Well Servicing Magazine: December 2021

DECEMBER 2021

IN THIS ISSUE Dr. Scott Tinker Widens the Aperture PPHB Market Outlook Improving Worker Safety Congressional Spotlight: Rep. Stephanie Bice Emerging Technologies

Water Management New Challenges for Oil and Gas

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CONTENTS 4 ISSUE 2 • DECEMBER 2021 An Energy Workforce & Technology Council Publication

Leslie Beyer, Energy Workforce & Technology Council

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STEPHANIE FUQUA Director of Marketing

COUNCIL STAFF TIM TARPLEY SVP Government Affairs & Counsel

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Congressional Spotlight: Rep. Stephanie Bice, OK-05

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Market Outlook Allen Brooks, PPHB

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MARINA OUANO Director of Finance MARIA SUAREZ Director of Government Affairs

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Minimizing Freshwater Consumption in Hydraulic Fracturing Operations Temi Yusuf, Schlumberger

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Produced Water Management Abheek Banerjee, Exterran

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Emerging Technologies: A Time to Engage With Our Political Leaders Greg Burkart, Duff & Phelps, a Kroll Business

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PHILLIP DEBAUCHE Director of Environmental & Technical EDDIE BOWMAN Events Specialist

Water Midstream: A Rapidly Growing Sector Undergoing Seismic Change Michael Steinhacker and Evan Tikka, Wood Mackenzie

DEIDRE KOHLRUS Director of Government Affairs RONI ASHLEY Director of Operations

On the Importance of Water Andy Knapp, Energy Workforce & Technology Council

ANDY KNAPP Senior Advisor ESG, Sustainability & Energy Transition PEGGY HELFERT Vice President Programs & Events

Cover Story: Dr. Scott Tinker Phillip DeBauche, Energy Workforce & Technology Council

LESLIE BEYER CEO/Editor in Chief MOLLY DETERMAN COO/Editor

CEO’s Perspective

Technology Advancements Improve Worker Safety Cameron Barrett, Field Safe Solutions

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New Safety Standards Needed for Field Automation Phillip DeBauche, Energy Workforce & Technology Council

SUSAN DUDLEY Administrative Assistant

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Advertiser’s Index

ABOUT THE COVER Dr. Scott Tinker, Director of the Bureau of Economic Geology, Chairman of the Switch Energy Alliance and the Texas State Geologist (Photo by Raymond Sauceda)

Well Servicing Magazine is published quarterly by Energy Workforce & Technology Council as a complimentary publication. Interested subscribers should email info@energyworkforce.org to be placed on our mailing list.

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Copyright 2021 Energy Workforce & Technology Council

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CEO’S PERSPECTIVE/

2022 Outlook Encouraging

By Leslie Beyer, CEO, Energy Workforce & Technology Council

Members, As the economic recovery from the COVID-19 pandemic continues and the Omicron variant impact remains uncertain, the market is changing quickly. The traditional energy space is now one of the best places for investing, as natural gas and crude oil have been performing well due to inevitable demand. And while we have a way to go before reaching 2019 levels, the outlook for 2022 is encouraging.

The industry is on track to generate a large amount of free cash flow from 202123 ­– as much as was lost during the last decade, according to IHS Markit. ExxonMobil and Chevron are planning to increase drilling in the Permian next year, even as they keep an eye on overall spending. And BP plans to increase investment in onshore U.S. shale and oil to $1.5 billion in 2022, up from $1 billion this year. All of this is welcome news, considering that previously analysts were predicting an uneven recovery in North America, with spending increasing in the Middle East, Asia and Latin America.

All of this production will be impacted by governmental policies and legislative action. The recent "Build Back Better" package on Capitol Hill includes many elements to reduce domestic production by adjusting methane fees, increasing royalty rates on new onshore oil and gas leases, and banning new oil and gas leases in federal waters off the entire Pacific and Atlantic costs, as well as the eastern Gulf of Mexico – actions that are all aimed at reducing oilfield production at a time when the United States needs growth the most. Instead of asking OPEC+ to increase production, the President should focus on supporting domestic production and therefore the highly-skilled men and women of the energy services and technology industry. No one in the world produces energy cleaner, safer and more securely than the United States.

As President Biden recently said, it’s “just not rational” to move to entirely renewable energy overnight. We know that oil and gas will remain a fundamental part of the energy mix. It’s crucial for investments to continue in the upstream sector because the energy services and equipment industry can be the solution providers in the goal towards a lower carbon future. We are not the enemy; we are the ones that can support the administration's goal of producing energy in a cleaner way. We have the skilled workforce that's needed, and we must ensure that America has ample supplies of both oil and gas for the foreseeable future.

The Energy Workforce & Technology Council promotes this message every day, and we are grateful to our members support in this effort.

Leslie Beyer CEO Energy Workforce & Technology Council

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Well Servicing Magazine/December 2021

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COVER STORY/

Widening the Aperture THINKING CRITICALLY ABOUT ENERGY & ENERGY POVERTY

By Phillip DeBauche, Energy Workforce & Technology Council

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r. Scott Tinker, a leading geologist, educator and energy expert recently discussed issues with wide-reaching impacts throughout the energy industry, including global energy poverty, carbon emissions, energy transition in developing countries and making science-based progress towards a realistic lower-carbon future.

Tinker, who is Director of the Bureau of Economic Geology, Chairman of the Switch Energy Alliance and the Texas State Geologist, addressed the gathering of industry leaders about his scientific perspective on the future of energy.

He works to bring industry, government, academia and nongovernmental organizations together to collaborate on solving major societal challenges in energy, the environment and the economy.

“When evaluating energy, we’ve gotten to widen the aperture,” he said. “Energy underpins everything in our lives, and it’s not simple. Simplistic approaches like clean and dirty, good and bad – these are binary choices that don’t exist. We’re being made to think they do, but they don’t exist today. We’ve got to wait and then think critically.”

Tinker said that the disparity in access to clean, affordable and efficient energy in developing countries comprises a global energy poverty that affects us all.

“The true energy transition is from poverty to prosperity,” Tinker said. “Without it, nothing else happens.”

Currently 75% of the world’s population accounts for less than 20% of the global energy consumption per capita. For those energy-disadvantaged countries to grow and emerge in the world economy,

Tinker says the focus must turn to reliable energy to enable high-quality education.

“Population growth is tied directly to energy, and education is dependent on consistent and affordable access to energy.”

As populations grow and the global economy supports development of emerging countries around the world, a global increase in energy demand from a growing middle class will outpace our current global capacity for energy production. This could hinder the world’s ability to meet environmental and climate goals, Tinker said, because emerging energy markets in traditionally energy-poor, non-OECD countries with booming populations do not have access to cleaner-burning energy sources like nuclear or natural gas. Emerging economies like India and Pakistan rely heavily on coal power, which will have a massive impact on global CO2 emissions.

“North America and Europe have been flat for 40 years and are coming down,” Tinker said of greenhouse gas emissions. “Asia and the rest of the world are just getting started.”

Advances in technology and investments in natural gas infrastructure have ushered the U.S. into an ongoing energy transition. Since the shale boom in 2005, natural gas has emerged as an efficient, affordable and less carbon-intensive energy source than coal.

“Those involved in hydraulic fracking made it cheap to replace coal and renewable portfolio standards in a big way in the United States,” Tinker said. He cautioned that while a natural gas-powered economy has many virtues, the industry must take elimination of flaring and venting seriously.

“Recovery to date of less than five percent of technically recoverable natural gas leaves a

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tremendous remaining resource,” he said.

As part of his quest to dispel “factually correct but factually incomplete” data projections, Tinker led the audience through an overview of what it would take to replace oil and gas with renewable energy sources like wind and solar if current industry target dates remain in effect.

“Equitable and sustainable energy transition requires non-partisan energy education and critical thinking. Current federal anti-oil and gas policies are going to negatively impact shale production, global emissions, national security, and oil and gas prices because somebody else will keep producing with less restrictive policies.”

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Well Servicing Magazine/December 2021

He also highlighted common misconceptions about the renewable energy sector and its role in future energy markets.

“The sun and the wind are renewable, but the wind turbines, solar panels and batteries aren’t,” Tinker said. “Let’s be completely factual and factually complete: There’s no truly renewable energy. It all comes from the earth. We make it and dump it back into the earth or into the atmosphere.”

Tinker closed with his key focus area for a sustainable and achievable low-carbon future: “Let’s quit focusing on eliminating fuels and start to focus on decreasing emissions, which is the climate problem.”

TOP: Aldo Perez, AUGE Industrial, and Steve Schwin, Estis Compression LEFT: Council CEO Leslie Beyer and Dr. Scott Tinker RIGHT: Marie Caekebeke, Council ESG Committee Chair

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Well Servicing Magazine/December 2021

CONGRESSIONAL SPOTLIGHT/

Rep. Stephanie Bice, OK-5

As your first year as a Member of Congress comes to an end, what pices of legislation or work on behalf of the Oklahoma 5th district are you most proud of?

The first bill I authored this year was H.R. 2378, the Protecting Military Families with Disabilities Act, which would prevent service members and their families from being charged out-of-pocket expenses for needed housing upgrades to accommodate a disabled family member. Sadly, this is an issue we have seen at military bases across the nation, and Tinker AFB has had several housing related issues over the last few years.

I’m pleased to say that a modified version of my bill was included in both the House and Senate versions of the FY2022 National Defense Authorization Act, and I expect it to be signed into law before the end of the year.

I was also proud to have authored successful amendments that secured millions of additional dollars to assist the National Guard in securing the U.S.-Mexico border, and an amendment that would require the Department of Defense to strengthen its mental health and suicide prevention efforts.

I’d also like to mention the casework my constituent services team has been focused on.

My office has been inundated with passport requests and assistance with the IRS for stimulus checks and other issues. We’ve handled more than 374 of cases successfully. Constituent service is one of the most important things members of Congress do, and my team is the best.

This June, you toured Energy Workforce & Technology Council Member Company Kimray’s facilities in your district. You saw first-hand how manufacturing and distribution can be affected by the ups and downs of the energy industry. What is Congress doing to relieve regulatory burdens targeted at the

energy and manufacturing industries?

This is an issue I think a lot about because it affects the livelihoods of millions of everyday Americans.

Sadly, we have seen this Administration take drastic actions to halt oil and gas exploration, shut down key infrastructure like the Keystone XL pipeline, and propose new burdensome regulations on a range of our nation’s most important industries.

I have been working on legislation with my colleagues to counter these efforts, including cosponsoring H.R. 4132, the Unnecessary Agency Regulations Reduction Act, which would require the federal government to put together an annual list of burdensome or duplicative regulations and would establish a process to allow Congress to quickly eliminate such regulations through passage of a joint resolution of disapproval.

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foreign inputs.

I’m also a cosponsor of H.R. 1776, the Regulations from the Executive in Need of Scrutiny Act (REINS Act) which would require Congressional approval of all major agency rules and regulations that have an economic impact of more than $100 million.

These bills represent two important ways for Congress to reclaim its power, and for the American people to be respected by federal bureaucrats.

Washington seems increasingly polarized on major issues affecting Americans and their everyday lives.

Do you think there are areas where the country and Congress can come together to get things done?

Earlier this year I served on the Defense Critical Supply Chain Task Force of the House Armed Services Committee, which put together a listing of policy proposals to protect the Department of Defense from such vulnerabilities. I’m pleased to say that many of our Task Force’s recommendations were included in the FY2022 National Defense Authorization Act, including a provision I authored to require DoD to engage with workforce and education stakeholders to build the workforce of tomorrow.

As a member of the House Energy Action Team, what does this group do and what are the issues you focus on?

Now more than ever, our nation needs its lawmakers to be thoughtful and to respect the wishes of all Americans. Sadly, The HEAT team is a we have witnessed Democrats in Congress writing major legislation coalition of House Rebehind closed doors, in the dead publicans, each with of night, with little to no input an energy focus in the sought from Republicans.

With that said, I have seen quite a lot of bipartisanship during my time serving on the House Armed Services Committee. Nearly all of the members of that committee, on both sides of the aisle, recognize the importance of supporting our nation’s troops, and protecting the American people from our nation’s adversaries.

district they represent.

They emphasize an “all of the above” platform that promotes energy policy to create jobs in the industry and support America’s energy independence.

I have been successful at advancing several common sense, bipartisan pieces of legislation through this Committee, including several of the bills previously mentioned.

As the COVID-19 economic recovery continues, many companies are struggling with supply chain issues importing materials produced overseas.

What can Congress do to help encourage reshoring of production and manufacturing jobs to the U.S.?

As our nation continues to face increasing aggression from China and other adversaries, it’s increasingly clear that we need to re-shore the production of certain national security, telecom and healthcare products. The COVID-19 pandemic laid bare just how brittle and vulnerable our supply chains are on 12

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The HEAT team is a coalition of House Republicans each with an energy focus in the district they represent. They emphasize an “all of the above” platform that promotes energy policy to create jobs in the industry and support America’s energy independence.

Following President Biden’s cancellation of the Keystone XL pipeline and other executive orders that have been detrimental to the industry, I knew I had to do more to protect the thousands of jobs in my home state of Oklahoma that rely on the energy sector. This coalition meets regularly to discuss issues impacting oil and gas, and we hear from leaders from across the U.S. with interest in energy issues. ..................................................................................

Congresswoman Stephanie Bice is a fourth generation Oklahoman, born and raised in Oklahoma’s Fifth Congressional District. She graduated from Oklahoma State University in 1995 with a degree in Marketing and International Business.

Prior to her election to Congress, Bice served in the Oklahoma State Senate for six years. During her tenure, she was Assistant Majority Floor Leader and Chair of the Senate Finance Committee.

In the House of Representatives, Bice was elected by her peers to serve as Freshman Class President and serves as a member of the Republican Whip Team.

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MARKET OUTLOOK/

History Doesn’t Exactly Repeat BUT IT DOES RHYME

By Allen Brooks, PPHB

“

Lower for longer” was former BP CEO Robert Dudley’s description of his management team’s frame of mind as they plotted the company’s future.

That was back in 2015, when oil prices were falling after Saudi Arabia abandoned its role of supporting the organization’s official price and targeting the recapture of its lost market share.

Petroleum industry executives recalled when Saudi Arabia made a similar move – 1985 – and what resulted. It was an ugly decade marked by energy company bankruptcies, reduced drilling and completion work, and hundreds of thousands of jobs lost. But consumers were smiling as they filled up on cheap gasoline.

Fast forward to 2021 and the oilfield service world is as challenging and uncertain as it was in the 1980s. Today, traditional producing company activity drivers are no longer as compelling, upsetting the dynamics of planning for well service companies. The priorities of E&P customers are different from those in 2015 and for decades prior. Then, cash flow was important, but growing oil and gas production was key because it drove company valuations and executive compensation.

Today, there is a new hierarchy of industry activity drivers. Financial discipline and environmental, social and governance (ESG) metrics are at the top of the list.

Growing production and reserves ranks lower. Will this new industry DNA survive the pressure for expanded output in a recovering economy and an emerging global energy crisis? Or will managers embrace their old impulse for unrestrained and profitless growth?

Despite the ongoing pandemic, economic activity is recovering, which is driving forecasters to raise their oil consumption projections. Since the spring 2020 collapse, we are enjoying a sustained recovery in demand. Projections by OPEC, the IEA, and the EIA call for oil consumption surpassing 2019 pre-pandemic levels sometime in 2022. They also see demand continuing to increase in the years ahead.

Weighing on executive thinking is the regulatory push 14

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to reach a fossil fuel-free world within the next 25-30 years. As a result, many forecasters project global oil consumption peaking in the mid-2030s, a decade away.

The rush for a clean energy world is running into technological and financial challenges – issues never fully explained to a public forced to pay escalating power bills and having their lives disrupted by policies and mandates.

Oil and gas executives are watching the news and seeing renewable energy facing greater challenges than ever envisioned. Increasing numbers of electricity blackouts are forcing utilities globally to turn to fossil fuels to keep the lights on. At the same time, utilities are abandoning coal, the cheapest and most prolific power source in the world, due to its high carbon emissions.

Many utilities worry about greater reliance on intermittent renewable power, so they are turning to natural gas, and in some cases oil, for backup supplies.

This suggests those peak oil consumption dates may be pushed out further into the future. Importantly, even if oil consumption peaks, oil use will not drop to zero.

Energy forecasts for 2050 see fossil fuels — oil, gas and coal — still involved in powering the world’s economy.

The EIA envisions oil and gas consumption growing beyond 2050, if the funding is available.

Belief in the long-term future of fossil fuels is driving transactions in the petroleum world. The decision

by Shell to sell its Permian acreage to ConocoPhillips reflected a strategic effort to leverage the core strengths of each company. Shell held a small asset base in the Permian relative to its worldwide holdings. Selling those oil wells will barely impact Shell’s long-term prospects.

For ConocoPhillips, the acquisition expands its acreage in the basin, allowing it to leverage existing staff and logistics infrastructure, key to increasing profitability.

With financial discipline at the top of the strategy list, petroleum companies have been reluctant to step up drilling new wells, despite higher commodity prices. New wells are highly visible and could draw critical attention.

Less visible, but potentially more profitable, are new well completions and sustaining well output. E&P company spending is directed that way. Drilled but uncompleted well counts are falling from their June 2020 peak. With-

out an acceleration of new well drilling, the U.S. may be on the cusp of a peak in domestic oil output. If that happens, oil prices will go higher to stimulate more drilling, or we will begin importing more oil, increasing the country’s dependency on foreigners for our energy, and lifting global prices.

For the oilfield service industry, pricing struggles to advance in a lower activity environment. The increase in OFS bankruptcies over the past several years reflects the weak pricing and depressed activity that followed the 2014 oil price collapse. This led to fewer service companies operating, however, OFS capacity did not shrink enough to restore profitability throughout the sector.

The lack of pricing power set the stage for mergers and acquisitions to consolidate capacity, strengthen survivor balance sheets and begin restoring OFS pricing power.

This ongoing process will continue if the history of oilfield business cycles is any guide.

Despite the elevated roles of financial discipline and ESG, oil and gas consumption will continue to grow. The need for petroleum products will extend for decades, regardless of the push for a net zero carbon emissions world. That need will drive the petroleum industry and its OFS companies to strategize how best to grow. Climate

activists’ pressure on lenders and providers of capital will create challenges for funding corporate growth, but improved profitability will help provide the necessary funds.

Petroleum company executives looking to the future and concerned about the myriad of challenges they face should reflect on the past and remember that their predecessors also faced daunting challenges, which they subsequently managed. There is no reason to believe today’s leaders cannot successfully navigate the future. ......................................................................................................

Allen Brooks has spent 40-plus years in the energy and investment industries as an energy securities analyst, an oilfield service company manager, a consultant to energy company managements and a member of the board of directors of oilfield service companies. Since 2005, Mr. Brooks has been an adviser to PPHB LP, a boutique oilfield service investment banking firm with offices in Houston and Calgary. There he publishes his highly regarded energy newsletter, Musings From the Oil Patch, and provides proprietary research for the firm’s partners.

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THE WATER ISSUE/

On the Importance of Water

By Andy Knapp, Energy Workforce & Technology Council

I

f the current energy transition isn’t complicated enough, energy producers are also contending the energy paradox – consumers demanding affordable and reliable energy with little or no environmental impact.

The corresponding “energy mix” is about offering options for communities, be it a nation or village, to make choices about which combination of energy sources works best for its population. To be a truly effective energy mix, the inventory of offerings must be inclusive. With competing community priorities, the goals and path to achieving the agreed outcomes will likely not be easy.

“The energy As Council CEO Leslie Beyer has put it, “Oil and gas will remain part of the energy mix for years to come.”

more than $1,000 per year. On the industrial side, EPA estimates the U.S. employs 18.2 billion gallons per day from direct water withdrawals, not including water from public supplies. Thermoelectric power water withdrawals account for an estimated 49% of the total.

Regardless of its many uses and sources, societies around the world have grown complacent to the difficulty of finding and processing water. Much like the energy challenge, water consumers demand it be cheap, clean and plentiful.

On the other end of the spectrum, some societies simply demand water, in whatever form they can get it. Growing scarcity has been attributed to increased sector has demand for freshwater resources worked hard to ‘sell by expanding populations and the every molecule’ in corresponding depletion of fresh competitive markets. water sources. Following eight years of drought in California, even Wall Accessibility to water is Street’s supply and demand ears increasingly strained, perked up in 2020 with the CME and we are moving Group’s foray into the water hedge business. And as we all know, with toward a reality that scarcity comes rising prices.

The energy sector recognizes and respects its place as one of the most regulated industries on the planet.

However, the operating aperture continues to tighten. Legislative there is no such thing as and regulatory actions continue to wastewater.” challenge access to resources. InThe energy sector has worked hard creased emissions controls demand to “sell every molecule” in competicontinuously improving technology. tive markets. Accessibility to water is Proper disposal and remediation increasingly strained and we are moving toward a reality require specialized engineering and action. Even with that there is no such thing as “wastewater.” these headwinds, oil and gas are first-pick options in the energy mix inventory and will remain so for the Water in any form has value. Businesses are foreseeable future. constantly determining the difficulty of separating target water from the components mixed with it. Further, The energy dilemma gets even thornier when we add experts are endlessly calculating which processes are the availability and importance of what was once seen needed to impart the quality levels required for the as ubiquitous and renewable: water. water’s next intended use.

Water access, utilization and volumes have been flashpoints for wars, court battles and family feuds.

Myriad industrial, commercial and residential applications employ water as a universal solvent in any of its phases: solid, liquid and gas. And as humans, we cannot discount water’s vaunted role as the essence of life.

The U.S. Environmental Protection Agency (EPA) reports that the average American family uses more than 300 gallons of water per day at home, at a cost of 16

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Can the purification process be done with limited environmental impacts, or do we need high-energy brute force that potentially blow emissions targets?

Can the produced water be processed in situ, or can it be safely transported offsite? Can this water enter a pipeline to send it for further processing, utilizing the remarkable safety record of the pipeline system?

In situ or offsite, ESG considerations come into play, like risk to the communities where we operate and

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THE WATER ISSUE/ compliance with applicable legislation and regulation.

Does taking water from one location and reintroducing it into another create a shortage or other challenge at the original site? Every solution comes with intended and unintended outcomes.

produced water rather than freshwater resources.

To better facilitate this transition, the market has seen the rapid emergence of a new midstream water segment that has contributed technology, capital and large-scale buildout of water pipeline infrastructure. As a result of this sizeable water management investment, produced water is being cost-effectively treated closer to the well site, reducing emissions and risk. Water treatment technologies and methods have been upgraded to allow for increased recycling and in most cases, a higher tolerance for different water types used in those applications.

How we associate with water today is different than how our predecessors viewed the resource. “Water is a precious commodity” has been used for generations and the quip is true … for the most part. Water is indeed precious and becoming more so. As global populations expand and the impacts of climate change are felt, concerns about water “As a result of sizeable usage, access and quality are accelerating as fast as the debate over our water management energy future. investment, produced An introductory economics class would say that a commodity is an economic product that is useful or has value, and that the market views as fungible, with little or no regard for the producer of that product. By this definition, water seems like a commodity.

However, do industry and society really agree with the macroeconomics 101 textbook?

water is being costeffectively treated closer to the well site, reducing emissions and risk. Water treatment technologies and methods have been upgraded to allow for increased recycling and in most cases, a higher tolerance for different water types used in those applications.”

It isn’t as simple as potable vs. non-potable anymore. With enough differentiators in the types of and uses for water, is it time to give water its due and change the way we talk about it? Ultimately, does water need to be decommoditized, differentiated based on its specific characteristics?

It is clear — water needs a new marketing team.

In the energy sector, we have a particular respect for water. From well site production activities to hydroelectric power generation to equipment cooling, water is integral to the process of delivering what consumers need. Already environmentally conscious, energy producers recognized long ago the need to conserve water. They have pushed themselves further to improve the speed and efficacy of their environmental stewardship efforts, many specific to water.

While it is difficult to quantify a “typical” hydraulic fracturing job due to differences in rock formations, well type, operator and equipment, and number of stages, improved pressure pumping technology and practices have significantly reduced water requirements. In just a few short years, the adoption of “slickwater” hydraulic fracturing as an alternative to hybrid cross-linked gel hydraulic fracturing has enabled the widespread use of 18

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It isn’t about simply reducing groundwater consumption; it’s about utilizing the incremental resource of produced water and swiftly transitioning industry to the widespread application and practice of treating, recycling, reusing and recovering that produced water resource across the supply and value chain.

The Council’s diverse membership includes companies dedicated to water treatment, management, conservation and utilization. The future of water is not solely the responsibility of these companies. It is up to every member of the Council and the industry to recognize the importance of water and assure its permanent availability.

The Council’s ESG, Environmental, Energy Transition and Technology, and Government Affairs committees have all addressed the issue of water at some point in their discussions. These committees can offer so much expertise in assuring that as a critical component of the world economy, the energy industry treats water with the respect it deserves.

Our members have already proven through their capital investments and technology innovations that they are committed to conserving water resources. Now, the Council has an opportunity to be the business leader in addressing the many “waters” we interact with every day. ..................................................................................

Andy Knapp is the Senior Advisor - Sustainability, ESG and Energy Transition for the Energy Workforce & Technology Council. Andy develops and manages the Council’s positioning, strategy, and activities for ESG, Sustainability and Energy Transition & Technology.

Water Midstream: A Rapidly Growing Sector Undergoing Seismic Change

By Michael Steinhacker and Evan Tikka, Wood Mackenzie

P

roduced water is a longstanding byproduct of oil and gas production all over the world. The advent of horizontal drilling created a new low-cost oil and gas production source and brought new sets of challenges for upstream operators.

solutions. Over the past five years, thousands of miles of buried pipeline have been built, which has created multiple hydrovascular third-party networks. Pipelines are one of the safest and most cost-effective methods to transport and dispose of millions of barrels of produced water each day.

Wood Mackenzie identified produced water as one of the key bottlenecks for oil and gas production growth in 2017. The numbers tell the story: the Delaware Basin is forecast to produce 2.3 million barrels per day (bpd) of crude oil and 9.3 million bpd of water in 2021. This suggests an average basin-wide water-to-oil ratio (WOR) of 4:1.

With more than 50 active companies, water midstream is the predominant sector tackling produced water transportation and disposal. However, industry needs vary by region.

The increased volumes of produced water created the need for an entirely new class of infrastructure focusing on water pipelines, recycling facilities and disposal

For example, water handling costs are high in places like the Powder River Basin and Marcellus due to transportation distance. To help keep costs in check, evaporation and surface discharge solutions have been developed.

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THE WATER ISSUE/

Figure 1: Delaware Basin Produced Water Forecast (2021 to 2040)

However, these are still more expensive relative to cheaper saltwater disposal wells in areas like the Permian.

Generally, the industry remains fragmented as water midstream companies transition from small scale to large, well-capitalized companies. The largest water midstream companies are even beginning to gain traction in the public equity markets. The winners in the space will ultimately be the few that emerge with massive scale and long-term contracts with the best and largest E&Ps. Additionally, flexibility is important as water midstream companies will need to incorporate strategies to address topics such as seismicity and ESG. There will be a continued need for saltwater disposal, particularly in places like the Delaware Basin. Even if the industry sources 100% of its completions water requirements from recycled water, there are still millions of barrels per day that need to be disposed of (see Figure 1 above). This creates future opportunities for water midstream companies and new entrants providing alternative disposal solutions, such as evaporation and surface discharge.

However, it is not all smooth sailing. There are several notable operational and regulatory headwinds that threaten the longevity of current industry practices. The most pressing issue is the rise in seismicity in the Permian Basin.

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Figure 2: Permian Basin Seismicity Trends

As seen in Figure 2, Permian Basin seismic events have increased by 23x since 2015. Culberson County, Texas is on pace to experience roughly 400 earthquakes in 2021 alone.

For the first time, the Texas Railroad Commission officially linked seismicity to saltwater disposal. In September, the Commission released a “Seismic Response Action” to address the recent increase in 3.5+ magnitude seismic events in the Midland Basin. There are ramifications from this that will impact completions cadence and costs.

Following the playbook used by regulators in Oklahoma, the Railroad Commission has implemented several new measures for 76 SWDs in the area to reduce dis-

posal activity. The Commission hopes these actions will ultimately reduce the frequency and magnitude of local seismic events.

..................................................................................

Michael Steinhacker is a Vice President in the Houston office of Wood Mackenzie. Michael has led the upstream consulting practice for the Americas since 2014. He has extensive experience in deal sourcing and origination with a focus on opportunity screening, transaction advisory, and corporate strategy. His client base includes onshore and offshore upstream oil & gas companies in addition to large NOCs. Michael holds a MA in International Relations from Georgetown University, School of Foreign Service, in Washington DC and BA from University of Rochester, in New York. ​

But in a scenario where regulators seek to reduce injection pressure and disposal volumes and limit new SWD permits, water handling costs would increase for producers while also creating a catalyst to implement disposal alternatives such as evaporation.

As an industry, responsible handling of produced water is the only way forward. The growth in volumes and commitment from water midstream companies to be part of the solution will create opportunities for continued learnings and efficiency gains.

..................................................................................

Evan Tikka is a Managing Consultant in the Houston office of Wood Mackenzie. Evan focuses on energy and infrastructure, with a particularly emphasis on transaction due diligence and corporate strategy. Evan has experience in upstream, midstream, and oilfield services and is a core member of Wood Mackenzie’s Water Infrastructure and CCUS practices. Evan graduated from Trinity College with a B.A. in Public Policy & Law.

However, growth and profits cannot come at the expense of public safety and geologic integrity. E&Ps depend on reliable water handling to carry out drilling and production plans. Therefore, near-term actions of the industry will be critical in determining the path forward for the sector.

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21

THE WATER ISSUE/

Minimizing Freshwater Consumption in Hydraulic Fracturing Operations

By Temi Yusuf, Schlumberger

H

ydraulic fracturing is a well stimulation treatment involving the pumping of engineered fluids and proppant at high pressure (above fracturing pressure) into reservoir rock.

The intent is to create fractures propped open by special materials called proppant. This process creates high-conductivity communication with a larger reservoir area and bypasses any existing near-wellbore damage, thereby improving a well's productivity.

This stimulation method significantly improves the economic viability of most wells, especially in unconventional reservoirs, such as shale gas or other low-permeability reservoirs, which may not produce optimally without it.

Completions in unconventional reservoir development have continued to evolve over time—from vertical to horizontal wells, longer laterals and more stage counts per well. Stimulation jobs have followed this size trend, with more freshwater required to hydraulically fracture wells for viable production. In 2019, almost 5 billion barrels of water were required for fracturing operations in the U.S. only (IHS Markit 2021). This is equivalent to about 11 days of water consumption (domestic and industrial applications) for the city of Houston.

Likewise, significant volumes of water are produced from various well activities, including post-hydraulic fracturing flowback, water breakthrough and water naturally produced along with hydrocarbons. In 2019, the total flowback and produced water volume onshore in the lower 48 states was almost 20 billion barrels (IHS Markit 2021). This presents its own unique challenges for treatment, handling or disposal, with several billion dollars dedicated yearly by oil companies for water management.

Lower-permeability formations, as found in most unconventional plays, require long and narrow fractures to optimize production. This has primarily been achieved by using low-viscosity water-based fluids (known as slickwater) pumped at high rates into the formation. The main fracturing fluid additive is a friction reducer used to optimize pumping rates while minimizing pressure drop in the wellbore.

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Well Servicing Magazine/December 2021

The major drawback of slickwater fluids, however, is their low proppant-carrying capacity. Consequently, higher-volume water is needed to place the designed amount of proppant within the fracture. This challenge is further amplified in regions where water scarcity is a growing concern.

Furthermore, slickwater operations require high hydraulic horsepower to somewhat compensate for the lower proppant transportation capacity of fluids through high fluid velocity. This results in higher energy consumption and associated emissions per well treatment.

Fracturing operation designs have explored the use of hybrid fluids—using slickwater for early, low-proppant-concentration stages followed by higher-viscosity guar-based fluids for later, higher-proppant-concentration stages. These hybrid operations introduced further operational complexity, requiring more equipment resources, mixing, and handling on location. Guar-based fluids are also a less sustainable option when compared with polyacrylamide-based friction reducers.

In recent years, major technological improvements in friction-reducer chemistry have enabled a drastic reduction of freshwater consumption in fracturing operations.

Friction reducers were modified to provide higher

viscosity. This supports flexibility in the design and enables pumping of much higher concentrations of proppant.

Consequently, water volume requirements are lower, which minimizes pump time and leads to a lower carbon emissions footprint. This improvement also further simplifies the process, reducing equipment requirements by using only one fluid system throughout the stimulation operation.

Historically, most friction reducers came in liquid form with a substantial part of the formulation being the solvent or liquid carrying agent. Effectively, several million pounds of product are handled and transported during fracturing operations worldwide with most of this being just the solvent.

The introduction of dry high-viscosity friction reducers (HVFRs) streamlines logistics and handling, offering a lower-weight, higher-efficiency (100% active material), and more sustainable alternative to liquid HVFRs. Chemical alterations to the particles assure dispersion and controlled hydration for higher-performance operations.

Most high-viscosity friction reducers are sensitive to salts naturally occurring in water and usually perform better in freshwater sources. Due to the ionic charge on the polymer, the presence of significant quantities of opposing charged ions such as calcium, magnesium or iron in water sources results in undesirable fluid performance and, in extreme cases, the formation of semisolid agglomerates of polymer complexes. This suggests that the quality of water and total dissolved solids (TDS) is critical to the fluid performance and well productivity.

The need for freshwater coupled with the sheer volume required in these operations puts pressure on water sources in the area—potentially competing with domestic and other industrial water needs.

Freshwater sourcing and post-treatment disposal of produced water significantly contributes to operators’ operating expenses today. These costs are higher still in arid areas around the world where freshwater is scarce.

With unconventional gas developments expected to ramp up to align with the transition to more sustainable energy sources, a solution that resolves both water sourcing and disposal challenges is invaluable.

Dry HVFRs have now been modified so they become tolerant to higher salinities, up to 300,000 ppm TDS (30% salinity). The tolerance to high salinity offers attractive water flexibility. Operators can reuse produced and flowback water from neighboring wells in lieu of costly water treatment or disposal.

In summary, the growing demand for freshwater sources for stimulation and the need to dispose large volumes of produced or flowback water presents a unique opportunity to improve fracturing fluids used in unconventional well stimulation.

Slickwater fluid systems have evolved from low-viscosity, low-proppant-carrying, and freshwater-enabled liquids into dry high-viscosity fluid systems compatible with higher water salinities. This provides the industry with simpler, more sustainable, flexible, cost-effective and streamlined operations with lower water requirements and carbon emissions footprint. ..................................................................................................................................

Temi Yusuf is a Stimulation Chemistry Product Manager for Schlumberger. She has a chemical engineering background with 17 years’ experience in the oil and gas industry. Her experience and expertise span technical, operations, sales, and marketing in well stimulation (fracturing and acidizing), sand management, water and gas conformance, cementing, and coiled tubing domains.

WellServicingMagazine.com

23

THE WATER ISSUE/

Produced Water Management EMBRACING SCALABLE, INNOVATIVE SOLUTIONS IN NORTH AMERICA

By Abheek Banerjee, Exterran

P

roduced water management has evolved significantly over the past decade, especially in the U.S. unconventional market as water volumes continue to increase.

Compared to the Middle East, however, management of produced water in the U.S. unconventional space continues to be handled on a smaller scale (<100,000 BPD).

Individual operators tend to work in pockets and deal only with their own produced water even though this is an issue that neighboring fields and facilities also experience. With pipelines and infrastructure development on the rise, the industry needs to consider consolidated, large-volume treatment.

If scaled correctly and in conjunction with newer, innovative technologies, this approach opens doors to producers and mid-streamers to benefit from simplified facility designs, economies of scale and higher process efficiencies. The emergence of environmental, social and governance (ESG) and sustainability as key strategic components for stakeholders further supports the argument for consolidated and innovative produced water management.

CHALLENGES

The volatility and unpredictability of oil prices remains one of the biggest hurdles steering operators away from medium- to long-term contracts for water management.

Short-term or “frack-on-the-fly” models will not work for large-volume facilities.

Further, drilling programs are often tied to oil prices and steady produced water flow rates cannot be guaranteed, which impacts projected plant utilization and resulting economics.

Another challenge that prevents large-volume treatment is the sharing of water between operators — this can be difficult if partnering operators are hesitant to accept another operator’s water quality specifications.

Lastly, this industry can also be reluctant to change and 24

Well Servicing Magazine/December 2021

embrace newer technologies, which calls for a shift in mindset and approach to move forward and understand the potential benefits.

RECENT ADVANCEMENTS

A notable change over the past five years has been the considerable development of produced water infrastructure, specifically pipelines. The market is moving towards consolidation, even though progress has been slow.

As produced water volumes continue to rise, pipeline infrastructure will provide more opportunities to collect volumes from multiple producers for treatment at centralized facilities with larger capacities. This largescale midstream model provides more flexibility, reliability and cost efficiencies, making this approach a more economical and sustainable option, especially in the face of rising freshwater prices.

New/innovative water treatment technologies now can operate within a larger functional window and handle upset scenarios with varying feed qualities without compromising outlet quality. These new technologies also simplify overall plant design by removing multiple pieces of equipment and increasing process efficiencies.

In addition, automation and remote monitoring technologies reduce overall operating expenditures, particularly due to labor and chemical savings.

The Produced Water Society recently released a suggested outlet target quality guideline, a step in the right direction to address the challenges in standardization of outlet water requirements when sharing treated water amongst operators.

ECONOMICS AND SCALABILITY

Exterran recently completed a study for a produced water reinjection project that compared a traditional water treatment plant design to an innovative large-scale design scheme for a 750,000 BPD facility. The traditional design approach includes multiple trains of degasser vessels, skimmers, induced gas flotation (IGF) vessels and filter polishing to reduce oil in water and suspended solids.

Exterran’s innovative large-scale solution uses one large flotation tank to handle the gas, eliminating the need for the degasser vessels. The flotation tank also provides a longer retention time and higher oil/water separation efficiency in one step, eliminating the need for oil skimmer vessels, IGFs and multiple trains.

From a capital expenditure (CAPEX) perspective, this innovative design provides a reduction in equipment by 18 vessels, 39 pumps, 850+ valves and instrumentation, a 60% reduction in balance of plant piping, and a 40% reduction in footprint size. From an operating expenditure (OPEX) perspective, chemical usage is reduced by approximately 40% due to treatment occurring in one tank with a higher retention time (as opposed to multiple vessels with lower retention times) and innovative microbubble flotation technology. Removing 39 pumps results in a 65% reduction in overall plant power consumption. With a 50% reduction in major equipment, this also equates to reduced maintenance and manpower requirements.

ESG IMPACTS

As modern companies evolve in growth of intangible assets, growth of intellectual capital, use of technology, and their awareness and understanding of climate change, it begins to make sense why ESG plays an important role in our industry. Traditional financial models in our industry focus exclusively on the monetary factors.

Recently we have seen the rise of ESG built into strategic investing—considering not only the financial gain for a company but also the direct and indirect effects the business has on sustainability, climate change and the wellbeing of others.

In Exterran’s large-scale produced water reinjection study, potential reportable ESG metrics include the 65% reduction in power consumption, along with a 60% reduction in steel and a 40% reduction in concrete required for facility construction. These metrics result in a significant decrease in carbon footprint. Fewer valves, less process equipment and piping also means reduced potential for leaks and fugitive emissions. Furthermore, this design allows operators to meet water quality targets without freshwater blending. With respect to ESG, these reductions translate to upwards of 35-40% reduction in CO2 emissions in plant design and operations.

NEXT STEPS: WORKING TOGETHER

As an industry, if we can take the initiative to see what large-scale produced water management looks like from a logistics, infrastructure and partnerships perspective, there are some significant opportunities. By being open

to innovation and looking at a consolidated treatment approach, industry will realize efficiencies and improved economics, and will understand what this means from an ESG perspective. By incorporating ESG into business models today, companies can get ahead of the curve for tomorrow’s regulatory environment and reporting requirements.

The future of the produced water management industry depends on all of us working together, adhering to ESG initiatives, and embracing innovative, large-scale solutions to help treat water in a sustainable, costeffective manner.

..................................................................................................................................

Abheek Banerjee has over nine years of experience in project management, business development, and engineering within various sectors of water treatment.

As Product Line Manager for Exterran Water Solutions, Abheek is responsible for the development of the product portfolio strategic growth plan and go-to-market strategies for new products.

Abheek’s experience spans a variety of projects in geographically different energy sectors including the U.S. shale play market, Canadian oil sands and Middle Eastern regions. His diverse knowledge and understanding of challenges faced within the produced water industry has led to new product innovations and the positioning of Exterran as a global leader in produced water treatment and recycling for the energy industry. Abheek holds a Bachelor’s degree in Chemical Engineering from McGill University in Montreal, Canada.

WellServicingMagazine.com

25

SOMETHING

Emerging Technologies: A TIME TO ENGAGE WITH OUR POLITICAL LEADERS

By Greg Burkart, Duff & Phelps, a Kroll Business

I

n a recent edition, Well Servicing Magazine published an insightful article about the importance of new environmental, social and governance (ESG) technologies to the energy industry.¹ As an example of the strides being made in the industry, the author mentioned that recent hydrogen demonstrations have been garnering attention as an alternative fuel source in reciprocating engines and in dual fuel and natural gas applications.¹ Moreover, the Energy Workforce & Technology Council’s (the Council) ESG certification process gives participating companies a year-long opportunity to explore and adopt new technologies that lead to lower carbon and overall emissions. The remaining challenge, as with most new technologies and R&D, is cost.

While there has been mixed sentiment from the current

26

Well Servicing Magazine/December 2021

administration and Congress toward the fossil fuel industry, there have been recent examples where our political leaders have sought to assist the industry with exploring and adoption of new technologies. One bipartisan example is the United States Innovation and Competition Act (USICA).2 The $250 billion authorization bill, passing the U.S. Senate on June 8, 2021, was originally conceived to assist semiconductor companies, but later expanded to include a collection of multi-sectoral science and technology initiatives.

The expansive USICA includes the Strategic Competition Act of 2021.3 Title I pertains to investing in a competitive future with subtitles focusing on authorizations to assist U.S. companies with global supply chain diversification and management as well as global infrastructure and energy development.4 The Strategic Competition Act has a dual purpose of countering predatory lending and financing by China in the energy sector in develop-

ing countries and increasing exports of U.S. advanced energy technologies. By spreading development costs across a broader geography, this piece of legislation has the potential to lower the incremental costs for new ESG technologies in the U.S. After passage of the USICA, the U.S. Senate Committee on Energy and Natural Resources reported out a broad bipartisan bill designed, among other major initiatives, to spur development of new technologies in the energy sector. The bill, known as the Energy Infrastructure Act, supports energy R&D in a number of ways.

First, if passed, the U.S. Geological Service would receive an appropriation of $167 million to build an energy and minerals research facility with academic partners.

Second, and more relevant to the Council’s ESG initiatives, the U.S. Department of Energy would receive an appropriation of $8 billion to fund the development of at least four clean hydrogen hubs. The hydrogen hubs are to be located across the country, with two designated for natural gas producing regions. The bill would also appropriate another $500 million to support the research and development and demonstration of manufacturing equipment used for hydrogen production, processing, delivery, storage and use.

With these bills serving as examples of the bipartisan support in an otherwise deadlocked Congress, now is the opportune time for companies developing new technologies in the energy sector to engage our political leadership to support passage of these types of bills on terms acceptable to the industry. By establishing cooperative agreements with relevant agencies and research institutions, the industry has an opportunity to reduce the costs of developing and deploying its new technologies, reducing overall emissions and securing the competitive future of the U.S. energy industry. Now is the time to act.

1. “Emerging Technologies: How they Impact the Industry”, Mark Reed, Mustang Cat, Well Servicing Magazine, Q3 2021, found at: https://issuu.com/wellservicingmagazine/docs/ wsm_q3_2021_final/s/13045470 2. “US Innovation & Competition Act”, S. 1260 of the 117th Congress (2021 – 2022) found at: https://www.congress.gov/bill/117th-congress/senate-bill/1260/text 3. “US Strategic Competition Act”, Division C, Section 3101, et seq.

4. Id at Subtitles A and B, Sections 3101 – 3111-3116 5. “Energy Infrastructure Act of 2021”, S. 2377 of the 117th Congress (2021 – 2022) introduced in the Senate on July 9, 2021 6. See Section 2004 of the Energy Infrastructure Act 7. See Section 3101 of the Energy Infrastructure Act, amending Title VIII of the Energy Policy Act of 2005, 42 USC 16151 et seq, Sections 813 to 816

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Greg Burkart is a managing director and city leader in the Detroit office for Duff & Phelps, a Kroll Business. He is the leader of the Site Selection and Incentives Advisory practice.

Greg specializes in identifying and securing sites that meet the current and futures needs of clients, and structuring and negotiating government-sponsored economic development incentives packages.

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27

SAFETY/

Technology Advancements are Improving Workers Safety

By Cameron Barrett, Field Safe Solutions

M

ost people are familiar with the Internet of Things. Fewer know about the Internet of Behaviors (IoB) – using data to change behaviors.

From a worker health and safety program perspective, this means collecting data from the field and proactively using it to influence behaviors that create a safer work environment.

BENEFITS OF A DIGITIZED WORKFORCE

Digitizing your workforce keeps at-risk workers connected to other team members, improving their safety through the ability to communicate in real-time. It also creates additional benefits that help business leaders use data to prioritize operations.

ing and later at a different site another site-specific safety training. Because they have this information ahead of time, site administrative personnel can quickly identify the safety training required for each worker and have materials ready for completion as they arrive to keep them safe and focused on the task at hand. By automating the process of surfacing worker safety compliance requirements before they even get to site, clients with many field workers can save hundreds of person-hours each month.

4. Re-assignment of personnel to higher-value projects. Manual processes create a substantial administrative inefficiency requiring multiple full-time employees.

Digitizing the process eliminates the need to sift through files and spreadsheets to identify existing certifications and training gaps that must be addressed according to each site’s unique specifications.

1. A safer, more connected workforce. In North America, there are more than 6,200 workplace fatalities and more than 1.2 million injuries per year. A digital By digitizing processes, environmental, health and the resources previously safety (EHS) solution is an WHAT IS GEOFENCING? assigned to manually assist important tool in protecting GPS identifiers create virtual borders (geofencfield workers with their workers from being part of es) around a location. These identifiers allow you certifications are now being these statistics. It can do to monitor contractors and employees, track their re-assigned to perform this by connecting workers check-in and check-out times, identify their training tasks that generate a highso the organization knows and certifications, and direct them to the projects er ROI and greater worker instantly where they are and most in need of action. satisfaction. their status, and can provide direction if an incident arises. Help can be dispatched quickly and the data conUSING THE IOB TO INFLUENCE BEHAVIOR cerning the incident used to mitigate future occurrences.

Teams of oil and gas workers traveling every day across site are not unusual. IoB can manage health and 2. Improved workforce planning and well site safety data to influence and improve that trip. Data feeds maintenance scheduling. With a digital solution, field a process where scheduled workers are provided the data is easily and quickly collected and used to deternecessary forms at the start of their day, saving the time mine the maintenance requirements of each well site and required to manually find them (assuming they remember track the qualifications and skills of work crews. As a reto look in the first place). sult, team members with the right qualifications perform These forms can include a vehicle inspection form. work prioritized for the highest revenue impact. EHS This simple reminder to take the necessary steps to data can also be leveraged to help meet ESG goals. inspect a vehicle can help your company: 3. Faster safety and certification processes “at the gate.” The IoB – in combination with geofencing – tracks workers (including their training and certifications) at a given site. A contractor may visit a site in the morning that requires a specific well-servicing certification train28

Well Servicing Magazine/December 2021

• Save time in the process by surfacing the form, rather than requiring the worker to locate it.

• Lower vehicle maintenance and operation costs by

identifying deficiencies or maintenance before an issue happens.

• Improve worker safety by ensuring corrective actions are taken before an incident occurs.

IoB, digital EHS solutions and geofencing to transform the safety of your at-risk workers and realize efficiencies across your organization in a cost-effective manner. The savings from administrative improvements, reducing costly incidents, operational efficiencies, and helping companies meet green initiatives often outweigh the licensing costs of the technology.

EXAMPLE

......................................................................................................

• Decrease the costs of potential incidents.

A worker shows up at a yard to pick up a vehicle. The area is geofenced, so we know in real-time the worker’s whereabouts and what they are about to do next (in this case, drive the vehicle). An automated “just in time” push notification is sent to ensure they remember to complete a vehicle inspection form before leaving.

Without geofencing and the actions the IoB enables, the more traditional communication method would be to spam their inbox first thing every morning with a variety of less intuitive notifications. These types of non-specific emails tend to be ignored, are ineffective and can actually be counterproductive.

EMBRACE THE DIGITAL TRANSFORMATION

These examples are just the tip of the iceberg regarding how you can leverage technology advancements like the

Cameron Barrett is the Chief Executive Officer of Field Safe Solutions.

Previously, Cameron held several executive positions, including Vice President of Government and Carrier Services at Axia Netmedia Inc. and President of CSC Canada. He joined Field Safe Solutions following a 25+ year career as an international technology, sales and operational executive in industry-leading technology companies.

Cameron holds an MBA from Heriot-Watt University, an MSc (Law) degree from Abraham Lincoln University and an ICD.D designation from Rotman School of Business. He is currently a Member of the Board of Directors and Governance Committee for Field Safe Solutions as well as The Huntington Society of Canada. Cameron previously served as a Board Member of the Information Technology Association of Canada and was a Member of the Executive Committee of AXIA Netmedia Inc.

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29

SAFETY

New Safety Standards Needed for Field Automation

By Phillip DeBauche, Energy Workforce & Technology Council

G

lobal oil and gas demand is predicted to increase by more than one third by 2025.

With this surge in energy demand, the oil and gas industry is being challenged to improve production efficiencies and maintain a growth trajectory in its crude oil and natural gas resources. However, the safety of the men and women in the oilfield workforce must be paramount to any other aspect of a planned job.

and automation bubble in the oilfield centers around the “what” and the “how” – the specific technology available to be deployed and the task it is designed to perform.

Companies are keying in on “what” parts of the traditional job are being changed and outdated, and “how” emerging technologies such as advanced data analytics, artificial intelligence (AI), machine-learning algorithms and remote monitoring are driving this shift in the energy sector.

Increasingly, producers and operators are turning to intelligent automation technology to increase production in a cost-effective manner.

While the “what” and “how” may dominate the conversation, companies should not overlook the most critical element in the digital revolution — the “who”.

Most of the current dialogue around this innovation

In every case out of a hundred, process automation

30

Well Servicing Magazine/December 2021

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and optimization must be secondary to oilfield safety. In order to keep safety first, the oilfield workforce will need to integrate, manage and work alongside these new tools for a safe, successful operation. It is important not to forget that in the age of technological transformation, the “who” is just as critical as the “how.”

tial to success. A company’s safety standards need to be deeply rooted in a thorough understanding of how new technologies work and where elements of safe working environments are impacted before jobs are assigned and people are deployed on site.

Any oilfield worker associated with a new tool or process needs to be trained on its complete functionality in As with any rollout of new industry innovations, the tra- order to ensure job safety. It is also important to remember that automation will impact a wide range of routine ditional safety requirements and certification standards tasks in the oil and gas industry, both in the field and in that exist in the field may not be in line with the newly support functions. Overlooking the impact of automation created safety requirements. Each step in oilfield proon supporting roles like finance, accounting and human duction is intrinsically linked, so that when one variable resources can lead to unforeseen complications. It is is changed (replacement of a frac feeder, updating an essential for companies to acknowledge the impacts existing blender, decreasing the number of trucks on the of automation across the entire sector and continue to road), the entire system needs to be re-evaluated from a develop proper safety procedures that worker safety point-of-view. lead to harmony between each part of “There may be the process.

There may be unforeseen complicaunforeseen complications that arise with the implementaIntelligent automation is not simtion of new tools/procedures on a job tions that arise with the ply the deployment of digital tools; it site. Every chain in the link needs to implementation of the represents a completely new way of be evaluated from a safety perspecnew tools/procedures doing business that allows companies tive and planned for accordingly. This to constantly discover, learn, change, can be accomplished by engaging on a job site. Every and expand as they strive to meet the entire management team in plan chain in the link needs growth objectives. Now, it is more imanalysis to ensure safety management to be evaluated from a portant than ever to integrate worker is included in the complete business safety as a fundamental part of the safety perspective and management process and not just an oilfield revolution. add-on after the fact.

CHANGING LANDSCAPE & STANDARDS

planned for accordingly.”

The deployment of system-wide automation procedures and technologies is beginning to allow companies to do more work with less required handson deck. This “less is more” approach allows companies to determine what is necessary on site, often driven by cost efficiencies.

System automations are changing the requirements of some jobs that have traditionally needed six pairs of hands to only two. A parade’s worth of vehicles and field instruments are being replaced with smaller, sleeker apparatuses that can accomplish the same goals more efficiently and with a fraction of the original carbon footprint. The key consideration that needs to be made with the changing number of required workers on site is safety qualifications are becoming more complex and demanding. Companies that are engaged in these operations need to be cognizant of safety gaps that will be created with this sector-wide replacement of the old with the new and properly develop their safety standards to cover all of the gaps for on-site workers.

To keep pace with the ever-changing industry dynamics, comprehensive training to the task at hand is essen-

Implementing machine learning is not new or unique to the oilfield. Every industry from agriculture to textiles is tinkering with new technologies that can achieve the holy grail of business objectives: driving up production while driving down costs.

With the steady rollout of new smart-technology and intelligent automation, the energy sector has already proven that it can work towards a smarter future. The only way to make that future stick is with comprehensive and sustainable safety standards that continue to evolve alongside the constantly changing landscape of technology implementation. ......................................................................................................

Phillip DeBauche is the Council’s Director of Environmental and Technical.

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BITCO Insurance Companies ...............................................................................................21 Cavins Oil Well Tools ...........................................................................................................36 Commerce Bank ....................................................................................................................5 GD Energy Products.............................................................................................................2 Loftin Equipment .................................................................................................................27 Lucky Rental Tool .................................................................................................................13 Lucky Services ......................................................................................................................13 Lucky Health & Safety ..........................................................................................................13 NOV .....................................................................................................................................10 Oil States Industries...............................................................................................................29 TRM LLC ..............................................................................................................................13 VIVA Energy Services ...........................................................................................................29

SEP TEM B E R AUG 29-SEPT 1 HOUSTON U.S. Foreign Service Officer Industry Training Program

OCTOBER HOUSTON Shoot for the Stars Marksmanship Tournament

OCTOB E R OCTOBER 5-6 HOUSTON Oil & Gas 101

WellServicingMagazine.com

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Reborn in the U.S.A. Before Recertification

After Recertification

When you need to refurbish or recertify your pipe handling equipment, you want it done right and delivered to you right away. That’s why Cavins has a three-acre facility wholly dedicated to doing just that. Right here in the U.S.A. We’ve been in the well servicing business for 90 years designing and manufacturing the highest quality oil well tools in the industry. We know how expensive downtime can be, so we get your equipment back to you in the shortest time possible.

We follow API-Q1 and ISO9001 regulations and can load test up to 350-ton capacity. We have the

know-how and the specifications to refurbish the vast majority of pipe handling equipment in the field today.

You can count on Cavins to do the job right the first time and get your tools back to you right now so you can get up and running without delays.

Call today or Email us at repair@cavins.com (661) 827.1200 Fax (661) 827.1300 www.cavins.com email: repair@cavins.com

Born in the U.S.A. ®

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Spiders Slips Power Tongs Sand Pumps Bailers Hose Connections Depthometers Oil Savers Junk Snatchers Safety Clamps Sucker Rod Elevators Tubing Elevators Cement Dumps Blowout Preventers and Rod Strippers Rod and Crane Hooks Elevator Links and Hooks Baash-Ross, Foster, Hillman-Kelly, KelCo and Web Wilson are licensed trademarks of National Oilwell Varco, LLC

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