Conference to focus on enhancing Bakken’s supply chain

Williston Economic Development, DAWA Solutions team to connect manufacturers, energy producers

BY MARNIE LAHTINEN

The first annual Manufacturing and Logistics Conference (ManLog) will be held March 25-26 at Williston State College in Williston, N.D., and will also serve as the launch of the Enhanced Bakken Supply Chain Initiative. Williston Economic Development and Williston-based DAWA Solutions Group are collaborating for the event and initiative, both of which are intended to align regional energy industry stakeholders with local manufacturing and logistics companies in order to explore business development opportunities in the Bakken.

The production of North Dakota’s oil and gas demands an array of commodities and materials, many of which are currently outsourced nationally or internationally. Energy companies wait days — sometimes weeks — for product turnaround, and therefore face a higher break-even Brent crude price because of these, and other, inefficiencies. ManLog organizers hope to connect regional manufacturing and logistics companies with oil service companies to form local supply chains that could reduce the cost of doing business in the Bakken.

“This is an immature oil and gas market from a supply chain perspective,” says Jeff Zarling, president of DAWA Solutions Group. “We may not be able to create widgets in Williston because of the high costs of doing business in the Bakken, so then we create widgets in Wahpeton. But we want to have the supply chain relationship in the Williston Basin where the problems and the customers exist.”

The conference will serve as a “conduit” to bring two industries together to identify how they can serve each other’s needs, according to Zarling. “The oil and gas industry is not real accessible, and regional manufacturers don’t necessarily know how to engage them and get involved,” he says. “The Enhanced Bakken Supply Chain Initiative is a regional initiative … and will enable this to happen in an organized and ongoing effort.”

“ManLog will give us the chance to get that 30,000-foot-view of all the challenges, and then we can drill down hard to take a look at the opportunities and challenges,” says Shawn Wenko, executive director at Williston Economic Development.

Approximately 300 operators and suppliers, primarily based in the Dakotas and Montana, are scheduled to attend the conference.

Zarling and Wenko acknowledge it can be difficult to access the supply chains of large operators and service companies. Therefore, the Enhanced Bakken Supply Chain Initiative and ManLog are targeting smaller, nimbler and more entrepreneurial companies. “Fracking and completion techniques have been pioneered in small companies like Denver-based Liberty Resources,” Zarling says. Many of these smaller fracking companies don’t have their own manufacturing capacities, he explains, so they hire service companies and buy products from them to accomplish daily operations.

In addition to solving existing issues for the oil and gas industry in the Bakken, Zarling says the supply chain initiative places an emphasis on business development and innovation. “Local manufacturers can develop products that aren’t just used here, but elsewhere as well,” he says.

David Lehman is a manufacturing extension specialist at the North Dakota State University Manufacturing Extension Idea Center and will be moderating a panel at ManLog. “Having had major manufacturers here like Bobcat, Case and John Deere prior to the major Bakken activity, we have an established manufacturing base in our region with the capabilities required to make piece parts for major manufacturers,” Lehman says. “We need to showcase that and take a look at the opportunities that exist … this event will serve to open up that discussion.”

Zarling says the recent downturn in oil prices only adds value to the initiative. “The industry is more focused on the initiative now because it’s going to help to reduce costs and reduce break-even price so producers can be more profitable at a lower per-barrel price. We’re getting more interest in the initiative now than we were a year ago.” PB

Marnie Lahtinen Contributing writer MarnieLahtinen@gmail.com

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Monthly additions from one average rig

New-well gas production per rig

March-2014

March-2014

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Indicated monthly change in gas production (Mar vs. Feb)

March-2014

Indicated monthly change in gas production (Mar vs. Feb)

March-2014

March-2014

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Gas Captured/Sold

Employment

Data provided by David Flynn, chair of the University of North Dakota Department of Economics. Reach him at david.flynn@business.und.edu.