June 2014 The Bakken Magazine

JUNE 2014

The Intricacies Of

Infrastructure A flare capture tech provider, EPC contractor partner to solve industry’s major needs Page 32

Plus:

2014 WBPC Event Review Page 20

AND:

Power Supply Providers And The Evolution Of Equipment Page 42

Bakken Perceptions Vs Reality Page 50

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The BAKKEN MAGAZINE JUNE 2014

1 - 8 0 0 - 2 2 7- 8 1 5 9

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Q M A T. C O M

CONTENTS

JUNE 2014

VOLUME 2 ISSUE 6

Pg 32 INFRASTRUCTURE & CONSTRUCTION

Partners In Flare Reduction

A flare capture technology provider and an EPC contractor collaborate to solve the challenge of flaring in the Bakken.

BY LUKE GEIVER

Pg 42 INFRASTRUCTURE & CONSTRUCTION

Generators Evolving With The Bakken

Don’t skip the genset in any discussion on Bakken infrastructure development. Power supply equipment is as crucial as ever, and evolving.

BY EMILY AASAND CONTRIBUTION

50 Bakken Backers: Matters of Perception

Survey reveals misconceptions about living conditions that may make “outsiders” want to rethink what they know of the Bakken oil play.

Pg 20 EVENT REVIEW

Big Moments From The 2014 WBPC

A recap of the Bakken’s most important event of the year, including the stories, stats, speeches and takeways that defined the 2014 Williston Basin Petroleum Conference.

BY THE BAKKEN MAGAZINE STAFF

BY ROB LINDBERG

6 Editor’s Note

On Conferences and Infrastucture

BY LUKE GEIVER

8 ND Petroleum Council

Joining the elite: 1 million barrels launches North Dakota into an exclusive club

BY TESSA SANDSTROM

10 Events Calendar ON THE COVER: A GTUIT LLC service worker on a Bakken well pad equipped with the company's unique natural gas liquid extraction technology that helps reduce flaring and recover valuable NGLs.

Bakken News and Trends

14 Bakken News

Bakken News and Trends

PHOTO: GTUIT LLC

THEBAKKEN.COM

5

EDITOR'S NOTE

On Conferences and Infratructure

Luke Geiver

Editor The Bakken magazine lgeiver@bbiinternational.com

For the Latest Industry News:

www.TheBakken.com Follow us: twitter.com/thebakkenmag facebook.com/TheBakkenMag 6

Two million total barrels of oil per day will eventually be produced in the Williston Basin, the CEO of the Bakken’s No. 1 oil producer predicts. Development of the Williston Basin will impact the next five

generations, according to North Dakota’s top oil regulator, meaning that our grandchildren’s grandchildren will be around to see it. Bakken crude is, and has been, correctly classified for shipment via rail. Each one of these significant tidbits was disclosed at the 2014 Williston Basin Petroleum Conference, held in Bismarck, N.D., May 22-24. It is hard to characterize the event as a conference anymore, as, not surprisingly, the success of the WBPC has mimicked the rapid trajectory of the Bakken development itself. The WBPC is not just a booming event anymore, it has become an industry institution. For our “Big Moments From The 2014 WBPC” review, The Bakken magazine team dissected the presentations, speeches and most-talked about stories from the event.

In this month’s issue, we also tackled the theme of infrastructure and construction. With North Dakota’s adoption of regulations to reduce flaring going into effect this month, we focused on infrastructure developments aimed at flare reduction. Although a piece on the role, and evolution of, power supply equipment may not seem like the obvious choice for a story, Emily Aasand’s in-depth look at how generators are and will be used to power installations from well pads to construction sites reveals what the industry wants and needs from infrastructure-linked equipment. And, as she explains, power supply equipment providers are upgrading their offerings to fulfill the industry’s desire to not only capture, but also utilize as much of the associated gas produced at the well head as possible.

In the story, “Partners In Flare Reduction,” we provide a behind-the-scenes account of how a relatively young flare capture technology provider formed a partnership with a well-established EPC contractor whose project portfolio includes several Bakken-based infrastructure developments, refineries on both coasts and even the Minnesota Twins stadium. Following a year of due diligence, GTUIT LLC and Corval Group announced their partnership during the week of the WBPC. In a sit-down meeting with the main members of the partnership in the VIP room, we learned why the unique partnership could provide immediate assistance to operators looking for an all-encompassing solution to flare reduction. The partnership will combine GTUIT’s NGL recovery technology with the project management and manufacturing abilities of Corval, a combo that will put proven technology, and the necessary well site infrastructure together faster than ever before.

For the second month in a row, we have included a contribution written by Rob Lindberg, director of Bakken Backers, an organization focused on helping businesses, community leaders and others understand whats going on in the Bakken. Lindberg tours the state on a near-weekly basis, talking with people about the impact of the Bakken on day-to-day operations. We are excited to announce that Lindberg’s contribution's will be a monthly staple of the magazine.

And, on the topic of monthly pieces included in every issue of the publication, check out the North Dakota Petroleum Council’s column penned by Tessa Sandstrom. It will give you reason for excitement.

The BAKKEN MAGAZINE JUNE 2014

ADVERTISER INDEX www.THEBAKKEN.com VOLUME 2 ISSUE 6

26

AE2S

17

AE2S Water Solutions

46 Airgas USA LLC

EDITORIAL Editor Luke Geiver lgeiver@bbiinternational.com

30

American Hospitality Management Inc.

53

American Society of Civil Engineers

Senior Editor Sue Retka-Schill sretkaschill@bbiinternational.com

54

Bakken Directory.com

Staff Writer Emily Aasand eaasand@bbiinternational.com

35

BakkenJobs.com

18

Blackmer

34

Brock White Company

PUBLISHING & SALES

31

Capital Lodge

Chairman Mike Bryan mbryan@bbiinternational.com

45 Capps Van & Truck Rental

Copy Editor Jan Tellmann jtellmann@bbiinternational.com

36

CHS, Inc.

55

FMC Technologies Inc.

38

Golight Inc.

Vice President of Operations Matthew Spoor mspoor@bbiinternational.com

39

Greystone Construction

Vice President of Content Tim Portz tportz@bbiinternational.com

47

JANX

CEO Joe Bryan jbryan@bbiinternational.com President Tom Bryan tbryan@bbiinternational.com

44 J-W Energy Company

Business Development Manager Bob Brown bbrown@bbiinternational.com

3

MBI Energy Services

Account Manager Tami Pearson tpearson@bbiinternational.com

12-13

Marketing Director John Nelson jnelson@bbiinternational.com

37

NCS Energy Services, Inc.

Circulation Manager Jessica Beaudry jbeaudry@bbiinternational.com

19

OPTIMAJETS, Inc.

28

Pedigree Technologies

27

Petrogas Process Systems Inc.

Traffic & Marketing Coordinator Marla DeFoe mdefoe@bbiinternational.com

4

ART

56

Art Director Jaci Satterlund jsatterlund@bbiinternational.com

2

Subscriptions Subscriptions to The Bakken magazine are free of charge to everyone with the exception of a shipping and handling charge of $49.95 for any country outside the United States.

To subscribe, visit www.TheBakken.com or you can send your mailing address and payment (checks made out to BBI International) to: The Bakken magazine/Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You can also fax a subscription form to 701-746-5367. Reprints and Back Issues Select back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more information, contact us at 866-746-8385 or service@bbiinternational. com. Advertising The Bakken magazine provides a specific topic delivered to a highly targeted audience. We are committed to editorial excellence and high-quality print production. To find out more about The Bakken magazine advertising opportunities, please contact us at 866-746-8385 or service@bbiinternational.com. Letters to the Editor We welcome letters to the editor. If you write us, please include your name, address and phone number. Letters may be edited for clarity and/or space. Send to The Bakken magazine/Letters, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203 or email to lgeiver@bbiinternational.com.

29

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Quality Mat Company RecyClean Services Rossco Crane Serka Services, LLC

49 Tempus Aircraft Sales & Service 11

Unconventional Resources Technology Conference

16

Wells Concrete

23

Wingate By Wyndham

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7

NORTH DAKOTA PETROLEUM COUNCIL

Joining the elite: 1 million barrels launches North Dakota into an exclusive club

By Tessa Sandstrom

Eagle Ford and Permian, are leading a shale revolution that is reducing our nation’s dependence on foreign oil. The Permian, Eagle Ford and Bakken are three of just nine super-giant oil fields in the entire world to ever produce 1 million barrels per day. These and One million barrels of daily oil production is a milestone only other smaller U.S. shale plays now account for more than 10 percent four states—Texas, California, Louisiana and Alaska—have ever of the world’s oil supply.

North Dakota’s role in this is reached in U.S. history, but for a significant one. Since the Bakken about a decade, only Texas has discovery well was drilled in 2006, continued to produce more than U.S. oil imports have dropped seven figures per day in the U.S. 18.5 percent. At 1 million barrels Over these past 10 years, Texas’s per day, North Dakota’s producstatus has been a lonely one, as it tion alone is equal to 76 percent serves as the only U.S. representaof the oil imported from Saudi tive in an exclusive group of only Arabia and would be enough to 20 countries, and one Canadian province that currently produce 1 fuel nearly 48,272 cars per day.

The impacts on our national—and million barrels per day.

Upon reaching this milestone, international—energy security are immense. According to energy North Dakota will find itself and financial advisor Tom Petrie, among top energy producing the Bakken and “this new era of countries, thanks in large part to growing domestic supply prosinnovation by industry leaders who have developed and success- pects should significantly facilitate America’s leadership in fostering fully deployed the technologies global and economic stability.� that have unlocked the Bakken.

One needs to look no further Production from the Bakken acthan right here at home to see counts for 90 percent of North how energy development is bringDakota’s oil production, and its ing economic stability. Since 2006, impacts continue to reverberate North Dakota has seen its oil throughout the nation and the output grow six-fold, creating tens world. of thousands of jobs and careers In fact, the Bakken, along within the state and contributing with other shale plays like the

North Dakota will reach a significant milestone this spring that will catapult the state to heights that few countries and even fewer states have achieved: 1 million barrels of oil production per day.

8

The BAKKEN MAGAZINE JUNE 2014

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Energy development is also fueling income growth. Since 2011, the rise to 1 million barrels per day has meant 56,000 new jobsâ&#x20AC;&#x201D;well-paying jobs. Because of North Dakotaâ&#x20AC;&#x2122;s strong economy, we have seen our average per capita incomes grow to become the second-highest, behind only Connecticut.

Our state and local governments remain among the major

beneficiaries of oil and gas development. In 2013, the petroleum industry contributed $2.9 billion to state coffers, accounting for more than 50 percent of total revenues collected that year. Since 2006 when oil production was only 109,400 barrels per day, oil and gas industry contributions to state revenues have grown by 1,507 percent. That is not a typoâ&#x20AC;&#x201D;the oil and gas industryâ&#x20AC;&#x2122;s tax contributions have truly grown 1,507 percent from $180.5 million in 2006! At $100 per barrel, it is estimated the industry will pay about $11 million per day in

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production and extraction taxes, further growing state revenues.

The state will continue to see a significant portion of oil and gas taxes funneled to the North Dakota Legacy, or â&#x20AC;&#x153;Rainy Dayâ&#x20AC;?

Fund. In just a little over four years, the fund has accumulated $2 billion. Another $1 billion is expected to be deposited into the fund during the 2013-2015 biennium, further strengthening this fund for North Dakotaâ&#x20AC;&#x2122;s future.

This growth to 1 million barrels should not be taken for granted. Three other states were once a part of this elite group,

but have seen production decline, leaving only Texas and soon, North Dakota in that club. The right policies, however, can ensure North Dakota maintains its spot with Texas and the positive effects are lasting.

It is estimated that North Dakota has another 14 to 17 yearsâ&#x20AC;&#x2122; worth of drilling left to fully develop the Bakken with todayâ&#x20AC;&#x2122;s technology, leading to several decades more of production.

Considering todayâ&#x20AC;&#x2122;s technology is only capable of recovering 6 to 8 percent of reserves, however, the future recovery rate could be even

higher. Every additional 1 percent of recovery would mean an additional 1 billion barrels of oil from the Bakken.

North Dakotaâ&#x20AC;&#x2122;s future is bright, and it is a reflection of the many hard-working men and women who are living, working and investing in our strong and growing communities. We appreciate the patience and support from communities, landowners and North Dakotans as we tackle the challenges of rapid growth.

In appreciation for this support, the North Dakota Petroleum Council will host a

â&#x20AC;&#x153;Million Barrelsâ&#x20AC;&#x201D;One Million Thanksâ&#x20AC;? Celebration on June 25 in Tioga. The celebration will be free and open to the public and will include a BBQ, talks from state and industry leaders, tours of the Clarence Iverson No. 1 well, a mini-museum, aerial tours of the Tioga area, and an airshow by the Texas Flying Legends. We welcome you all and hope to see you there.

Author: Tessa Sandstrom Communications Manager, North Dakota Petroleum Council tsandstrom@ndoil.org 701-557-7744

THEBAKKEN.COM

9

EVENTS CALENDAR

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The Bakken magazine is one of the hottest forums where you can promote your products and services to a targeted circulation of decision makers looking for real solutions to the challenges they face every day in the Bakken play.

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will be distributed at the following events: Bakken Artificial Lift & Production Optimization 2014 July 16-17, 2014 Denver, Colorado Issue: July 2014 The Bakken magazine

Unconventional Resources Technology Conference Establish 2014 your brand August 25-27, and connect your Denver,business Colorado with decision makers Issue: August 2014involved in the Bakken play.

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service@bbiinternational.com | 866-746-8385 | www.TheBakken.com

10

The BAKKEN MAGAZINE JUNE 2014

The Bakken | Three Forks Shale Oil Innovation Conference & Expo

July 2015 Grand Forks, North Dakota

EPA APPROVED

The Issue Are you in compliance with the new EPA regulations effective April 2014?

EPAâ&#x20AC;&#x2122;S AIR RULES FOR THE OIL & NATURAL GAS INDUSTRY

Storage tanks used in oil or natural gas production are subject to EPAâ&#x20AC;&#x2122;s 2012 New Source Performance Standards (NSPS) for VOCs if they have the potential to emit six or more tons of VOCs a year. This legislation (40 CFR 60 Subpart 0000, â&#x20AC;&#x153;Quad 0â&#x20AC;?) affects existing older tank batteries built as far back as of August 2011. Additionally, all recently installed tanks that come online after April 2013 will have to have controls (VRU or combustor), to reduce tank VOC emissions by 95 percent and in place by April 15, 2014 or within 60 days after startup, whichever is later

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The BAKKEN MAGAZINE JUNE 2014

The Solution MISSION™ Enclosed Vapor Combustors: MEVC NOV Mission introduces a full line of reliable enclosed combustors for the ever changing requirements of today’s regulation filled oil and gas industry. Mission’s MEVC design incorporates years of tank vapor experience with a highly effective combustor design— tested and EPA approved “99% plus” for destruction of vent emissions from oil and condensate tank batteries, loading operations and storage facilities. NOV Mission’s stainless steel enclosed flare design is capable of meeting strict environmental industry regulations while also offering significant cost savings. Scalable to customer application, this combustor is field-proven throughout the world.

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13

BAKKEN NEWS

14

The BAKKEN MAGAZINE JUNE 2014

BAKKEN NEWS & TRENDS

BAKKEN NEWS

Lifting Export Ban Would Create ND Jobs Bakken-related hiring firms and job placement companies that are busy now would see busy taken to a whole new level, if the ban on U.S.-based crude oil exports is lifted. That situation could create 10,000 new jobs in North Dakota in less than seven years, according to a report recently completed by the energy consulting firms of ICF International and EnSys Energy.

While the U.S. currently exports refined crude products such as gasoline and diesel, the ability to also export crude would prompt continued and higher produc-

tion for the U.S., according to the report. For organizations such as the American Petroleum Institute, the importance of lifting the export ban is linked to the reward of free trade: new jobs, higher investment in oil production and greater energy security.

For Bakken oil producers, lifting the ban would assure a refining endpoint for the light sweet crude and its refining capacity in the U.S. could max out in the next few years.

The report assessed how lifting the ban would impact the following categories: changes in hydrocarbon

production; changes in refinery throughput and costs; changes in import-export port services; changes in transportation sector including changes in production flows by rail and pipeline; and the changes in petroleum product consumer costs due to changes in fuel costs “Restrictions on exports only limit our potential as a global energy superpower,” said Kyle Isakower, vice president for regulatory and economic policy at API. “Additional exports could prompt higher production, generate savings for consumers and bring more

jobs to North Dakota. The economic benefits are wellestablished, and policymakers are right to reexamine 1970sera trade restrictions that no longer make sense.”

Depending on global oil prices, the report said that if the export ban were lifted nine states—Florida, Michigan, Indiana, California, New York, Pennsylvania, Ohio, Texas and North Dakota— could each see more than $1 billion in state economic gains in 2020 alone.

THEBAKKEN.COM

15

BAKKEN NEWS

May, June Mark Record Bakken Months

16

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Resources monthly production report indicated that the state was producing 261,088 barrels of oil per day. In April 2012, the same report revealed North Dakota production had reached 348,367 barrels of oil per day.

In April 2013, production for

The BAKKEN MAGAZINE JUNE 2014

the state totaled 558,254 barrels of oil per day. This year, the April report showed the stateâ&#x20AC;&#x2122;s production to be 951,340 barrels of oil.

For the entire Williston Basin, the N.D. Pipeline Authority first reported in September 2013 that the Williston Ba-

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Itâ&#x20AC;&#x2122;s timespans like the previous two months that have made the Bakken a globally recognized oil producer.

This month, North Dakotaâ&#x20AC;&#x2122;s oil industry announced it has surpassed 1 million barrels of oil produced per day (bopd).

In May, Continental Resources issued a statement announcing that the Bakken shale play (including North Dakota and Montana) has produced a cumulative total of roughly 1 billion barrels, according to data from energy consultant and information specialist IHS Inc. â&#x20AC;&#x153;This milestone validates the immense potential of the Bakken field and development is just beginning,â&#x20AC;? said Jack Stark, senior vice president of exploration for Continental Resources in the statement. â&#x20AC;&#x153;Two thirds of this oil was produced in the last three years.â&#x20AC;?

In April 2010, the North Dakota Department of Mineral

sinâ&#x20AC;&#x201D;including North Dakota, eastern Montana and South Dakotaâ&#x20AC;&#x201D;had surpassed 1 million bopd at 1,013,005.

BAKKEN NEWS

Despite Fat Cat Sale, QEPâ&#x20AC;&#x2122;s Bakken Position Still Strong

QEP Resources Inc. has devoted 52 percent of its 2014 capital allocation to the Bakken, the highest percentage out of eight possible allocation categories. Although the exploration and production company has continued to focus primarily on the Bakken shale play, it recently sold acreage located in the Williston Basin. QEP Resources wholly owned subsidiary QEP Energy Co. has sold what the company called its Fat Cat acreage for roughly $35 million. The Fat Cat acreage was not considered to be an operated focus area.

Although QEP still has leaseholds spread throughout Williams County, N.D., its main leasehold focus will now be its Fort Berthold and South Antelope blocks. In both areas, QEP has reported well costs of $11 million per well for wells drilled to 12,500 feet. Before the sale of Fat Cat, QEP held 117,000 net acres in the Williston Basin.

The company is currently running eight drilling rigs. According to

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Chuck Stanley, president, QEP will average 20 to 25 well completions per quarter in 2014. The company is monitoring other infill density programs being performed by other operators, and, QEP is also working on its pilot program to determine optimal well spacing. The results of the pilot project may be released by the end of the year.

Last year, the company purchased a large acreage block in the Permian Basin, a play that now represents roughly 18 percent of total capital allocation for the company.

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BAKKEN NEWS

RR Report: Bakken Crude Does Not Cause Accidents

LAB SETTING: Inspectorate's new Williston, N.D., lab will work to provide quicker test results to clients looking to verify oil characteristics before shipping.

PHOTO: INSPECTORATE

Crude-by-rail shipments have quadrupled in the past decade and, according to Kip Wills, director of the U.S. Pipeline Hazardous Materials SafetyAdministration’s Central Region office, the increase is not slowing..

The increase in crude-by-rail has provided oil producers a flexible option to transport Bakken crude to available markets on the East, West and Gulf Coasts, an economic element of crude by rail that will keep the practice strong for years to come regardless of pipeline installation, Wells said.

The benefits of shipping crude by rail have not come without a handful of negative incidents, mainly train car derail-

ments. To ensure that PHMSA is helping to decrease the number of incidents related to the Bakken, Wills conducted a two-year study on crude by rail, specifically in western North Dakota, during which he spent more than 80 nights in North Dakota over the past year. He has a clear message about what he has seen. “Bakken crude didn’t cause any of the accidents,” he said. The issue is with rail infrastructure or human error.

In February and March, Wills led a team effort to conduct inspections of rail car facilities and crude handling locations that included visits to 40 facilities, and educational outreach sessions for

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The BAKKEN MAGAZINE JUNE 2014 SUPPLIER

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first responders on flammableliquid incident protocols. As a result, the team now has 10 enforcement actions pending. But, crude handling via rail does not have any major issues, Wills says.

For Wills, a state trooper, the one issue that is concerning is the: crude moved from the well site to a pipeline or transloading facility via cargo tank. Because not all liquid cargo tanks are the same, and not all are classified to haul a specific type of Bakken crude, some tankers are moving crude without the proper classification. This summer, Wills intends to focus more on cargo tank hauling and he hopes operators will take note. â&#x20AC;&#x153;They will

have to come up with some kind of testing protocol for properly matching crude type with the proper cargo tank,â&#x20AC;? he said.

To help operators test the crude before shipment, facilities like Willistonâ&#x20AC;&#x2122;s newest testing site can help. Inspectorate, a division of Bureau Veritas Commodities Division, global testing and analysis firm that recently opened a lab in Williston, is one of many firms that can analyze crude oil and gas from a North Dakota well. Neil Chapman, operations director for the lab, said his team can ensure that operators or crude handlers are in compliance with regulations. â&#x20AC;&#x153;We are heavily involved in making sure the fuel is tested

LAB WORK: Although many facilities focus on crude testing, others, like Inspectorate's Williston facility, are looking to expand into proppant testing.

correctly to ensure the correct packaging group is applied for that oil movement,â&#x20AC;? he said.

One of the main benefits of Inspectorateâ&#x20AC;&#x2122;s services is the minimal time to test and provide crude characteristic results back to its clients. The Williston facility can complete a testing procedure in 24 hours, Chapman said. The timeliness of the lab help crude handlers cut the lead times required to line up the appropriate cargo tanks for hauling.

Although its initial focus on crude characteristic testing will represent the largest portion of its service offerings, Chapman believes other testing services will help to expand the reach of the Williston lab, including other testing services related to the transportation of crude and of handling ceramic-based proppants.

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EVENT REVIEW

BIG

MOMENTS FROM WBPC 2014 A breakdown of the memorable speeches, stats and stories from the Bakken’s biggest industry gathering of the year

By The Bakken magazine staff

The Williston Basin Petroleum Con- Think Long Term, Act Now ference has ascended from event to inLynn Helms, director of the North Dadustry institution. This year’s show broke kota Department of Mineral Resources, ofattendance and exhibit records. Attendees had opportunities to speak with providers of well site-specific clothing and the operators responsible for the actual wells. CEOs were there. Partnerships were announced and, without a doubt, new strategic relationships were conceived. Massive oilfield equipment was on display, and stories on the future of the Williston Basin development flowed like light, sweet crude for three days in Bismarck at the Bakken’s biggest spectacle.

20

The BAKKEN MAGAZINE JUNE 2014

fered an in-depth account on the Williston Basin and a serious look at the future of western North Dakota’s oilfields. “There will be five generations of North Dakotans and people around the world impacted by the Bakken and Three Forks,” he said. “That means what we do today will impact our grandchildren’s grandchildren.”

Helms has overseen the regulatory development of the Bakken since its inception.

Although his oversight has meant dealing with issues new to him and his staff, his presenta-

EVENT REVIEW

THEBAKKEN.COM

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EVENT REVIEW

tionâ&#x20AC;&#x2122;s mantra was linked to the idea of longevity. The state, the industry, and anyone involved with the oil and gas industry needs to think longterm, but act now, he said.

The ideal is already in action with the construction of crucial infrastructure to handle oil and gas. The boom in infrastructure will only continue, he said. â&#x20AC;&#x153;There is a huge amount of work and production ahead of us.â&#x20AC;?

In the Bakken and Three Forks formations, the industry is now entering full optimization mode. Roughly 90 percent of the core Williston Basin acreage in both formations has been derisked. Because the acreage has been proven, operators are now experimenting with interwell spacing and multiwell pads, some moving to 18-well pads.

Although the Bakken and Three Forks are proven to be economical oil producers, the methods for oil extraction still vary in type and success. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;ve been doing this since 2004 and we donâ&#x20AC;&#x2122;t know how many wells it is go-

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ing to take to achieve ultimate primary recovery from this incredible resource,â&#x20AC;? Helms said. â&#x20AC;&#x153;There has been a tremendous amount of work to increase the recovery factor, and that will continue.â&#x20AC;? Investments in ultimate recovery rates have

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focused on completion design and optimal well spacing to date, and experimentation with both will continue. â&#x20AC;&#x153;I hope I can stand up here two years from now and tell you that we found the answer, but I canâ&#x20AC;&#x2122;t assure you of that.â&#x20AC;?

As the industry continues to experiment with downspacing and completion design, it

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The BAKKEN MAGAZINE JUNE 2014

will also have to learn how to capture more flared gas. With the start of a new protocol designed to require operators to formulate, and eventually implement, a plan to capture more associated gas produced during oil retrieval, Helms and his team plan to spend the next six months making the gas capture plan efficient and effective for industry and the state. Because no other states have dealt with the type

EVENT REVIEW

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of flaring that the Williston Basin features, the team cannot look to others for examples. â&#x20AC;&#x153;We are really the first to try and do all of this stuff with gas capture,â&#x20AC;? he said.

While the team will be focused on streamlining the gas capture plan process, others from the DMR will continue work to research potential source rocks present below the Bakken and Three Forks formations. According to Helms, there are six formations that could potentially hold value as unconventional resources.

CEO Perspective

Harold Hamm, Jim Volker and Thomas Nusz, all CEOs of their respec-

tive exploration and production companies, heavily focused on developing the Bakken, shared the stage to provide updates and new perspective on their accomplishments in the Williston Basin.

The message of Hammâ&#x20AC;&#x2122;s presentation was headline worthy. â&#x20AC;&#x153;I ultimately predict we will be producing 2 million barrels per day,â&#x20AC;? he said. â&#x20AC;&#x153;I donâ&#x20AC;&#x2122;t think that is over the top.â&#x20AC;?

Continental is working to identify the best option for developing its resources through well density and spacing tests. The entire Bakken industry is monitoring that work, Hamm said. The industry is also in fear of another crudeby-rail incident; something Hamm said could negatively impact production.

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Jim Volker, CEO of Whiting Petroleum Corp., spoke about Whitingâ&#x20AC;&#x2122;s production history in the Williston Basin and how it has increased the size of the Den-

26

ver-based company. â&#x20AC;&#x153;Whiting is a rapidly growing company due, in large part, to its efforts in North Dakota,â&#x20AC;? he said. In 2014, Whitingâ&#x20AC;&#x2122;s Williston Basin production reached an all-

The BAKKEN MAGAZINE JUNE 2014

time high, and the company also set a record for its discretionary cash flow.

The future for Whiting looks promising, due, in part, to recently applied comple-

tion designs involving cemented liners and coiled tubing, Volker said. The design has increased oil production by as much as 70 percent in wells that have used the new design. The knowledge Whiting Petroleum has gained in the Bakken, including from the new methods, has Volker excited for new ventures the company will develop on new acreage in Colorado.

Thomas Nusz, CEO of Oasis Petroleum, also shared perspective on the Bakken pure-playâ&#x20AC;&#x2122;s completion methodology along with its plans for growth. â&#x20AC;&#x153;Depending on whose projections you look at over the next three to five years, we [industry] could be producing 1.5 to 1.8 million barrels of oil per day,â&#x20AC;? Nusz said. If the high estimates are reached, Oasis will be playing a major role. â&#x20AC;&#x153;We are so effi-

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cient with drilling,” Nusz said.

In 2010, Oasis was drilling 10 wells per drilling rig per year.

Four years later, the team is drilling 14 wells per drilling rig per year, and the company has increased the number of drilling rigs it operates. Oasis has a drilling inventory that should last 17 years. It currently produces 43,000 bopd on roughly 500,000 acres.

Like Continental, 2014 will be a year devoted in large part to downspacing tests and experimentation with completion design. “As we go into the second half of the year, we will have about 60 percent of our wells that will have something other than our base completion design,” Nusz said. The

current design used by Oasis included a 36-stage frack with roughly 4 million pounds of proppant. According to Nusz, the company has found recent success with slickwater fracks.

A seven-well pad to be completed this year will feature slickwater frack jobs on every well, he said, to illustrate his point. “We are trying to optimize what we have before we go into full field development and start punching these things out,” Nusz said.

Planning efforts by Oasis have become complex.

In year’s past, the company needed only 18 months to plan for new wells, but that has changed. “We have had to change our planning horizons

from 18 months to 36 months. In the first part of this year, we were already starting to lay out our plans for 2015,” he said.

Crude Characteristics Determined

A study of the characteristics of Bakken crude was completed in time for the event.

Jeff Hume, vice president of strategic growth initiatives for Continental Resources, provided an inside look at how the study was conducted and what the results reveal. Several operators joined together for the study, Hume said, so that it would provide more comprehensive results.

Turner, Mason & Co., de-

signed and performed the study. The tests involved 15 well sites and seven rail car terminals resulting in 152 samples of crude taken from every region of the Williston Basin. The study cost $400,000 and the results offer verifi able insight into Bakken crude. According to the North Dakota Petroleum Council, the study results showed that Bakken crude “does not pose a greater risk to transport by rail that other transportation fuels.”

Separate tests involving samples from a rail facility also helped to prove Bakken crude’s stability in different temperatures and in different geo-

THEBAKKEN.COM

27

EVENT REVIEW

graphic regions. Samples collected from a rail facility from August to March showed that the crudeâ&#x20AC;&#x2122;s stability remained roughly the same in different temperatures. A study also tested crude in five rail cars located in North Dakota. The rail cars were shipped to St. James, Louisiana, and the crude was tested again. The tests showed the crude did not undergo any meaningful changes.

The main takeaways from the study are that Bakken crude is not corrosive and that it is consistent from the time it is taken from the well until it is delivered at an offload site following rail transport. All of the verified characteristics show that Bakken crude falls within the specifications to safely transport crude using existing U.S. DOT 111 railcars.

INTERESTING EXHIBITS: Like the wooden matting hoisted in the air (pictured here), the outdoor exhibits included equipment from every segment of the oil and gas industry.

PHOTO: RENAE MITCHELL

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The BAKKEN MAGAZINE JUNE 2014

After a final summary of the test results is released this month, Hume said the team that worked on the tests will develop best practices for creating the most stable barrel of Bakken crude possible. â&#x20AC;&#x153;We are going to try and develop some standards,â&#x20AC;? he said. The standards could include a Bakken benchmark label that would represent a quality and characteristic standard of the liquid for anyone is involved in the handling and utilization of the product to see.

The Future of Bakken Crude

Helms and the oil company CEOs presented the study results on the event main stage, but many more insights into the future of the Williston Basin were offered throughout the event.

Global oil and gas economist Vikas Dwivedi of Macquarie Securities Group presented on the global outlook for oil supply, including major factors that impact the global oil landscape. According to Dwivedi, the worldâ&#x20AC;&#x2122;s demand for oil is climbing again. â&#x20AC;&#x153;We are back to pre-

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HANDS-ON LEARNING: As part of the outdoor exhibits, young students and others had the opportunity listen to industry experts discuss the basics of the Bakken.

PHOTO: RENAE MITCHELL

financial crisis oil demand growth,” he said. China’s demand for gasoline is clear, he said, noting that the country is on pace to sell 25 million gasolinebased cars this year. The U.S. topped out on gasoline-based car sales at 18 million nearly 10 years ago, he added.

The growing demand for oil is good and bad for the Bakken. For Dwivedi, the biggest issue for Bakken crude, or light sweet crude, is the light sweet crude refining capacity in the U.S. Unless the export ban is, however--allowing overseas refiners to take in light sweet crude—“we will be drowning in light sweet crude,” he said. By the end of the year, the U.S. may have more light sweet crude than it can handle. “We are living on borrowed time.”

Over three days, roughly 4,500 people attended the 2014 WBPC. The trade show floor included 530 exhibitors, and 150 entities were classified as sponsors. Sean Hannity, a national radio voice, spoke on the main stage to an audience that filled the Bismarck Civic Center floor and the bleachers of the facility. His message to attendees was based on his favoritism of the Bakken, a place he regularly tells people throughout the country to head for in search of employment. To close the show, Ron Ness, president of the NDPC thanked those in attendance, and his staff. He also commented on his aspirations for the event. “We wanted to make this a world class event.”

Author: Luke Geiver Managing Editor, The Bakken magazine lgeiver@bbiinternational.com 701-738-4944

30

The BAKKEN MAGAZINE JUNE 2014

INFRASTRUCTURE & TECHNOLOGY

PARTNERS IN FLARE REDUCTION The venture between a relatively new technology provider and a nationally recognized EPC contractor hints at the current state of flare reduction

By Luke Geiver

North Dakota Gov. Jack Dalrymple believes that 2014 will be a pivotal year for the state’s oil and gas industry and that several years from now, developments and regulations put in place this year will be credited for forming the industry’s future. For Dal-

rymple, the future starts this summer, when regulations designed to promote greater flare gas capture take effect. “We are a state that has encouraged oil and gas production, but we are not a state that has been soft on regulation,” he says.

A relatively young Bakken-based flare gas capture technology provider and a nationally recognized engineering, procurement and construction (EPC) contractor both hope the governor’s belief that this summer’s flare gas regulations will help to shape the future of the Williston Basin will come to fruition. Less than a month before the state implemented its regulatory process designed to force operators to capture more of the

UNIQUE PARTNERSHIP: To provide clients with access to a wider ranger of flare solutions in a quicker time period, GTUIT LLC and Corval Group have partnered.

32

The BAKKEN MAGAZINE JUNE 2014

INFRASTRUCTURE & TECHNOLOGY

THEBAKKEN.COM

33

INFRASTRUCTURE & TECHNOLOGY

MANUFACTURING MIGHT: Corval Group will help to manufacture GTUIT Technology through the partnership.

PHOTO: GTUIT LLC

associated gas produced at the well site, and just days before the governor made his statements about 2014â&#x20AC;&#x2122;s impact on the Bakkenâ&#x20AC;&#x2122;s future, GTUIT LLC and Corval Group announced a unique partnership that could not only help the state to reduce flaring, but also thrive with, because of the

greater emphasis by operators to invest even more into flare reduction GTUIT, a Montana-based remote flare gas capture technology and service provider formed in 2009, and Corval Group, an EPC contractor responsible for building several gas compression stations

in North Dakota and working on other major oil and gas infrastructure developments, announced a strategic partnership in late May. The idea for the partnershipâ&#x20AC;&#x201D;in the works for roughly one yearâ&#x20AC;&#x201D; is simple: Help upstream operators and midstream processors establish unique

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The BAKKEN MAGAZINE JUNE 2014

INFRASTRUCTURE & TECHNOLOGY

SERVICE SECRETS: The GTUIT team has found success with operators based on its ability to provide full-service to the use and maintenance of its technology, a trait that was attractive to Corval Group.

PHOTO: GTUIT LLC

solutions to their flare-linked challenges.

With new regulations requiring operators to focus on something other than oil extraction, the partnership believes it can help operators utilize the associated gas resource without investing additional time into the process of doing so.

To date, no partnership formed to address flare-based issues in the Bakken has featured two entities with as much bootson-the-ground experience as the GTUITCorval Group team-up, according to Dave Reif, vice president of business development for Corval Group. And, to date,

there has not been the level of regulation on flaring that is now present in the state.

The formation of a partnership that offers Bakken oilfield experience with new ways to address flaring is a good thing, Reif believes. Since 2009, Corval Group has been looking for a way to enter the

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In the harsh world of oilfield operation,

IT’S SURVIVAL OF THE FITTEST.

INFRASTRUCTURE & TECHNOLOGY

upstream oil industry. “What became obvious about the partnership early on for us was that there was not going to be one company able to solve this problem [flaring] for the industry.

It would have to be multiple companies working together in smart ways and listening to what operators would need,” he says. After a full year of due diligence performed by both sides of the partnership on how each entity might benefit the other or fit into to preestablished company cultures, Reif is excited to talk about the venture, even admitting that although he is excited, the partnership might seem unusual.

A closer look at the industry’s needs for flare reduction and the innovative venture reveals why Reif is excited.

‘I talked to an operator recently that had multiple contracts and multiple pieces of equipment to manage and handle. They don’t want that. They want a one-stop solution.’

Brian Cebull, President, GTUIT LLC

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The BAKKEN MAGAZINE JUNE 2014

Brian Cebull, president and CEO of GTUIT, will never forget sitting down at a Starbucks Coffee shop in Grand Forks, N.D., following a Bakken trade show. After speaking with members from the Corval Group team at a nearby booth during the show, Cebull joined up with Kurt Swenson, executive vice president of Corval Group and Reif to discuss a potential working relationship over coffee. The talk represented a moment of accomplishment for Cebull, the leader of a company founded in 2011 to treat flaring at remote well sites. “We started the company from an idea,” he says. “We now have equipment and systems running out in the field.” GTUIT’s success stems from its technology that removes the natural gas liquids (NGLs) from associated gas streams. “We knew we weren’t going to be the company that would be offering all of the possible flaring solutions. But, we wanted to be a key piece of the solution.”

The sit-down with Corval Group at Starbucks proved to be the moment that helped Cebull realize his vision for expansion. Over the next year, Cebull met with Swenson, Reif and others from Corval more than a dozen times to develop the partnership’s capabilities.

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NEW BOND: Members from each entity involved in the flaring partnership talk at an outside display at the 2014 Williston Basin Petroleum Conference.

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The BAKKEN MAGAZINE JUNE 2014

â&#x20AC;&#x153;Both sides were honest and upfront with each other from the start.

We told each other that there might be nothing to the idea of working together, or, there may be something,â&#x20AC;? Reif says of the partnershipâ&#x20AC;&#x2122;s early days. â&#x20AC;&#x153;We needed to understand the model that they were using and if it would fit us.â&#x20AC;?

According to Swenson, the GTUIT model was exactly what Corval Group had been looking for. Corval Group has worked on several large-scale Bakkenbased projects, ranging from transload facilities to gas compression stations.

The EPC has also worked on refineries outside of the Williston Basin and even the Minnesota Twins stadium. But, until it officially starts working with GTUIT, Swensonâ&#x20AC;&#x2122;s team will have never worked in the Bakkenâ&#x20AC;&#x2122;s upstream sector. â&#x20AC;&#x153;Today we are very strong in the midstream and downstream sectors,â&#x20AC;? he says. â&#x20AC;&#x153;Putting our welders and our boots on the ground that can do work on the well pads will help us launch into the upstream sector.â&#x20AC;?

Together, Cebullâ&#x20AC;&#x2122;s and Swenson's teams will work with operators to evaluate all flaring streams and how they might be utilized. â&#x20AC;&#x153;The oil producers have a portfolio of wells and they have drilling permits in front of them.

The gas companies have a set of assets that are now or will be going into the ground. We want to provide operators analysis of the best solutions based on all of that information in combination with the operatorâ&#x20AC;&#x2122;s needs,â&#x20AC;? Swenson says. In some cases, it could be using multiple GTUIT units, or in other cases, it could mean adding power generation sourced from well site gas. â&#x20AC;&#x153;The solution could be one of many things.â&#x20AC;?

Corval will help fabricate and install any infrastructure needed on the well site from piping to skid mounted units. The service will help to accelerate the timeline required for getting wells equipped to reduce flaring, and for GTUIT, it means getting more units

THEBAKKEN.COM

39

INFRASTRUCTURE & TECHNOLOGY

into the field faster. Corval will help to build the compression refrigeration modules that are critical to the GTUIT technology platform.

GTUIT will continue to service and maintain its technology used in the field, an approach that Swenson was drawn Brian Cebull, too. “No one else is offering the service President and CEO, GTUIT that we see from GTUIT. They can interface with production companies and operators. They live up to the commitments able approach in any given situation, he that they have made,” Swenson says. adds, something the project management The pitch for the partnership is expertise of the Corval side of the partbased on the GTUIT technology that nership will use with operators. can capture the valuable NGLs for the “I talked to an operator recently that gas stream, Corval’s project management had multiple contracts and multiple piecreputation along with its abilty to assemes of equipment to manage and handle. ble well site infrastructure, and, the equal They don’t want that. They want a oneopportunity approach the partnership is stop solution,” Cebull says. To provide an taking to flaring solutions. all-encompassing solution, the partner“We aren’t under any misconcepship will work with several technology tions that there aren’t other solutions out providers. Although the NGL extraction there,” Reif says. The strength of the technology is core to everything, other partnership is about using the best avail-

technologies can and will be bolted on, ‘The regulatory Swenson says. will actually end up working climate is changing. with“We a lot of the other technology proIt is happening viders,” Cebull says. “We will work with them to integrate in with our system and right now. ’ get real solutions on the ground.”

40

The BAKKEN MAGAZINE JUNE 2014

Flaring Solution Providers Needed

The advent of the gas capture plan era forces operators to look more closely at how they can and ultimately will capture more flared gas. Within two years, the gas capture plan designed by the North Dakota Petroleum Council could help the industry to capture roughly 90 percent of all associated gas produced in North Dakota. The monthly average of gas flared has hovered around 33 percent the past several months. Remote well sites that may never connect to a gathering pipeline, or wells in specific regions of the play, have often been the main contributors to flaring. Some of the larg-

INFRASTRUCTURE & TECHNOLOGY

est operators in the Bakken, including Continental Resources, capture roughly 90 percent of all the gas it produces.

In April, Cebull and many other industry representatives provided testimony and perspective before the North Dakota Department of Mineral Resources.

The packed-house event focused on the development and implementation of a gas capture plan. Since the meeting, the North Dakota Industrial Commission has approved the GCP plan. The NDIC has delayed the DMR’s ability to enforce production delays following the absence of a GCP for 90 days starting in June, however.

“The most important thing for us to remember and for the industry to remember, that we heard from the hearing and that we continue to hear, is that the regulatory climate is changing. It is happening right now,” Cebull says.

“The market is changing so fast,” Reif says. “The dynamics of a given well

pad could change every 60 days depending on how the infrastructure is being developed around it. To be fair to the opportunity of utilizing the gas stream, we are going to have to innovate our way to some of the solutions.”

That is the challenge for the recently formed partnership and the rest of the industry, Cebull says, to find ways to show a meaningful flare reduction impact. “We need to show that if you are doing something, you can have a meaningful impact on flaring,” he says.

To Swenson, the formation of the partnership will help it succeed when others might fail. With the partnership, he says, the team can offer speed to market for all of its services, from well site infrastructure construction and project design that a technology provider may have struggled with, to manufacturing the well site technology itself.

Reif believes the partnership will succeed if it can keep a pulse on the in-

dustry and understand all that is happening, from pipeline infrastructure to well pad design.

“If you have real technology that an operator wants to try, we will get it on the ground,” Cebull says.

Even with the excitement of what the team feels it has to offer, their outlook on the future is telling of just how much the flaring segment of the Bakken’s development will change. “We are prepared to significantly advance the deployment of remote capture technology as the long-term infrastructure is being built out,” Swenson says. “We don’t see our solutions as permanent, but we want to accelerate the interim step in a significant way.”

Author: Luke Geiver Managing Editor, The Bakken magazine lgeiver@bbiinternational.com 701-738-4944

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INFRASTRUCTURE & CONSTRUCTION

GENERATORS EVOLVING W ITH THE BAKKE N

CRUEL CONDITIONS: Harsh winter weather not only impacts oil production, it has forced generator providers to revamp service schedules and retrofit equipment to withstand belowzero weather.

PHOTO: NOV PORTABLE POWER

42

The BAKKEN MAGAZINE JUNE 2014

As the extreme demand for power supply continues, the equipment used is evolving

By Emily Aasand

The evolution of generators in the Williston Basin is having a huge impact on the productivity of wells in the Bakken. Most places in Western North Dakota

donâ&#x20AC;&#x2122;t have the utility infrastructure to support oil and gas development, making portable power necessary to keep the wells running effectively and efficiently.

Companies across the country are taking note of the changing demand for generators in the Williston Basin. Companies ranging in size from the nationally known Caterpillar and National Oilwell Varco to smaller, local companies such as Bakken Generator, are offering unique equipment packages specifically designed to meet the customer demands and the changing landscape of the play.

National Companies Make Their Mark

Caterpillar first entered the Bakken with earth-moving equipment for developing drilling pads, and, after recognizing the need, expanded its service to include providing power systems.

Cat also provides for gas compression at the well site, drilling applications, and well services.

THEBAKKEN.COM

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BAKKEN DEBUT: Cat launched its latest generator built with a robust engine to withstand extreme weather conditions.

PHOTO: Caterpillar Inc.

At the Williston Basin Petroleum Conference in May, Caterpillar introduced the new Cat CG137-8 Generator Set. The Cat CG137-8 is a V12, 4-stroke-cycle generator set that runs on natural gas and offers fuel flexibility enabling op-

44

eration on a wide range of gas quality—from wellhead gas to pipeline quality natural gas. The generator set features superior gas engine air and gas mixing ability as well as the trademarked ADEM A4 control system that provides integrated ignition,

The BAKKEN MAGAZINE JUNE 2014

speed control and engine protection.

Cat’s concept was to build a generator capable of running on 100 percent associated gas sourced from the well site. Not only does this reduce the flaring, it also reduces the need and cost

associated with diesel delivery and storage.

Bi-fuel generators use diesel as a pilot fuel to ignite the natural gas, whereas dual-fuel is a combination of natural gas that uses propane as a backup.

Propane is needed when the pressure level of the associated gas sourced from the well head is not adequate. With the shift from using bi-fuel generators to dual-fuel generators, companies are launching new and improved power systems. This allows for a higher production rate at the well site and it cuts back on time and money budgeted for diesel refuels.

“I’ve seen machines last 30 years,” says Todd Krueckeberg, Cat’s North America sales and service manager for oil and gas.

“With the proper maintenance

INFRASTRUCTURE & CONSTRUCTION

and the proper service intervals, those machines can easily run for 20 to 30 years.”

A distinguishing feature of the generator is that Caterpillar uses the same engine in them as it uses in its earth-moving equipment.

“They’re built very robust, very heavy duty, and they’re built so they [the engines] can be overhauled two, three, or four times,” Krueckberg says.

NOV’s Impact

As with most providers, while NOV offers diesel generators but is heading toward the use of natural gas generators as their primary power supply.

“In our fleet, we have both,” says Guillermo Barreto, NOV Portable Power

Northern sales manager. “We have the capability of diesel and the capability of natural gas.”

Although natural gas is the way to go, according to Barreto, it’s a more sophisticated operation.

“It requires more engineering, more of a higher degree of understanding of what you’re pulling up from the ground,” says Barreto. “But operators are slowly but surely gearing up to natural gas.”

NOV has one of the largest generator services in the Bakken area.

“We have two shop locations, one in Ray, N.D., and one in Dickinson, N.D., that are sizeable in terms of footprint, where we actually man the shops with repair capabilities

INTEREST IN POWER: NOV Portable Power frequently provides demonstrations of its equipment's capabilities.

PHOTO: NOV PORTABLE POWER

Bakken-bleed-trim.pdf 10/19/2013 2:59:44 AM

THEBAKKEN.COM

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INFRASTRUCTURE & CONSTRUCTION

Local Companies Enter The to run pumps, pump jacks and other equipment in the off-grid Business

GOING BIG: NOV Portable Power has expanded its North Dakota operations to better service every part of the oilfield. It is also offering larger power supply units.

PHOTO: NOV PORTABLE POWER

and major overhauling capabilities,” says Barreto. “With being located north and south of the Missouri river, we’re able to cover a pretty extensive footprint.”

Barreto has visited with operators regarding the electricity demand and while operators are planning for the long-term, they’re also investing in the electricity grid.

Bakken Generator, a division of Global Power Supply, is a smaller, local portable power supplier that formed in 2012.

The company's goal is to provide worry-free, reliable power at well sites. It provides the generators, the fuel filtration, the maintenance and repairs.

“We thought the Bakken name showed that we weren’t just passing through,” says Ron Zamir, CEO of Bakken Generator. “It shows that we’re based there and that our core business is to provide local service.”

Bakken Generator sees the Williston Basin as a long-term opportunity to provide generator rentals as well as other direct services for its customers. Their generators are used

locations of the Bakken.

“We also provide complete services with our equipment,” says Zamir. “We do pick-up and delivery, we do all the preventive maintenance and on-site repairs, and we also maintain repairs if the unit has a problem.”

That aspect of service is unique to Bakken Generator.

Full-service isn’t something all power supply companies provide.

For customers in the North Dakota area, time is money and timely service and reliability matters, according to Zamir.

Bakken Generator has shifted its focus to build its business in accordance with these high demands.

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IN HIGH DEMAND: The increasing demand in generators and generator services will help provide sustainable jobs for years to come.

PHOTO: GLOBAL POWER SUPPLY

FULL SERVICE: Bakken Generators provides full maintenance and service on more than 100 of its portable power units.

PHOTO: GLOBAL POWER SUPPLY

“We’ve built our business up and now have upward of 100 units that are available to rent,” Zamir says. “We have full-time technicians who live in Williston who are able to meet with customers and to provide additional service.”

That service also helps customers to stay in compliance with the latest government regulations.

With the recent government mandates on the reduction of flaring in the Williston Basin, Bakken Generator expects that more customers will turn to natural gas (dual-fuel) because the natural gas that’s coming out of the ground is reusable and equipment providers are now offering a reliable, and proven, option.

48

“You can use that gas, instead of wasting it, by filtering it and running it through the generator,” says Zamir. “The gas actually comes out cleaner if you run it through a generator because EPA kits can be placed on generators to reduce emissions even further.”

According to Zamir, internal combustion engines are also well-suited to run on associated gas.

The Evolutions

The changes in generator service, besides supplying power to the Bakken, have also created more job opportunities in the Williston Basin.

“We’re [Cat] going to be in the Bakken for a long time and that’ll help provide jobs that

The BAKKEN MAGAZINE JUNE 2014

are sustainable to help that area grow,” Krueckberg says.

The generator business has been around for years and will continue to be prevalent in the Bakken. With oil wells not having access to the electrical grid, generators are going to continue to be in constant demand. Increases in the need for generator services create sustainable and long-term job opportunities.

With North Dakota’s winter being merciless this year, Bakken Generator had to add people to its staff to stay on top of issues and to keep things running the best they could.

This winter, Dickinson, N.D., had the fourth coldest December on record and between the areas of Williston and Bismarck, the state recorded the ninth snowiest December since 1890. Only 60 wells were completed in January, roughly 30 wells fewer than the typical number required to continue the oil production increase from month-to-month, says Lynn Helms, director of

the North Dakota Department of Mineral Resources in his monthly director’s cut.

“That’s one of the things we’re doing to try to improve our customer’s uptime,” says Zamir.

NOV ran across similar issues.

“North Dakota has challenging conditions 6 to 7 months out of the year, with subzero temps, so the equipment must be outfitted correctly,” says Barreto. “We need to make sure our equipment is more robust and weather worthy to endure the harsh winters.”

Author: Emily Aasand Staff Writer, The Bakken magazine eaasand@bbiinternational.com 701-738-4976

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49

BAKKEN BACKERS: CONTRIBUTION

By Rob Lindberg

WORKFORCE CIRCA 2012: An aerial photograph shows workforce housing and other oilfield related equipment.

PHOTO: OVERLAND AERIAL PHOTOGRAPHY

Matters of Perception

50

The BAKKEN MAGAZINE JUNE 2014

The Bakken is changing North Dakota and, while it can be overwhelming, most of us agree it is for the better.

Our cities and schools are growing. Our incomes are growing as well, both inside and outside the Bakken. In fact, North Dakotans are now among the best paid in the nation.

Ten years ago, the typical recent high school graduate moved eastâ&#x20AC;&#x201D;Williston to Minot, Minot to Grand Forks, Jamestown to Fargo, and Fargo into Minnesota. Whether for work, for school or a post-college career, few people chose to make a move west.

Today, the story is very much the opposite amid our stateâ&#x20AC;&#x2122;s booming energy industry and the stifled national economy. Thousands of native North Dakotans and many thousands of others have been given the opportunity to build promising careers in the state.

With this sort of success, it is no surprise that a December 2013 poll shows the oil and gas industry receives strong public support with more than 80 percent of respondents giving favor to the industry. Similarly, more than 70 percent thought North Dakota has a bright future. The poll, however, showed very clear differences in how the growth of communities in oil producing

BAKKEN BACKERS

TRAFFIC STOPS: Several high-traffic areas in western North Dakota are undergoing massive retrofit construction upgrades.

Rob Lindberg

counties is perceived by those who live in those counties and those who live outside them.

Poll respondents from outside the state’s oil counties cited greater concern for crime and environmental safety than did those in western oil counties and this difference comes with little surprise. Listen to media reports from the New

York Times or even some of our own media and there’s no escaping their stories of rampant crime and environmental concern. Their stories give an illusion of inescapable crime and a landscape filled with crew camps and well pads.

The truth is considerably different. While crime and public service calls have increased, crime grew only one percent in the oil counties from 2011 to 2012, considerably less than the 7.9 percent

across the state. “To characterize this as the wild, wild West wouldn’t be accurate,” said Attorney General Wayne Stenehjem at the time. Even reported spills require a better understanding. Large spills are very rare. More often than not, a spill is less than one barrel of oil and in 75 percent of incidents, it occurred within a working area designed to contain fluids.

To a much greater extent, citizens in the Bakken

cite much greater concern for issues that can be addressed readily and have either already shown, or are in the midst of, a great deal of progress. They overwhelmingly care more about everyday impacts— driving safely, finding housing and building the infrastructure to support growing communities.

Notably, these responses aren’t from a lack of concern or from ignoring crime and safety by those in the Bakken,

THEBAKKEN.COM

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BAKKEN BACKERS

VIEW FROM THE ROAD: A drill site works in the foreground with several producing well pads near Dickinson, N.D.

but are rooted in a matter of pragmatism. In a recent letter to the editor, a woman wrote â&#x20AC;&#x153;Like anywhere, if you make smart decisions and keep good company, trouble has a tough time finding you,â&#x20AC;? which applies to the vast majority of those in the Bakken mostly concerned with working and feeding their families. Instead, Bakken respondents, more so than non-Bakken respondents, have a more pragmatic outlook on their challenges and look to solving these issues.

These results also follow a pattern of data from earlier studies that show a lack of commonality in per52

ceptions of the oil development between Bakken and non-Bakken counties. When activity in the Bakken first ramped up, surveys showed declining ratings in quality of life in the Bakken from its residents, even dipping below 50 percent, while the perceptions from non-Bakken respondents stayed strong. This changed in late 2012, when development in the oil and gas producing counties took strides and noticeable improvements took hold, such as new hotels, additional restaurants and the temporary bypass around Williston. At that point, Bakken respondents again rated

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quality of life favorably while other North Dakotans fell below 50 percent in ranking western North Dakota positively for the first time. In 2013, these trends intensified, with Bakken residents show-

ing additional satisfaction and non-Bakken residents showing even lower perceptions of the Bakkenâ&#x20AC;&#x2122;s counties.

This is a very telling split.

For two years now, Bakken residents have regarded their

region significantly more favorably than those outside it. These differences in perception impact how communities in western North Dakota develop and who chooses to move to these communities over the long run. They impact how our state’s leaders make expenditures and, likewise, how our western cities and towns will grow into communities that offer unmatched opportunities for both economic success and quality of life.

Most importantly, the differences show that many of us need to learn more about oil development and those in the Bakken need to tell the story about their growth and needs more effectively.

ON THE WEB

Join Bakken Backers at BacktheBakken.org or find us at Facebook.com/BakkenBackers

Author: Rob Lindberg Director, Bakken Backers 701-989-5432 rl@backthebakken.org The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of The Bakken magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).

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