funds, Williston Basin/Mid

31, 2011. w

The Lipper Fund Awards program highlights funds that have excelled in performance, relative to peers. Lipper rankings are based on Consistent Return

“Crude-by-rail transport is a hot topic right now, and it’s irresponsible for the industry to not come up with safer practices in transportation,” he says. Integrity sees this as an opportunity for firms building tanker cars that help prevent explosions if derailed. “With all the turmoil in the Middle East, there’s a real opportunity here,” Morey summarizes. “It makes the profits of the Shale Revolution more sustainable. Driven by new technology, it’s more and more economical to drill for oil and gas in the U.S., and we see potential as a result.” Disclaimer: The Fund is sold by prospectus only. An investor should consider the investment objectives, risks, and charges and expenses of the Fund carefully before investing. The prospectus contains this and other information about the Fund. You may obtain a prospectus at no cost from your financial adviser or at www. Please read the prospectus carefully before investing. Past performance is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Diversification does not assure a profit

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LARSON electronics

Explosion-proof lighting and power distribution by Larson Electronics Larson Electronics’ energy-efficient, easyto-maintain, explosion-proof light fixtures are a well-lit, safe lighting solution. With high-output LED illumination and industrial-grade construction, these lights are built to withstand the rigors of harsh and extreme conditions, yet still provide a bright, effective lighting solution. When working in explosive, hazardous, corrosive and marine-rated environments, lighting equipment has to be UL-certified and compliant to OSHA safety standards. Larson Electronics’ explosion-proof lighting equipment carries hazardous location certifications and is available in configurations to meet all relevant class and division requirements of a given location. Product offerings include portable lights, light masts, tank lights, rig

lighting, oilfield lighting and more. Among Larson Electronics’ lighting products is the HAL-48-3L-LED-BMSW, a four-foot-long, three-lamp LED pivoting rig light. This light is rated Class 1, Division 2, and has a T4A temperature rating. This lamp comes complete with three of Larson Electronics’ specially designed LED T-series bulbs that produce 15 percent more light than standard T8 bulbs. The solid-state design of the LED lamps give this fixture superior resistance to damage from vibrations and extremes in temperature, as well as a lamp service life over twice that of standard T8 bulbs. Larger-scale lighting includes the LM25-3S-EPLC2-12X150RT-RB, a 25-foot, two-stage telescoping light mast that

From left to right: EPLC2-3x100LED, HAP-48-3L-LED-BMSW, LM-25-3S-EPLC2-12x150RT-RB, and MGL7-480-2x120V.



contains 12 Class 1 and 2, Division 1 and 2 LED light-heads. The 12 LED light-heads produce approximately 150,000 lumens capable of illuminating seven acres. This light tower features a rotating base that allows operators to aim the light in any direction, regardless of the towers location. This light boom can be extended to 25 feet for maximum area coverage and collapsed to 12 feet. The EPLC2-3X100LED-4-100 is a portable lighting solution that is rated Class 1, Division 2, and Class 2, Division 1 and 2. This light is comprised of three 48inch LED light-heads mounted within a triangle-design frame, giving operators 360 degrees of work area coverage. The three light-heads produce a combined

larson electronics

21,750 lumens of high light output. This floodlight system can be positioned in its upright position, laid down on its side or suspended in its upright positioning using the pickeye located at the top of the frame. The pickeye can also be used to lower this light into tanks through manway entries. In addition to Larson Electronics lighting systems, the company also manufactures and distributes a wide variety of threephase and single-phase portable power distribution systems. From skid-mounted temporary power distribution substations to dolly-cart-mounted transformers, these power distributions are designed for use in industrial and offshore applications. Most of the time customers need power distribution systems designed to fit their specific needs. Larson Electronics can specially design power distribution systems to fit a customer’s specifications. One of Larson Electronics’ most popular power distribution systems is the MGL748-2X120V. This power distribution transforms 480V three-phase to singlephase 120V AC and 240V AC 60hz. This unit provides operators the ability to safely tap into and distribute 480V AC power from sources like generators and direct grid power. It’s on a dolly-cart-style system, so you can tip it back, roll it where you need to and connect your primary power, giving operators several 120V AC outlets. For over 40-plus years Larson Electronics has manufactured industrial lighting and power distribution products, many of which can be customized to fit a customer’s specific needs. Larson Electronics can provide lighting layouts and in-house designs to ensure that all your requirements are met before purchasing. From indoor compact light fixtures to outdoor towering light masts, you can find your lighting solution at w

Most of the time customers need power distribution systems designed to fit their specific needs. Larson Electronics can specially design power distribution systems to fit a customer’s specifications. Larson Electronics

Part # HAL-48-2L-LED-BMSW

Part # MPD-480X17-75K-120X14 Part # EPLC2-3X100LED-4-100

Part # EPL-16BS-1X150LED-100

Part # EPL-PM-150LED-100

Part # LM-25-3S-EPLC2-4X150RT-RB

Larson Electronics’ oil field lighhng helps create a safe, well-lit work environment with Class 1&2 Division 1&2 raangs, high output LED illuminaaon and industrial grade construccon. Lighhng oppons include portable lights, mast lights, surface mount lights, tank lights, power distribuuon systems and work area lights. │ 1-800-369-6671 │ BAKKEN OIL REPORT – FALL 2014



Oasis Petroleum continues to grow production profile in the Bakken Oasis Petroleum is the premier, pure play E&P operator in the

further transforming the company, as we move from drilling to

Williston Basin with over 500,000 net acres in the heart of the

hold acreage to full field development. Across our consolidated

play. We are committed to creating long-term shareholder value

acreage position, we operate 403 spacing units and have

through the development of the significant resource potential

identified 3,590 gross-operated drilling inventory locations, which

from the Bakken and Three Forks formations. We believe the

assumes on average five Bakken wells and five Three Forks wells

location, size and concentration of our acreage in our core project

across our position. This equates to approximately 17 years of

areas create an opportunity for us to achieve cost, recovery and

drillable inventory.

production efficiencies through the large-scale development of our project inventory. Our management team has a proven track record in identifying, acquiring and executing large, repeatable development drilling programs, and has substantial experience in the Williston Basin.

In 2014, approximately 60 percent of our drilling activity is dedicated to full field development. With that, we plan to invest $1,250 million to drill and complete 205 gross-operated wells (147.8 net) and 7.7 net non-operated wells. We expect to grow production in 2014 to between 46,000 and 50,000 Boepd, an

Oasis went public in 2010 and produced, on average, 5.2

increase of 42 percent at the midpoint over 2013 levels. Almost

thousand barrels of oil equivalent per day (“MBoepd”) that year.

90 percent of our total $1,425-million capital budget in 2014 is

Since that time, Oasis has significantly grown production and

allocated to drilling and completing new wells, with the balance

produced 43.7 MBoepd in the second quarter of 2014. Oasis

earmarked to infrastructure, cost-saving facilities and seismic and

had proved reserves of approximately 219.3 million barrels of oil

geophysical work to better understand our assets.

equivalent as of December 31, 2013, and currently employs over 425 people.

Oasis Petroleum’s well inventory has a broad range of characteristics including different depths, well designs, and

We have focused our core drilling and completion program

costs. This helps us drive very compelling economics across our

on growing production and reserves and identifying ways to

portfolio, and we expect to grow our inventory and economics

increase our inventory through downspacing and the lower

through well optimization. For example, we have seen strong

benches of Three Forks. Additionally, in 2013, we made $1.5

results from wells completed with slickwater, which have

billion of acquisitions in the heart of the play to strengthen our

resulted in production uplift of 35 percent or more compared

long-term visible growth profile. We are now in the process of

to wells completed. We anticipate completing approximately 70



oasis petroleum

expand our inventory in areas where we currently do not count it. Our initial results have been encouraging so far as the wells in the deepest part of the basin have generally performed within or above our Three Forks type curve. Our story is a simple one, and it has served our shareholders well since our inception in 2007. We continue to grow our production profile with the vast majority of capital being allocated to increasing production and reserves while investing in programs and infrastructure that reduce costs. We ended the second quarter of 2014 with total liquidity of $1,422 million, including the available capacity under our borrowing base. In addition, we will continue to execute a managed hedging program to mitigate the risk of unforeseen changes in commodity prices.

percent of our wells in the second-half of 2014 with alternative completion techniques, including 30 percent dedicated to highintensity techniques such as slickwater. In addition, utilizing a tailored approach to completion design by project area has enabled us to generate very strong economics across our entire acreage position. Our work in Montana is a great example of our successful efforts to lower well costs and enhance returns. By delivering well costs below $6.5 million, we expect to be able to pay back wells in less than 16 months and generate IRRs in excess of 70 percent at current commodity prices. We believe we can continue to increase value in this project area, especially as we test new completion techniques such as slickwater. Finally, we have further progressed our understanding and development of the Three Forks, including the lower benches. We plan to drill approximately 30 wells into the lower benches this year, including wells that may 176


Finally, we couldn’t do any of this without our great employees and partners. Our growth and success can only be attributed to our hard-working team. From start to finish, the team has done an incredible job acquiring acreage, selecting drilling locations, drilling and completing wells, identifying ways to maximize economics, getting product to market and securing the financial resources to make it all happen. We continue to attract highperformance people because we strive to make Oasis Petroleum a great place for motivated individuals to work. Considering the milestones we have achieved so far, we remain excited about the future we will build at Oasis. w

L.J.R. Pumps & Parts

GET YOUR FLAMERESISTANT (FR) WORK WEAR RIGHT HERE. (just 1 mile north of the airport)

L.J.R. is your one stop shop for mud pumps, parts, & unitized packages. Specializing in EWS series (W440, W446, W500) G/D-TEE style, and Bomco F-series.

FR workwear including: » Shirts » Pants » Jeans » Coveralls » Jackets

Whether if it is hard to find seals and gaskets or piston rods and clamps, we have got what you need. We also stock certain JWS, EW-447, and PAH parts.

Ph: 713-397-0082 email -


5211 22nd Ave West, Williston, ND 58801 701-774-5955




On technology’s cutting-edge Cirrus Systems’ Haul Truck Priority Service mitigates risk on-site, increases profitability By Jillian Mitchell

The hauling process is one of the key components of mining

An added bonus, the mobile HTPS solution can be moved and

operations and represents a significant cost associated with fuels,

adapted as the mine evolves, and once mine equipment is

tires, lubricants, oils, and the general maintenance of the haul

integrated with the Cirrus platform, additional applications can

truck fleet. Whether it’s open-pit mining, underground mining

easily be added. Further to that, the system is offered as a full-

or oilsands extraction, Cirrus Systems’ platform can improve

fledged service with respective tech support included in the



Cirrus Systems’ Haul Truck Priority Service™ (HTPS) platform

Since 2012, Northern Nevada’s Cirrus Systems LLC has provided

allows for real-time control and management capabilities built

organizations with cloud-based solutions that improve

around the Cirrus Systems platform, enabling users to monitor

productivity and operational effectiveness through real-time use

and control traffic systems concurrently.

of enterprise resources. With more than 80 years of combined

“In collaboration with on-site staff, Cirrus Systems increases safety to the hauling cycle at multiple, haul truck and light vehicle traffic intersections to improve haul trucks timing,” says Bob Christensen, vice-president of business development, Cirrus

experience, the software and hardware service team is proficient at shaping companies on the cutting-edge of technology. Their latest development, the HTPS, has been well-received by industry since its release in mid-2013.

Systems, LLC. “This immediate improvement is directly associated

“Haul-truck operators like the added controls to safely and

with reduced haul truck operational and fuel consumption costs,

efficiently negotiate intersections, especially in limited visibility

and increased driver and site staff safety.”

situations, while mine managers are pleased with reduced costs,

Through existing GPS equipment, drivers using the HTPS tool can

improved cycle times, and improved safety,” Christensen says.

navigate intersections without having to stop and start trucks – a

Most recently, Cirrus Systems signed an agreement with a

solution offering significant gains in operational efficiency and

global mining leader. The deal was solidified after a two-month

enhanced safety.

Haul Truck Priority Service™ testing period at the company’s



northern Nevada mine, whereby the system delivered significant and measurable results with 100 percent uptime. In this instance, a second system was later installed at a critical intersection for the client’s concurrent twoyear mine plan. “After multiple deep-dive discussions between both teams, we honed in on an optimal solution to safely free up haul-truck traffic through intersections,” says Christensen. “By integrating the haul truck information to the Cirrus platform, we were able to real-time control intersections such that light vehicle and contractor traffic would yield to haul

platform can also deliver accurate real-time fuel consumption

trucks when present, thereby safely increasing cycle times and

data and analysis of the mining equipment, a huge value since

delivering a significant fuel savings.”

fuel expenses are a significant variable cost to mining operators.

The HTPS is currently being adapted to manage and control

Cirrus Systems, LLC

mine equipment at other critical “pit to mill” processes. One

1455 Kleppe Lane, Sparks, NV 89431

example is optimizing ore re-handling by the real-time control

T: + (1) 775-393-9112

and integration of the crusher/hopper supply to the mill. The w

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ATEX-certified power tools = Safety in explosive atmospheres Working in explosive atmospheres carries many challenges, the most important of which is the safety of the workers. An explosive atmosphere is defined as one in which enough flammable gas, mist, vapor or dust is mixed with air to cause an explosion if ignition (electrical or mechanical) occurs. The requirements for controlling explosive atmospheres, as well as the standards for equipment and protective systems used in them, are outlined in the ATEX directive. ATEX is a directive outlining a number of technical and quality objectives that must be complied with to the satisfaction

of a third-party certification association. This directive is addressed to those who design, manufacture or sell any equipment intended for use in potentially explosive atmospheres. Once the objectives have been met, the approved product is marked with the appropriate ATEX classification label and “Ex” symbol. Compliance with the ATEX directive has been a legal requirement in all European United States since July 2003. The ATEX symbol is recognized internationally, assuring users worldwide that the product was manufactured to high levels of safety.

CS Unitec Inc., a company specializing in pneumatic, hydraulic and electric power tools, offers a line of power tools for the oil, gas and energy industries. ATEXcertified air and hydraulic power tools from the company include reciprocating saws, hacksaws, rotary hammer drills, impact wrenches, portable band saws, circular saws, dust-collection vacuums, nut runners, magnetic drills, axial fans, ventilators and more. “Naturally, it is important to follow the operating instructions for each tool. In addition, it is critical to use the correct safety equipment required when working in hazardous areas and Ex zones,” says CS Unitec president Tom Carroll. “The ATEX directive, while not a requirement in the United States, is a practical, detailed guide for working safely in high-risk areas. When choosing the right tool for an explosive zone, each user is responsible for following all safety regulations, including knowing the correct tools for use.” Ex zones are defined for gas, mists or vapors as an atmosphere where a mixture of air and flammable substances in the form of gas, vapor or mist is: • Present frequently, continuously or for long periods = Zone 0. • Likely to occur in normal operation occasionally = Zone 1. • Not likely to occur in normal operation but, if it does occur, will persist for only a short period = Zone 2. Ex zones are defined for dusts as an atmosphere where a cloud of combustible dust in the air is: • Present frequently, continuously or for long periods = Zone 20.




• Likely to occur in normal operation occasionally = Zone 21. • Not likely to occur in normal operation but, if it does occur, will persist for only a short period = Zone 22. Four ATEX classification elements are used to ensure that a specific piece of equipment is appropriate for its intended purpose and can be safely used in a particular application. These four elements are: 1. Industrial or mining application 2. Equipment category 3. Atmosphere, and 4. Temperature (see ATEX Classification Chart for more information). For example, CS Unitec’s Pneumatic Reciprocating Saw, model number 5 1217 0020, is approved for Ex II 2 GcT5, making it appropriate for industrial Ex zones 1, 2, 21, and 22.



For more information and product specifications on CS Unitec’s ATEX-classified industrial power tools, please visit, call (800) 700-5919, (203) 853-9522 internationally, or email: w


Wait less for liners Prime location in Miles City, fleet of delivery trucks, and ability to fabricate custom liners of every shape and size set Brawler Industries apart There’s an old saying that “there are some things in life worth waiting for.” When it comes to lining frac tanks or rig pads, however, waiting is simply not an option. “One of the first questions we hear from people calling our company is, ‘how fast can you get it here?’” says Kent Metzger, executive vice-president of Brawler Industries, LLC. “They don’t just want a liner quickly – they need it now.” Fortunately, for most of those callers, Metzger often has an answer that’s music to their ears: “We can have it to you tomorrow or within a few days.” A Part of the Bakken for 36 Years The ability to deliver high-quality frac-tank liners, as well as rigpad liners, to sites throughout the Bakken begins with Brawler’s strategic location in Miles City, Montana. Formerly known as Western Industries, prior to its acquisition by Tailwind Capital and subsequent merger with West Texas Plastics, the company has been fabricating, delivering and installing containment membranes for the oil and gas industries since 1978. “Of course, when we began working with customers in the oil and gas industry, there was no such thing as fracking,” says Metzger. “The applications for our products were far different then. But as the industry changed, we changed with it, developing solutions that met the needs of our customers at that time. Our frac-tank liners evolved as part of that process.” Pit liner.



Setting a New Standard of Customer Service Part of the company’s evolution – and its growth – came from its “above and beyond” philosophy of service. “We know that frac liners and many of the other products we offer are critical to how, and sometimes whether, a company can do business,” says Brawler’s general manager, Jennifer Simonsen. “That’s why we maintain a fleet of trucks here in Miles City that can be loaded and deployed in a matter of hours after an order comes in, if necessary. That means shorter delivery times and, frequently, reduced shipping costs. It makes a difference to our customers, and is just one more way we prove our determination to set a new standard of service.” Simonsen notes that, depending on location and whether or not custom manufacturing is required, a liner can be delivered in as little one day, and a maximum of three to four days. There Can Be No ‘One Size Fits All’ Mentality Over the last few decades, Brawler has manufactured thousands of liners throughout the Bakken. In fact, Brawler maintains the largest inventory of materials for oil and gas applications in the U.S., with a comprehensive selection of liners in the most commonly used steel and concrete frac-tank system sizes stored at the Montana location. As a vertically integrated geomembrane manufacturer, the company is also now stocking roll goods of HDPE, LLPDE and reinforced textured liners at the Miles City plant.


Left: Rig-pad liner.

According to Metzger, one of the facts Brawler learned early on is that the ability to manufacture custom products would determine their long-term success.

Above: Tank liners.

City, Montana, to serve the Bakken region, and Texas offices in Midland, Pleasanton and Houston to serve the Permian and Eagle Ford basins. w

“There can be no ‘one size fits all’ mentality in the oil and gas industry,” he says. “So we have a team of dedicated product specialists and on-site technical support at our Miles City facility to consult with clients about their individual needs.” Experienced industry professionals themselves, these team members conduct in-depth customer interviews to create a solution that will work on an individual basis. The type and volume of fluids needing to be contained, frac-tank location, length of storage time and the manner in which the liner will be used are all factors that must be considered in choosing the right products and methods for manufacturing. “Once materials have been selected, we utilize a proprietary process in fusing them together within very strict parameters to ensure the lining will hold in even the harshest and most extreme conditions,” Simonsen says. “It results in a single piece – up to 100,000 square feet or more – and eliminates the need to seam the liner on the jobsite, thus reducing the likelihood of potential leaks or failures.” “Our customers appreciate the benefits that come from working with a local manufacturer,” she notes. “Our ability to create what they need, when they need it and get it to them quickly hasn’t just built our company – it’s ensured they can continue to build theirs.” Brawler now has manufacturing and distributions centers in four key locations to service the oil and gas fields; these include Miles

Noble Well Services Inc. Box 393 • Arcola, Saskatchewan • S0C 0G0

OFFICE | 306-455-1213 Chris Nidesh | AREA MANAGER | 306-577-8793 Shane Ippolito | FIELD SUPERVISOR | 306.575.7807 Van Bot | SAFETY SUPERVISOR | 306.575.8792 Locally owned and operated. Experienced Crews. Mobile freestanding equipment. BAKKEN OIL REPORT – FALL 2014



Wanzek Construction, Inc. positioned to support Bakken oilfields through roustabout services With an established history of performing complete construction services for the oil and gas industry, Wanzek is expanding its roustabout service department to meet the high demand for trained tradespeople with the ability to handle well-site maintenance. Wanzek’s roustabout team prioritizes securing oilwell production flow quickly and efficiently by integrating with clients’ existing crews and staff to create a seamless business unit. Arnie Jelinek, vice-president of the company, is excited by the domestic oil boom and what the rising production is achieving for the U.S. His understanding of the industry has led Wanzek to grow both its oil and gas construction team and roustabout service team. “It’s not just about constructing facilities,” Jelinek says. “Maintaining and repairing a site is critical for long-term profitable operations and safe working conditions.” Poised at the onset of a boom of new domestic source of oil and gas energy has led to growth in Wanzek’s team and the expansion to roustabout service. Jelinek sites Wanzek’s highly competent, qualified team members, as well as a significant fleet of companyowned cranes and equipment, as the key resources that result in the company’s service excellence. “Our crews are experts at handling every aspect of a well site, from tank batteries to ground maintenance, and we have continued to expand our fleet to meet our clients’ needs,” he states. This expansion has led to the construction of a facility in Alexander, N.D., that will serve as a depot for the firm’s equipment storage and maintenance. The six-acre site features an 8,000-square-foot shop and office building and will provide living quarters for up to 24 team members working in the Bakken. This central location is expected to result in a more efficient crew deployment process, and strengthened company ability to service customers. With the announcement in the April Director’s Cut report that North Dakota has surpassed one million barrels of crude oil production per day, Wanzek’s new facility is both timely and well-positioned. Jelinek states that Wanzek’s development has been deliberate, with attention to building strong, reliable teams. Qualifications and training include ASME: U, S and PP certificates and R Stamp; NCCCO-certified riggers and operators; a rigorous cross-training program and continuous specialty training. The company is 186


focusing on actively recruiting, training and retaining team members who excel in providing services at the onset of a project and through the life of an oilfield. “We put teams in place that will uphold our core values,” Jelinek states. “It is essential that each team member strive for excellence, work collaboratively, navigate challenges and support a safe workplace. Our growth has been due largely in part to repeat clients. That is a fact we are proud of and it gives us a strong foundation from which to build.” Wanzek’s oil and gas team is gearing up for their next projects, including three in the Bakken and two in Wyoming. To meet the increasing need for roustabout service, the company has recently recruited team members to focus specifically on this area of the market. “Wanzek is continuing to build industry knowledgeable teams highly capable of excelling in all areas of this industry,” Jelinek says. Wanzek’s investment extends to an impressive company-owned fleet that has earned recognition on American Cranes & Transport Magazine’s list of North America’s largest crane-owning companies. Wanzek’s demand for crane services in oil-rich western North Dakota has expanded significantly with opportunities in a wide range of services to the oil and gas industry. To support the company’s dedicated crews, Wanzek has continued to expand this force, allowing teams to go to work promptly and finish correctly. Wanzek’s extensive fleet consists of all-terrain, rough-terrain, lattice-boom crawlers and hydraulic truck cranes. Recent acquisitions include a 275-ton Link-Belt all-terrain crane, a 155ton Liebherr all-terrain crane and a 500-ton Liebherr all-terrain crane. Wanzek’s cranes services include engineering and project management, engineered crane lifts, crane rentals and services, rigging services, transportation services and heavy lifts/heavy transportation services. Wanzek is continuously investing in its equipment and technology in order to provide clients with innovative and cost-effective services. For roustabout rates and services, call 701-282-6171. For crane service rates and information, call 701-282-6171. Additional information on Wanzek’s teams and services can be found at w


GeoLok spray foam and MaxGuard elastomeric coating products proven Demilec assets for Bakken play By Tim Banman A leader in polyurethane spray foam systems says two of its products are ready to service oil and gas production in the Bakken oil region. Demilec’s closed-cell spray foam and elastomeric coatings have numerous oilfield and pipeline applications, making them ideal products for use in the Bakken region, says Robert Naini, specialty market leader for Demilec. GeoLok is a low-exothermic spray foam, manufactured by Demilec for trench breakers, pillow pads and rock guards, for a safer and more efficient application compared to traditional pipeline placement, Naini says. The common practice of laying sandbags during pipeline construction poses various hazards for workers, who jump into the trench and work on uneven terrain to navigate the pipeline. These types of safety concerns are eliminated with the easily installed Demilec spray-foam system, GeoLok. Only two workers are needed to apply GeoLok: one behind the gun and another managing the back of the rig, compared to the multi-man crew of workers needed for handling and laying sandbags. “Sandbagging is very labor-intensive, very tedious and dangerous because you have workers crawling in and out of a trench, in and around and over pipes – and it’s time-consuming,” Naini explains. “It becomes a much safer and faster project to spray GeoLok pipeline and breaker foam.” The polyurethane spray foam will “hold the pipe in place and provide support and assistance in placement of the pipe during construction,” Naini says. The foam breakers will help manage erosion during the building of the pipeline by minimizing runoff and washout. In areas where rock falls could be a concern, GeoLok spray foam can be applied to create a rock shield – a large over-sprayed area to protect the pipeline during construction through the backfill process.

Spray-foam breakers installed around pipes.



Demilec has sold GeoLok spray foam in Alberta, Canada, for years and it has been used in several pipeline installations, where it has received outstanding reviews in one of North America’s busiest oil and gas producing regions. Based on the success in Canada, Naini says GeoLok spray foam is ready to roll out to U.S. markets, with big potential seen in the Bakken

Containment applications using polyurea, a type of elastomeric coating; these products are also used for corrosion protection, weather-proofing and sealing. play, as well as other fracking areas in Oklahoma, Texas, Louisiana, Pennsylvania and New York. While Demilec continues to build on its spray foam offerings to U.S. markets, Demilec’s MaxGuard spray elastomeric coatings standout as a leader in corrosion control with many practical oil and gas applications. From containment, pipe and tank protection, concrete and metal rehabilitation projects, and abrasion resistance benefits, Naini says MaxGuard demonstrates dependability when needed most. The two-component, fast-set coating results in a very durable lining, similar to a truck-bed liner, which can provide the fast and efficient solution oil and gas producers need in a variety of situations. MaxGuard can also create oil and grease-resistant washable surfaces, encapsulate hazardous materials, cover pipe joints, fill cracks, protect pipelines, or seal aquaculture basins. Maxguard adheres to all types of substrates, including wood, concrete, metal, fiberglass, PVC, or geotextile. The versatile elastomeric coating can be applied in high and low temperatures, on vertical, horizontal or slanted surfaces in all forms and dimensions. The highly resilient coating stands the test of time with chemical-resistant properties and is available in several colors. With several unique formulations available, Demilec will help consumers choose the best product to suit the job at hand.


MaxGuard SLAM 250 can bridge cracks and gaps with a slight foaming reaction, is impact-resistant, and has higher yield than traditional polyurea. SLAM 250 can also be used for containment applications and crawlspaces. MaxGuard H-760 provides the highest abrasion resistance and can be used for truck-bed liners, protective finishes or for high-traffic areas. MaxGuard U-250 provides a higher hardness rating and is difficult to damage after cured. MaxGuard U-290 works best in cold climates and has high elasticity. Finally, MaxGuard U-190 is a low-pressure pure polyurea that can provide many of the benefits of a polyurea protective coating and can be processed at less than 2,000 psi. To find out more about GeoLok and MaxGuard, visit, or call 1-877-DEMILEC (336-4532). w BAKKEN OIL REPORT – FALL 2014



Lithia Ford of Grand Forks unveils free vehicle delivery to the Bakken area

and reliable service from trained

Lithia Ford of Grand Forks will deliver any

professionals. In 2006, the dealership

new or used vehicle purchased from its

partnered with Lithia Motors, bringing

lot to any location within 300 miles of

access to a nationwide network of auto

the store – absolutely free. This program

retailers and support staff.

provides a no-cost, hassle-free way for

“Lithia was a real game-changer for us,” says Roger Johnson, general manager,

Bakken workers to purchase a vehicle from a trusted source.

Lithia Ford of Grand Forks. “We’d been

“We want to support the growth of

in the community for a long time, we’ve

the Bakken formation, and the growth

watched it grow, and we saw the need to

of western North Dakota,” continues

The Bakken formation continues to be

provide local people with greater access

Johnson. “That’s why we want to make

a boon for local communities, residents

to vehicles and service.”

it easy for people to do business with

The growth of production on the

sourcing quality, dependable vehicles; it’s

and job-seekers. With production predicted to continue growing for the foreseeable future, the need for consumer infrastructure supporting the massive operation continues to increase,

Bakken formation has increased that

us. And in the end, it’s not just about also the need to have a support network

need further. Hence, the dealership is

available. Lithia offers that support on a

responding with an innovative delivery

level few in the country can match.”

as well. That means access to an array of


essential consumer goods, from housing

“We know people are out there working

and daily necessities to vehicles.

network of over 120 stores, a reach

hard, they need a vehicle they can

unmatched by just about any other

Lithia Ford of Grand Forks has been

depend on, and they don’t have time

dealer in the state. Lithia owns and

a supporter of the local community

to waste driving hundreds of miles and

operates dealerships selling all major

for decades. Through all manner of

shopping around to find it. So it just

makes in states from coast to coast. Lithia

economic situations, the dealership

made sense for us to develop a program

started as a family business in 1946 in

has been a source for quality vehicles

to meet that need,” Johnson explains.

Ashland, Oregon.



Lithia Motors (NSE: LAD) is a nationwide

lithia ford

“We know people are out there working hard, they need a vehicle they can depend on, and they don’t have time to waste driving hundreds of miles and shopping around to find it.” “The size and scope of Lithia’s network

“We’ve been fortunate to have been

we’re happy to be here to help.”

is such that we have access to resources

serving the community for a long time

other dealers only dream of,” he says. “Not

Lithia Ford of Grand Forks is located on

and I don’t know that I’ve ever seen as

32nd Avenue South in Grand Forks. Their

much potential as there is right now. And

website is w

only does that mean inventory, it also means we can do things others can’t, like offering free delivery to the majority of the state.” As a manufacturer, Ford is also wellsuited to meet the needs of Bakken workers. The F-150, the flagship of Ford’s full-sized truck line, is consistently ranked above competing brands for quality and durability. Data analysts Vincentric also named the 2014 Ford F-150 the “Best Value In America” for its class. Lithia Ford of Grand Forks carries the full line of new Ford trucks and SUVs, as well as the manufacturer’s entire array of vehicles. That includes the 2014 Ford Fiesta, named a “Best Car For The Money” by U.S. News And World Reports.



• Hotsy has been providing pressure washing equipment to the Oil & Gas Industry since 1970 • ETL certified to UL-1776 safety standards • No open flame • Heavy angle iron frame and chassis with durable powder coat paint resists years of corrosion and rugged use

In addition to new vehicles, Lithia Ford of Grand Forks also carries an extensive selection of Ford-certified pre-owned vehicles, each carrying extensive warranty coverage direct from the manufacturer. The dealership sells used cars of all makes and models.

Scan to watch our video: Hotsy & the Oil Industry

“We have a huge used vehicle inventory,”


says Johnson. “And by partnering with Lithia, we literally have access to thousands of used vehicles across the country. So if there’s something you’re looking for, there’s almost no doubt that we can get it, ship it here and deliver it for free.” The dealership only sees blue sky ahead for business in the Bakken area, as well as Grand Forks.

We service the Bakken Oil Fields with heavy-duty cleaning equipment. Our dealers are well-versed in the oil industry and can provide fast, dependable service. Hotsy’s are tough and built to last. We service your machines, providing genuine Hotsy parts, maintenance programs and on-site repair, keeping your pressure washer downtime to a minimum. Consider Hotsy Brown, a detergent specifically designed for the oil industry. Hotsy has over a 100 hot and cold water pressure washers to choose from and they are sold exclusively through our dealer network. To find your dealer, visit our website at


“It’s an exciting time to be doing business in North Dakota,” Johnson enthuses. BAKKEN OIL REPORT – FALL 2014 BakkenOilReport_Hotsy_halfpage_v_2014.indd 1


8/27/14 4:22 PM


Making customer service a priority Located in Peosta, Iowa, Mi-T-M Corporation manufactures pressure washers, generators, air compressors and a host of other industrial-grade equipment in a state-of-the-art manufacturing, assembly and distribution facility that spans over 850,000 square feet. The company supplies equipment to multiple industries, including: OEM, oil and gas, paint, rental, government, consumer, equipment distributors, and water treatment facilities. Known for its high-quality equipment and outstanding customer service, Mi-T-M sets itself apart from the competition with commitment and dedication. The company stands behind everything it builds with one goal in mind: build it to perform and build it to last. Mi-T-M believes in craftsmanship and value, which is why each and every piece of equipment from Mi-T-M is built with outstanding quality to last a lifetime. When it comes to customer service, the Mi-T-M Corporation in Peosta, Iowa, acts like an old-school small company. Part of what that means is every phone call is answered by a person, not a machine. “If all our lines are busy and someone has been on hold for 45 seconds, a bell sounds and anyone in our sales and customer service department who is free can grab that call to make sure the customer is personally taken care of,” says Dana Schrack, Mi-TM’s vice-president. Karen Anderson, Mi-T-M’s marketing manager, adds that it is that type of personal attention to detail and service for which the company is known. “When I first came to Mi-T-M, we hired a private research firm

to help find out what the Mi-T-M brand means, not only to our customers, but also to our sales representatives and employees. All three groups said that what sets Mi-T-M apart from our competitors is our customer service. We are a big company that acts like a small company because we really and truly care about our customer service,” Anderson says. Schrack says the company’s attitude and brand comes from MiT-M’s founder, A.J. Spiegel. “This is his vision and how he wants to run the company. That’s how customers perceive us.” According to the research firm, many companies claim to have outstanding customer service, but their research shows most are really not that way. “They came back to us and said, ‘You’re right. It’s obvious that what it’s all about is quality and your customer service,’” Schrack says. “As for quality, the direction from Spiegel is that we will not continue doing business with a supplier if the component or product doesn’t live up to expectations,” Schrack adds. Instead, Mi-T-M expands, invests in the necessary equipment and takes on the task themselves, whether it is fabrication, powder-coating, or something entirely different. Schrack says there are many instances that resulted in Mi-T-M bringing a process in-house. “We make our own laser beds for laser-cutting machines. We actually weld them here. John Deere found out and they signed a contract for us to do it for them, too,” he says. Before any product leaves the Mi-T-M facility, it is started and tested. This includes generators, air compressors, and hot water and cold water pressure washers. “It is one more way we can assure the quality of our products,” says Schrack. While some equipment carries the Mi-T-M brand, the company also builds specialized equipment with private labels. “We don’t care. Yes, we like to put our name and brand on our equipment, but if a customer wants to use their name, we can do it,” Schrack says. Mi-T-M is also working on developing ways to help those companies market the products too, such as creating videos that will allow customers to show off the equipment, again promoting the belief in outstanding customer service. “We’re very fortunate. We survived a lot of the ups and downs in markets. We have good people and good marketing strategies. We’ve grown significantly many times



Above left: Mi-T-M test room.

Above right: Hot-water pressure washers going into the test room. Right: 3,500 psi hot-water pressure washer.

over just because we have good people,”

a reputation for outstanding customer

says Spiegel. “We are very persistent about

service and high-quality, dependable

service and we are very persistent about

products. For a complete list of equipment

keeping customers for a long time.”

or to locate a dealer, please visit

For 43 years, Mi-T-M Corporation has built w




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Full-speed ahead: Devils Lake attracts business and visitors alike By Melanie Franner

Devils Lake has set out a two-fold plan to build momentum over the next few years. The highly popular tourist destination is looking to build on its reputation as offering one of the best fishing and hunting experiences in the United States. Add to that the area’s already strong industry base – and its close proximity to the Bakken oilfields – and you’ve got a recipe for strong growth and prosperity for some time to come. One with nature Located in northeastern North Dakota, Devils Lake has a population of around 7,200 permanent residents (2010 Census). The main industry in the area is agriculture, followed closely by tourism. “We’ve got the largest natural lake in North Dakota,” states Suzie Kenner, executive director, Devils Lake Convention and Visitors Bureau. “Our lake is over 220,000 acres. We draw people from all over the Midwest and Canada.” Spring and summer see anglers congregate at the 600+ hotel rooms in town or at the 20 resorts and cabins spread along the water’s edge. Winter is just as busy, with many visitors taking advantage of the area’s renowned ice-fishing activities. 194


Recognized for its perch, walleye and other fish species – not to mention local hunting – Devils Lake continues to draw the sports enthusiast. It also proves attractive to families looking for a natural, outdoor vacation. “This is a great place for families, especially in the summer,” states Kenner. “Families can get out on the lake to do some fishing or some recreational boating. The town holds regular activities throughout the summer and there are a handful of history museums located downtown.” There are also about 20 different campgrounds spread around the lake, such as Graham’s Island State Park – the busiest park in the state and one with 131 camp sites. Other attractions include Sully Hill National Game Preserve and the Creel Bay Golf Course, both of which are located on the shores of Devils Lake. Recreational open water and ice fishing in the area are estimated to generate more than $20 million annually. More than just fishing In addition to the various sporting activities available in Devils Lake, the town offers several festivals throughout the year. These include: the Devils Lake Fire Department Ice Fishing Tournament

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and Raffle, the largest ice-fishing tournament in North Dakota, which draws 4,500 people and sells some 18,000 raffle tickets (which typically sell out in three weeks); ShiverFest, a weekend of various events and entertainment for the whole family; Devils Run, the largest classic car show in North Dakota; local and professional fishing tournaments; and the Lake Region Rodeo Association’s Rough Rider Rodeo Finals.

The new industrial park will be a flexible, multi-use facility with

Other popular features of the town include the Fort Totten Little Theatre, which presents Broadway musicals during the summer, and the Chautauqua Festival, an annual celebration of music, art, dance and drama in the Lake Region.

opportunity for businesses to locate in Devils Lake.”

“We’re always looking to add more events and festivals,” says Kenner. “It’s a great way to attract local residents and tourists.” Another big attraction of the area is the Spirit Lake Casino, a 49,000-square-foot casino located eight miles from town. Built at an initial cost of $7 million, the Spirit Lake Casino is currently undergoing significant expansion. Industry interests The other side of Devils Lake is industry. The agricultural-based community has slowly and steadily been building its business base over the years – spreading out into new areas of interest. “Our mission is to foster and develop existing and new business and industry in the Lake Region,” states Rachel Lindstrom, executive director, Devils Lake Economic Development Corporation. “We have a direct, two-lane highway to the Bakken oilfields and are just a three-hour drive from the town of Stanley. Our excellent location makes us the ideal place for people working in the oilfields to raise their families.” It also makes it a good location for businesses looking to support industry in the oilfields. It is for this reason that Devils Lake recently purchased a 130-acre site located about two miles northwest of the city limits. “Forward Devils Lake will be a state-of-the-art industrial park with a wide variety of amenities and support services,” explains Lindstrom. “It provides easy access to the Bakken region, while still providing a feeling of community.” 196


lot sizes ranging from five to 130 acres. It features rail (dedicated service and switching from Northern Plains Railroad/Canada Pacific Railroad), highway (U.S. Highway 2) and air (Devils Lake Regional Airport) accessibility. “We have an older industrial park that is reaching its capacity,” states Lindstrom. “This new industrial park will open up a lot more

Discussions with one of these businesses is already in the works. The potential oil-related tenant is currently working with the Devils Lake Economic Development on the viability of moving into the area. “This is the kind of growth that we are looking for,” adds Lindstrom. “It’s a steady and continued growth, not the kind that comes overnight and can be gone tomorrow.” And, if Lindstrom has her way, Devils Lake will have to build a new industrial park in the next five to 10 years because Forward Devils Lake will be sold-out. “I hope that we’re in a position where we have to acquire more land,” she concludes. “That would be an excellent position to be in.” w

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How to improve your CSA score By Dennis Zerbst

Has your boss tasked you with improving the vehicle maintenance portion of your company’s Compliance, Safety, Accountability (CSA) score? How do you go about that? How would you change your maintenance practices to achieve the biggest impact on your CSA score? What if I told you that checking just four items on your semi-trailer during every inspection would cover 73.5 percent of the items that cause Level I inspection OOS violations? Basing your inspection and maintenance practice around these four items is a slam-dunk to lowering your road repair costs and fines, and the key to your next promotion. We get our data from the recently released Roadcheck 2014 data, published by the Commercial Vehicle Safety Alliance (CVSA: They tell us that in a three-day period, 49,656 Level I inspections were performed and 23 percent, or 11,421 vehicles were placed out of service. These statistics represent the state of commercial vehicles as a whole, and the OOS violations are amazingly consistent year over year. That is a good thing.

The key to checking these items on a semi-trailer is to use an advanced diagnostic tester, like the LITE-CHECK 920 ( What can a tester like this do for the first two items that have to do with brakes? First, this tester can perform a 60-second leak-down test on both the emergency and service lines at the same time. If you do have an air leak, it will identify which line the leak is on and whether it is an external or internal leak so you can find and fix it quickly. Using the remote control, a technician can go under the trailer and apply and release the brakes with the push of a button. This makes measuring brake stroke a simple and quick, one-man job. It also lets the technician observe the brakes during operation to check for seized or loose parts. He will be in the same position as the officer during a Level I roadside inspection, and can see and hear everything the officer will be able to. What better way to improve your odds of passing a Level I inspection than to inspect the same things the same way the officer will. We have just checked the items that cause 46.2 percent of OOS violations and it took one technician about five to 10 minutes.

1. Brake System

29.5 percent

2. Brake Adjustment

16.7 percent

3. Tires/Wheels

13.8 percent

4. Lights

13.5 percent

The next big-hitter is tires and wheels. I suggest that you do a visual inspection of the tires and check the air pressure with a tire gauge. While the technician is under the trailer inspecting the brakes using the LITE-CHECK 920 tester, he can easily listen for air leaks from tires and inspect the inside surfaces of the tires that might be missed if an inspection is only done from the outside. Tire auto-inflation systems are nice, but they have to be checked for leaks like any other air system. This will be accomplished when the technician performs the leak-down test on both air lines previously mentioned.


73.5 percent

Now for the simplest item that gets more commercial vehicles

It means that you can build an inspection and maintenance program that will focus on the big hitters and know that it will keep working for you into the future. The Roadcheck 2014 OOS maintenance big-hitters are:



pulled over in the first place – which can lead to a Level I inspection – a light out. With the exception of the ABS light, all lights on a semi-trailer are in parallel circuits. That means you can have a light out, but the circuit continues to function and to light the other lights on the circuit. That is why a technician has to go around the trailer one time and physically check each filament in every light. This is easily done with a LITE-CHECK 920, because the remote control lets the technician activate each circuit as he passes each light to check for proper operation. Of course, a sophisticated tester does more than just light up the lights. The LITE-CHECK 920 constantly monitors each electrical circuit for opens, shorts and chassis shorts. If such a fault exists and the alarm goes off letting the technician know, the readout on the tester will identify the fault and the circuit(s) involved so the technician can begin fault isolation immediately. And there you have it. Using an advanced diagnostic trailer tester, like the LITE-CHECK 920, a single technician can check the problem areas that account for 73.5 percent of OOS events in about 10 minutes. In addition, the tester can speak directly to any manufacturer’s ABS ECU (anti-lock brake system electronic control unit) using PLC (power-line communication) technology. This lets you see vital items about the health of the ABS System so you can fix things proactively in the shop rather than reactively out on the road.

There will be over four million Level I inspections on commercial motor vehicles this year. If 23 percent of these are placed OOS, that amounts to 920,000 vehicles that are idled. When you consider that just having a CMV sitting on the roadside is costing you $500 per hour in addition to fines, customer dissatisfaction due to missed delivery times, an increase in CSA score, and an increase in insurance costs – it makes an investment in an advanced diagnostic tester look like a good idea with a definite payback. For further information, please visit and FMCSA’s Compliance, Safety and Accountability (CSA) program ( w

“We have cut out PM time per trailer in half. Having the ability to access the ABS information is awesome!” Lite-CheCk 920 Customer

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1-800-343-8579 BAKKEN OIL REPORT – FALL 2014


bwfs industries

BWFS Industries celebrates 25 years Houston-based ASME code-fabrication shop announces their 25th anniversary

Houston, Texas, August 29, 2014 — BWFS Industries, LLC (formerly Butchers Welding and Fabrication Services) announced the celebration of 25 years of providing ASME code-pressure vessels to clients from offshore applications to onshore ones, including the shale plays across the United States and Canada. Joe Butcher, president and owner, began providing shopfabricated vessels and skid-packaged equipment after an extensive career in on-site welding and fabrication at drilling sites both onshore and offshore. Butcher brought a desire to be a business owner along with a commitment to providing quality fabrication services to his present and future clients. “Our focus has always been to provide a great product and to be a reliable partner with all of our customers,” Butcher says. “We respect and appreciate our role in the oil and gas community.” BWFS Industries, located in northeast Houston, has grown from a 6,000-square-foot facility with welding accomplished by hand, to two facilities that hold the most recent state-of-the-art equipment with more than 50,000 square feet under roof on more than 17 acres of property. An ASME code shop, BWFS Industries, has a total of nearly 13,000 coded vessels in current service. This includes U.S. locations and others around the world. Heavy-wall fabrication of up to six-inchthick wall vessels are a part of the experience of BWFS Industries. Lifting capacities in each of the shops of 150-ton-plus in-house stress-relieving, media-blasting and painting have allowed BWFS Industries to meet their customers’ increasing demands for on200


time deliveries. Automated welding equipment, plasma-plate cutting capabilities and improved material handling has allowed BWFS Industries to grow with their customers’ needs. In 2014, shipments from the Houston facilities have been made to projects in Canada, Montana, North Dakota, and numerous other job sites in the continental U.S.A. BWFS Industries prides itself on their staff of estimators, engineers and project managers who have extensive experience in working with purchasing staffs, engineers and on-site inspectors to ensure the vessel(s) are built to specification and delivered as promised. As BWFS Industries prepares for growth in the next 25 years, plans are in the works to break ground on an expansion that will give the company capabilities of handling even larger vessels in both size and weight. BWFS Industries has been built on a foundation of: • Good engineering products. • Methodical orderly project management. • Emphasis on safety requirements. • Excellent workmanship. • On-time delivery. For more information on BWFS Industries and their experience and service to satisfy ASME code fabrication needs, companies can call the sales office directly at (713) 299-4481. Media contact: Dick Carden – Vice-president, Sales and Marketing Tel: (713) 299-4481 • Email: w

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CanElson Drilling (US), Inc. – A leading provider of oilfield services CanElson Drilling (US), Inc. purchased Redhawk Drilling of Mohall, North Dakota in June of 2011. The management team in the Mohall operations office consists of Larry Bloms, operations manager, Paul Bloms, drilling superintendent, Tina Zietz, office manager, Lynn Schwark, shop hand, and Brittany Nelson, administrative assistant. CanElson now has six rigs operating in the region. CanElson is actively pursuing potential customers operating in the Rocky Mountain region and hopes to add to their drilling fleet in this area. In 2014, CanElson has contributed to the St. Joseph’s Community Foundation, the Kids Academy of Berthold, the Ashley Pool Fund and the Antler Outlaws of Youth Rodeo. CanElson will continue to support various community endeavors in the area. CanElson operates contract drilling rigs in the Western Canadian Sedimentary Basin (WCSB), the U.S., and in Mexico for oil and natural gas exploration and development companies. CanElson also assembles new drilling rigs at a facility in Nisku, Alberta, operates contract oil and gas service rigs in Mexico, and operates a CNG transportation and related services business. More information on CanElson Drilling Inc. can be found on the website: w



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‘Pack Higher Expectations’: Visit Bismarck-Mandan got you covered. The sister cities of Bismarck-Mandan can provide everything you need to conduct the perfect business meeting, convention or retreat: • The Bismarck Civic Center consists of 200,000 square feet of meeting and convention space, including a new 100,000-square-foot exhibit hall, an 8,600-seat indoor, multi-use arena, and several additional meeting rooms. • Bismarck-Mandan has more than 3,500 hotel rooms within 15 minutes of the Bismarck Airport. Even with the ongoing growth experienced by both cities, you’re never far from where you need to be. • Convenient, free airport shuttle service and free in-room hotel Wi-Fi.

Looking for a modern, yet friendly and relaxed location, in which to host your next conference or meeting? “Pack Higher Expectations” and visit Bismarck-Mandan, North Dakota. Bismarck-Mandan offers the perfect blend of business facilities to host your meeting, plus shopping, dining and recreational opportunities to provide guests with an authentic slice of the North Dakota lifestyle. Our inviting, full-service business facilities allow you to unpack your worries, and leave the planning and details to us. Looking for a setting for a small group of 100? No problem. Need space for a convention with 2,000 attendees? We’ve 204


The friendly staff members at our convention facilities provide you with VIP treatment during your stay. Our guests are our No. 1 priority, whether we’re hosting a meeting of 100 people or 1,000 people. North Dakota takes pride in offering warm hospitality and friendly faces; our people are one of our best assets. While you’re here . . . We realize you’re here for a work convention, but when your meetings are done for the day, there’s no reason you can’t have some fun while you’re in town, too. For that, you’ve come to the right place. Bismarck-Mandan offers unique attractions that are simply not found in larger cities. Here, we pride ourselves on providing big-city amenities with downhome charm and friendliness. Bismarck and Mandan feature vibrant downtowns, with countless unique businesses full

of friendly faces. There’s a thriving arts and culture scene, and a variety of locally owned dining establishments full of ethnic and North Dakota-themed offerings. North Dakota’s heritage is legendary. The “Old West” still lives here, and our history is yours for the taking. A trip to the North Dakota Heritage Center will guide you through our state’s beginnings, from the legends of Lewis and Clark, Sakakawea and Teddy Roosevelt, to the modern-day energy boom in western North Dakota and everything in between. Four new galleries engage visitors in our state’s fascinating history, from the time of the dinosaurs to life for the early settlers through to the state’s emergence as a national leader in agriculture and energy production. Want an up-close and personal look at history? You won’t have to travel far. Fort Abraham Lincoln State Park, overlooking the Missouri River Valley, was home to Gen. George Armstrong Custer and the Seventh Cavalry. It was from this fort that Custer and his troops rode to the legendary Battle of the Little Bighorn. Visitors to the fort experience life as it was in 1875. Nearby, the On-A-Slant Indian Village offers another perspective on plains life, with six reconstructed earth lodges like the ones called home by the Mandan Indians in the mid-1700s. Lewis and Clark spent more time in North Dakota than anywhere else during their exploration, and it’s easy to understand why. Our scenery is distinct, and much of the landscape first witnessed by the famous explorers in 1804-1806 remains virtually unchanged.

Hawktree Golf Club.

Missouri River.

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Once you decide Bismarck-Mandan is the right place for your event, we can help with all the details, including assistance in securing dynamic local speakers, entertainers, suppliers, caterers, signage, busing, unique off-site meeting locations and information about area attractions. The Bismarck-Mandan CVB maintains an online speaker and entertainment directory with an updated list of service

is home to seven golf courses, including the nationally ranked Hawktree Golf Course that has been ranked as one of the best 100 public golf courses in the country by both Golf Digest and Golf Magazine. Plan a trip to Bismarck’s Dakota Zoo, or simply stroll through our historic downtown areas.

State capitol. providers who specialize in fulfilling the needs of groups or all sizes. Visit our website at or call (701) 222-4308. Whether it’s coordinating of the details and themes of your convention or business meeting or recommending a day trip and a unique place to eat, the friendly residents of Bismarck-Mandan are here to help. All you have to do is “Pack Higher Expectations” and leave the rest to us. w

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A smarter approach to solids control

Left: Hyper-G drying shaker. Above: KT-1967HD2 decanter centrifuge.

When looking at technical brochures and marketing materials in regards to solids-control equipment, one question that should always come to mind should be: Is this really necessary? Other great questions to ask are: What are my day-to-day needs; and what are my severe, high-duty needs? Finding the right solidscontrol equipment is much like buying a personal automobile. Most vehicles’ speedometers advertise that they are able to achieve 140 mph, to even as fast as 220 mph or more, but is this really practical for everyday driving? It is partly a fancy marketing tool used by many auto manufacturers. Why pay more for features that, in the end, are as useless as the 220-mph on your automobile’s speedometer? KEMTRON Technologies knows that value is important to customers when they are selecting equipment. KEMTRON builds durable, value-driven equipment with customers’ needs in mind. Partially due to cost-savings, partially due to environmental reasons, as well as a myriad of other reasons, solids control is now considered a vital step in the drilling process. With that being said, it is clear that having the right solids-control equipment is critical. One major asset to an operator is knowing what solids-control equipment will be the right fit for their specific operation. There are many factors to consider, but the main factors you should consider when purchasing solids-control equipment include: how user-friendly the equipment is, flow capacity/G-force requirements, spare parts replacement, and the performance of the equipment with regard to your individual needs. When it comes to solids-control equipment, there are many 206


options available to operators, but the most important equipment used in the industry today are shale shakers and decanter centrifuges. The shale shaker is the primary piece of solids-control equipment used on a rig. By industry standards, the quality of the shale shaker will predict the cleanliness of the drilling fluid being treated. There are two types of shakers used on a rig site: a flo-line shaker and a drying shaker. The floline shaker is considered the first line of defense when it comes to solids. Drying shakers are always used in conjunction with other equipment and are used towards the end of a solidscontrol process. Drying shakers allow for more efficient waste management. Centrifuges are also an integral part of the solidscontrol process. Barite recovery or dewatering centrifuges work best when pretreatment of the used fluid by a shaker has been performed. Practically speaking, a centrifuge can target colloidal, ultra-fine, and fine particles, which is an important consideration in a region such as the Bakken. The demand for qualified operators in the field is growing at an exponential rate. Currently, there is a high turnover rate and continued erosion of the talent pool on today’s rig sites. In the Bakken, turnover can range as high as 25 to 30 percent – and often times higher. This high turnover rate comes from a multitude of factors including, but not limited to: the expansion of the industry as a whole, changes in the industry, site-specific reasons, and burnout. With these issues, a unique set of problems for companies has arisen. From the operational side, managers are constantly training new employees on how to operate


can now adjust the equipment relative to the type and volumes of solids being encountered during the drilling operation. High Gs are excellent for high solids or high flow, but constantly operating at this level will damage screens. The VFD panel is a great addition that can help users prevent damage from occurring and adjust quickly and efficiently to changing situations.

equipment. Time spent training is time that operators cannot afford to waste. The solids-control industry recognizes these problems and has begun to design user-friendly and easy-tooperate equipment in order to ease this burden. One new type of user-friendly technology would be equipment that provides operators with on-board sensors that alert the operator when trouble occurs. This new, smarter equipment is being developed so that the equipment can protect itself from overloading conditions and operator errors. KEMTRON has recently incorporated this technology for both shakers and centrifuges. Additionally, more and more systems are being pushed to provide “cruise control” capabilities. The capabilities allow a more hands-off approach to operation, which allows for increased flexibility for the user.

In addition, when purchasing equipment, thought should be given to spare parts and consumables. Are the spare parts and consumables easy to replace on the equipment? Are they trouble-free to order and keep in stock? Are the parts durable and long-lasting? These questions should be taken into consideration in order to ensure ease of operations and cause less stress on the operator. As time progresses and the Bakken continues to develop, operators can expect an expansion in these types of user-friendly technologies on the next generation of systems. KEMTRON is a company that strongly believes in innovation. Currently, approximately 20 percent of profits go back to research and development. The need for constant change and progression is necessary in such an ever-developing industry. KEMTRON enthusiastically looks to the future as both the region and technologies continue to grow. w

The oil and gas industry is somewhat sluggish to embrace new technology. Customers are more likely to choose classic technology that has been enhanced. For instance in recent years, on-board centrifuge controls have begun to utilize touch-screen technology much like one’s personal tablet. In regards to recent innovations with shale shakers, VFD panels have been developed that can provide the operator with both balanced elliptical and linear motion operation. By providing both settings, operators

The best tool boxes have the right tools for the right jobs. These are the tools that you use time and time again. These are the tools you can depend on.

Durable Value. Now. KEMTRON Technologies has been setting the standard in solids control and waste management equipment for 25 years. Quality, dependability, and durability are the driving principles our company was founded on.



de In The USA Ma •

de In The USA Ma •

KT-1967HD2 Dewatering Centrifuge BAKKEN OIL REPORT – FALL 2014





Solving soft-soil site-access challenges in oil-producing regions By Bill Handlos, P.Eng., Director, Presto Geosystems U.S. manufacturer Presto Geosystems, and their Canadian geosynthetics distributor, Layfield Group, designed and supervised the installation of two test access roads seven to nine meters wide (23 to 30 feet) with their unique Geoweb® soilconfinement system on Devon’s access roads and drilling pads. “The Geoweb® confinement system is a network of high-strength interconnected cells that contain and strengthen infill materials. Through confinement and strengthened infill, the overall crosssection can be significantly reduced,” notes Cory Schneider, environmental engineer, Presto Geosystems.

Canadian oil producer Devon Canada Corp. in Alberta has been extracting oil from Canada’s oilsands region since the early-2000s. Named “oil sands producer of the year” twice in five years by the Oilsands Review, they are a leader in oil production performance. Their early 2014 acquisition of the Eagle Ford, Texas assets and plan to drill more than 200 wells is an indication of their continued blueprint for oil production. At the forefront of their mission is a strong commitment to minimize the environmental impact of their operations. When sites are reclaimed, they are done so with the intention of returning them to their original natural environmental state. Access to oilfield sites can be a challenge – they are often over soft, organic soils, such as muskeg or saturated clay, or in areas where suitable fill material is scarce or very expensive. Oil producers like Devon Energy design their access roads to handle extreme loads from heavy construction, drilling and completions equipment. On a typical site in the Alberta oilsands region where muskeg is prevalent, the loading requirement exceeded 125,000 pounds (15,000 pounds wheel loads). The challenge was to build an access road that would not only support those loads, but could also reduce fill requirements, reduce operational maintenance time and costs, and minimize environmental disturbance. 208


To prove the performance of the Geoweb system and its ability to save infill costs, a reject screening from crushing operations (coarse sand <5mm, 0.2 inches) was utilized for infill instead of the typical larger aggregate. The use of the Geoweb system enabled a reduction of the typical haul road cross-section of 1.5 meters (five feet) to less than 300 mm (12 inches), an aggregate savings of 80 percent. A high-strength, high-flow geotextile was placed under the Geoweb material to serve as a separation layer. Geoweb sections were deployed and installed over the geotextile, and connected end-to-end with fast deployment ATRA® keys.

The Geoweb roadways have performed above expectations and

Made from high-density polyethylene, the system installation

have been employed on other oilfield lease roads and pads in the

is minimally impacted by weather extremes, and allows

oilsands and Bakken regions.

construction to continue late into the year. For long-term

“We did not like the material – we loved it. The roads have been performing way above our highest expectations,” notes Ron Thompson, construction procurement manager, Devon Canada

roadways and platforms, it provides a stable and lowmaintenance solution that is more economical than renting mats for the season. The Geoweb® soil stabilization system is a 30-year proven

Corp. “One of the access roads built with the Geoweb material in this region has been virtually maintenance-free for three years,” adds

technology that has been effective in solving difficult soft-soil problems in the construction of site-access roadways and drill pads in the oil and gas industry, as well as in other heavy-loading


applications such as in the mining, railroad and transportation

Another challenge of constructing oilfield roadways and pads is


working in cold wet-weather conditions. The Geoweb system’s

Easy to deploy and install without heavy equipment, it offers a

adaptability to weather extremes has been advantageous for

low environmental impact solution that reduces aggregate use

construction in severe climates – from the coldest regions of

and associated transportation costs, reduces maintenance time

Canada to the far north territories of Siberia, Russia – and in some

and costs, and keeps operations moving smoothly in some of the

of the wettest, soft-soil conditions in the world.

most heavily loaded, poorest soil areas of oil exploration. w

Quickest Access to the Oil. Less Cost, Less Maintenance, Less Hassle


Create Economical, Fastto-Deploy Access Roads & Laydown Areas Advantages of the GEOWEB® system with granular fill: • requires up to 50% less infill to bridge organic or soft soils • reduces settlement • is virtually maintenance-free during construction

CALL for a FREE Project Evaluation

GEOWEB®— Creating stable roadways to energy for over 30 years.


Presto Geosystems® • 800-548-3424 or 920-738-1328 • AP-7659




Inland Tarp & Liner (ITL™) Advanced Containment Solutions™ Serving the Bakken, Rockies and U.S. oilfield and shale gas plays

New ITL™ Distribution Center • Fairfield, North Dakota

• Three layers of LDPE.

ITL™ provides service companies and producers with a comprehensive approach, “Advanced Containment Solutions™”. This program encompasses working with explorers and producers (E&Ps) and their service companies to define wellsite challenges, applications and solutions in meeting Best Management Practices (BMPs). These challenges and solutions range from well-pad containment to pit liners, impoundments to tanks liners, and from secondary containment liners to containment system products.

• Non-geo laminated welding strip.

Supplying U.S. oilfield and shale gas plays with containment solutions requires ongoing R&D, technology transfer and pro-active service programs to meet the industry’s diverse specifications by regional plays. Announcing ... New ITL 30XGL™ Reinforced Liner Applications: Well-pad liner (surface and under rig mats) and secondary containment. Safety: Fabricated one-piece and large panel liners to reduce infield seam welding, designed with non-skid surface for workers. The New ITL 30XGL™ is a six-layer reinforced liner: • HDPE double scrim or “X” designation. 210


• Laminated geotextile surface layer for non-skid worker safety. • 100-percent recyclable (cradle to grave). This reinforced liner is “stronger and lighter” with extremely highpuncture and Mullen Burst properties (independent test data available upon request). Announcing ... New two-foot-high ITL™ Engineered Containment Walls Applications: Frac tanks, frac-tank farms. Safety: Fabricated one-piece liners to reduce in-field seam welding and designed with non-skid surface for workers. As another ITL™ Containment Solution, the new two-foot-high engineered containment wall is now available. This provides E&Ps and service companies: • An advanced-engineered solution for protecting the environment and stakeholders when an unexpected failure occurs; • A cost-effective system that is reusable for ROI. • Saves time and costs for set-up and dismantling. • Liner clip saves time and costs for attaching liner to wall.

This CRT is simply effective because it’s elegantly simple.

Photo courtesy of Beaver Drilling Ltd.

Volant’s Casing Running Tools have become the industry standard for operators drilling critical, challenging wells. Why? Because they can makeup, breakout, reciprocate, rotate, fill, circulate and cement. All in one tool. Plus, you won’t need multiple equipment and service operators, so there is less to go wrong. Tool operation is completely in the hands of the driller, so everything is safer. Like every Volant tool, it makes the complex simpler, the difficult easier. |

INland tarp & liner™

Announcing ... New one-foot-high ITL™ Engineered Containment Walls

the walls of tanks as an insulator.

Applications: Well-pad containment, portable equipment containment (duck ponds).

for in-ground ponds and impoundments.

As BMPs move forward with installing liners on the entire well pad, this new one-foot-high engineered containment wall is designed and ideal for well-pad containment. It also serves as a portable containment for equipment and other liquids.

Floating cover systems are also designed and custom-fabricated

ITL™ Secondary Containment Systems Applications: Larger tanks and tank farms. Safety: Fabricated one-piece and large panel liners to reduce infield seam welding; designed with non-skid surfaces for workers.

ITL™ Resources – Options for Producers and Service Companies: ITL™ above-ground storage tanks, floating cover systems and secondary containment systems

Based on E&P’s BMPs and state regulations, ITL™ offers turnkey

ITL™ offers E&Ps and service companies a cost-effective and proven track record option in fabricating one-piece liners and single-panel geotextiles for multiple storage tank dimensions. Based on our extensive experience in this area, stepped liners are the most cost-effective, and 40 or 30 mil LLDPE is the preferred liner of choice.

non-slip safety surface is designed for secondary containment.

Material selection, primary and secondary liner will vary based on the type of liquid stored (fresh water versus frac), tank manufacturer, project duration and leak-detection requirements. In addition, ITL™ provides its customers with CAD drawings. This unique resource brings together all parties and precisely documents the liner required and billed for. Finally, QA/QC procedures are paramount for this application. As in the case of all fabricated liners, ITL™ takes great pride in its rigid plant QA/ QC procedures.

with service companies by providing hands-on programs for

The following diagram is an example of a tank liner project.

Recycling Program

ITL™ Floating Cover Systems

Respecting and protecting the environment is more than a

As a companion product for storage tanks, insulated covers are deployed to reduce freezing, evaporation and odors. ITL™ works closely with our customers in designing custom-fabricated floating cover systems. These systems are custom-fabricated and have a projected ROI of three to seven years, depending on the system selected. CAD resources and the same rigid QA/QC procedures apply. Covers are also installed on outside or inside

an added value service for customers, ITL™ has been very pro-



secondary containment systems. Depending on the footprint available, engineered walls are available in three-foot and fourfoot heights. As addressed above, the new ITL 30XGL™ and its Custom-fabricated one-piece liners are fabricated to eliminate field welding and issues of weather, and to reduce seam failure. ITL™ Installation Training Programs As part of its technology transfer program, ITL™ works closely installation and welding techniques for field welding larger panels. In meeting with producers, technical data comparisons are presented, along with other key considerations such as site prep and subgrade. The next photo illustrates a subgrade with ITL 40X™ liner installed. The subgrade quality required no geotextile underlayment, saving material and labor costs for installation.

slogan at ITL™. ITL™ has recycled its scrap material for years. As active in identifying recycling programs and resources to both producers and service companies in multiple plays. Recycling liners and reducing the volume of materials dumped in landfills has evolved as a common and shared goal by many producers across the industry.

INland tarp & liner™

ITL™ Resources and Capabilities

• Containment products

ITL™’s U.S. capabilities include East and West Coast fabrication and distribution centers with over 220,000 square feet of manufacturing space. Annual fabrication capacity is well over 300 million square feet. ITL™ has a reputation for its rapid turnaround of custom-fabricated liners in just a few days or the same week. Based on the industry’s tight operation schedules, this rapid turnaround is vital for service companies in responding to producers.

Please call our number list at the end of the article for ITL™ material sample booklets with technical data sheets.

ITL™ offers a diverse inventory of containment liners and products to meet specific applications by geographic play: • CWPE single-scrim, double-scrim and specialty liners • LLDPE liners • HDPE liners • Geotextiles

Inland Tarp & Liner (ITL™) has been in business for over 30 years. Its headquarters is located in Moses Lake, Washington. ITL™ offers West and East Coast fabrication centers (220,000 square feet) with annual fabrication capacity of over 300 million square feet. New ITL™ Distribution Center now Serving the Bakken and the Rockies 2008 Highway 85 SW • Fairfield, ND 58627 For further information and assistance, please contact Todd Hoffer at 509.750.6767 (cell) or ITL™ at 800.346.7744. Or visit: w




Unit Liner Co. introduces Enviro-Guard temporary containment system Are you looking for a temporary containment barrier?

• No heavy equipment needed, but forklift accessible • Uniform wall thickness with thicker corners and edges Unit Liner Company: ‘Protecting You and the Environment’ Unit Liner Company, established in 1967, provides innovative solutions for oilfield challenges. We offer the industry-leading secondary containment systems with the Enviro-Guard metal containment system. The Enviro-Guard metal containment The Enviro-Guard temporary containment system is heavy-duty, modular, and re-usable for various storage-tank applications. Its unique design allows for this system to be the ideal solution for both short-term and long-term containment needs. The features and benefits of the Enviro-Guard temporary containment system make it the superior alternative to steel or concrete secondary containment structures. Features and benefits: • Structurally sound • Lightweight • Durable • Comes with drain plugs • Variety of colors 214


• Screw-on fill caps and lids • Compatible with square bolt-on or round screw-in lights • Easily relocated • Lower labor costs • Pre-molded attachment areas for lights and flags • Impact-resistant • Allows for application flexibility • UV and long-term fade-resistant • Larger barriers accept fencing • Withstands harsh treatment during installation and relocation • Ballastable with water or sand • Long-lasting visual appeal • Composed of recyclable material • Deployable by one or two people • Quick installation and removal

system is available either galvanized or powder-coated. We also provide oilfield pit liners, location liners, tank battery containment liners, spray-in polyurea liners, walkovers, tank rings, load-line containment, foam and snap-up berms, foam interlocking tank pads, cone bottom tank pads, and cattleguards/gates/panels. From lining pits for drilling to metal secondary containment liners for production sites, our innovative liner and containment products are only a phonecall away. Let us bring peace-of-mind to your operation with products that offer low-cost maintenance. To learn more, visit or call (888) 748-5463. w

Enviro-Guard Containment Systems

Load Line Spill Boxes

Polyurea Spray-In Liners

Coned Tank Pads

Oilfield Liners

Heavy-Duty Walk-Overs

Flexible Spill Containment

Complete Secondary Containment Structures


Call For A Quote Today!

(888) 748-5463

Dennis Campbell (405) 481-8074

Jeremiah Jordan (405) 481-8076

TEXAS Building and servicing Hydrostatic TEST TRUCKS

Testing units for over 30 years.

Fully stocked 1 1/4 thru 4 1/2 bar tools

• KMW parts tooling used on all truck locations • Our units are competitively priced and low maintenance

• High Pressure Hoses • Gauges • Valves • Sheaves • Bar Cups • Drag Cups • O-rings • Wireline

Texas Test Trucks Phone: 432.381.8142 Fax: 432.381.3730 Email: BAKKEN OIL REPORT – FALL 2014



Stephens Marine, serving Montana’s boat needs for over 10 years, proud to offer Custom Weld and Wooldridge product lines

Above: The extensive lineup of boat models allows customers the selection of a base platform to work from and modify to suit individual tastes. Top right: Stephens Marine’s clients range from law-enforcement agencies, tour guides, outfitters, and fire departments to search and rescue specialists, fish and wildlife departments, and those who do hydrographic surveys, provide environmental protection, and refined marine biology research. Right: Various hull designs, propulsion options, configurations, and custom features are available to meet any agency’s specific requirements. Custom Weld and Wooldridge are two of the most highly customizable boat manufacturers today. The small scale of these companies allows for optimum personalization of each boat to fit the buyer’s needs. Without a doubt, either of these companies can provide the best value for all of your leisure or business boating needs, as well as tactical or law enforcement requirements. Get exactly what you dream of: from paint color and type, boat length, and steering-column position, to jet or propeller motors, live fish wells, and built-in wash-down kits. All boats are individually handcrafted, with flawless craftsmanship that makes these boats maintain their value for years down the road. Custom Weld Boats has over 20 years of experience crafting some of the world’s highest-quality boats. Custom Weld uses only the finest-quality fixtures and materials available. Stainless-steel fasteners, hinges and quality marine-grade vinyl and carpet are used to cover their boats’ lifetime-warranted, pressure-treated floors. Only the very best vinyl and top-quality materials, with handcrafted stainless steel or aluminum-support bows, are used in the production of these boats. Wooldridge Boats boasts nearly 100 years of experience and knowledge passed down for four generations. Their boats are 216


made with aluminum, all-welded hulls, and their line-up includes several deep-water prop, inboard, and outboard jet designs. The exclusive Wooldridge tunnel is used throughout their outboard jet boat series, along with their unique hull designs to provide superior handling. It is not uncommon for some manufacturers in the welded aluminum boat industry to grind their welds to improve the appearance of them and make them more acceptable to the public. (In fact, some manufacturers actually use bondo over their welds!) The danger of grinding the welds is, of course, that the weld loses strength after being ground. By contrast, the welds on Custom Weld and Wooldridge boats are not ground. Thus, all the original strength of the welds are preserved; and the talent of the craftsman running the welder can be proudly displayed. Stephens Marine, serving Montana’s boat needs for over 10 years, is an authorized dealer for several brands, including both Custom Weld and Wooldridge. With our small-town atmosphere and nopressure sales approach, we can make your marine purchase a pleasant experience. Not sure what kind of boat would best fit your needs? Give us a call today and we can talk you through the process from start to finish. w

Wooldridge Boats Wooldridge Boats

Specializing in Custom Jet Boats

Wooldridge Boats

Wooldridge Boats

Wooldridge Boats

1303 South 96th Street Seattle, WA 98108 (206) 722-8998

1303 South 96th Street Seattle, WA 98108 (206) 722-8998 •


(800) 840-1680 | STEPHENSMARINE.COM


Novel PROH2O® technology for treating produced water Oreco has developed the PROH2O® system, a mobile containerized system based on ceramic membrane technology for filtering all types of produced water. The system currently has a patent pending. It can treat produced water by removing dispersed oil, suspended solids, and bacteria, therefore making the water ideal for reuse.

The system removes close to all oil, total suspended solids (TSS) and bacteria from produced water streams down to low levels (one ppm). It can treat produced water up to 1,000 cubed meters per day of feed. Typically the unit will have a recovery level of 95 to 98 percent. The unit is mobile, fully automated, and easy to hook up and operate.

The reason for reuse of conventional produced water is typically for enhanced oil recovery, where the PROH2O® system eliminates risk of blockage of the oil well and minimises labour costs as it is a fully automated system. Frac water flowback re-use is of particular interest due to significant cost reductions offered by minimising fresh water, trucking and disposal costs.

The PROH2O® as shown here is compliant with ASME and ABSA standards, and is suitable for operation in hazardous areas, CSA Class 1, Zone 2. The unit is equipped with back-flushing capabilities and has incorporated an intelligent cleaning strategy that utilises speciality chemicals when membrane fouling occurs. The PROH2O® can deal with almost any type of produced water, thanks to Oreco’s specially developed automated operation algorithm. The PROH2O® meets the highest international safety standards and directives, including ATEX in Europe, UL in the U.S.A. or CSA/CUL in Canada. Other international standards can be met upon request.

Mobile PROH2O® system from Oreco treating 1,000 cubed meters per day (40x12x8 feet).

The ceramic membranes in the PROH2O® system are operated in cross-flow mode for stable operation, with an intelligent operational program and unique cleaning-in-place (CIP) chemicals. Membranes and cleaning chemicals selected by Oreco gives robust operation with full recovery of membrane flux. Typically a unit will need CIP cleaning every second week of operation; it takes approximately three hours per month to perform the CIP cleaning procedure with minimal operator requirement. Produced water (input at left, output at right) treated to perfection with PROH2O®.

The operational cost of the PROH2O® system (power consumption on 185 KW) consists of CIP cleaning chemicals and labour costs that add up to less than $1.00 per cubic meter of treated water; excluding labour, the PROH2O® operational cost is less than $0.17 per cubic meter. An Oreco operator adding a special developed chemical, “Solution 100”, into the CIP cleaning tank, thus ensuring full recovery of the membrane flux.





Pure and clean produced water The benchmark for wastewater treatment in the oil and gas industry... Oreco’s PROH2O® system delivers innovative design and proven performance in a water separation system engineered for specific customer requirements. The highly effective technology of PROH2O® makes it the new standard for wastewater treatment, with the flexibility that meets the growing demands of the oil and gas industry. Featuring the world’s smartest membrane separation system, PROH2O® represents high pure-water recovery and near-100% removal of impurities from the most difficult sources

such as FRAC water, SAGD water and polymer flooding. With PROH2O®, installation is easy, maintenance is minimal and the robust engineering and technology mean optimal performance and continuous operation in all environments and conditions. The PROH2O® system offers the oil and gas industry: • Near-100% removal of oil, particles and bacteria • Dramatic increase in reuse of water in Hydraulic Fracturing

• No transportation and disposal costs for cleaned water • Increased capacity of existing disposal wells • Low daily operation costs • Easy, safe and flexible operation – even in harsh and hazardous conditions • Thorough operator training program • Exceeds the most stringent HSE measures Discover what PROH2O® can do for your business at

Oil-water solids separation and recovery solutions


PROH2O® Pilot Testing Before releasing the commercial PROH2O® systems, thorough site testing has been performed, with two mobile pilot units, for different types of produced water (like frac water flow back, conventional produced water and SAGD water, specifically in the Canadian oilpatch). More than 20 site tests have been performed and also many laboratory tests in collaboration with oil and gas companies. Also, tests produced at water disposal facilities showed that the PROH2O® technology increased the disposal capacity and as the PROH2O® is fully automatic, it eliminated the work exchanging bag filters. All tests have proven that the technology is very robust, with stable membrane flux and permeate quality that meets customers’ expectations.

Ceramic Membrane Technology for Produced Water Treatment Ceramic membranes have all the structural and chemical benefits of ceramics, namely high strength and superior chemical and thermal stability. This makes it possible to construct a system for membrane treatment of produced water that is both stable and efficient. Ceramic membranes are an obvious choice for the treatment of produced water, as they will be able to reduce both dispersed oil content and total suspended solids (TSS). This will make the treated water suitable for reusing water-flooding applications, suitable for further treatment (e.g., removal of TDS), or for discharge in a disposal well without risk of plugging the reservoir.

Ceramic membranes are chemically inert and robust, and create a physical barrier for the produced water.

Typical produced water composition is shown below in Table 1. TABLE 1 TYPICAL PRODUCED WATER COMPOSITION: Content: Value: Pilot unit test at a disposal facility for produced water.



Total Suspended Solids (TSS)

100 mg/L – 1000 mg/L

Total Dissolved Solids (TDS)

3,000 mg/L - 340,000 mg/L

Oil & Grease

5 mg/L – 1,000mg/L

Produced water can contain a great variety of substances and vary significantly in pH. However, the chemical resistance of the ceramic membranes will allow the membrane system to be used in every situation, as long as the liquid is pump-able in centrifugal pumps. The PROH2O® ceramic membrane system does an exceptional job at removing solids, dispersed hydrocarbons, and bacteria below one ppm. The main advantage of the system in treating produced water will be the reduction of solids to low concentrations and to sizes not larger than one micron. Pilot test with PROH2O® at different Canadian oil sites.

Industry Outlook for PROH2O® Water Treatment The oil and gas industry has lacked a simple solution for the treatment of produced water. The factors of an increased focus




Chart 1: Typical operational data from a pilot test, showing stable flux when back flush is working. on hydraulic fracturing, tightened water regulation, a strong

technology like the PROH2O® a unique opportunity to fulfill the

focus on water reuse and the importance of minimizing water

industry’s needs. w

costs within the oil and gas industry give robust water treatment




ESI Staffing – Feeding the hottest job market in the country! June Sheaks never imagined she would

unemployment rate. That equates to

2010, when it was a secretarial business.

end up owning and managing the only

about 360 people unemployed who are

When clients inquired more about

locally owned staffing agency in Williston, N.D. – the nation’s hottest market, which boast a minuscule 0.6 percent

actually looking for work. Sheaks purchased the business back in

finding full-time employees rather than typing and copying services, she quickly recognized the opportunity, repositioned her business to be the premier agency in the area and has since experienced 300 percent year-over-year growth over the last three years. (This without a sales force.) Sheaks had a yellow-page ad, great customer service, a personal touch and the referrals rolled in. The timing was perfect. When Sheaks bought the business three years ago, folks were rolling into Williston, knocking on company doors and getting hired on the spot because of the severe workforce shortage. As the word spread about the potential in Williston, thousands came to find jobs or applied online. At the same time, companies became more selective, wanting to find better skilled employees, pass background checks and meet company hiring standards. So what transpired very quickly were résumés flying into HR departments by the hundreds, with staff having to prescreen them, conduct background checks, make sure candidates had the proper skill-sets, and that they actually lived in Williston or were committed to doing so. This situation eventually led to an immense amount of paperwork and effort required by understaffed HR departments… which still did not significantly increase the quality and desirability of the candidates. ESI Staffing stepped in with a timely




Williston’s only locally owned staffing agency. Client Services


Temp to Hire and Direct Hire Employees

•Accounting • Administrative • CDL Drivers • Clerical • Construction • Education • Executive • Front Desk Staff • Housekeeping • Human Resources • Kitchen Staff • Labor • Landscaping • Manufacturing • Oil Tech • Professional • Retail • Sales • Skilled Trades • Technical • Warehouse

• You find or we recruit for you

Payroll Services Employee Screening • I-9 Verification • Drug Testing • Background Checks

Benefits of Using Staffing Services • Local/experienced with the unique Bakken job market • Recruit locally, regionally, and nationally to meet specific client needs • Very competitive... really... Try Us!

Bringing great people together with great companies. 417 First Avenue East, Williston, ND 58801

Office: 701-774-8484 | Fax: 701-572-9181

ESI staffing, inc.

solution. Companies provide a job

ESI Staffing offers temps to hire, direct

them). If the employee doesn’t work

description, pay range and benefit plan

placement and payroll services. The

out anytime within the 90-day period,

and ESI recruits on their national, regional

company has the option of hiring a

employers can replace them. The client

and local job boards. Once they filter

candidate directly or doing a “temp to

also has the option to buy-out their

through the candidates, narrow the

hire” (here, the employee will be on the

options down to a select few, ESI provides

ESI payroll for a trial period up to 90

those details to the clients and arranges

days, thus giving the company time to


determine if the person is a good fit for

contract anytime, in order to bring the candidate on as a full-time employee. This “try before you buy” concept is very popular in the Bakken, because of the high turnover rate. Research shows that turnover costs are anywhere between 50 percent to 150 percent of an employee’s annual wage, considering recruiting,

Diamond B Diamond B Oilfield Trucking, Inc.

For a Safe, Reliable, and Timely Source of Transportation

interviewing, boarding, training costs and lost productivity, sales and profit factors. If an employee stays with the company 60 days, they are much more inclined to stay. Another popular service provided by ESI Staffing is to assist clients on boarding employees quickly. “We have companies that have potential employees and want them hired immediately, but their corporate hiring process might take two to three weeks,” Sheaks explains. “They can work through us on a temporary basis until the hiring paperwork is processed.

Crude Oil Transportation,High Pressure Units, Water Hauling & Transportation

Other companies have their employee applicants work through us for the same reason, to make sure they are a good fit.” “Our services are also popular with companies that come to the area for a short-term project. They have us do their payroll to make sure all withholdings and paperwork is correct,” she says. ESI also recruits and fills managerial positions on a direct placement basis.

Plentywood, MT • Westhope, ND • Nunn, Colorado

Phone: 1-(800) 876-1376 or (701) 245-6663 Stephen C. Bowman, President Cell: (406) 765-7954

Daryl Sorenson, Vice-President Cell: (406) 765-8563

Chuck Ensrud, Operations Manager Cell: (406) 480-3183

Ole Hagen, District Manager Cell: (701) 263-5571

Kara Eggen, Office Manager Cell: (406) 480-0458

Alan R. Caldwell, CDS Safety Coordinator Cell: (406) 765-8600

“Even with all of our job boards, we find many of our best candidates in the Williston area through contacts, referrals and networking. There are definitely benefits of having ‘boots on the street’ in Williston.” There are great job opportunities but Williston also has its unique challenges. “Everybody wants to come to Williston.



ESI staffing, inc.

At the same time, companies became more selective, wanting to find better skilled employees, pass background checks and meet company hiring standards. Most of them get off the train thinking

the jobs available, and then target those

to $1,200 per bedroom,” she replies. “You

there are buses lined up to take them to

where they believe they’d be a fit.

will need temporary accommodations

$80,000 jobs in the oilfield. Many folks have no idea of the challenges there are here,” Sheaks explains.

“Don’t assume you will get here and start working immediately. And remember, the

until you get hired or have arranged permanent housing. Hotels are a

interviewing/on-boarding process can

minimum of $100 per night. Bring cash

“We make a point of advising people

take two to three weeks even if you get

resources to last a minimum of 60 days.

coming here to make sure they

hired,” she goes on to say.

Getting a job and a first check could easily

understand the five key issues. We tell

Additional advice for would-be applicants

them to research Williston. Are you

for jobs in the Bakken region? “Research

“Lastly, bring persistence and a positive

sure you want to work/live here? There

your short- and long-term housing needs.

attitude. This is a great place to live

are minus 40 degree temperatures in

Housing is extremely expensive. In fact,

and work, if you can just get over the

winter; it’s a very busy way of life; there’s

the highest rental rates in the country

initial challenges. Usually takes one

a high cost of living; limited retail stores;

can be found here. Some companies do

approximately six months (if part of

dangerous, crowded roads. We advise

provide housing or a housing allowance,

winter is included) to get settled and used

them to do their job search before they

but definitely not across the board.

to the place.... It’s the hottest job market

get here; define their skill set, research

Housing averages approximately $1,000

in the country!” Sheaks concludes. w

take that long.”




Lessons learned from the Bakken enable company growth Encore Energy focuses on shallow oil in Kentucky with long-term non-conventional gas and liquids The Bakken has dramatically improved and enhanced many of today’s non-conventional drilling and completion technologies. These improved technologies are now being applied in many other areas of the country, including Western Kentucky. Encore Energy, Inc. (Encore), a rapidly growing developer and operator of oil and natural properties in the Eastern U.S, has

• Extensive off-set oil production and trend information is available. • Relatively low-cost drilling, as compared to other areas. • Unlimited access to shallow oil prospects. • Initial production rates are very impressive and many wells in

recently refocused it efforts toward the aggressive development

this area have produced for 20 to 30+ years. Enhanced and/or

of “shallow oil” exploration and production in western Kentucky.

secondary recovery of oil reserves for the long term is also very

With the lessons Encore learned from the Bakken and Utica shales as they relate to multi-stage hydraulic fracturing and

encouraging. • There exist tremendous long-term “non-conventional” natural

lateral orientation, Encore is now planning to develop similar

gas potential in this area as a result of advancements made in

non-conventional and conventional resources in Kentucky.

horizontal drilling technology.

The company believes that Kentucky provides tremendous

Encore’s exploration and production programs are designed to

opportunities for the low-cost development of shallow oil and

provide the company and its partners long-term income, reserve

natural gas. According to the Kentucky Geological Survey, the

value (potential exit strategy), diversification, transparency,

annual production of crude oil has increased by ~37 percent

asset protection and tax savings while mitigating the inherent

(2.35 to 3.2 million BO) in just one year. The majority of this

risks associated with oil and gas development. Encore operates

production comes from western Kentucky.

its properties in Kentucky, through a wholly-owned subsidiary,

The company has just finalized drilling well No. 6 and has plans

Encore Operating Kentucky LLC.

to drill 20 to 30 wells, each targeting multiple oil formations in

For the short term, Encore intends to remain focused on shallow

western Kentucky. The company has commenced production

oil production, with non-conventional gas production from such

operations for wells No. 1 and No. 2, while well numbers three

formations as the New Albany Shale potentially providing a

through six are currently in-completion.

potential financial exit strategy for the long term.

Encore has re-focused it efforts toward the development of “shallow oil” exploration and production in Kentucky for the following reasons: • Oil prices are at record levels and the outlook has never been brighter. • The available oil markets in this area of Kentucky consist of four oil purchasers, two refineries and one pipeline. • Multiple-well drilling programs targeting multiple oil

About Encore Encore’s management has previously served as an operator in Oklahoma and Texas, resulting in multiple gas and oil discoveries including the Wallrath No.1H horizontal Woodbine well in Leon County, Texas, which produced a reported ~58,000 BO in its first year and was later acquired by Halcon Resources, as reported by the Texas Railroad Commission. Encore has also facilitated several lease acquisition and

formations provide a supreme level of diversification to Encore

divestment projects in the Utica shale of eastern Ohio, as well as

and its partners.

producing oil properties of central Ohio. Encore has developed



Encore Targets “Shallow Oil” Opportunities in Kentucky While Making Plans for Horizontal Non-conventional Gas and Liquids

Encore Energy, Inc. is a rapidly growing developer and operator of oil and natural properties in the Eastern US.

• Encore is an experienced operator with first-class operations, geoscience and industry relationships.

Encore has recently re-focused it efforts toward the aggressive development of “shallow oil” exploration and production in Western Kentucky. The Company believes that Western Kentucky provides tremendous opportunities for the low-cost development of shallow oil and natural gas.

• Multiple-well drilling programs targeting multiple oil formations provide a supreme level of diversification to Encore and its partners.

The Company is currently drilling and developing a thirty (30) – well project targeting multiple oil formations in Western Kentucky. Encore has re-focused it efforts toward the development of “shallow oil” exploration and production in Kentucky for the following reasons:

• Extensive off-set oil production and trend information is available. • Relatively low-cost horizontal and vertical drilling as compared to other areas. • Unlimited access to shallow oil and gas prospects. Highest NRI delivery. • Initial production rates are very impressive and many wells in this area have produced for 20 - 30+ years. Enhanced and/or secondary recovery of oil reserves for the long-term is also very encouraging.

• There exist tremendous long-term “nonconventional” natural gas potential in this area as a result of advancements made in horizontal drilling technology. Encore is currently securing a large acreage position and making plans for horizontal projects. Encore’s exploration and production programs are designed to provide Encore and its partners long-term income, reserve value (potential exit strategy), diversification, transparency, asset protection and tax savings while mitigating the inherent risks associated with oil and gas development. Encore is seeking qualified industry partners to participate in an array of projects. Encore operates its properties in Kentucky, through a wholly-owned subsidiary, Encore Operating Kentucky LLC.


strategic business relationships with prominent operators of the

recently, Stengell has participated as an expert speaker, keynote

Utica shale, and throughout the domestic U.S.

speaker and/or chairman for several Utica Shale Congress events

In October 2011, The American Oil and Gas Reporter magazine

from 2012 - 2014 in Houston, Texas and Columbus, Ohio.

released an article regarding Encore Energy, Inc. and its plans for

Encore is a proud member of the IPAA Independent Producers

the future.

Association of America, Kentucky Oil and Gas Association,

Steve Stengell is the majority shareholder, founder, president and CEO of Encore Energy, Inc. Stengell is the former CEO of a publicly traded exploration and production company

Society of Petroleum Engineers and American Association of Petroleum Landmen. Encore has recently sponsored Operation Pride of Bowling Green.

with 50+ employees and operating companies in Texas and

For more information, please contact Joseph Hooper at

Oklahoma, Allied Operating Texas and Oklahoma. Stengell holds

(855) 238-1242, ext. 224 or visit Encore at

a bachelor’s degree in corporate finance from the University

Note: The information herein contains forward-looking statements

of Kentucky and an MBA from Western Kentucky University.

and results may vary. Oil and gas exploration involves a high degree

In 2004, Stengell attended the IPAA Harvard Executive

of risk and uncertainty. No assurances can be made as it pertains to

Management program. In 2005, Stengell completed the Texas

production or reserve estimates. This is not an offer to sell or buy a

A & M Harold Vance Department of Petroleum Engineering –

security. An offer will only be made to qualified accredited investors

“Reserves and Evaluation” graduate certificate program. More

as defined by the SEC. w




Central Dakota Water Works LLC provides hot and cold water in the Bakken the holding tank through a heat exchanger and is stored in four holding tanks before being delivered to the truck load-outs. Current customers have found that under most conditions, they are able to eliminate a heat source on the fracking job, thus saving thousands of dollars.

Central Dakota Water Works LLC (CDWW) was established in 2011 after teaming up with Otter Tail Power Company to provide a unique service to the oil and gas industry – providing hot and cold water. Our water comes from the Missouri River into Ottertail’s settling pond and is then transported to the Coyote Station Power Plant south of Beulah, N.D. Cold water is pumped directly to our truck load-outs from a one-million-gallon holding tank. Our hot water is heated utilizing the waste steam after the generation process at the Coyote Plant. The heated water is circulated from

Our water depot provides lighted, concrete surfaces throughout our entrance and exit roads, staging and load-out areas for safety and convenience. Each loading station is fully automated, allowing the customer to choose hot or cold water. The water depot is located two miles south and one mile west of Beulah, N.D., adjacent to the Coyote Power Station on Highway 49. For further information, please visit or contact: Leigh Tessier - Cell: (701) 290-6689 or email: Duane Tessier - Cell: (701) 590-8415, home phone: (701) 974-3776, or email: w


WW Central Dakota Water Works LLC ✔ Eight loading stations dispensing hot and cold water to reduce costly waiting time. ✔ Water depot offers quick loading at up to 21 bbl./min. at each load out. ✔ Water is delivered up to 125 degrees F. Under most conditions a heat source on the customers location can be eliminated saving additional heating costs. ✔ Safe working environment. ✔ Some of the lowest rates in the Bakken. ✔ Excellent water quality.

Leigh Tessier - 701-290-6689

Duane Tessier - 701-590-8415 BAKKEN OIL REPORT – FALL 2014


Index to advertisers 4 Bears Casino & Lodge...............................................................................49

DistributionNOW........................................................................................ 158

A-1 Evans Septic Tank Service...................................................................64

Double Diamond Industrial Structures.............................................. 155

ACL Manufacturing, Inc...............................................................................45

Dragon Products / The Modern Group...................................118 & 119

Aire Industrial..................................................................................................91

Drake Water Technologies Inc...................................................................51

AmeriPride..................................................................................................... 177

Edward Jones..................................................................................................47

Arrow Truck Sales........................................................................................ 112

Encore Energy.............................................................................................. 227

Aspen Air...........................................................................................................32

Enerplus Corporation...................................................................................61

B&G Oilfield Services...................................................................................... 7

ESI Staffing, Inc............................................................................................. 223

BWFS industries LLC.......................................................................106 & 107

FB Industries Inc.......................................................................................... 123

BW Insurance Agency..................................................................................63

Ferguson Waterworks..................................................................................93

Bakken Fence...................................................................................................82

FR Depot......................................................................................................... 152

Baranko Bros., Inc........................................................................................ 151

Franz Construction Inc.................................................................................37

Bartlett & West............................................................................................. 177 Basin Electric Power Cooperative.......................................................... IBC Bismarck-Mandan Convention & Visitors Bureau........................... 234 Black Gold Industries Ltd......................................................................... 104 Blackmer............................................................................................................21 Blue Cross Blue Shield of North Dakota................................................13 Borsheim Crane Service, Inc.....................................................................IFC Brady Trucking, Inc........................................................................................29 Brawler Industries, LLC.................................................................................39 Breitling Energy Companies............................................................34 & 35 Brother’s Specialized Coating Systems Ltd..........................................37 Canary USA LLC..............................................................................................99 CanElsen Drilling Inc.................................................................................. 203 Capital Lodge............................................................................................... 165 CatTek Cathodic Services Ltd................................................................. 195 CCI Thermal Technologies Inc..................................................................... 3 Central Dakota Water Works LLC........................................................... 229

General Equipment & Supplies, Inc..................................................... 137 Glacier Oilfield Services............................................................................ 147 Graham Construction................................................................................ 171 Grand Hotel................................................................................................... 179 H. & L. Rentals and Well Service................................................................72 Hampton Inn & Suites............................................................................... 231 Hawkins Inc................................................................................................... 163 Haws Integrated & Axion MSR............................................................... 183 Hotsy Equipment........................................................................................ 191 Inland Tarp & Liner, LLC................................................................................11 IntegrityVikingFunds................................................................................. 117 Jasper Engineering & Equipment Co................................................... 103 JMS Crane & Rigging................................................................................. 205 Keltek Safety Apparel................................................................................ 225 Kemtron Separation Technologies....................................................... 207 KLJ........................................................................................................................55 L.J.R. Pumps & Parts.................................................................................... 177 Larson Electronics Magnalight.............................................................. 173

Claim Post Resources Inc......................................................................... 127

LaTech Equipment & Supplies................................................................ 140

Clean Harbors..................................................................................................53

Legacy Oil + Gas Inc......................................................................................22

CS Unitec Inc................................................................................................. 181

Lite-Check...................................................................................................... 199

Custom Stud Inc.............................................................................................58

Lithia Ford of Grand Forks....................................................................... 105

D&G Polyethylene Products Ltd............................................................ 197

Lynden............................................................................................................ 161

Dacotah Bank............................................................................................... 182

M Space Modular Buildings.......................................................................20

Dakota Gasification Company..................................................................95

Mac Heaters.....................................................................................................81

Demilec, Inc........................................................................................................ 5

MBI Energy Services............................................................................ 85, 149

Devils Lake Convention & Visitors Bureau............................................23

MDU Resources Group, Inc........................................................................... 4

Diamond B Oilfield Trucking, Inc........................................................... 224

Membrane Technology & Research, Inc................................................25

Dielco Crane Service, Inc.......................................................................... 201

Mi -T-M Corporation.................................................................................. OBC




















120 Acres


Flexible Lot Size


• Well, Septic, Gas, Electric, Phone and Internet to Site • Access to Highway 2, and Highway 8 • Site adjacent to new Stanley Truck Bypass • Close proximity to Stanley Municipal Airport


1/7/2014 9:20:19 AM



130125 01/07/2014

Index to advertisers continued Mid-Plains Distributing................................................................................67

Oilfield Improvements, Inc.........................................................................43

Millennium Directional Service Ltd..................................................... 141

Oneok, Inc.......................................................................................................75

Miller Architects & Builders..................................................................... 133

Oppidan.......................................................................................................... 231

Miller Insulation Co., Inc..............................................................................31

Oreco............................................................................................................... 219

Minnesota Limited, LLC...............................................................................84

PAC LP.............................................................................................................. 143

Montana Argo.................................................................................................65 Montana Lines, Inc........................................................................................87 Motion Industries...........................................................................................59 Mountain Supply & Service, LLC..............................................................69 Mountainview Energy Ltd....................................................................... 111 Mullen Crane & Transport............................................................................. 9 MW Industries, Inc.........................................................................................27 Neset Consulting Service......................................................................... 168

PEC Safety.........................................................................................................40 Phillips & Jordan Inc......................................................................................92 Pinnacle Environmental Technologies Inc...........................................18 Pinnacle / Farmers Union Oil.................................................................. 135 Plidco..................................................................................................................64 Presto Geosystems..................................................................................... 209 Pro Tank Products....................................................................................... 113 QMC Hydraulic Cranes................................................................................... 6 Quality Mat Company..................................................................................83

Noble Well Services Inc............................................................................. 185

R&R Contracting.......................................................................................... 136

Northern Technologies, Inc........................................................................14

RJ Corman Railroad Group.........................................................................15


Rapid City Economic Development..................................................... 134

Nuverra Environmental Solutions...........................................................33

Resirkulere USA...............................................................................128 & 129

Oasis Petroleum, Inc.................................................................................. 175

Reynolds French & Company....................................................................77


Communications Inc.

Call: 1.866.831.4744

DEL Communications Inc. & You.

The key to success.

We offer outstanding personal service and quality in the areas of: 232



Richland Pump & Supply......................................................................... 189

Titan Machinery..............................................................................................73

Riley Bros. Construction..............................................................................89

Torqued Heat...................................................................................................57

Roller Rod Guides....................................................................................... 231

Towmaster..................................................................................................... 221

Rossco Crane and Rigging Inc.........................................................96 & 97

TPS Sales............................................................................................................14

Shores Lift Solutions.....................................................................................71

Ulterra.............................................................................................................. 170

Sioux Steel Company................................................................................ 159 Southern Glove Inc..................................................................................... 193 Spartan Mat LLC.............................................................................................17 Stephens Welding & Marine................................................................... 217 Sterling Hose, Reel & Supply, LLC............................................................41 Summit ESP................................................................................................... 146 T&E Pumps Ltd................................................................................................19 T&R Transport............................................................................................... 153 Taney Engineering...................................................................................... 113

Unit Liner Company................................................................................... 215 University of Mary....................................................................................... 115 Value Place Williston.................................................................................. 147 Vehicle Mounted Air Compressors....................................................... 228 VEIT USA......................................................................................................... 145 Volant....................................................................................................... 79, 211 Wanzek Construction, Inc........................................................................ 187 Weir Minerals North America................................................................. 101

TCI Oilfield Factoring....................................................................................91

Westcon Incorporated.............................................................................. 169

Texas Test Trucks.......................................................................................... 215

Wood Group PSN........................................................................................ 109

Thawzall.......................................................................................................... 125

World Class Whitetails of Ohio..................................................................94

The Turbulator Company LLC....................................................................78

Xylem, Inc....................................................................................................... 139

Tifco Industries............................................................................................. 125

Z & S Dust Control....................................................................................... 157

1400 North Broadway Minot, North Dakota

Eliminate most rod and tubing wear and reduce drag with…

Ph: 701-838-1400

Enjoy comfort, convenience and an ideal location in Minot, ND – Located near the Minot Airport and Minot State University. Friendly service, clean rooms, comfortable surroundings, every time.

✔ The Perfect Mix Lobby ✔ Free Shuttle ✔ Free High-Speed Internet Access ✔ Free On the House™ Hot Breakfast ✔ 27/7 Snack Area ✔ Heated Indoor Pool & Hot Tub ✔ Fitness Center ✔ Guest Laundry ✔ Hilton HHonors®

For Reservations Call 1-800-HAMPTON |


Communications Inc.

DEL Communications Inc. and you,


Features and Benefits: • Extends the life of rods and tubing by reducing wear • Reduces energy requirements by reducing drag • Reduces lost production by extending time between work-overs • Reduces drag in directional wells • Reduces the need for sinker bars by adding weight and reducing drag Crooked Hole • Wheels are field replaceable Directionally Drilled • Centralizes rod string Stacking Rods • Determine placement by Computerized Analysis


Suite 300, 6 Roslyn Road, Winnipeg, Manitoba, Canada R3L 0G5

w w

Horizontal Production

Call us Toll Free at 855-ROD-GUID (855-763-4843) OilTizer 1-4 pg ad revise.indd 1

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Hundreds of dedicated people in Bismarck-Mandan’s hotels and restaurants are ready to make your meeting a success. Behind our over 3,100 sleeping rooms, our 100,000 square feet of exhibition space, and our 8,600-seat indoor, multi-use arena, you’ll find a professional who can’t say, “no.” Tap into our talent. Call Sheri Grossman at 1.800.767.3555 or visit


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“It’s just what we do. Delivering peace of mind and reliable power to our consumers is what drives us.” Bryan Keller

When a deadly tornado ripped through South Dakota in 2010, its path of destruction included a three-mile stretch of a Basin Electric transmission line. The structures were no match for the 166-200 mph wind, but accepting defeat was not an option. “I have to take my hat off to the crews and supervisors for safely restoring the line in record time,” says Bryan Keller, Basin Electric TSM vice president. Cooperative employees have continually stepped up whenever help is needed – on the job or in the community. Through charitable opportunities like United Way, Basin Electric and its employees go above and beyond to give more and do more than expected. Fulfilling the needs of our members and communities is our top priority.

24 hours a day, 7 days a week, we’re working for you.