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SPRING

2017

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Published by: DEL Communications Inc. Suite 300, 6 Roslyn Road Winnipeg, Manitoba Canada R3L 0G5

Spring 2017

CONTENTS

President & CEO David Langstaff

Message from the editor, Shayna Wiwierski 6

Offset well protection during fracking: WST tools change the economics 30

Message from Senator Steve Daines 8

Develop effective pipeline pre-commissioning testing in cold weather 32

Message from Senator John Hoeven 10 Message from the Premier of Saskatchewan, Brad Wall 12 Pipelines trump protests 16

Industry training through proven models 34

Dakota Access Lifeline 20

Making the right connection in fluid transfer 38

Anti-fracking forces turn to monkey-wrenching after 2016 defeats 21

Opportunity awaits in Regina 40

Energized: Williston Area Chamber of Commerce 22 The cash stash behind anti-pipeline activism 26 Meridian Energy continues to set new standards for its state-of-the-art Davis Refinery 28

Introducing the In-Pipe Turbine Generator (IPTG) for remote locations 42 The new face of safety standards for 2017 44 Putting you first: Badlands Integrity Group provides safety courses to the oilfield 46

Publisher Jason Stefanik Managing Editor Shayna Wiwierski shayna@delcommunications.com Sales Manager Dayna Oulion Toll Free: 1.866.424.6398 Advertising Account Executives Gladwyn Nickel Mic Paterson Jay Richardson Telmo Reis Anthony Romeo Contributing Writers Bette Grande Vivian Krause Janna Lutz James O’Dwyer Isaac Orr Jessica Sena

Production services provided by: S.G. Bennett Marketing Services www.sgbennett.com

INDEX TO ADVERTISERS

Art Director Kathy Cable

Aggreko – Americas........................................ 33

Klj.............................................................................3

Badlands Integrity Group.................... 24 & 25

LaTech Equipment & Supplies..................... 38

Design / Layout Dana Jensen

Baranko Bros....................................................... 19 Benz Oil Company Inc.................................... 10 Bismarck State College................................... 35 Blue Cross Blue Shield of N.d.........................7 Cat-tek Cathodic Services.........................IBC Cci Thermal Technologies Inc..................... 14

Lighting Master Corporation....................... 43 Linwood Capital, LLC....................................... 36 Maple Leaf Marketing, Inc............................. 17 Miller Insulation................................................ 46 Minnesota Limited........................................... 12

Dakota Gasification..................................... OBC

Msa – The Safety Company............................9

Dixon....................................................................IFC

Obele Oil.............................................................. 41

Equipment Source Rental............................. 11

Pec Safety........................................................... 45

Fraccure................................................................ 27 Government of Saskatchewan Ministry of The Economy............................... 13 Graham................................................................. 15

Polyguard Products......................................... 38 Reynolds French & Company...................... 37

Cover Image Devin Tanner © Copyright 2017 DEL Communications Inc. All rights reserved.The contents of this pub­lica­tion may not be reproduced by any means, in whole or in part, without prior written consent of the publisher­. While every effort has been made to ensure the accuracy of the information contained in and the reliability of the source, the publisher­in no way guarantees nor warrants the information and is not responsible for errors, omissions or statements made by advertisers. Opinions and recommendations made by contributors or advertisers are not necessarily those of the publisher, its directors, officers­or employees.

Riverbend Oil & Gas, LLC............................... 23

Horizon Resources........................................... 18

Weir Minerals.........................................................5

Jms Crane and Rigging.................................. 42

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MESSAGE

Message from the editor Shayna Wiwierski It’s been a wild ride since President Trump took office. Just like he said he would in his campaign promises, the president approved TransCanada’s Keystone XL pipeline this past March. Eight years after it was proposed, Trump issued a presidential permit for the $8 billion Keystone XL pipeline, while being surrounded by TransCanada Corp. president and CEO Russ Girling in the Oval Office. The announcement was part of a refreshed American energy policy that will bring jobs back to Americans and keep oil within the nation’s boundaries instead of purchasing it from offshore countries in the Middle East. President Trump also signed an executive order to advance the Dakota Access Pipeline in January 2017, creating more controversy for the pipeline which would start in North Dakota and end in Illinois. We take a look at these two controversial pipelines in this issue of the Bakken Oil Report magazine, while also exploring the history of why pipelines have gone from hidden underground vessels that transport oil to front-page news. We also take a look at what the Trump administration means for jobs in North Dakota, Montana, and the rest of the Bakken region, as well as all the features our readers know and love from the suppliers in the area. I hope you enjoy this spring 2017 issue of the Bakken Oil Report, and as always, if you have any story ideas or comments, please send them my way.

Shayna Wiwierski @DELCommInc

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BAKKEN OIL REPORT – SPRING 2017


MESSAGE

Message from Senator Steve Daines Earlier this year, we witnessed the inauguration of our new President Donald Trump. This peaceful transition of power is a testament to the enduring promise of America’s democracy – that a federal government created by the people exists to serve the people. Our federal government was designed to be limited, with limited powers, and the rest was reserved for the states. January 20, 2017 was more than a transfer of power from one administration to the next. This started a transfer of power from the federal government, back to the states and back to the people of Montana. After traveling thousands of miles across Montana the past two years, I’ve seen a state rich in resources – coal, cattle, wheat, oil, natural gas, timber, wind, hydro, pulse crops, public lands, national parks – but what truly makes Montana “the last best place” is the people. However, Montanans have been concerned by what’s happening in Washington. I heard from Montanans the need to return educational decisions back to Montana and families, rein in regulations that are killing jobs, to secure our nation, the need to toughen and enforce our trade laws and ensure a level playing field in foreign markets for Montana agriculture, the need to expand made-in-Montana energy, the need to protect access on our public lands and the need for Washington to balance the budget and work for the people. Following the election, I gathered a list of DC regulations and policies that Montanans identified to me that have stifled job creation, economic growth, and 8

BAKKEN OIL REPORT – SPRING 2017

innovation. I compiled them into a list of actions that I shared with the president for him to make a priority. The first items on my list stop the war on coal and approve the Keystone Pipeline. Last fall, I was on a tour in eastern Montana and stopped at Ekalaka Public Schools. As I walked in the doors of the school, I couldn’t help but notice some of the state-of-the-art infrastructure. The new gym was recently built and is the pride of 4C in southeast Montana. I asked the superintendent where they got the funds to build it. He told me that over 90 percent of the tax revenues for schools came from pipelines. Speaking of pipelines, I’m pleased to report that under the Trump administration, we are moving forward to build the Keystone XL pipeline. The Keystone XL pipeline will create about 800 jobs in Montana, and generate $80 million a year in Montana property taxes, more than $16 million of which would be distributed to Montana’s schools and the university system. And, it will transport 100,000 barrels a day of Bakken oil. It will reduce electrical prices 10 percent for thousands of eastern Montana customers.

The Keystone XL pipeline will create about 800 jobs in Montana, and generate $80 million a year in Montana property taxes. of the Keystone Pipeline, both in terms of jobs and energy security, and the fact that 21st century pipelines are the most environmentally sound way to transport oil. Even though Montana said “yes” to Keystone, the Obama administration said “no”.

Last year, President Obama’s EPA Administrator Gina McCarthy appeared before the Appropriations Committee to discuss the impact of the Clean Power Plan regulation that threatens to destroy 7,000 Montana jobs. I challenged her to quantify the environmental benefits for Montana and she could not give me a straight answer.

Fortunately, we have a new EPA administrator from another Keystone pipeline state who does understand you can be pro-energy and pro-environment. Scott Pruitt and I had a great discussion last week about how we can work together for Montana. Scott understands that we need a true “all-of-the-above energy strategy,” renewable energy and fossil fuels, resulting in more made-inMontana energy, not more made in the Middle East energy. The very first item I listed on my to-do list for President Trump was to roll back the EPA’s power plan. I’ve been assured will see movement imminently.

Of course, that was coming from the same person who couldn’t see the value

It’s a simple concept: let Montana energy power America and power the world. w


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MESSAGE

Unlocking our energy potential through regulatory relief, states-first approach By Senator John Hoeven

With a new congress and a new administration in the White House, we have a real opportunity to unlock the energy potential of North Dakota and our nation. That means goodpaying jobs for workers, lower prices for consumers and energy security for North America. We can get there by focusing on the fundamentals – creating a strong business environment through regulatory relief and certainty. By removing federal roadblocks to development and allowing states to take the lead in regulating energy development, we can open the door to greater private investment and economic growth. In fact, we have already begun rolling back burdensome policies from the Obama administration. The first to go was the Stream Buffer Rule, which we repealed earlier this year. Due to its one-size-fits-all approach, this rule imposed significant costs without any additional environmental benefits in states like North Dakota. Policies like this undermine our domestic energy production, increase our reliance on foreign energy, raise prices for consumers, and threaten jobs around the nation. That is why we continue working to repeal similar federal overreaches, such as the EPA’s Waters of the U.S. (WOTUS) rule and the Bureau of Land Management’s Methane Rule. Further, we are making sure the new administration is on the same page

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with us. I’ve met with many of the new officials throughout the confirmation process, including Environmental Protection Agency (EPA) Administrator Scott Pruitt, Interior Secretary Ryan Zinke and others, to ensure they understand the impacts of these rules and will work with us to rescind them, either through the Congressional Review Act or the executive rulemaking process. At the same time, we are creating a better business climate to help advance much-needed energy infrastructure and innovative new projects. Through legislation like my North American Energy Infrastructure Act, we can prevent unnecessary and costly delays in constructing modern infrastructure, such as new pipelines and transmission lines, helping us to safely move energy from producers to consumers and businesses. In addition, my CO2 Regulatory Certainty Act will better allow developers to claim tax credits for CO2 sequestration projects, encouraging them to use this method in enhanced oil and gas recovery. This legislation also dovetails with my work in the Senate Energy and Appropriations Committees to support the innovative work of the Energy and Environmental Research Center at the University of North Dakota, which is helping develop two carbon capture and sequestration projects in our state, the Allam Cycle and Project Tundra. Ultimately, it is new innovations like these, coupled with state-led regulations, that will ensure good environmental stewardship while empowering a robust energy industry. We have shown in North Dakota time and again that we do not need federal mandates to ensure environmental quality, with regulatory agencies consistently giving our state high marks on factors like our air quality and land reclamation practices. The people who live and work locally are the best judges of how to protect their land, air, and water. They know and understand their land and have the greatest incentive to be good stewards of it. That’s why we are confident in a states-first approach. It will be an engine for our economy, bringing new investment, jobs, reduced cost of living, and better security for our nation. w


MESSAGE

Message from Brad Wall, the Premier of Saskatchewan Saskatchewan’s economic well-being is closely linked to the success of our resource industries, including the energy sector.

Today, Saskatchewan ranks number two

The numbers tell the story.

barrels of oil and 520 million cubic feet

Oil and gas companies are responsible for an estimated 15 percent of Saskatchewan gross domestic product (GDP). In 2016, investment in new exploration and development was estimated at $3.6 billion, and upstream oil and gas activity supported approximately 31,000 jobs directly and indirectly.

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BAKKEN OIL REPORT – SPRING 2017

and number three in oil and natural gas production in Canada, accounting for an estimated daily production of 459,600 of natural gas. The combined value of

Saskatchewan’s resource assets are

our provincial oil and gas production in

unchanged—and considerable. We have

2016 was $6.8 billion.

56 billion barrels of initial oil in place,

As the global petroleum industry

and 1.2 billion barrels of remaining

continues to recover from a significant market downturn, Saskatchewan’s remains a solid, low-cost, opportunity-

recoverable reserves. Nearly half of those total remaining recoverable reserves are heavy oil.

rich jurisdiction in which to operate.

There’s no question Saskatchewan

Regardless of market trends,

is among the world’s most reliable


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suppliers of energy. A secure North American energy market depends in no small part on continued progress in the development and marketing of our energy resources, particularly when 65 to 70 per cent of Saskatchewan’s oil production is exported to the United States. That is why we remain a strong supporter of pipeline development to increase market access for Western Canadian oil. We know that pipelines remain the safest and most environmentally sound method for transporting oil to refineries and will allow the industry to diversify its customer base. We welcome the federal government’s approval of Enbridge’s Line 3 Replacement project and the recent decision in the United States to proceed with the Keystone XL project. As we continue our advocacy for pipelines, we also remain opposed to the federal government’s carbon tax, which would do disproportionate harm to the energy sector and resourceproducing provinces like Saskatchewan

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and Alberta. We believe in mitigating carbon emissions through the use of technology, like the leading-edge carbon capture projects underway in southeast Saskatchewan. Our government remains committed to maintaining a competitive operating environment for the industry. In the Fraser Institute’s 2016 global survey on barriers to investment in oil and gas exploration and production facilities, international petroleum industry executives and managers ranked Saskatchewan as the fourth most attractive jurisdiction for investment in the world, rising from seventh place. The United States remained the most attractive region overall in the world for investment, followed by Australia, which moved ahead of Canada this year. Canada’s fall to the third place is attributed to investors continuing to view Alberta as less attractive for investment—that province dropping 18 spots in the 2016 world rankings to 43rd. This year, the relative investment attractiveness of all Canadian jurisdictions in the survey declined from 2015—except for Saskatchewan. According to the survey, Saskatchewan’s investment climate and the government’s decision to keep royalty rates and taxation unchanged even in a low-price environment has been “exemplary policy”. This approach results in low-risk opportunities here for the industry, and we are working to encourage and enable those opportunities by clearing the way for continued growth and investment. One example of this is Saskatchewan’s Integrated Resource Information System (IRIS), our online system for supporting the development and regulation of the provincial oil and gas industry. IRIS is the result of a six-year modernization program to replace the Ministry of the Economy’s aging and nearly obsolete computer and paper-based systems. Since going live on November 19, 2015, IRIS has delivered significant enhancements to service. It allows industry to conduct a comprehensive

range of regular business and regulatory tasks with the Government of Saskatchewan online—24 hours a day, seven days a week. This new selfservice system has replaced various outdated systems and manual paperbased procedures for a vast spectrum of routine business activities. IRIS has also significantly improved efficiency on the government side—for instance, by reducing processing times for well licence applications by as much as half in some cases. Where certain complex or labour-intensive processes once took weeks to perform, they can now potentially be completed within hours or days. Almost 60 percent of the respondents in a recent survey of industry users of well and facility infrastructure functionality ranked our service as either ‘excellent’ or ‘good’ compared to other regulators they work with. This is a solid example of our government’s commitment to continually improving our capabilities to meet the needs of the oil and gas industry. Commodity markets change and fluctuate, and they always will. However, nothing has changed in Saskatchewan when it comes to our increasingly accessible resource base. Nothing has changed with respect to Saskatchewan’s favourable operating environment that we continue to build on and improve. Nothing has changed with respect to our reliable policy regime. We will continue to provide a stable investment climate for oil and gas development, an investment climate that ranks among the best in the world. Our industry is stronger because of it— our communities will thrive because of it—and the province of Saskatchewan is fulfilling its great potential because of it. w

Brad Wall Premier


REPORT

Pipelines Trump Protests By Jessica Sena President Trump wasted no time issuing executive orders to move stalled pipeline projects forward; the Keystone XL and Dakota Access Pipelines. The United States is the number-one consumer of oil and boasts the largest pipeline network in the world. Pipelines are lifelines to the American economy and a modern way of life. They are an indispensable part of our nation’s energy infrastructure, and the safest means of transporting petroleum products. DAPL Dakota Access, a 30-inch-diameter pipeline owned by Energy Transfer Partners, will move up to 570,000 barrels per day from the Bakken oilfields to Patoka, Illinois. It was scheduled to be operational by the end of the 2016. All permits, including approval by the U.S. Army Corps of Engineers, were obtained by the company; however, protests, federal intervention, and a change in position by the corps have stopped the pipeline in its tracks. Self-proclaimed “water protectors” have descending upon a protest site near Lake Oahe at the confluence of the Cannon Ball and Missouri Rivers to protest the pipeline crossing a half mile north of the Standing Rock Sioux Indian Reservation. Celebrities and environmental activists have flocked to North Dakota to stop what they believe is an injustice against the Sioux people. A lawsuit was filed by Earthjustice on behalf of the Standing Rock Sioux Tribe which stated, “The public water supply for the tribe, which provides drinking water for thousands of people, is located a few miles downstream of the proposed pipeline crossing route." It argues, “The cultural and religious significance of these waters cannot be overstated. Construction of the pipeline ... and building and burying the pipeline would destroy burial grounds, sacred sites, and historically significant areas on either side of Lake Oahe.” Consultation with GeoEngineers, a subcontractor on the Dakota Access Pipeline, provided information which concluded that the boring process would not be of a magnitude to impact natural features, cultural resource features, or above-ground structures. Chairman and CEO of Energy Transfer, Kelcy Warren wrote, "concerns about the pipeline’s impact on the local water supply are unfounded”, and "multiple archaeological studies conducted with state historic preservation offices found no sacred items 16

BAKKEN OIL REPORT – SPRING 2017

along the route". Within the corridor where the Dakota Access Line was sited lays an existing natural gas pipeline. In September, Judge James Boasberg of the U.S. District Court denied the tribe’s lawsuit to block pipeline construction, siting a lack of evidence that building the pipeline would harm the tribe or cultural resources. The judge added that while the tribe had been provided countless opportunities to comment on the proposed route, tribal members did not appear at any of the 141 meetings held by the Dakota Access team. Immediately following the failed lawsuit, the Departments of Justice, Interior and the Army Corps of Engineers announced an indefinite suspension of pipeline construction to reassess cultural impacts to what the tribe calls sacred ground. In the announcement to halt construction beneath Lake Oahe, it was said the conflict highlights the need to consider "nationwide reform with respect to considering tribes' views on these types of infrastructure projects”. Keystone XL Across the border, Canadian midstream company TransCanada has been given the go ahead to resubmit an application for the long-awaited Keystone XL pipeline. Keystone XL is a proposed 36-inch-diameter crude oil pipeline which starts in Hardisty, Alberta, and stretches south to Steele City, Nebraska. It would deliver up to 870,000 barrels of crude oil per day to gulf refineries, and contribute $3.4 billion to the national GDP. Keystone XL has served as a poster child for needlessly delayed projects under the Obama administration. TransCanada filed the permit six years ago. After a half-decade-long process, the Keystone XL decision was pushed off indefinitely, in spite of an extensive study by Obama’s state department. The reason: politics. In 2014, the state department released a report which should have cleared the path to approval of the pipeline. It concluded that the Keystone XL would not substantially impact greenhouse gases. Oil transport by pipeline is, in fact, the least impactful on emissions. Consider the emissions produced by diesel-powered rail or truck transportation. Had TransCanada been approved for construction three years ago, the pipeline would likely have sailed smoothly through Montana, where the pipeline has already been approved. The


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REPORT

continued

Land Board voted unanimously in 2012 to grant rights-of-way to TransCanada. Two years ago, the Sioux and Assiniboine tribes of the Fort Peck Reservation passed a resolution opposing the Keystone XL pipeline. Unquestionably, the Dakota Access protest near the Standing Rock reservation in South Dakota has placed pipeline projects in the crosshairs for opponents. Following the announcement of Trump’s executive orders, protesters warned they’d be out in full force to stop the projects from being built. No doubt the passivism of the Obama administration has empowered activists and opponents of the oil and gas industry. Like Dakota Access, the Keystone XL would cross north of a reservation boundary. The 2015 Fort Peck Tribe resolution was the result of concerns that a pipeline failure upstream from Fort Peck Dam could contaminate the entire Missouri River water supply. In North Dakota, similarly, concerns have been over the impact to water in Lake Oahe and the Missouri River, which provides drinking water to the Standing Rock reservation through an intake located downstream. The intake for the Montana Assiniboine/Sioux Water Project is on the Fort Peck reservation off the Missouri River, which borders the reservation on the south side. At the Missouri River, the

Keystone XL would be buried 40 to 60 feet below the riverbed. Additionally, a TransCanada spokesman said the company has agreed to 59 special conditions for the project, including the use of flexible, high-strength carbon steel near waterways that can withstand the impact of a 65-tonne excavator. The steel TransCanada will use is designed with special features to reduce corrosion. Both the Keystone XL and Dakota Access Pipelines will be utilizing the latest and safest monitoring technologies, including pressure and temperature sensors and automatic shutoff valves. Before any crude moves through either pipeline, they will be required to be hydrotested to ensure their mechanical integrity. Once complete, these pipelines will be monitored 24/7 from a central control station capable of responding within seconds to any pipeline abnormality. Beyond the protest of the tribes and environmental groups, Keystone XL has earned widespread support from landowners, county commissioners, legislators, Montana’s governor and congressional delegation. That’s because of the enormous economic impact the pipeline would have, making it a boon for hard-up rural communities. Nearly 300 miles of Keystone XL would cross through Phillips, Valley, McCone, Dawson and Fallon counties in Montana, supporting 3,700 jobs and generating $127.2 million in Montana wages. It will include a bypass known as the Bakken Marketlink, which will transport crude out of the Williston Basin to the Gulf coast. The Marketlink will create 200 jobs and generate $10.3 million Montana earnings. In property taxes, the pipeline will yield approximately $26 million dollars and a total of more than $760 million in new economic activity in Montana. Under the Obama administration, federal agencies relied upon political gamesmanship and an arbitrary application of the law to shelve projects which would spur the nation’s economy. Many of the decisions and rules made over the last eight years were fueled by an agenda to dismantle the energy industry; an agenda which has made casualties of America’s working class. Trump’s move President Trump’s executive orders regarding the Dakota Access and Keystone XL Pipeline -along with his cabinet selection and repeated calls for a regulatory roll-back - provide a glimpse into the agenda he campaigned on; an agenda focused on unleashing the country’s energy potential. While cautiously optimistic, many in the oil and gas industry, from corporate offices to rig floors, are looking forward to the resurrection of a consistent application of the law and predictable energy policies that puts boots (and drill bits) back on the ground. w

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BAKKEN OIL REPORT – SPRING 2017


In 1967, Emil and Ernie Baranko started moving dirt to subsidize their ranching

operation. Seeing opportunities in the 1970’s, they diversified into the oilfield, building

hy would you call an earth moving contractor for environmental services? locations and providing maintenance. Emil took over the construction while Ernie took e’ll give you three reasons. We have a solid local reputation for honesty, reliability and over the ranching. adiness. We’ve acquired the assets of a major environmental company. And when With the downturn in the 1980s, Emil branched into county DOT work, and later in the u have a dirty job, we’ll move mountains to keep your operation and reputation spotless. 1990s sought opportunities with coal and power plants to help keep them busy. Gregg ontractor for environmental services? and Glenn, Emil’s sons, worked with him until his retirement in 2000, and Glenn bought 196 7 7 local reputation for 2honesty, e a solid and 01 Gregg’sreliability shares in the company in 2007. of aEmergency major environmental company. And when 4/7 Response Environmental Services The company grew at a very steady pace until the explosion of the Bakken, which has tains to keep your operation andenabled reputation spotless. Baranko Bros. to grow to a size never imagined by Emil and Ernie back in 1967.

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REPORT

Dakota Access Lifeline By Bette Grande and Isaac Orr Western North Dakota has a history of oil booms and busts. The cycle began when oil was discovered in western North Dakota in the 1950s and occurred again in the 1980s. Today, global oil prices and a lack of pipeline transportation have put the crunch on oil production, putting the industry at risk once again. But all that might change now that President Donald Trump has signed executive actions designed to speed the construction of the Keystone XL and Dakota Access Pipelines, thereby extending a lifeline to the western North Dakota economy. The approval of these pipelines is a stark break from the previous administration’s policies, which obstructed the construction of vital pipeline infrastructure. These pipelines greatly improve the economics of transporting oil and make the North American energy industry more competitive in the global marketplace. Transporting oil from North Dakota via pipeline is far less expensive than transporting oil by rail. It costs approximately $15 per barrel to transport a barrel of oil by rail, but it is estimated transporting oil via the Dakota Access Pipeline (DAPL) will only cost $7–$8 per barrel. Reducing transportation costs will significantly affect North Dakota oil producers. They are currently forced to sell their oil at a discount compared to other areas, because they pay higher transportation costs, so the pipelines’ potential savings will improve business dramatically. The Keystone XL Pipeline will likely extend a similar lifeline to oil producers in western Canada, many of whom are dependent on oil exports to the United States to gain access to greater global markets. Western Canadian oil has sold at a discount of about $14 per barrel compared to West Texas Intermediate oil over the past year, data compiled by Bloomberg show. That may shrink to $5 to $7 per barrel should more pipelines be built. Although it now appears these pipelines will be constructed— thanks to the support given by the Trump administration— multiple roadblocks imposed in the past have delayed their completion and driven up costs for energy companies and local governments. For instance, the protests against the completion of DAPL have so far cost taxpayers and construction companies tens of millions of dollars—and this does not include clean-up costs (to avoid the environmental disaster left behind by the protesters) and the still-accumulating court costs. Like Keystone XL, the site of the Dakota Access Pipeline became the epicenter of the national anti-pipeline protest in 2016. 20

BAKKEN OIL REPORT – SPRING 2017

Thousands of protesters occupied land near the Standing Rock Sioux Reservation in an attempt to prevent the completion of the project. Although many of the protesters were peaceful, others—including some who were paid to protest—swarmed construction sites, burned vehicles, killed livestock, and damaged construction equipment. In some cases, the protests caused schools to be put on lockdown, making it impossible for parents to get to their children. The nature of the protests overwhelmed local law enforcement and necessitated additional law enforcement from multiple jurisdictions to be brought in to ensure safety and protect property, all at an enormous cost. According to the North Dakota Department of Emergency Services, the protests’ costs, as of February 10, 2017, are about $33 million—and they are still rising. North Dakota oil production dipped below one-million barrels per day in September, October, and December of 2016, but that it is less likely to occur again now that it appears the Dakota Access Pipeline will finally be completed. DAPL will vastly improve the economics of producing oil in the Bakken. It’s also likely a major reason Continental Resources has announced it will invest $700 million in North Dakota in 2017. Pipeline protesters often say, “Water is life”, but it seems they do not realize oil is also life. The United States gets 35 percent of all the energy it uses from oil. Oil is what powers the ambulances taking our loved ones to the hospital, and it is the fuel that transports protestors’ organic vegetables to the grocery store. In fact, energy independence is national security. We can either produce our oil domestically, creating hundreds of thousands of jobs for American workers, or import it from other countries, many of which use the funds to support causes most Americans totally oppose. w Bette Grande (Think@heartland.org) is a research fellow at The Heartland Institute. She represented the 41st District in the North Dakota Legislature from 1996 to 2014. Isaac Orr (IOrr@heartland.org) is a research fellow specializing in hydraulic fracturing at The Heartland Institute.


REPORT

Anti-fracking forces turn to monkey-wrenching after 2016 defeats 3.0 Direct Enforcement (a) Direct Action Enforcement. If the City of Lafayette fails to enforce or defend this law, or a court fails to uphold this law, any person may enforce this law through nonviolent direct action. If nonviolent direct action is taken to enforce the provisions of this law, law enforcement personnel employed by the City of Lafayette shall be prohibited from arresting or detaining persons directly enforcing this law. “Direct action” as used by this provision shall mean any activities carried out to directly enforce the prohibitions of this law.

Lafayette Direct Action clause. For the Colorado activists and residents opposed to responsible natural resource development such as hydraulic fracturing, 2016 was a year bookended by a pair of defeats at the state’s highest court and the ballot box. In May 2016, the Colorado State Supreme Court affirmed the longstanding decision to keep regulations of oil and gas development at the state level. The court overturned local measures in a pair of Colorado cities that sought to limit or ban fracking outright. Disappointed but emboldened, the activists turned to state ballot measures that would challenge the court’s interpretation of state authority, but ultimately failed to gather enough signatures to place anything on the November ballot. Meanwhile, the Colorado oil and gas industry supported rival Amendment 71, a measure designed to make citizen-referred amendments more difficult, in hopes that repeated attempts to bring anti-fracking and other anti-development measures to the ballot box every two years would cease. The new amendment would require a 55 percent threshold instead of the previous simple majority, and supporters argued that shoring up Colorado’s citizen initiative process would not only “raise the bar”, as the slogan went, but effectively put the local vs. state regulatory battle to rest, permanently. But anti-energy activists have not ridden off into the sunset. Boulder County’s intransigence on its own oil and gas moratorium has set up a showdown between the county commissioners and the state’s attorney general, Cynthia Coffman. Coffman filed a lawsuit against the county in February, arguing that state preemption should result in enjoining the moratorium. Defiantly, Boulder’s commissioners embraced the lawsuit, calling it “a sweetheart deal for the oil and gas industry, but a massive waste of Coloradans' tax dollars for the state to sue us on industry's behalf.” “We are prepared to defend our right to safeguard the health, safety and well-being of our constituents,” they wrote.

But now, another community seeks action on what could be described as legalized monkey-wrenching targeting oil and gas development. The Colorado Hometown Weekly called the measure, facing an early March vote in Lafayette’s city council, a “provision to legalize nonviolent direct action protests — such acts can include sit-ins, strikes, workplace occupations or blockades — [that] would target drilling activity and allow protesters unprecedented immunity from arrest or detainment.” One of the city council members, Merrily Mazza, is the mother of prominent local anti-fracking activist Cliff Willmeng, who helped draft the Climate Bill of Rights and Protections for the city to consider. While never successful statewide, the activists knew that oil and gas development could be stopped if local measures targeting those resource areas could be approved. A de facto ban could be obtained more easily, as most of Colorado’s extraction occurs in a handful of counties. But with the setbacks in 2016, activists had to be creative. Seeing the temporary success and national media coverage inspired by the protests of the Dakota Access Pipeline in North Dakota in the latter part of the year, Colorado’s anti-development forces sought a way to avoid the ban/moratorium lawsuits and the need to seek ballot box access: construct a legal way to sabotage oil and gas industry activities with law enforcement sanction that would, if applied, result in the halting of development and garner a much-needed injection of media attention. As the #DAPL protests fade, expect more of the same efforts to enact guerrilla activist ordinances like the one in Lafayette. As has been a frequent theme of this ongoing series, there are no permanent victories for either side, as the policy battle between implacable and indefatigable deep-pocketed opponents continues to disrupt the industry. w A copy of the proposed Climate Bill of Rights and Protections can be found here: http://landing.pmpfb.com/files/2017/01/LafBORv2.pdf. BAKKEN OIL REPORT – SPRING 2017

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REPORT

Energized By Janna Lutz, President, Williston Area Chamber of Commerce

President Trump took office on the day of our chamber's annual banquet. I didn’t get to see much of the inauguration, as we were prepping for a wonderful night of awards and entertainment. We recognized some great people in our midst that night and listened to an inspiring speaker. The weather cooperating and the uplifting message was perfect timing. But as much as I'd like to take credit for getting everyone energized for a new year by selecting a great speaker and coordinating above-freezing temperatures, I cannot. It wasn't a certain speaker, a flawless awards ceremony, or even the weather. It was a significant change in the status quo – a change in administrations with hopes for things to be different. A clear federal support of the energy industry that is closely tied to our economy is more likely to be behind the increased activity that right now is very palpable. We're all busy (again, this may still be surprising to those who believed the misconception of a 'bust' complete with tumbleweeds). At the chamber, were busy working on our 2017 initiatives and events. Our District 1 representatives have been busy working hard in the 65th Legislative Assembly. N.D. Governor Burgum has been busy and engaged with DAPL. Trump's been busy making headlines. But be sure, in the Williston area, we're not just busy, we are energized! • Jobs: In the month of February, four different energy companies hosted job fairs. In March, Job Services’ multiindustry job fair hosted over 60 companies looking for more than 1,500 jobs. Skilled labor is in high demand – the energy industry comprised over 25 percent of the employers at the job fair who were looking for the majority of the available jobs. Jobs in retail, healthcare, manufacturing, and service are still among those sought after as well. • Housing: Housing prices normalized and over 70 more homes were sold in 2016 than in 2015. According to the Williston Herald, it is expected to have switched from a buyers’ market by the time this article is published. • Business: The chamber and economic development continue to see and hear from people who are starting new businesses. In 2016 alone, we had 32 ribbon cuttings - 19 new businesses, seven grand reopenings, and six relocations. 22

BAKKEN OIL REPORT – SPRING 2017

In 2016 alone, there were 19 new businesses who set up shop in Williston, N.D. • Airport project(s) – Our new regional airport (XWA) project is still underway – we are waiting on the spring thaw to start moving dirt and still anticipate a Q4 2019 opening. Also, we are proactively seeking community input for the redevelopment of the existing site, particularly land-use ideas. • The City of Williston and Williams County have been working on an updated regional comprehensive plan, a transportation plan, and corridor studies, which passed through a public hearing in February. The Williston area is busy. Our regional economy is not only energized, it is poised for the growth and activity that we know is here and will be here for our children's children. You may see some tumbleweeds – we still are in North Dakota after all – but you're more likely to see them get stuck under a truck on its ways to the next job. We will stay busy supporting businesses and encouraging a workforce that benefits the industries that make Northwest North Dakota a great place to live and work. Williston was once called the ‘city of opportunity’. Joseph W. Jackson, one of Williston’s first mayors wrote “Williston has arrived and her future is brighter and far more certain than ever”. This statement couldn’t be more true today, considering that the whole region continues to be a place of opportunity. w


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The cash stash behind anti-pipeline activism By Vivian Krause

Pipelines are crucial to the safe transportation of oil and gas, and yet they have become unusually controversial. Let’s be clear: this is not by chance. This is squarely because a group of American funders, mostly from California, has financed a massive, anti-pipeline campaign against Alberta oil. Back in 2009, the anti-pipeline movement was put into motion by a trio of U.S. charitable foundations: the Rockefeller Brothers Fund, the William and Flora Hewlett Foundation, and the Tides Foundation. The Rockefeller fund is one of the charitable entities of the famous family of oil pioneers. The Hewlett Foundation was created by one of the founders of Hewlett-Packard, and the Tides Foundation (Tides) is an intermediary that receives funds from billionaire philanthropists, including Warren Buffett, and then distributes the money as the donor directs. Since 2009, Tides and its funders have quietly financed more than 100 First Nations and environmental activist groups in order to bring the Alberta oil industry to its knees. Under the banner of an international effort named The Tar Sands Campaign, Tides has made more than 400 payments totalling $30 million to First Nations and environmental groups in Canada, the U.S., and in Europe, tax returns show. That’s more than 400 cheques and wire payments ranging from $12,000 to $700,000. To the average person, the Tar Sands Campaign is invisible. None of the participating organizations go around saying that they are part of a Rockefellerfunded campaign to put the screws to Canada. But that is exactly what they are doing. 26

BAKKEN OIL REPORT – SPRING 2017

When the Tar Sands Campaign funding was first reported in The Financial Post in October of 2010, information about it was scant. In fact, the only reason that this campaign was discovered was because of three little words, “Tar Sands Campaign”, that were unexpectedly noticed in dozens of payments that were reported in the U.S. tax returns filed by Tides. Since the Tar Sands Campaign has come to light, public opinion about it has been split. Some scorn the activist groups and First Nations who are involved, accusing them of being bought-and-paid for by their American funders. But this view doesn’t fit the facts. Even without U.S. funding, environmentalists have been trying to restrict the oil industry for decades. Indeed, activists have been against oil since long before the big U.S. cheques began to roll in. In general, the media has given the benefit of the doubt to the activists and First Nations, taking them at their word that their campaign is purely environmental. However, in light of statements made Michael Marx, the long-time director of the Tar Sands Campaign, this stance lacks merit. On his organization’s website, Marx admits, “From the very beginning, the campaign strategy was to landlock the tar sands so their crude could not reach the international market where it could fetch a high price per barrel.” Evidently, the Tar Sands Campaign is not strictly about the environment. By the admission of its original director, this campaign is meant to hurt Canada where it matters: in our national wallet. No doubt about it, the Tar Sands Campaign also helps to protect American economic and trade interests,

The Apollo Alliance, which was created as an energy policy initiative, changed its logo, replacing the words “energy independence” with “clean energy” and then merged with labour unions to become the BlueGreen Alliance.

guaranteeing that the U.S. has exclusive access to Alberta’s heavy crude at lower prices than U.S. buyers would pay for the same oil from anywhere else. It is important to note that anti-pipeline activism is funded as a small part of a much larger effort to foster renewable energy. To understand the overarching motivations of the funders, it helps to look at the history of their effort and the way that energy independence has been re-branded as “sustainable energy”, and more recently, as “clean energy”. Saving the climate has become code for reducing U.S. dependence on the Middle East. As we know, renewable energy is domestic. Fostering renewable energy is tantamount to increasing energy independence and weaning the United States off of foreign oil, particularly from the Middle East. The California philanthropists that are funding the campaign against oil from Western Canada are doing no such thing in their own backyard. Against Texas, North Dakota, or Oklahoma, there’s no multi-million-dollar campaign like there is against Canada. On its website, the Hewlett Foundation makes clear that it does not fund activism in the states that account for 95 per cent of U.S. oil production. Indeed, American charitable foundations are not funding a major campaign against domestic oil production. They are trying to restrict foreign oil production, particularly from


Canada. Come to think of it, this isn’t so surprising. Canada is the only oilexporting country that can be bullied out of the international market without risk of civil unrest and economic collapse. Back in 2001, on the heels of the California energy crisis and the beginning of the Iraq war, a group of California philanthropists set out to achieve something that had eluded the United States for decades: energy independence. Leading the pack were the Rockefeller Brothers and the Hewlett Foundation, which has since become the world’s biggest funder of climate activism. Since 2010, the Hewlett Foundation has granted more than $1 billion to organizations that spearhead the climate movement. By 2004, the Hewlett Foundation and like-minded philanthropists had put together a suite of energy policy initiatives, including Securing America’s Future Energy and the Apollo Alliance. Why that name? Its funders recognized

that energy independence would be no less of a challenge than putting a man on the moon. The Apollo Alliance produced a landmark document titled New Energy for America that called for no less than $300 billion in U.S. government loans, subsidies, and grants to kick-start a global market for renewable energy. Around that same time, the Rockefeller Brothers and others produced a document titled How to Talk to Americans. This report gives tips for what to say about touchy issues like getting off Middle East oil, and promotes the re-branding of energy independence in the name of protecting the environment. Eventually, the Apollo Alliance changed its logo, replacing the words “energy independence” with “clean energy” and then merged with labour unions to become the BlueGreen Alliance. In 2015, the United Stated ended its longstanding ban on exporting U.S. oil. By 2016, according to Bloomberg News, U.S. oil companies exported three-million

barrels a day of refined products. Gasoline exports hit an all-time high of almost onemillion barrels a day, up ten-fold from a decade ago. Of course, the U.S. couldn’t export its own oil without a lock-down on the Canadian crude that covers at least one quarter of domestic requirements. Since the Tar Sands Campaign began, anti-pipeline activism has come to be about much more than oil. First Nations who have felt powerless for decades have new power, purpose, and more. If pipeline companies and their clients want to dial back the activism against their business, they need to deal directly with the big U.S. funders who have bankrolled the organization of antipipeline protests. The protestors aren’t paid, but the organizers sure are. Until pipeline companies deal directly with the big U.S. funders, the organizers of the anti-pipeline movement will continue to do what they are paid for. w Vivian Krause is a Canadian writer. On Twitter, she’s @FairQuestions.

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Meridian Energy continues to set new standards for its state-of-the-art Davis Refinery

A 3D rendering of Davis Refinery by Vepica USA.

Davis Refinery Permit Update On October 7, 2016, Meridian Energy Group, Inc. submitted its permit to construct application to the N.D. Dept. of Health – Air Quality Division for the Davis Refinery, Meridian’s greenfield refinery proposed for Billings County, N.D. Since that time, Meridian has, through its engineering firms, Vepica USA, Axens North America and ZIA Engineering & Environmental Consultants, developed additional refinery process engineering that will further improve all emissions inventories by lowering such emissions to levels that will leave no scientific doubt as to whether or not the Davis Refinery will be approved as a synthetic minor source. The addition of some newer technology equipment accompanied by more advanced best available control 28

BAKKEN OIL REPORT – SPRING 2017

technology (BACT), has resulted in additional time to complete the application in its amended form. This amendment to the application was submitted on April 5th and will lower emission levels even further across the board from the original permit submitted in early October. William Prentice, Meridian’s CEO, had this to say on the amendment submittal, “Meridian is very excited by the accomplishments of its technical team, and eager to actually get the Davis Refinery started in the field. Meridian can begin construction of Davis Light, the first phase of the Davis Refinery facility as soon as the PTC is received. Meridian hopes that the permit review, which began in October of 2016, will be completed in time to enable Meridian to make full

SEH Engineering flying a weather kite to the height of Davis’ tallest structure, in demonstration from Buck Hill in TRNP.


use of the coming summer construction season.” Meridian anticipates ground breaking for its Davis Refinery to occur shortly after it receives the permit to construct from the North Dakota Department of Health - Air Quality Division. In the interim, the company is proceeding with the purchase and fabrication of long-lead items of equipment and vessels, and expects to be in full commercial operation of Davis Light in early 2018. Offtake MoU’s Inked Meridian is finalizing negotiations on an array of agreements supporting the operation of the Davis Refinery, including product distribution and offtake, crude supply, and crude-product logistics agreements. Further announcements will be made in the coming weeks as these negotiations are completed. In early February, Meridian inked a Memoranda of Understanding with several local and regional petroleum product distribution firms, under which these firms will purchase and distribute up to 268-million gallons per year of refined products from the Davis Refinery. This is an important milestone for Meridian, since it represents over 67 percent of the design refined capacity of Davis Light, the first phase of the refinery, and a still-significant portion of the completed 55,000 barrels per day capacity of Davis Refinery. Upon completion, the Davis Refinery will produce over 800 million gallons of refined products per year. Negotiations of distribution agreements with other firms are proceeding. In addition, Meridian announced that it has completed a letter of intent with Sequent Energy Management L.P.

(Sequent), under which Sequent will provide the Davis Refinery with its natural gas requirements. Eye on the environment Meridian is working to minimize the impact of the Davis Refinery on the environment with the implementation of the BACT to reach near-zero emission levels. These controls are designed not only to prevent, but to detect and report any fugitive emission. The company also intends to minimize the visual impact on the landscape with plans to work with agricultural departments at local universities to implement natural tree and plant borders surrounding the refinery. When Meridian filed for its zoning and conditional-use permit with the Billings County Board of Commissioners, the permit application regarding the environmental impact was prepared by several independent biologists in accordance with the 1987 U.S. Army Corps of Engineers Wetlands Delineation Manual. They concluded (1) The proposed project is not expected to have direct impacts on endangered or threatened species. (2) The proposed project site is not listed as prime farmland. (3) The cultural resources review did not reveal any significant previously recorded cultural resources within the proposed construction boundaries of the refinery. The US Fish and Wildlife Services and the North Dakota Game and Fish Department were both consulted for purposes of this permit and both concluded that it is unlikely this project will have any long-term impacts on the threatened or endangered species of North Dakota. As a result, Meridian was granted unanimous approval of its zoning and conditional use permit in July of 2016. w

Meridian’s new video, The Standard in Clean Technology can be found at http://www.meridianenergygroupinc.com/video/. BAKKEN OIL REPORT – SPRING 2017

29


Well Suspension

Offset well protection during fracking WST tools change the economics

There are more than 1,000 wells in the Williston Basin alone waiting to be fracked. Fracking is expensive, and even more so when you have to suspend adjacent wells. Well Service Tools Ltd. (WST) has created a series of tools that could drastically drop the cost of suspending nearby wells, while eliminating environmental risks and saving you days of service rig time. As fracks get longer and more complex, especially in high-density fields, there are major risks of downhole communication caused by pressure leaking into an adjacent well. WST tools work with a suitably designed frack program to minimize costly workovers, increase safety, and reduce environmental incidents like spills and even blowouts. Preventive well suspension for nearby wells for the duration of the frack operation are now routine, but they can be expensive and time consuming. At least, they used to be. Well Suspension Tools Ltd. has created a better way. We have developed a unique set of tools that allow companies to quickly, inexpensively, and safely suspend rod wells, leaving the rods and pump in the well, ready to be reactivated. The ‘T’ tool is best for wells closest to the frack. It connects directly to the rod string and prevents any movement of the rod assembly. With the well flushed and the pump seated, it also prevents solids infiltration. The ‘C’ tool is simpler, slipping over the sucker rod in such a way that the rod upset can’t slide through. Both tools allow the polished rod to be removed and a wellhead placed on top, securing the well. The tools have no moving parts, 30

BAKKEN OIL REPORT – SPRING 2017

are inexpensive, and a skilled rig worker can learn to use the tool in less than 10 minutes. Companies throughout North America have found that this tool drastically trims costs and saves time. In North Dakota, an oil company was notified by an offset operator of an impending frack that it was going to affect 14 of their wells. Well Suspension Tools was called and 14 sets of reusable tools were delivered and installed within a day and half. After the fracks were done, the wells were back producing in even less time. The oil company estimated saving $500,000, and more than three weeks of service rig time. Well Suspension Tools have been created to address the concerns of frack operations, but also operating costs, well maintenance, well servicing, and the suspension of unprofitable wells. The majority of oil wells use an artificial lift system, and it is expensive to suspend the rod assemblage so that work can be done on the well. By reducing that cost, well maintenance using solvents and chemicals can be done more efficiently and for less money. The assets of a suspended well – rods and pumps - can be stored inside the well in an inhibited environment and wells are easily re-activated when the frack is over or when economic conditions improve. Optimization is the defining ethos in the oil and gas industry today, and this simple, reusable tool is the perfect tool for your business at this time. w For more information, visit our website at www.wellsuspension.com.


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31


Aggreko

Develop effective pipeline pre-commissioning testing in cold weather

Pre-commissioning oil and gas pipelines for field readiness requires a series of tests to validate the system’s structural integrity before introducing the hydrocarbons to be transported. Hydrostatic testing (hydrotesting) for leaks involving a flooding and pressurization process typically includes pressure testing up to one-and-a-half times the actual pipeline maximum allowable operating pressure (MAOP), and holding the pressure, followed by dewatering, drying, and moisture removal. However, certain factors need to be considered when hydrotesting with water in freezing conditions. The flooding phase is typically carried out with a diesel-driven water pump while the pressurization phase requires compressor capacity. Several types of information are obtained through hydrotesting, such as flaws in the pipeline material, stress corrosion cracking (SCC) and specific mechanical properties of the pipe. Test water temperature must first be stabilized and heated, if necessary, to avoid chilling or freezing before the actual four-toeight-hour pressurization phase of the test can be initiated. Meeting specifications Air compressors located on the opposite end of the pipeline to be hydrotested provide 100 percent oil-free air to push the test water back into storage tanks after the test. The same air compressor can then be utilized to dry the pipeline by pushing drying pigs through the line. To perform the final step of removing moisture from the piping system, engineers typically deploy a lowamperage desiccant dryer to reduce residual moisture to avoid crystallization in freezing weather to required minimum levels. This type of dryer configuration operates off of 120v that is obtained by installing an inverter on the compressor batteries with the capacity to achieve the desired dew point below the hydrate formation curves, taking into consideration the colder 32

BAKKEN OIL REPORT – SPRING 2017

temperatures and proportionately lower pressures that need to be factored in when hydrotesting in cold climate conditions, such as what is seen in the Bakken. Selection of compressed oil-free air or inert nitrogen for propelling pigs in the drying phase depends on the volatility and combustion risks. If the risk of combustion has been eliminated, the use of compressed clean dry air is preferred due to its efficiency. In some cold condition cases, pneumatic testing employing a glycol liquid that won’t freeze or inert nitrogen has been considered over hydrotesting. However, higher costs must be factored for the pneumatic testing option. Whether employing compressed dry air or nitrogen, drying a pipeline requires relatively low pressure (less than 100 psi). Section-by-section testing of the pipe’s integrity may call for several pigging phases for cleaning and drying that involve the use of inert nitrogen in the first phase, followed by the use of dry air in the next phase. For example, in a four-step phase, two of the phases involve dry air and two involve nitrogen, particularly with gas pipelines in active shale plays. In any case, there are inherent risks that need to be taken into consideration, whether for new lines with less stringent specifications in place, relative to existing lines with a history of substantial maintenance and rework. Pre-commissioning in cold weather More pipeline operators are outsourcing the multi-phase precommissioning process to a one-source provider capable of delivering a comprehensive solution under a wide range of ambient temperature conditions. As a result of the hydrotesting capabilities available from a single source, Bakken operators can perform pipeline pre-commissioning even in cold weather conditions. w


Push Those Pigs. When pushing pigs and drying pipelines to specs during testing and commissioning, use the most reliable turn-key equipment provider, Aggreko. With a wide range of 100% oil-free air compressors and desiccant dryers, we can help you finish the job ahead of schedule. Aggreko, Power, Heating and Cooling Specialists for pipelines. Call us to learn more. T: 800.AGGREKO E: aggreko@aggreko.com

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33


Bismarck State College

Industry training through proven models

The National Energy Center of Excellence provides nationally-recognized training and educational programs in a number of energy industry sectors. “Do more with less” is a refrain commonly heard during times of budget crises, when trying to make ends meet as a business becomes increasingly difficult. But “work smarter, not harder” may be a better approach. These challenges can prove to be a great opportunity for those with the right training and preparation to increase value and the bottom line without adding unnecessary cost and risks. One way to provide that training and preparation to employees is through apprenticeships. Apprenticeship training combines theoretical instruction with on-the-job training to prepare high-quality skilled workers to meet the demands of a competitive economy. Apprenticeships are a proven model throughout many sectors in the energy industry. The Bismarck State College National Energy Center of Excellence (NECE) has been offering high-quality technical energy programs to students since 34

BAKKEN OIL REPORT – SPRING 2017

1970, and apprenticeship training programs to industry partners for more than 20 years. With close to 30 different formalized apprenticeship programs in place with numerous companies, the NECE has delivered proven results and credentials recognized both nationally and internationally. Don’t see what you’re looking for? The NECE is eager to work with your individual company to develop a customized apprenticeship program that specifically meets your company’s training needs. Courses in our apprenticeship programs are delivered through face-to-face instruction, online instruction, or a combination of both, coupled with the hands-on piece employees take part in through their employer. Apprenticeships provide employees the ability to master their current position and the chance to climb a career ladder in order to move into higher-skilled positions within the organization “one rung” at a time. Showing employees where they are

and where they can strive to be in their future upon successful completion of their apprenticeship program gives them balance and a sense of control over growing their career. The online, NECE instructor-led or selfstudy courses contain reading materials and interactive learning tools (ILTs) that demonstrate the operation and internal view of components and systems employees might rarely see. This is done through animations and 3D cutaway modeling. In addition, simulations are used to provide trainees the ability to take control of industry equipment and systems such as LACT units, hydraulic systems, separation units, sulfur recovery, pipeline pigging, and pumping units. Online courses are available 24/7, making them ideal for employees who are working rotating shifts and who are provided with the opportunity to work on their apprenticeship courses during working hours.


Bismarck State College is home to the National Energy Center of Excellence (NECE), a nationally-recognized leader in energy education. Our on campus and online degree and certificate programs give you the edge you need to remain competitive in a changing energy environment.

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35


Bismarck State College

the visual training aids and find them extremely helpful for training personnel, supervisors, or operators who work with both experienced and new employees. Studies show that companies who invest in their employees experience an increase in employee retention and overall morale. Having employees well-grounded in their company who understand their role in an organization and the impact they have on the overall efficiency, safety, and productivity is invaluable.

Interactive labs such as this motor starter allow students to learn concepts and theory in a safe, controlled manner. The NECE also offers industry access to

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of their job. These ILTs are developed by

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With affordable pricing, flexible delivery and scheduling, the NECE provides many options to companies of all sizes, and we look forward to working with you in a competitive, technologically advanced, ever-changing industry. w Learn more at bismarckstate.edu/energy, or contact us at bsc.energy@bismarckstate.edu or 701-224-5651.

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w w w. l a t e c h e q u i p m e n t . c o m 38

BAKKEN OIL REPORT – SPRING 2017

Dixon’s Bayloc design is intuitive, with simplicity and interchangeability being the critical features. Over the past decade, a cam and groove design of dry disconnects has become popular and offers the following benefits to the operator: - Easy, time-saving connections with no need to drain or empty hoses - Elimination of spillage when properly coupled - Valve cannot be opened unless the unit is coupled - Automatic locking arms - All-stainless handle prevents rusting, extends life


Dixon

- Two-piece adapter for easy seal replacements or rebuilds Flow performance For some operators, there may be a concern about pressure drop when a dry disconnect coupling is inserted into the fluid transfer line. The reality is that the pressure drop in the most popular hose sizes equipped with Bayloc is quite small, and likely of little consequence to the operations (see Figure 1). Learn more Founded in 1916, Dixon® is a manufacturer and supplier of hose couplings, valves, dry disconnects, swivels, and other fluid transfer products. The company’s global reach includes a range of products for numerous industries including petroleum, chemical processing, food and beverage, steel,

Figure 1 - Tests on one-and-a-half-inch, two-inch, and three-inch hoses equipped with Bayloc™ cam and groove dry disconnect couplers and adapters show a modest pressure drop at various flow rates. As an example, for a two-inch hose at a flow rate of 90 gallons per minute, the pressure drop is just 2 PSI. fire protection, construction, mining and

For more information, visit dixonvalve.com

manufacturing. w

or call 877-963-4966.

Cold temperatures affecting epoxy cure!

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be their solution. Applied at temperatures as low as -40° F with no cure times and less installation problems. For more information, scan the QR code on the right with your smart device or call us at

281.580.5700

www.Polyguard.com

Innovation based. Employee owned. Expect more.

BAKKEN OIL REPORT – SPRING 2017

39


Economic Development Regina

Opportunity awaits in Regina Regina at night. Photo by Mark Greschner. The people of the Greater Regina Area (GRA) are accustomed to building great things. From the more than 300,000 hand-planted trees that dot our beautiful city to Wascana Lake, the largest human-made lake in North America, we think big. But this is not what makes us unique. Canada’s agrarian and energy history is worn proudly and displayed prominently in our economic and tourism assets. Our community serves as the gateway to the Bakken formation, providing worldclass services and supplies to firms operating in the Williston Basin. Regina has specialized firms servicing the upstream, midstream, and downstream industries locally and around the world. From contracting, pipeline & oilfield construction, to environmental and petroleum engineering services, Regina’s innovation fuels the energy industry. Our community has a long and proud energy history.

All year long, you will find a festival or celebration happening here in Saskatchewan's capital to get you excited and energized about experiencing something new. Seen here is the farmers market in downtown Regina. 40

BAKKEN OIL REPORT – SPRING 2017

Economic Development Regina Inc. (EDR) is the leading economic development agency for the City of Regina and the GRA. We work as project


Economic Development Regina

Regina serves as the gateway to the Bakken formation, providing world-class services and supplies to firms operating in the Williston Basin.

leaders providing essential connections between organizations and strategic and competitive intelligence to help businesses make the right decision to grow or locate in our region. Opportunity awaits your organization in the GRA. At EDR, we are passionate about supporting investors to make the most of the opportunities here. Our Investment Attraction Office provides free, confidential, and customized advice to companies and investors. We are an ‘investment concierge’, offering business intelligence, path-finding to local resources, and introductions to government agencies as required. Connect with one of our knowledgeable specialists to receive additional site selection information, relevant economic data, and potential emerging trends in the region. EDR is here to help you succeed. We encourage you to explore all that our community has to offer both by way of business partners and suppliers, and tourism experience. Regina is a unique blend – home to a 100-year-old symphony orchestra and

the nation’s most passionate sporting enthusiasts. All year long, you will find a festival or celebration happening to get you excited and energized about experiencing something new. Take in a show at the Globe Theatre, a stroll through the Cathedral Village, see the history of the RCMP Heritage Centre, or enjoy one of Regina’s many new crafter breweries, including Bushwakker Brewpub, Rebellion Brewing, or Pile O Bones Brewing Co. After, enjoy one of Regina’s many local restaurants, including Malt City, Beer Brothers, Crave or the Capitol, to name a few.

From the inspirational and the historic, to the little quirks that give it its charm, Regina will capture your heart and provide every reason to return again and again. In Regina, we tell visitors “welcome home”, because despite our diverse, growing and innovative economy, we are prairie people. Real. Relaxed. Remarkable Regina. See for yourself, welcome. w Learn more at economicdevelopmentregina.com and tourismregina.com.

OBELE OIL CORPORATION Paralee L. Obele, CEO 1485 West State Route 89A, Suite #5, Sedona, Arizona 86336

928-282-4908

www.ObeleOil.com

62 years of exploration and production. Call for info to participate in the drilling of new wells. Buying and selling production/minerals.

BAKKEN OIL REPORT – SPRING 2017

41


Lightning Master

Introducing the In-Pipe Turbine Generator (IPTG) for remote locations In an effort to provide uncompromised, low-maintenance and “green” electricity to those isolated locations without commercial power access, Lightning Master has developed the innovative In-Pipe Turbine Generator (IPTG). A cutting-edge product, this solution was designed to ensure safety with minimal maintenance and minimal negative environmental impact as it generates power without combustion of fossil fuels. While solar power could be considered an alternative, it has the obvious limitations of efficient and consistent energy harvest. Solar panels are also notoriously expensive and vulnerable to environmental damage.

IPTG installation, maintenance, specifications The In-Pipe Turbine Generator is an electric generator contained in a two-foot section of six-inch stainless-steel pipe. It harvests energy by using the natural flow of gas within the pipe to rotate a turbine and produce electric current in coils mounted around its exterior. The generator is designed to generate power 24 hours a day with an option for 12- or 24-volt output. Sites using supervisory control and data acquisition (SCADA) systems can effortlessly monitor the IPTG system. To ensure the device operates efficiently, it is built to last with 316 stainless steel. It’s approximately 300 pounds and does not compromise the structural integrity of the pipe.

www.jmservicesinc.com

5610 Interstate Avenue, Billings, MT 59101 Office: 406-839-5035 Fax: 406-294-5269

JMS Crane and Rigging is a full service company from the start of a project to completion by providing planning strategies, engineering solutions, crane lift, transportation, and cartage all while performing with integrity, efficiency, and safety.

42

BAKKEN OIL REPORT – SPRING 2017


Lightning Master

Specifications

There is also nothing costlier than getting the local utility

The In-Pipe Turbine Generator is:

company to build service to a remote location for 500 watts.

• • • • • • • • • • •

The In-Pipe Turbine alleviates the expense issue of power access in

Economical Designed for use in Class 1, Division 1 areas Does not compromise integrity of the pipeline Hydro-tested to 2000 PSI Six inches for standard pipeline, but can be customized Easily installed – industry standard flanges to bolt to pipeline Produces 12 or 24 voltage No combustion or pollution No environmental hazards Self-contained, no injuries Designed for unattended operation

remote locations: • It can’t be stolen • Other equipment can be run off of the unit • The IPTG is ideal for battery charging • Free electricity once inline • Units can be run in a series to produce more power The IPTG (patent pending) does not demand constant monitoring, and is uniquely environmentally friendly as it does not burn hydrocarbon fuel to generate power, yet is significantly more efficient and dependable than solar, at half the cost. w

Cost effective

For more information on this and other advanced alternatives

Other power sources such as diesel and gas-powered generators require maintenance and fuel; both expensive when considering their potential installation in a remote location.

to lightning protection and power generation solutions, contact the experts at Lightning Master at 800-749-6800, or email us at solutions@lightningmaster.com.

IN-PIPE TURBINE GENERATOR (IPTG) Lightning Master’s innovative IPTG system is designed to provide electricity at remote locations lacking commercial power. It generates power using the flow of natural gas through the pipeline without combustion of fossil fuels.

US

PAT EN

DE

D

The IPTG is an electric generator contained in a two-foot section of 6”stainless steel pipe. It is installed using standard industry flanges. Feed piping may be flanged up or down to that size. The IPTG is tested to 2,040 PSI. Magnetic flux generated by the rotation of magnets within the pipe produce electric current in coils mounted around the exterior of the pipe. The generator outputs through an umbilical cable to its control box that may be remotely mounted conveniently near the site batteries and SCADA system. The generator output may be monitored remotely through the existing site SCADA system or a dedicated monitoring system. The IPTG overcomes the shortcomings of solar panels, thermal-electric generators, diesel generators, combustion turbine generators, and wind. It is less expensive, requires little maintenance, is resistant to damage and corrosion, and burns no fuel, reducing the site environmental footprint. The In-Pipe Turbine Generator is designed to generate power 24 hours a day and be maintenance-free for extended periods.

INTRODUCING: Lightning Master’s Innovative In-Pipe Turbine Generator (IPTG) RELIABLE 24/7, Off-the-Grid Green Power for your SCADA and other battery charging needs.

2100 - A Palmetto Street, Clearwater, FL 33765

1-800-749-6800

lightningmaster.com BAKKEN OIL REPORT – SPRING 2017

43


PEC Safety

The new face of safety standards for 2017 By James O’Dwyer

In the definition of management of change (MOC), three fairly significant groups of standard changes have debuted for 2017. Here’s a snapshot.

but think in a downturn condition, I cannot hire anyone (yet) to assist with this, and in the spirit of doing more with less, is there a more turnkey solution?

The American National Standards Institute (ANSI) has updated their 2010 revision of the Z390.1, “Accepted Practices for Hydrogen Sulfide (H2S) Training Programs” for 2017. The Z390.1 revision committee made up of industry stakeholders and subject matter experts spearheaded the overhaul in part to the ongoing hazards with H2S that relate to significant risk and exposure. Beyond that, the former standard had a more industry-specific focus, a mixture of “mandatory” and “advisory” terminology, and interpretable content often flexed to negate intent of this voluntary applied standard practice. The updated performance standard institutes some specific requirements that the employer must meet to be able to verify that the student has competency beyond the former standard where it was largely upon the student to learn and apply. The change really reflects a closer correlation to the OSHA language for “demonstrated competency” of knowledge, training, and with equipment (brand, type, size, and style) within work conditions that match the application. The standard will include, but is not limited to, a mandatory student instructional contact time between three to four hours1 applying to initial and required annual retraining. An expanded requirement for visitors to areas where H2S may be present, and a more poignant lateral reference to ANSI Z88.2 – 2015, “Practices for Respiratory Protection”. Not excluding of course, the expectation that training program creation or retooling of current programs meet the updated 2016 version of the ANSI Z490.1 standard for “Accepted Practices in Safety, Health and Environmental Training”.

Enter the Bureau of Land Management (BLM), who updated Onshore Order 3, 4, and 5 in Q4 of 2016. Changes that took years in the making and not without some spirited input from industry and regulatory groups alike. At least one of the changes was related to the acceptance surrounding remote tank gauging which could be impactful for tank gauging exposure potential3.

Once you begin to fold in the ANSI Standard impacts, that are enforceable under the General Duty Clause2, you cannot help 44

BAKKEN OIL REPORT – SPRING 2017

Finally, the Occupational Safety and Health Administration (OSHA). The agency issued a memorandum for “Enforcement Guidelines for Upstream Oil and Gas Extraction Industries”. This was targeted to employers under NAICS Code 211111 for “Crude and Natural Gas Extraction”, NAICS Code 213111 for “Drilling Oil and Gas Wells”, and finally NAICS Code 213112 for “Support Activities for Oil and Gas Operations”, summarized as scopes of work for drilling, servicing, and production operations. Within the memo, it identifies not only employers of those NAICS codes, but the contractor-performed work activities of those industries. Within the “Priority Hazard Items” listing4 for CSHO’s to target were A) Respiratory Protection and Hazard Communication for Hydrogen Sulfide (H2S) and VOC’s exposures, including tank gauging operations, B) Chemical overexposures to H2S for all upstream operations and to poisons (carbon monoxide), asphyxiates (carbon dioxide), and volatile organic compounds (VOC’s) (heptane, hexane, octane, pentane, and propane) during tank gauging operations where exposures to substances listed in Table Z-1 and Z-2 must not be exceeded. C) Hazard communication (HCS) in upstream operations including H2S exposures in all operations and chemical exposures during tank gauging operations. Oh, it


PEC Safety

gets better – 1910.1200(d)(1) Hazard Classification. “Chemical manufacturers and importers shall evaluate chemicals produced in their workplaces”. I would encourage you to check out CPL 02-02-079, where it goes on to outline under “known to be present” that “oil and gas products; the producer are considered manufacturers under the HCS”5. PEC Safety is part of your solution. With the only industry-wide accepted and ANSI Z390.1 compliant program for the academic training portion, making PEC H2S Clear (www.pecsafety. com/h2sclear) a training requirement can significantly and consistently reduce the liability related to this hazard and costs for re-training and hiring. Open the door to recordkeeping verification and consistency. Check us out today for a demo, www.pecsafety.com. w

application per OSHA Field Operations Manual (FOM) current version. 3

See BLM issued onshore order revision content language for more.

4

Not an exclusive list of OSHA Standard priority hazard items, see memo for inclusive list. Memo authored by Thomas Galassi, Director, Directorate of Enforcement Programs to Regional Administrators.

OSHA Enforcement Guidance for Upstream Oil and Gas

5

Extraction Industries, authored by Thomas Galassi, Appendix B, Priority Hazard Items, OSHA Standards, # 18, page B-7 and OSHA CPL 02-02-79 Effective Date July 09,2015, Inspection Procedures for the Hazard Communication Standards (HCS 2012), pg 9, Inspection Guidelines, B –Scope and Application, 1,j.

footnotes 1

Verify with printed copy of standard for exact number.

2

See OSHA 1910 General Industry Standards, 5(a)1 references, the OSHA Act and 1926 Construction Standards with any General Duty Clause reference including the process of

James O’Dwyer is a master PEC instructor & business development for Colorado operations. He can be reached at james@pecsafety.com or 985.249.0353.

GET SAFELANDUSA TRAINING FIND A PEC SAFELANDUSA INSTRUCTOR

PEC has hundreds of authorized professional trainers around the country that can supply your company with SafeLandUSA. To find a trainer in your area, visit www.pecsafety.com/map.

BECOME AN AUTHORIZED PEC TRAINER

For companies that have an in-house trainer, PEC offers a Train the Trainer course in our PEC Basic Orientation (8-hour) and PEC Core Compliance (24-hour). Both courses are accredited by SafeLandUSA. This option allows you to train on your schedule and at your own facility. For more information about PEC’s Train the Trainer, visit www.pecsafety.com/become-a-trainer.

HAVE YOUR IN-HOUSE SAFETY ORIENTATION ACCREDITED

As an accrediting organization, PEC has the ability to accredit your existing safety orientation as SafeLandUSA.

PEC Safety | Phone – 866.647.2338 | Email – safety@pecsafety.com | Website – www.pecsafety.com BAKKEN OIL REPORT – SPRING 2017

45


Badlands Integrity Group

Putting you first Badlands Integrity Group provides safety courses to the oilfield Compliance, there are many ways

company. If we get complacent, lives are at stake.

we can talk about it. A necessary evil, a chore, a struggle, or a critically important part of a business, and the first to go when we hit a slow pace in production. Badlands Integrity Group understands the differences in each industry and we know that everyone does not fit into

The importance of safety is never underestimated here at Badlands Integrity Group, simply because the loss of a life due to lack of knowledge or training is every safety compliance team’s worst nightmare. In order to prevent such nightmares, we keep the “boots on the ground” well educated in all areas involved in proper safety. But, we also understand that we are all human and mistakes can happen.

that perfect box. Our focus is to stay on top of every new safety measure so as not to become complacent in our position as a safety compliance

www.MillerInsulation.com

INSULATION, BUILDINGS, AND SCAFFOLDING SERVICES OIL FIELD • INDUSTRIAL • COMMERCIAL • RESIDENTIAL NORTH DAKOTA BRANCH LOCATIONS:

3258 SW 110 Z Ave Dickinson, ND 58601 General Manager: Brian Janke Phone: 701-225-5877 Fax: 701-225-7884

9124 Derrick Avenue Williston, ND 58801 General Manager: Don Ell Phone: 701-572-2718 Fax: 701-572-7433

46

Here at Badlands Integrity Group, we have over 70 combined years of knowledge and training to offer anyone interested in using our services to keep their company within compliance. Whether you need OSHA 10 or 30 hour, H2S, Confined Space, Safeland, CPR first aid AED, MSHA, or more, we can be your one-stop shop for all your safety needs. We also offer services with drug and alcohol testing with consortium and reasonable suspicion course included. DOT with driver file maintenance, such as background checks with MVR’s, IFTA, and 2290 filing. We have ISN, ARIBA, PEC, ECCS, AVETTA, and other programs. All of our departments work together to keep you well informed and up to date on everything.

3520 East Century Avenue Bismarck, ND 58502-1393 General Manager: Bill Eckroth Phone: 701-258-4323 Fax: 701-222-8045

3222 4 th Avenue Southwest Fargo, ND 58103 General Manager: Curt Heiser Phone: 701-297-8813 Fax: 701-297-8816

When most people think of safety, they think of the phrase “safety first”, and while that is all well and good, our motto is “you first”. The basis of safety begins and ends with you. If you are not taking into consideration all aspects of safety, then the safety will not be there. With that, if a situation isn’t safe for you to do what is required of you for a job to be completed successfully, and you go in anyways and get hurt, then nothing else is going to matter at that point.

WYOMING BRANCH LOCATIONS:

UTAH BRANCH LOCATION:

3700 Salt Creek Highway Casper, WY 82601 General Manager: Mike Idso Phone: 307-265-5646 Fax: 307-235-0052

50 North 500 West North Salt Lake, UT 84054 General Manager: Dennis Banyai Phone: 801-936-8352 Fax: 801-936-8397

BAKKEN OIL REPORT – SPRING 2017

2615 Industry Drive Cheyenne, WY 82007 General Manager: Fritz Messer Phone: 307-635-5311 Fax: 307-635-8500

Our staff thrives for excellence on everything safety. If you have any questions, we would be more than happy to help you out. Just give us a call today and let us make the “B.I.G.” difference for you! w


WE PROUDLY SERVE ALBERTA, SASKATCHEWAN & MANITOBA OILFIELDS. We are available to travel in any parts of Canada & U.S. to meet your needs.

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THE ISSUES

Corrosion of steel is a serious concern. When steel is exposed to surrounding soil, electrochemical cells form which leads to active corrosion sites and eventually to penetration of the external steel, leading to expensive repairs, environmental damages and production downtime.

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CAT-TEK’s cost effective cathodic protection program is a fraction of the cost of the work-over of a well casing and/or flow line leak into the environment and loss of production. We base our CP systems on your needs and your environment.

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Contact: Steven Liebelt Vice President of Marketing and Sales sliebelt@bepc.com 701-557-4418

Bakken Oil Report Spring 2017 issue  

The Bakken Oil Report spring 2017 issue features stories on the cash stash behind anti-pipeline activism, meridian energy, and so much more.

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