OCTOBER 2015 ENERGY PIPELINE 1
On-site power requirements are critical. Wagner Power Systems has the solutions to your urgent and planned rental needs. Wagner Rental Power responds with a fleet of self-contained electrical power generators and air compressors, many contained within weather-proof, sound attenuated enclosures. This fleet includes portable trailer-mounted units that are easy to move on and off-site. Wagner Power Systems also offers specialized oil field equipment Wagner Rents offers electric power generators up to 100 kW, air compressors up to 375 CFM, light towers, Godwin pumps, hand tools and more.
Find us on the web
Give us a Call
WagnerPower.com
1-877-654-1237
2 ENERGY PIPELINE OCTOBER 2015
ANADARKO PETROLEUM CORPORATION
ANADARKO IS... Among the world’s largest independent oil and natural gas exploration and production companies – providing for today, innovating for tomorrow.
www.facebook.com/anadarkopetroleumcorporation
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: APC ENERGY PIPELINE www.anadarko.comOCTOBER | 2015 NYSE
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Features WE SUPPORT OIL & GAS
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36
A HOMEGROWN PERSPECTIVE
LIFETIME ACHIEVEMENT
Grassroots groups are sprouting up to educate residents about the many benefits of locally produced oil and gas.
Pete Stark, a “giant among the men and ladies” in oil and gas wins COGA award.
By Amy Kegg
By Sharon Dunn
16
2015 ROCKY MOUNTAIN ENERGY SUMMIT By Sharon Dunn
20
LAND OF LIGHT
Biggest solar array east of the Rockies set for Pueblo.
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Collaborative effort closes an old road, promotes new trailhead at Pawnee Buttes Trail. By Nikki Work
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NEW OLD GROWTH
Grover rancher, Pawnee Buttes Seed replant land after wind turbine installation. By Bridgett Weaver
4 ENERGY PIPELINE OCTOBER 2015
Can Images horizontal of chemical wells enhance concentrations opportunities in soils usingforinfrared small geothermal spectroscopy. power.
ON THE COVER Design by Darin Bliss
By ByGary GaryBeers Beers
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By Jeff Tucker
A FENCE FOR DEFENSE
TECH TECH TALK TALK
IRAN SANCTIONS
A new agreement offers a little relief for the Iranian economy.
Departments
By Linda Kane
42
U.S. EXPORTS BAN The why behind the 1970s embargo on exports. By Linda Kane
51
MAKING HOLE Meteor crater oil discovery. By Bruce Wells
8
Support Company Profile
10
Field Worker Profile
12
Executive Profile
44
News Briefs
54
Data Center
Oilfield Water Logistics
Meet Rebecca Johnson, Anadarko Petroleum Corp.
Meet Craig Walters, Anadarko Petroleum Corp.
See What We’re Made Of. Storage, separation and control solutions when you need them, where you need them.
Let us show you the Worthington difference.
1.800.835.9136 Energy@WorthingtonOilandGas.com
Columbus, OH
Skiatook, OK
www.WorthingtonOilandGas.com
Wooster, OH
Bremen, OH
Dickinson, ND Garden City, KS OCTOBER 2015 ENERGY PIPELINE 5
ENERGY is your
BUSINESS PUBLISHER Bart Smith EDITOR Randy Bangert GENERAL MANAGER Bryce Jacobson ACCOUNT/PROJECT MANAGER Bruce Dennis BUSINESS MANAGER Mike Campbell MANAGING EDITOR Sharon Dunn CONTRIBUTING WRITERS Gary Beers Linda Kane Amy Kegg Jeff Tucker Bridgett Weaver Bruce Wells Nikki Work
You need an electrical distributor that provides more than just inventory. From engineering support to inventory management solutions, we focus our energy on your success. Contact your local Border States location for more information. Greeley CO
970.356.1150
ADVERTISING DIRECTORS T.J. Burr Sabrina Poppe ACCOUNT MANAGERS Cristin Peratt Mary Roberts Kristy Zado CREATIVE MANAGER Alan Karnitz CREATIVE TEAM SUPERVISOR Afton Pospíšilová ART DIRECTION & DESIGN Darin Bliss
ENERGY PIPELINE MAGAZINE 501 8th Ave. P.O. Box 1690 Greeley, CO 80632 For all editorial, advertising, subscription and circulation inquiries, call (970) 352-0211. Send editorial-related comments and story ideas to: editor@energypipeline.com For advertising inquiries, contact: bjacobson@energypipeline.com
borderstates.com Supplying products and services to the construction, industrial and utility industries.
6 ENERGY PIPELINE OCTOBER 2015 30-250 (2015-06)
October 2015, Volume 3, Issue 2. Published by Greeley Publishing Co., publisher of The Greeley Tribune, Windsor Now, the Fence Post, and Tri-State Livestock News.
Agfinity’s Tire and Vehicle Centers provide tires and service for all major equipment from backhoes to man-lifts and cars to light pickups. Plus other services like:
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Bandag Retreads Paint and body services Service trucks that provide mobile tire service Gas and Diesel maintenance for all types of vehicles and equipment For more information about Agfinity’s Tire and Vehicle Centers, please call or visit: (970) 454-4068 (Greeley, CO) or (970) 454-4030 (Eaton, CO) After Hours: (970) 350-1293 / Emergencies: (970) 590-6755 www.agfinityinc.com
OCTOBER 2015 ENERGY PIPELINE 7
SUPPORT COMPANY PROFILE
Oilfield Water Logistics
CORPORATE HEADQUARTERS 8214 Westchester Drive Dallas, Texas 214.292.2011 4775 Larimer Parkway Johnstown 970.775.8100
NUMBER OF EMPLOYEES 100
WEBSITE www.oilfieldwaterlogistics.com
SERVICES OFFERED Oilfield Water Logistics (OWL) provides water infrastructure and services to the energy industry with a focus on pipeline gathering systems, produced water disposal and reclamation.
HOW LONG HAS YOUR BUSINESS BEEN OPERATING IN WELD COUNTY? We’ve had offices in Weld County since 2010 and have been at our current location since 2013.
WHY SHOULD CUSTOMERS DO BUSINESS WITH YOUR COMPANY? OWL, through its partnership with Natural Gas Partners and NGP Energy Technology Partners, is a leader in water management and is able to provide energy companies
in the most prolific basins a confident choice to handle their water logistics. We take the proper steps to ensure our facilities and operations are held to the highest standards. Currently, we’re redesigning and building several facilities to broaden our service offering and provide long term solutions for our customers.
HOW LONG DO YOU ANTICIPATE BEING IN BUSINESS IN NORTHEAST COLORADO? OWL is focused on developing a water
logistics network positioned to serve our customers for the long term.
IS YOUR COMPANY IN A GROWTH MODE? Yes, we have many projects both under development and in the growth pipeline.
WHAT KIND OF SKILLS, EXPERIENCE OR EDUCATION DO YOU LOOK FOR IN EMPLOYEES? Depending on the positions available, we typically review applicants with a wide range of skill sets.
OILFIELD WATER LOGISTICS Interested parties are welcome to contact our office for more information regarding open positions.
8 ENERGY PIPELINE OCTOBER 2015
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FIELD WORKER PROFILE
Rebecca Johnson ANADARKO PETROLEUM CORP. STAFF REPORT • FOR ENERGY PIPELINE
HOMETOWN I’m a Colorado native. I was born and raised in Colorado Springs. I went to school at Colorado State University in Fort Collins. And I’ve been blessed to be able to work in Colorado my entire career.
WHERE DO YOU LIVE? I moved from Aurora and have lived in Berthoud since 1998.
there I was working for a professor doing some research for the computer industry in deposition on silicon wafers. I applied and received a summer internship working for Amoco in Durango. I had the opportunity to work in a new compressor facility and to work on completions. I fell in love with completions engineering and was offered and accepted a full time job in Denver in 1992. I’ve been blessed to work for the majority of my 24 years of my career in completions engineering.
HOW LONG HAVE YOU BEEN WORKING IN NORTHEASTERN COLORADO? WHAT IS YOUR JOB 11 years. 1998-2004 TITLE AND DUTIES? and 2010-2015.
HOW DID YOU GET INTO THE INDUSTRY? I really didn’t have any intention to work in the oil and gas industry. I went to CSU and graduated with my degree in chemical engineering. While I was 10 ENERGY PIPELINE OCTOBER 2015
I’m a project completions engineering adviser. I’m currently working on a small multidisciplinary team to model fracture stimulations in horizontal wells in the Wattenberg Field. I am a part of the completions team that designs and implements
the completions for the horizontal wells. I’m been blessed to have been able to work all the parts of this process, from design, to modeling, to supervision on location, to post evaluation, to managing. The best part is being on location.
WHAT IS COMPLETIONS ENGINEERING? Let me start at the beginning. We start the process of drilling a well with the geologist determining where to drill a well based on the geology and the rock formations having oil and gas. Next the drilling engineers design and then drill a well down into the ground ~7000 ft down below the surface and then 5000’10,000 ft horizontally through the rock formation. This is where the completion engineer’s job starts. We test the integrity of casing and the cement behind the casing of the
well. Then we design how we’re going to frac the well. This includes a lot of work for the detailed procedure design including perforating (spf, cluster spacing, charges), stage size, plug type and placement, water and sand volumes, ramping and maximum sand concentration, pump rate, coil tubing and tool design to drill out the plugs, and the procedure of running tubing into well. We work with our completion foreman on safety, environmental protection and logistics. As a team we work for continuous improvements on design, reducing footprint, traffic and noise. There’s even more to it, but with all of that essentially what we’re doing is pumping water and sand into the rock formation 7000’ deep at a pressure high enough to fracture the rock. We pump the water to carry the sand. We pump the fine grained sand to hold
open the fractures in the rock. Creating these fractures in the rock and keeping these fractures open allows the oil and gas to be produced.
WHAT IS THE MOST INTERESTING THING ABOUT YOUR JOB? I love fracking and the engineering behind it. It’s challenging and that’s why it’s fun. It’s challenging because of the geology. It’s fun to work with integrated team members, like geologists, petrophysicists, geophysicists and reservoir engineers and talk about how the rock changes along 10,000’ of the well bore and how we can change our design to optimize each fracture.
WHAT IS THE BEST PART OF YOUR JOB? The best part of my job is working with so many great people in the industry. It’s nice to see the people that I work with around the
community and to get to meet their families.
WHAT IS THE HARDEST PART ABOUT YOUR JOB? The hardest part has been recently when there has been a lot of miscommunication about fracturing. Since this is what I do for a living, it doesn’t take very long to tell my friends, church family and neighbors the facts. It’s good to see their quick understanding of the process. I would recommend that people talk to their neighbors in the industry, as that’s the best source for the facts.
WHAT DO YOU DO IN YOUR PARE TIME? VOLUNTEERISM, SCHOOL, SPORTS? My husband is a native also and so we love getting out into nature, walking, hiking or fishing. We spend a lot of time on the weekends with our extended families. Our parents are getting older and so we spend time on the weekends helping them, particularly my husband’s mom in Eaton. We usually walk/run along a river trail (Big Thompson or Poudre River Trail) on our way from Berthoud to Eaton, or we’ll go to a state park after church on Sundays. We are also active members of our church as Session members and enjoy singing in the church choir.
WHAT ARE YOUR FUTURE AMBITIONS IN THE INDUSTRY? I don’t have any big ambitions. It may sound simple, but we’re very fortunate to have the oil and gas resources here in
Colorado to heat our homes and provide the fuel for our cars and the plastic for everything else in our life. And it’s a blessing to be able to work and live close to our families in Colorado.
24/7 HEAVY DUTY TOWING & ACCIDENT RECOVERY SERVICE
WHAT DOES THE WATTENBERG FIELD AND THE DJ BASIN MEAN TO YOU? This is very near and dear to my heart because it’s my home. Northern Colorado is such a great place because there is so much to do. There are such friendly people, nice small towns, bigger cities with everything you need, the rivers, the lakes, the state and national parks, the wide open views of the beautiful farmland, and the mountains.
HOW DO YOU FEEL ABOUT THE CURRENT ENVIRONMENTAL DEBATE GOING ON WITH “FRACKING” IN COLORADO? Again, I think there is a lot of miscommunication about fracturing. Do you know how many wells there are in Weld County? About 22,000. Do you know when the first well was drilled in Weld County? 1970. A lot of my friends and neighbors are surprised that we’ve been drilling and fracking for the past 45 years right here. Most of the wells have multiple layers of rocks that have been fracked, so it’s easily two to four times per well. And we all live and work here, so if there were problems, we’d know. I’m proud to work in this industry and I’m blessed to be doing it in Colorado.
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OCTOBER 2015 ENERGY PIPELINE 11
Jeff Hansen - General Manager
EXECUTIVE PROFILE
ANADARKO PETROLEUM Vice President, Operations
Craig Walters
BY SHARON DUNN • SDUNN@ENERGYPIPELINE.COM
it’s been said the first hour of the day is critical in management. For Craig Walters, it’s the hour after work that is the most useful. Walters, vice president of operations for Anadarko Petroleum in Denver, relishes that time. It’s not because he finally can escape the crazy days as an executive of one of the top two oil and gas producers in Colorado. He needs time to reflect. “Where I do a lot of reflective thinking is on the drive home,” he said from his 18th floor office in downtown Denver, overlooking a rain-soaked city in late August. “More important to me, how did we wrap up the day? How did we move the ball forward? What interactions did I have to have a positive influence on the team or my peers as well as those outside? “Really, that last hour of the day is more reflective and an opportunity for me. ... What did we accomplish as a team? And that’s how I measure self satisfaction. Did we move ball down the road and how far?” Growing up in Wyoming and learning his work ethic from his rancher grandparents, Walters strayed from those Western roots somewhat when picking schools. Though, he never thought he’d end up in the oil and gas world. The son of an electrical engineer, Walters was a good student in math and science. “I knew early on I wanted to be an 12 ENERGY PIPELINE OCTOBER 2015
engineer. Originally, I thought I wanted to be a mechanical engineer,” Walters said. He started visiting schools. He ended up at the Colorado School of Mines. “At that time, there was a lull in the oil and gas industry,” Walters said. “Being from out of state, I went to the admissions office looking for scholarships. They listed off three options that they had dollars for: One was geology, another was geophysics, and the last was petroleum engineering.” His choice was odd. He knew the first couple of years’ curriculum would be the same for all areas of the college, so he picked petroleum engineering, knowing he could change things up after that time. “As I got involved in it, I thought, ‘This is really something I want to pursue.’ I got summer jobs and that work experience. It really highlighted opportunities that are out there in the oil and gas industry, and I decided to stick it out. “At this point, I look back, and it’s been a phenomenal career path. Had I pursued a mechanical engineering degree, I don’t know what I’d be doing today. It’s kind of like a fork in road (that) worked out really well.” Today, amid the global oil downturn and watching other companies reduce staff and cut costs, Walters is keenly aware of how it affects morale among his troops. He wants to make a difference in people’s lives, and
QA &
with Craig Walters
Energy Pipeline sat down with Craig and asked a few more questions: ENERGY PIPELINE: Describe the industry today compared to 10 years ago, how much have things changed in your tenure? For the better, or worse? CRAIG WALTERS: It’s been good - on all parts. There are several things I can actually think through over the past 10 years where we’ve led as an industry. One is around technology, horizontal drilling and fracturing are not new, that’s been around for decades, but really the application of those techniques and some of the basins we have across the U.S., and taking those to the next level. The technology around some of the infrastructure. Some of what we do today most likely wouldn’t have
Answers continued on page 14
Secondary Containment Systems
Secondary Containment Systems for the Oil & Gas Industry
Paul Taucher P.G. Secondary Containment Systems Systems Secondary Containment Owner / Principal Hydrogeologist Paul Taucher P.G. Energy Compliance LLC Paul Taucher P.G.Owner / Principal Hydrogeologist ensure that Anadarko retains its stellar people, so they can 2302 Nighthawk Drive Owner/Principal Hydrogeologist Energy Compliance LLC Paul Taucher P.G. Laramie, WY 82072 be effective, so when the market returns, he can unleash that 2302 Nighthawk Drive Paul Taucher P. Containment Owner /Options Principal Hydrogeologist 307/721‐8951 (office – rolls to cell) existing talent on the next big thing. Laramie, WY 82072 Owner /(cell Principal powder-coat paint (BLM colors) or direct) Energy Compliance LLC Hydro 307/760‐2662 It all stems from his background, and his family, where he 307/721‐8951 (office – rolls to cell) galvanized 2302 • wall height (12-68 in)Drive • shape Nighthawk Energy Complianc Fax – 307/721‐8958 Wall‐bracing grew up in Wyoming. He spent his summers and spare time 307/760‐2662ZGD (cell direct) (round, oblong, rectangular, Laramie, WYround-corner 82072 2302 Nighthawk D taucher@wyo2u.com helping out the with the ranching, building a work ethic that Fax – 307/721‐8958http://www.siouxsecondarycontainment.com/ 307/721‐8951 (office –•rolls cell)820 rectangular) • 12 or 10-ga steel wall toWY ZGD Wall‐bracing Laramie, taucher@wyo2u.com lasts today. 307/760‐2662 (cellliner direct) bracing (Z-post or307/721‐8951 ZGD) • many OTHER SERVICES (office – r http://www.siouxsecondarycontainment.com/ Fax – 307/721‐8958 fabric options “My personal mantra is ‘You can count on me.’ If anyone HydroGeology • Site Assessment ZGD Wall‐bracing options • geotextile 307/760‐2662 (cell OTHER taucher@wyo2u.com crossover steps • load-line containment Uranium Geology comes to me and says ‘I need help,’ I’m there. WhatSERVICES I say I’m Fax – 307/721‐89 http://www.siouxsecondarycontainment.com/ ZGD Wall‐bracing HydroGeology • Site Assessment WDEQ Voluntary Remediation Program going to do, they can count on 110 percent it’ll get done. taucher@wyo2u. Containment Services Include OTHER SERVICES Uranium Geology Environmental Compliance “It’s just how you’re raised. It comes back to family, and the HydroGeology • Site Assessment http://www.siouxsecondarycontain SPCC required & as-built capacity WDEQ Voluntary Remediation Program Project Management community out on the ranch and calving, or putting up a barn. Uranium Geology calculations (no charge) • Multiple options OTHER SERVICES Environmental Compliance Remediation Everyone pitches in and you help someoneProject out.” Management WDEQ Voluntary Remediation Program designed and provided to ensure Permitting HydroGeology • Site Assessment Environmental Compliance appropriate containmentZGD (noWall‐bracing charge) Remediation Waste Management Uranium Geology Project Management Options for liner penetrations and Permitting WDEQ Voluntary Remediation Program ZGD Wall‐bracing Remediation cleanout sumps • Options for unique CONTAINMENT SERVICES INCLUDE Waste Management Environmental Permitting Compliance containment requirements SPCC required & as‐built capacity ZGD Wall‐bracing Project Management Waste Management calculations (no charge) CONTAINMENT SERVICES INCLUDE
ABOUT
Craig Walters AGE 43.
CURRENT JOB TITLE Vice President, Operations.
YEARS WITH ANADARKO PETROLEUM 21 years.
YEARS IN ENERGY INDUSTRY 21 years.
CITY YOU GREW UP IN Encampment, Wyo.
HIGH SCHOOL YOU ATTENDED Encampment K-12 School.
COLLEGE ATTENDED/ DEGREES Bachelor of Science in petroleum engineering from Colorado School of Mines, 1994.
Remediation Multiple options designed and SPCC required & as‐built capacity Other Services CONTAINMENT SERVICES INCLUDE HydroGeology • Site • Uranium Permitting provided toAssessment ensure appropriate calculations (no charge) ZGD Wall SPCC required & as‐built capacity Geology • WDEQ Voluntary Remediation containment (no charge) WasteMultiple Management CITY YOU options designed and (no charge) • calculations Environmental Options for linerCompliance penetrations LIVE IN NOW provided to ensure appropriate Program Multiple options designed and Project Management • Remediation and cleanout sumps CONTAINMENT SERVICE Denver, Colo. containment (no charge) provided toManagement ensure appropriate Permitting • Waste Options for unique Options for liner penetrations Z‐Post Wall‐bracing SPCC required & as‐bui containment (no charge) containment requirements and cleanout sumps calculations (no ch WHAT DO YOU Options for liner penetrations CONTAINMENT OPTIONS: powder‐coat paint (BLM colors) or galvanized • wall height (12‐68 in) 307.721.8951 (office) OptionsContainment for unique Systems options DOZ‐Post IN YOUR Secondary and Multiple cleanout sumps Wall‐bracing shape (round, oblong, rectangular, round‐corner rectangular) • 12 or 10‐ga steel desig containment requirements 307.760.2662 (cell) • 307.721.8958 (fax) Options for unique provided to ensure SPARE TIME? wallWall‐bracing bracing (Z‐post or ZGD) • many liner options • geotextile fabric options • crossover steps ap Z‐Post CONTAINMENT OPTIONS: powder‐coat paint (BLM colors) or galvanized • wall height (12‐68 in) containment requirements taucher@wyo2U.com containment (no ch load‐line containment EXPERIENCED INSTALLATION AVAILABLE Various outdoor activities. shape (round, oblong, rectangular, round‐corner rectangular) •powder‐coat 12 or 10‐gapaint steel CONTAINMENT OPTIONS: (BLMwww.siouxsecondarycontainment.com colors) or Paul Taucher P.G. galvanized • wall height (12‐68 in) EXPERIENCED INSTALLATION AVAILABLE Options for liner pene / Principal Hydrogeologist wall bracing (Z‐post or ZGD) • many liner optionsshape • geotextile options • crossover steps Owner (round,fabric oblong, rectangular, round‐corner rectangular) • 12 or 10‐ga steel Energy Compliance LLC and cleanout sum FAVORITE load‐line containment INSTALLATION AVAILABLE wall EXPERIENCED bracing (Z‐post or ZGD) • many liner options • geotextile options • crossover steps 2302fabric Nighthawk Drive Options for uniq MODERN load‐line containment EXPERIENCED INSTALLATION AVAILABLE Z‐Post Wall‐bracing Laramie, WY 82072 require AUTHORS 307/721‐8951 (office –containment rolls to cell) 307/760‐2662 (cell direct) CONTAINMENT OPTIONS: powder‐coat paint (BLM colors) or galvanized • wall height ( David Baldacci and Clive Fax – 307/721‐8958 ZGD Wall‐bracing shape (round, oblong, rectangular, round‐corner rectangular) • 12 or 10‐ga Cussler. taucher@wyo2u.com
BEST ADVICE YOU EVER RECEIVED “When presented an opportunity, take it.”
PROFESSIONAL BACKGROUND He has spent his entire career with Anadarko. He has served as vice president Colorado operations since October 2013; from 201213, he served as completions manager; from 2010-12, he served as operations manager for the Rockies Midstream; from 2008-10, he was an area manager for Rockies Enhanced Oil Recovery.
wall bracing (Z‐post or ZGD) • many liner options • geotextile fabric options • crosso http://www.siouxsecondarycontainment.com/ OTHER SERVICES load‐line containment HydroGeology • Site Assessment Uranium Geology
EXPERIENCED INSTALLATION AV
WDEQ Voluntary Remediation Program
Environmental Compliance Project Management Remediation Permitting Waste Management
ZGD Wall‐bracing
CONTAINMENT SERVICES INCLUDE
Z‐Post Wall‐bracing
SPCC required & as‐built capacity calculations (no charge) Multiple options designed and provided to ensure appropriate containment (no charge) Options for liner penetrations and cleanout sumps Options for unique containment requirements
CONTAINMENT OPTIONS: powder‐coat paint (BLM colors) or galvanized • wall height (12‐68 in)
shape (round, oblong, rectangular, round‐corner rectangular) • 12 or 10‐ga steel wall bracing (Z‐post or ZGD) • many liner options • geotextile fabric options • crossover steps
load‐line containment
EXPERIENCED INSTALLATION AVAILABLE
OCTOBER 2015 ENERGY PIPELINE 13
QA &
continued from page 12
been done 10 years ago. A lot is driven by the unique position Anadarko has in the DJ in its core area of acreage. It allows us to put in significant oil gathering and water infrastructure that has a profound impact on the environment. If you look at oil gathering or water infrastructure, on a daily basis, we’ve taken 2,000 trucks off the road. Ten years ago, companies would not have done that. They’d say let’s just truck. But if you take into account the overall capital costs that ... more important the above ground opportunities we have to impact our social license to operate. Those are things that have been over the last 10 years that I’ve seen grow significantly. EP: Since the shale revolution hit, more opposition has come up swinging against anything and everything the oil industry does. How does that complicate what you do? And did you ever expect there would be such a lobby against oil and gas at a time when America was struggling to come up with a better solution to relying on foreign imports? CW: We understand there is an inconvenience with our operations, especially during drilling and completions. I really think the challenges the public has brought to the table has made us better as an industry and really made Anadarko, in my view, as best
in class. We’ve come to the table and worked with NGL, environmental groups, impacted stakeholders, the communities, the public and government officials really to drive what I think are ... we lead the nation with oil and gas regulation. Colorado has the most stringent oil and gas regulations in the country, and it’s in part due to those open and honest communications that the public has had, and our response to that. A great example is air emissions regulations we got put in place a year ago, ... coming together to find good ... we as an oil and gas company, our product is oil and gas. The last thing we want to have is emissions. We want to put every molecule through the sale meter that we can. It’s in our best interest to have tougher regulations around air emissions. EP: The industry obviously is struggling amid this environment. How is it that Anadarko has been able to continue going without trimming staff like many other major producers? CW: The time horizon we worked is longer dated than daily. We don’t make decisions on what oil prices are doing today or even a month out. Our decisions are based on our forward-look on oil. It helps to have a consistent program. (Layoffs) are not healthy for the staff. You need that vision, that plan that’s put in place and have to have
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flexibility, but we’re not going to have knee-jerk reactions. Other companies are in unique situations; anyone can look good when oil prices are $100 a barrel. As product process ramped up, lot of companies that made key entries into certain plays at relatively high process and potentially levered up their balance sheet. As commodity prices fall, they’ll have challenges. We do have a strong balance sheet and a great portfolio, with Wattenberg being No. 1 in our portfolio. We have 1,500 employees here. In the Wattenberg, we have 1,000 producing horizontal wells, and we have an additional 4,000 locations yet to be drilled. It is amazing the technological advances we’re able to make and how we access some of that resource that 30 years ago people looked and said, ‘We’ll never get out of the ground. Let’s go after the easy stuff.’ So here we are today working into this source rock that 30 years ago people said you’ll never get out. Who knows what will happen 30 years from now? EP: What personal goals do you have this year? CW: The goals I set for myself are around personal development. That’s something I continue to focus on and have through
my career. How do I grow as a leader? One of the particular ones I’m focused on this year is adaptability. Being able to more readily relate to those with whom I’m interacting and understanding their perspective. In the past, I’d say I had a tendency to approach things technically, logically, because I do have an engineering background. This makes sense to me, that should make sense to everyone. Rather than fitting a square peg into a round hole, I’ve learned to adapt to situations at hand. Read people, read body language, and learning to pick up on those aspects and have engaging conversation that advances the issue we’re working on. EP:What’s the coolest thing you’ve made work? CW: Making the Wattenberg work has been a l lot of fun. In the past two years, if you look at the asset itself, where it was at in 2013 when I took it over, and hand-picked select individuals to fill certain roles. It’s just been phenomenal what we’ve been able to do. I have a great team. It truly is a team effort and folks we have working the Wattenberg are best in the business. EP: Final words: CW: If I’m working on something I’m passionate about, it’s not work at all.
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OCTOBER 2015 ENERGY PIPELINE 15
2015
ROCKY MOUNTAIN ENERGY SUMMIT
AWARD WINNERS Several people and companies took home some proverbial hardware in August during the annual Rocky Mountain Energy Summit through the Colorado Oil and Gas Association and the Colorado Oil and Gas Conservation Commission. The awards and their recipients were announced at the summit, which was held at the Colorado Convention Center in Denver: COGA SUMMIT AWARDS EMERGING LEADER AWARD SARAH DERDOWSKI, director of Operations, Global Energy Management Program, University of Colorado Denver. This award recognizes the outstanding achievement of an emerging leader within industry. This individual will have already made significant contributions to the industry and have demonstrated the potential for leadership, dedication, and innovation. All nominees must be under 35 years of age. LIFETIME ACHIEVEMENT AWARD PHILLIP H. “PETE” STARK, Petroleum Information Solutions Pioneer This award honors an individual who has performed outstanding service and achieved noteworthy accomplishments over the course of their career 16 ENERGY PIPELINE OCTOBER 2015
in Colorado’s oil and gas industry. This individual’s exceptional devotion of time, effort, thought, and action serves as an inspiration throughout the industry. (2014 Inaugural Honoree: Fred C. Julander, Julander Energy) ADVOCATE OF THE YEAR AWARD Presented by the Honorable Gov. John Hickenlooper
TED BROWN, recently retired as Senior Vice President, Rockies, Noble Energy This award recognizes an individual who has shown outstanding personal dedication and commitment to proactive advocacy on behalf of the oil and gas industry. Going above and beyond all expectations, this individual is engaged in public education, community engagement, and meaningful dialogue about responsible energy development in Colorado. This individual may be employed by the industry or may advocate on our behalf as an ally.
COGCC OPERATOR AWARDS Presented by COGCC director, Matt Lepore
LOCAL GOVERNMENT COORDINATION FOR EMERGENCY RESPONSE ENCANA CORPORATION Encana held a multiagency derrick rescue training exercise with the cooperation of four fire protection agencies in June 2014. The teams tested scenarios in which three different forms of rescue were provided for a worker who sustained mock injuries during rig operations. The exercise provided opportunities for each agency to support the other emergency agencies likely to arrive on the scene if these types of incidents occur. Encana also sent two pieces of equipment to the site, including a renovated Incident Command trailer and a spill response truck. The Incident Command trailer gave on site personnel direct phone contact with the safety officials at the Emergency Operations Center. WATER QUALITY PROTECTION / NEW TECHNOLOGY APPLICATION NOBLE ENERGY, INC. Noble is a partner and sponsor for the Colorado Water Watch (CWW), a monitoring network of water quality sensors located near oil and gas operations. The company
funds the project’s infrastructure, including wells and equipment. CWW staff at Colorado State University - Fort Collins gather and analyze sensor data for the purpose of detecting whether there are any changes in groundwater due to natural or operational impacts, including those that may arise from hydraulic fracturing. The first phase of the project is complete, and the project has a website (http://waterwatch. colostate.edu/Home/ Dashboard) offering water quality information desired by communities in the DJ Basin. ENVIRONMENTAL PROTECTION BONANZA CREEK ENERGY Bonanza Creek formed a Flowback Working Group within the company to develop best practices for its flowback operations in the DJ Basin. Key outcomes of the group’s work include a reduction in air emissions, reduction in the risk to health and safety, and reduction in spills. Achieving these results required Bonanza Creek to use closed-top oil and water tanks that route gas from separators to the sales line, reducing emissions by 95% compared to open-top tank systems. Second, the operator deployed grounding and bonding systems to prevent arcing electricity, implemented
flame arrestor technology to protect separation equipment and tanks, and deployed flowline support blocks and high pressure restraints that minimize dangerous movement of high pressure lines. Finally, flowback operations used sealed and manifolded tanks, in additional to containment materials beneath tanks, to reduce risk to the site from spills. COMMUNITY RELATIONS WPX ENERGY Between October and December 2014, WPX drilled nine wells on a pad in the town of Parachute. The pad was located north of housing units and a senior center owned by the Garfield County Housing Authority and northwest of another subdivision. During the first half of 2014, WPX shared project plans with the Town Trustees, residents, and the senior center at various meetings, companysponsored events, and door to door visits. WPX staff also communicated with residents by telephone, e-mail, and postal mail newsletters, and the company installed extra signage and sound walls. The project was successful because the Town received no complaints, and because WPX itself received two complaints about noise and dust, both of which the company investigated and resolved.
ENVIRONMENT
CONSERVASIONIST SAYS APOCALYPTIC VIEWS ABOUT CLIMATE CHANGE DON’T WORK TO CHANGE MINDS BY SHARON DUNN • SDUNN@ENERGYPIPELINE.COM
denver - To get to the most rational discussion about environmentalism and have it work in today’s world, the conversation has to change, a leader in the environmental movement told oil and gas industry officials on the final day of the Colorado Oil and Gas Association’s annual conference in late August at the Colorado Convention Center. Peter Kareiva, director of the UCLA Institute of the Environment and Sustainability, who’s known for his advocacy of harmony between environmentalism and the forces that would tend to harm the environment, told audience members that the apocalyptic version of climate change no longer works. “When you talk about the apocalyptic vision of global collapse to the climate, I don’t think that’s a powerful way to motivate people,” he said during a panel discussion with Oliver Morton, senior editor of The Economist. “It’s too far off.” While that apocalyptic vision has always been a part of the conversation, studies have shown it simply doesn’t work. Karieva said a more poignant way to influence the conversation about climate change, and the need to clean up the environment, is to focus on the now. “If you can say, there’s a gradual degradation of the quality of your life, then you talk about things that become increasingly harder to do,” Kareiva explained. As an example, he said the quality of wine will decline as the climate changes, as the grapevines are very sensitive. If you like wine, that’s going to be a concern. “If you focus on the immediate, next-year local degradations, you can get collective
THE NATURE CONSERVANCY WORKED WITH DOW CHEMICAL IN THE PAST FOUR TO FIVE YEARS TO REDUCE ITS FOOTPRINT, AND IT BECAME A LASTING PARTNERSHIP THAT WORKED FOR BOTH INTERESTS action,” Kareiva said. “This global apocalypse has not been an effective narrative.” Studies have shown, he said, that most people see the ultimate climate collapse as too far away to act today, as if there’s still enough time to let it go. Amid that kind of thinking, he said, there will never be collective action on conserving resources and cleaning up the environment. Kareiva suggested no longer drawing a line in the sand. Conservationists need to work with those in the energy industry. As an example, he said, he and a team from The Nature Conservancy worked with DOW Chemical in the past four to five years to reduce its footprint, and it became a lasting partnership that worked for both interests. “Our scientist worked with their
engineers,” Kareiva said. “We asked questions of practical operations. What can we as people who know about the ecosystem and nature tell you that will help you? We looked at protecting coastal habitats, planting trees for ozone mitigation, (protecting) the river. The DOW Chemical company needs cleaner water than we need for drinking. We came up with solutions. It took three years. “Then, they wanted to make it part of corporate practices and culture,” Kareiva said. “The idea is to change their culture in terms of thinking about nature. We could do it because we made it very practical.” He said a lot of the workers there were outdoorsmen, who took pride in working to clean up their operations. “It’s not like they wake up and say we want to destroy the environment,” Kareiva said. “The workers were happy to be doing this.” Specific to the oil and gas industry, Kareiva said there are ways to consider the environment, if groups are willing to work with the industry instead of beat it with a stick. “The conservation movement needs to work more closely with the oil and gas industry so mitigation and offset funding can achieve some pretty grand things,” he said, noting that in Mongolia, such work with the mining industry created some national parks that coexisted with the mines. “Instead of blocking things, the conservationists need to work with industry.” There’s no getting around the energy industry if we want the world we live in now, he said. Cell phones, cars, toys, are all possible through fossil fuels. “You’re not going to get rid of fossil fuels,” he said. “You can’t have cell phones without copper.” OCTOBER 2015 ENERGY PIPELINE 17
MOUNTAIN 2015 ROCKY ENERGY SUMMIT
US Sens., Democrat Michael Bennet, left, and Republican Cory Gardner, right, discuss the controversial deal involving the Iran sanctions at the 2015 Colorado Oil and Gas Association’s annual Rocky Mountain Energy Summit. Manu Raju, center, a senior congressional reporter at Politico, moderated the discussion before a packed meeting hall at the Colorado Convention Center. Photo by Ali Xafar, for Energy Pipeline.
FOREIGN AFFAIRS
IRAN NUCLEAR DEAL WEIGHS HEAVY ON MINDS AT OIL, GAS CONFERENCE BY SHARON DUNN • SDUNN@ENERGYPIPELINE.COM denver - The Iran nuclear deal weighed heavy on oil industry minds
in late August as they discussed global and domestic energy policy at the Colorado Convention Center. The 100-page agreement, which would lift sanctions against the country, allowing the country back into the world energy market, and supposedly limit its nuclear powers. It is a deal that’s drawn the ire of many policy makers, and many in the energy industry, and is seeing major opposition in Congress. Speakers attending the Colorado Oil and Gas Associations annual Rocky Mountain Energy Summit, discussed the Iran deal at length, including Colorado’s Sens. Cory Gardner, R-Colo., and Michael Bennet, D-Colo.. The two were expected to talk about Colorado’s increased leadership in bipartisan energy leadership but the conversation veered early into the controversial Iran nuclear deal, domestic energy policies and allowing the U.S. to export crude across the globe, bucking decades of energy policy of hording American oil. Many in the oil and gas industry are paying close attention to the Iran Nuclear deal, mostly because it will open up a historic oil and gas field in Iran that some say could put 500,000 to eventually 1 million barrels of oil per day on the market. In a world market that is fueled by an oversupply, mainly in part to the United States’ expanded production in recent years, that’s a scary proposition - especially in an environment where that oversupply has led to decreased prices. In the week of the conference, oil closed under $40 a barrel for the first time in six years. Bill White, former deputy secretary of energy for the United States and chairman of Lazard Houston, a global financial advisory and asset management firm, said Iran likely wouldn’t be able to beef up its oil 18 ENERGY PIPELINE OCTOBER 2015
production as quickly as some predict. “Separate and apart from sanctions ... five to six years from now, you could see Iran playing a much bigger role in the daily oil production than today,” White said, as he addressed a packed hall as the keynote lunch speaker Wednesday. “In five to six months, I don’t think so. And the 400,000 to 800,000 barrels are just people guessing.” Gardner, one of 47 US senators who signed a letter opposing the deal, said the Iran deal would not only provide for Iran a “patient pathway to a bomb,” it would pave the way for Iran to create a new market for oil while leaving the United States in a rut. “The reality is, you have an Iranian deal that will create a new market if it goes into effect, at the same time, the U.S. won’t be able to export crude under current policy, so we have the Iranian region with access around the glob, and the U.S. won’t,” Gardner said. The bigger concern, Gardner said, is the deal in no way curbs Iran’s ability to attain a nuclear bomb. “The goal of the entire Iranian negotiation was to eliminate the nuclear capability of Iran and this agreement does not do that,” Gardner said. He said in year 15 of the agreement is when the fun begins, in which Iran will be able to continue to “operate an industrial sized nuclear industry and have the approval of the world community to have that infrastructure, leading them to a very short breakout time in a little over a decade. Five years from now, the conventional arms embargo will be lifted. In eight years, the ballistic missile embargo will be lifted. Next spring, the sanctions will be listed. Billions of dollars in escrowed oil money will flow into the Iranian economy and Iran has done nothing to step away from being the world’s leading state sponsor of terrorism.” Bennet, while stating he wasn’t in favor of the Iran deal, said he didn’t believe there was a better deal available. In 2009, he said the U.S. learned from area leaders that Iran was two to three months away from making a bomb, Bennet said. The U.S. didn’t help its own position, he said, having invaded Iraq, “taking off a significant counterweight to Iranian aggression.” “That’s why we’re faced with a lot of bad choices because we limited our solutions along the way,” Bennet said. “There are no good choices. This region has gotten so much more complicated than it was, and all kinds of issues related to terrorism... and for me, the most troubling aspect after 15 years, there are no limits on the amount of uranium the Iranians can enrich.” Ken Hersh, CEO of NGP Energy Capital Management, spoke earlier in the week. He said the Iran deal was as much as done, as world powers already had begun moving in. “We didn’t liberate our foreign policy,” Hersh said in his discussion on global energy markets and mayhem. “Essentially, we all boxed ourselves in. Whatever Congress decides doesn’t matter. The U.S. is only going to be isolated if we turn it down.”
ECONOMICS
ENERGY ABUNDANCE BRINGS ABOUT NECESSARY POLICY CHANGE, SPEAKER SAYS BY SHARON DUNN • SDUNN@ENERGYPIPELINE.COM
it’s a new world order.
“The United States needs to change its philosophy on this global scale. No longer is the country at the mercy of others in an environment of finite resources.”
Gone are the days of hording oil and bowing to the Middle East’s dictation of world gas prices. The United States’ recent oil shale revolution, which has kicked up oil production to help put a global glut of an extra 1 million barrels of oil per day than demand, and that has created some global changes. That will require the U.S. to rethink some if its policies, said Ken Hersh, CEO of NGP Energy Capital Management in the Colorado Oil and Gas Association’s Rocky Mountain Energy Summit in late August. “We’re in a new day, we need to accept that and the U.S. energy industry is living proof. Keep optimistic. The data is compelling and the forces of economic growth is compelling.” Hersh was a keynote speaker at the coference in late August, discussing the global impact of North America’s resource revolution. He delivered an hour of geopolitical discussion that involved China, Russia, the Middle East in a new order in which the U.S. is kicking about 9.5 million barrels of oil a day on the global market. The United States, he said, needs to change its philosophy on this global scale. No longer is the country at the mercy of others in an environment of finite resources. “We all grew up ... in a world where oil and gas was deemed to be scarce, where if you could find it, that was the premium, anywhere in globe that was a good thing because the world was short,” Hersh told a
KEN HERSH, CEO, NGP Energy Capital Management
packed meeting room. About 1,000 people signed up for the annual three-day conference. “We have switched and what I’d say is permanent era of hydrocarbon and energy abundance,” Hersh said. Hersh said the ‘70s policies of hording crude is not the best strategy in this new world order, in which countries are experiencing newfound bargaining power for their energy needs, which is tending to change political strategies. Geopolitical struggles and resulting supply disruptions also will mean less on the world stage, which
could again change political strategies. The U.S. itself must come up with a new strategy, he said. “The U.S. is thoroughly confused,” Hersh said. “We don’t know whether to embrace or hate this oil and gas revolution. Our policy makers and producers have been frenemies for so long. We know U.S. economic growth over the last 150 years would not have been possible without cheap, plentiful energy, and now we have even more, and we don’t know whether to love it or hate it.” But internally, those politics also will change, Hersh said. At present, 32 states now produce oil and gas, and people are realizing the benefits that come with it. “Bashing big oil was always easy,” Hersh said of the national political scope. “Now, can we really embrace an industry they were taught to bash?” That confusion is playing out, he said, in the recent Clean Energy Plan, and using the United Nations to debate climate change. He said getting the big five countries on the same page on reducing emissions can reduce 50 percent of global emissions. He said its time to lead, knowing the U.S. has a stronger hand to play on the world energy scale. “If you project the strong hand, amazing things can happen,” he said. “Lead the reform instead of leading from behind.” OCTOBER 2015 ENERGY PIPELINE 19
Dignitaries toss the ceremonial first shovel of dirt during the groundbreaking event of the Sun Edison Comanche Solar project on Aug. 20, 2015 in Pueblo. From left to right: Jeff Ackermann, Colorado Energy Office director; Joshua Epel, Colorado Public Utilities Commission chairman; Rob Morgan, Renewable Energy Systems Americas chief strategy officer; Rep. Clarice Navarro-Ratzladd, Colorado District 47; Rep. Daneya Esgar, Colorado District 46; David Eves, Public Service Company Colorado president; Liane “Buffie” McFadyen, Pueblo County commissioner; and Paul Gaynor, SunEdison executive vice president for EMEA and the Americas (Chris McLean, The Pueblo Chieftain)
LAND OF LIGHT
Biggest solar array east of Rockies set for Pueblo BY JEFF TUCKER • FOR ENERGY PIPELINE
“It’s totally changed,” Gaynor said. “We’re just at the beginning of more projects like this in the state and the world.” government leaders as they turned over dirt east of the Comanche David Eves, president of Public Service of Colorado, a subsidiary Generating Station and celebrated renewable energy’s bright future of Xcel Energy, said the in Pueblo. Pueblo project is crucial to the Construction work on the company’s plans to triple the $200 million, 120-megawatt amount of large-scale solar Comanche Solar project had projects in Colorado by the already begun but the event end of 2016. memorialized the start of a “This project is the lion’s project that will bring the share of that,” he said. largest solar array east of the Eves recognized that while Rocky Mountains to Pueblo Xcel doesn’t provide electricity County. The panels will cover to Pueblo, the project remains about 900 acres on two sites. SAL PACE, commissioner, Pueblo County a major investment to the city Paul Gaynor, executive and county. vice president of SunEdison, “We’re very happy to continue to be partners and support the told the crowd that the Aug. 21 event was another example of growth of Southern Colorado,” he said. how renewable energy is no longer about “a lot of pony tails Joshua Epel, chairman of the Colorado Public Utilities and flip flops” and that now, especially in Colorado, solar energy Commission, noted that solar power in Colorado, where there’s an is a competitive choice for utilities looking at expanding abundance of sunshine, is a safe bet and the project represents a their capacity.
the august sun was shining on a gathering of business and
“This is branding Pueblo as a place of the future, looking for alternative forms of energy.”
20 ENERGY PIPELINE OCTOBER 2015
LEFT: Project manager Simon Day, at podium, welcomes the crowd to the groundbreaking ceremony of the Sun Edison Comanche Solar project on Aug. 20, 2015 in Pueblo, Colo. (Chris McLean, The Pueblo Chieftain) BELOW: Jeff Ackermann, Colorado Energy Office director, signs a solar panel at the 156 MW Comanche Solar ground breaking event Aug. 21 in Pueblo. Photo by Justin Levitt.
commitment to diversity in Colorado’s sources of power. “It’s a hedge against increases in gas prices and it’s a hedge against the volatility of fossil fuels,” he said. A week prior to the ground breaking, the Pueblo County Commissioners approved the permit with eight conditions, most of which are standard requirements such as following with the plan they submitted to the county, using best management practices and complying with the zoning code and other county regulations. The county public works department also required the project to pay for any damage that construction traffic does to local roads. The project will employ about 370 construction workers on site and, at the low end, generate $600,000 annually in property tax revenues. Once up and running, it’s expected to employ roughly six people. Commissioner Sal Pace noted that the investment comes without the kinds of tax breaks that other utilities get in Pueblo. “This is branding Pueblo as a place of the future, looking for alternative forms of energy,” he said. Hart said the move represents belief in the power of alternative energy in Pueblo. “Anyone who’s from here and watched their dashboards curl up in the summer knows the power of solar here,” he said. Sam Sours, regional development director for Community Energy Solar, said the 120 megawatt facility will use a different technology than what’s in place at the BrightSource Energy plant in Ivanpah Dry Lake, Calif. That facility is a solar thermal project, which uses thousands of mirrors to direct the sun’s rays onto boiler towers that generate steam, which spins a turbine and creates electricity, Sours said. With that kind of directed heat, recent reports have said birds flying over the site have caught fire in the air. Workers at the California plant call them “streamers” for the plume of smoke they leave in flight. The Pueblo project will use photovoltaic units instead of mirrors. The basic difference is that a photovoltaic unit gathers the sunlight and converts it directly into energy, instead of reflecting concentrated beams of light onto a specific target.
The result is that even on one of Pueblo’s hotter days, someone could stand next to a photovoltaic unit with no ill effects, Sours said. The power generated will be sold to Xcel Energy, which does not provide power to Pueblo. State Rep. Daneya Esgar, D-Pueblo, also noted that SunEdison and Xcel will partner with Pueblo City Schools (D60) to bolster the STEM curriculum at Central High School by allowing students to examine the technology and exposing them to the fields that are applied there, such as electrical engineering. State Rep. Clarice Navarro, R-Pueblo, said the project was an opportunity to create construction jobs in the state. Jeff Ackerman, director of the Colorado Energy Office noted that “historically, Pueblo was the backbone of Colorado” based on its production of steel and electricity for the rest of the state. Now, he said, the city and county are coming to the forefront of renewable energy. The project will spread 450,000 photovoltaic panels across two sites near the Comanche plant. The electricity generated by those panels will be enough to power 31,000 homes and will feed into Xcel existing infrastructure nearby. Rob Morgan, chief strategy officer for contractor RES Americas, said at the peak of construction about 6,000 panels will be installed each day. Morgan said the company will do its best to pull from the local labor pool to do the work. Pueblo Board of County Commissioners Chairwoman Liane “Buffie” McFadyen talked about the competing ideas of Nikola Tesla and Thomas Edison and compared that to the competition over power generation, from solar to wind, coal, hydro and natural gas. “Not only is it a good thing to do, but it’s the right thing to do,” she said. Jeff Tucker is a reporter at the Pueblo Chieftan. Contact him at jtucker@chieftain.com. OCTOBER 2015 ENERGY PIPELINE 21
A FENCE FOR DEFENSE Tread Lightly! Noble Energy and U.S. Forest Service partner to close old road, promote new trailhead at Pawnee Buttes Trail near Grover BY NIKKI WORK • FOR ENERGY PIPELINE the pawnee buttes trail has gone to the birds - or at least an old trailhead has. Sixteen volunteers met in late August in the Pawnee National Grassland near Grover to construct an 80-foot fence to block off a road that disrupts natural raptor nesting grounds. The U.S. Forest Service built a new trailhead further east on the same road as the old entrance. The new trailhead has covered picnic areas, benches, a parking lot, informative signs and a restroom, making it a better stopping point for hikers, hunters and more. Volunteers hope the fence they constructed will prevent visitors from using the old road and lead them to the new trailhead. The trailhead also should discourage unauthorized motor vehicle use, a problem on the other road. The new trail also is less disruptive to the eagles and hawks that nest in the buttes. 22 ENERGY PIPELINE OCTOBER 2015
THE TRAILHEAD ALSO SHOULD DISCOURAGE UNAUTHORIZED MOTOR VEHICLE USE... THE NEW TRAIL ALSO IS LESS DISRUPTIVE TO THE EAGLES AND HAWKS THAT NEST IN THE BUTTES “If you look at this compared to what we had up there, this a huge improvement,” said Lenora Arevalos, supervisory forest service technician.
The project is the result of a partnership between Noble Energy and national lands restoration group, Tread Lightly!. “That’s really what our partnership is focused on, ... cultivating stewardship, and outdoor recreation is just one way that we engage and incorporate that stewardship,” said Dianne Olson, Tread Lightly!’s assistant director. Robert Veldman, senior environmental coordinator for Noble Energy, said the company was looking for ways to get involved in the preservation of wildlife in northeastern Colorado. The two groups contacted the U.S. Forest Service to see what was needed on the grasslands, and the agency pitched three projects it didn’t have the resources to finish. The first, completed in June, focused on fixing up the Main Draw Off-Highway Vehicle Area by building a new fence and a new information kiosk. Friday’s trail project
was the second. The third, which will wrap up by the end of September, will construct restrooms and shade structures at the Baker Draw recreational shooting area. “These projects were already ready. The Forest Service needed someone to do it, we had the funds to do something, corporatesocial responsible work, and it was just a great fit,” Veldman said. “We’re users on this land, and we wanted to be able to do something we weren’t required to do.” Standing at the new trailhead, Veldman pointed out at the cattle grazing lazily in the shadow of the bluffs. He said the cattle were likely from Timmerman Ranch, one of Noble’s big clients. The Tread Lightly! partnership is for them, for the other area ranchers and for residents who enjoy the Pawnee National Grassland, he said. It’s also a tribute to the U.S. Forest Service, with which Noble works closely on oil and gas projects. “We wanted to do something with the people we work with every day, but it’s not oiland gas-related for a change,” he said. Though the involved organizations and volunteers hope the fence solves the problem of unauthorized vehicles in this wildlife area,
Sean Hasselstrom, right, and Evan Robins work to block off the old trailhead for the Pawnee Buttes in late August on the Pawnee grasslands. The two volunteers helped block the trailhead as an effort to protect the local raptor population.
Olson said it’s bigger than this specific road on this particular land. Outdoor recreationists should come prepared with maps and stay off roads that aren’t meant for motorized vehicles to preserve other habitats, as well. The now-blocked road, which has already been leveled off to eliminate ditches, will be seeded later this fall when the temperature drops. Tread Lightly!, Noble Energy and U.S. Forest Service officials hope the land returns to as natural a state as possible. The volunteers, who spent about three hours building the fence, were able to
accomplish something the U.S. Forest Service wouldn’t have had the resources to do in several months, Olson said. Meghan Keating, a volunteer with the U.S. Forest Service, said she was excited to see concerted efforts to preserve the Pawnee’s wildlife. As a wildlife biology major at Colorado State University, she said she feels good that she can directly help northern Colorado’s raptors. “It’s hands-on, and you’re kind of seeing some change happen right in front of you,” she said.
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About 50 people went on the Pawnee Butte Seeds Grasslands Tour in late August. The group saw three sites on the Lonesome Pines ranch, which have been replanted with indiginous plants to help reclaim the land.
NEW OLD GROWTH Grover rancher, Pawnee Buttes Seed replant land after wind turbine installation BY BRIDGETT WEAVER • FOR ENERGY PIPELINE
determined. They were going to bring me on board come hell or grover - Jim Sturrock’s ranch is for beef production first and high water.” energy production second. So Sturrock agreed to rent his land for wind energy production, “You can’t raise hamburgers without forage or grasses,” he said. but with a few stipulations. Sturrock sees about 400 head of cattle circulate through his ranch Cedar Creek was expected to help pay for the reclamation each year. so that land remained Sturrock showed a functional for ranching. group of interested Weld “The reclamation is County residents around part of the lease and how his more than 3,000-acre it’s supposed to be done,” ranch, Lonesome Pines Sturrock said. Land and Cattle Co., as Cedar Creek started part of the Pawnee Buttes installing wind turbines Seed Grasslands Tour. on Sturrock’s property in The two-day tour in late 2006, and the farm was August offered a showing completed by 2008. of farmland that is used GLEN LEDALL, salesman, Pawnee Buttes Seed Since then, Sturrock for energy production has worked with Pawnee and then reclaimed. Buttes Seed and Cedar Creek to put the land back to how it was Sturrock’s ranch is home to a wind farm, managed by Cedar with a few wind turbines on top. Creek Wind Energy, LLC, as well as his cattle. Don Hijar, director of Pawnee Buttes Seed, said the grass Sturrock said he never intended to have a wind farm on his everyone was seeing was planted there. property, but the wind energy company was pretty insistent. “I don’t know if you all understand that he planted what “It wasn’t in my business plan,” he said. “They were bound and
“We want to help progress, but we want to help preserve those natural resources that are precious.”
24 ENERGY PIPELINE OCTOBER 2015
IN A CLIMATE LIKE THAT OF EASTERN COLORADO, IT IS ESPECIALLY IMPORTANT TO PUT PLANTS BACK OVER THE SOIL AS IT CREATES A SHIELD FROM THE HOT SUN you see,” Hijar said. “Mother Nature helped some,” he said, by spreading seeds and watering with the rain. Sturrock planted wheat, barley and some other indigenous plants. It’s important for Sturrock to have the plants out in the fields because that’s how his cows eat. “The cow doesn’t care if it’s planted or natural - she’ll eat it,” Hijar said. Still, the “how” part of reclamation is important, said Glenn Ledall, Pawnee Buttes Seed salesman. Pawnee Buttes Seed often works with oil and gas companies as well as wind energy companies to reclaim land after the companies install the wells or turbines. “We don’t want to discourage (progress) - we want to support and encourage it,” Ledall said. “We want to help progress, but we want to help preserve those natural resources that are precious.” They work with sites both on the plains and in the mountains, Ledall said. “Clear at the beginning, (we decide) where do we put the oil site, oil well or wind turbine?” Ledall said. “Because we obviously need to disturb the land to get what we want to be putting in.” He explained that every area has different indigenous plants, and to make normal it requires putting those plants in. “It’s about starting out knowing what kind of soil, what kind of land we have,” Ledall said. “They really need to put it back” to what it was before the energy production started. In a climate like that of eastern Colorado, it is especially important to put plants back over the soil as it creates a shield from the hot sun. “As Jim at lonesome pines is doing, (we put) in a cover crop, we’re helping to start the process, and then we’re going to get back to the native plants and grasses,” Ledall said. The reclamation process is not short. Ledall said it could take three to five years just to start, and it is normally done in several phases. But no matter where the reclamation is happening or what kind of land it’s on, the goal always is the same. “We ultimately want to get it back to the original state,” Ledall said. “Before it ever was, before we started and that oftentimes is our long-term goal.”
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IMAGES OF CHEMICAL CONCENTRATIONS IN SOILS USING INFRARED SPECTROSCOPY BY GARY BEERS • FOR ENERGY PIPELINE
before discussing use of this tool in
oilfields, a basic use of this tool is highlighted with a 2012 project conducted in Italy.
IMAGES OF SOIL COMPOSITION IN ITALIAN FOREST If you were assigned a project to map the percentages of clay, silt and sand for a large area of forest soils, you would likely collect many soil samples, perform particle size analyses, and use the results to develop percentage contours on a two-dimensional map. Certainly, this would be a
26 ENERGY PIPELINE OCTOBER 2015
time-consuming and tedious effort. What if you could take a special photograph of this forest area and immediately produced the needed contour maps? Would the map based on the photograph be as accurate as the map based on actual soil samples? A project comparing these two approaches was conducted in an Italian forest and described in a recent article (“Visible and near infrared spectroscopy for predicting texture in forest soil: an application in southern Italy,” in the Italian Society of Silviculture and Forest Ecology, Volume 10, 2015). Comparisons of the contour maps are provided in the graphic. The information contained on maps based on infrared spectroscopy is essentially the same as
For over 50 years, GARY BEERS, has worked in numerous fields of environmental science as a consultant, regulator and educator. This career included senior management position with major consulting, nonprofit and public organizations. He has founded several successful firms to capture emerging resource management markets. One of his latest ventures, EnviroScienceINFO, provides content for public media.
the information based on actual field data (i.e., analyses of 235 soil samples).
IMAGES OF CHEMICAL CONCENTRATION IN OILFIELD SOILS The above tool (which measures a soil sample’s reflectance spectroscopy in the visible and near infrared spectral region) can be calibrated to provide an image of the soil area, with shaded areas corresponding to different concentrations of a specific chemical compound. The molecular-level, vibrations generated by the bonds in each chemical compound generates a unique “fingerprint” that is used in calibration. The tool can be calibrated to detect variations in concentrations of various regulated compounds (i.e., benzene, methanol, phenol, naphthalene, and chrysene) and of typical organic chemicals in native soils (i.e., lignin, cellulose, and humic acids). This fast, cost-effective, nondestructive approach to portraying a quantitative
snapshot chemical concentrations across a soil surface has an enormous potential for application in oilfields, especially related to environmental monitoring and remediation activities involving petroleum hydrocarbons. For long-term environmental monitoring, point-and-stare cameras could be polemounted to take time-lapse images of a soil area that may be at risk for petroleum releases. For periodic monitoring at various sites, hand-held cameras could provide images as many sites are inspected during a day. For soil remediation activities, initial images could provide a quick assessment of the extent of the problems and images taken during clean-up in the field could document the process, including attainment of endpoint concentrations. Advances in the use of this tool includes imaging of soil areas from drone-mounted cameras, as applied in precision agriculture.
OUTLOOK The financial entry for using this tool is relatively low, especially when there is
repeated use - compared to traditional approaches involving soil sample collection, analyses, and data interpretation for mapping chemical contours. Consequently, there will be an initial wave of overwhelming amounts of environmental information which has to be incorporated into the decision-making processes for environmental management. Some period of time will be needed to understand the core value of this new information and how it is best utilized by these processes. In the meantime, this tool will be invaluable as a means to rapidly monitor chemical status of key soil areas and, where a problem develops, a means to rapidly identify the size of a problem and document changes in soil chemicals as corrective actions are implemented. To comply with regulatory criteria, soil sample collection and analyses will have to be done in support of the use of this tool; however, this traditional data collection approach is expected to be reduced and confined to “ground-truthing” the chemical contours evident from visible and near infrared spectroscopy.
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OCTOBER 2015 ENERGY PIPELINE 29
BY AMY KEGG • FOR ENERGY PIPELINE
30 ENERGY PIPELINE OCTOBER 2015
WHILE THE ISSUE OF WHETHER LOCAL GOVERNMENTS CAN SUPERSEDE STATE REGULATIONS MAY WELL SEE ITS DAY IN THE STATE SUPREME COURT, AND DEBATES OVER THE SAFETY AND BENEFITS OF FRACKING CONTINUE TO HEAT UP IN COLORADO,
cadre of grassroots citizen groups in support of the oil and gas industry has sprouted up in northern Colorado. Amid the he-said/she-said, pointcounterpoint debates related to scientific studies and empirical proof, these pro-industry groups are focusing on educating the public to the benefits of locally produced oil and gas. Moratoriums or bans have been enacted in Boulder County, Lafayette, Broomfield, Boulder and in Fort Collins and Longmont, where litigation filed by the Colorado Oil and Gas Association is in the appeals process. In Loveland, voters defeated an initiative last year to impose a one-year moratorium. The town of Erie, whose borders happen to cross both Boulder and Weld counties, has been through a maze of public discussion and national attention regarding a proposed one-year moratorium on drilling in town limits. After Encana and
a
Anadarko Petroleum offered a self-imposed 90-day halt to operations, the town board eventually decided not to move forward with a moratorium, but rather establish memorandums of understanding or operator agreements with the companies. “Instead of banning and facing possible litigation from the state, Erie decided, let’s be a little smarter about this. Let’s work together to come to an agreement,” said DeAndrea Arndt, director of the citizens group, Erie Forward. Arndt said the group began when an anti-fracking group started in Erie several years ago that was “really loud.” “As a joke, my friend started a Facebook page called “Fracktastic” that didn’t really go anywhere, but that was the seeds of Erie Forward,” Arndt said. After the board initially voted to instill a moratorium, Erie Forward launched in February. Their mantra is educate, engage and empower.
IT IS SAD TO ME THAT THE INDUSTRY SUPPLIES 70-PLUS PERCENT OF OUR ENERGY NEEDS IS BEING PUNISHED. IT’S BITING THE HAND THAT FEEDS YOU. DEANDREA ARNDT director
Erie Forward
WE’RE ABOUT EDUCATION AND SUPPORT. WE’RE BRINGING ANOTHER SIDE THAT HASN’T BEEN AS PUBLIC AS THE NEGATIVE SIDE. WE WANT TO PUT THE RIGHT INFORMATION OUT THERE. PENNY SALAZAR
interim chairwoman, founding member
Energy Council of East Weld
32 ENERGY PIPELINE OCTOBER 2015
“THE GOAL IS TO EDUCATE PEOPLE WHO DON’T KNOW HOW FRACKING WORKS AND ABOUT THE MANY BENEFITS OIL AND GAS BRINGS US IN OUR EVERYDAY QUALITY OF LIFE. ENGAGE, AS IN TALK TO YOU NEIGHBORS ABOUT WHAT YOU’VE LEARNED, AND EMPOWER THOSE PEOPLE TO SPREAD THE WORD.” Arndt said she tells her children that if it weren’t for the oil and gas industry, they wouldn’t have a warm house, American Girl dolls, Legos, or even an outdoor barbecue, noting that many people she has engaged had no idea that plastics come from oil by-products. “There’s just this level of ignorance out there,” she said. “It’s sad to me that the industry that supplies 70-plus percent of our energy needs is being punished. It’s biting the hand that feeds you.” Arndt said Erie Forward has an email list of about 300, and its Facebook page has nearly 200 likes. Moving east and north, two other groups have emerged in Weld County: The Energy Council of East Weld and the Energy Council of West Weld. The two groups collaborate, but the reason for the geographical distinction is the dramatically different demographics found across the county, which covers nearly 4,000 square-miles and is the state’s largest producer of oil and second largest of gas (second to Garfield County). Penny Salazar is the interim chairwoman and a founding member of the East Weld group that started a little more than a year ago. She also is the Mayor Pro-Tem for Platteville. “Weld County has a very unique niche when it comes to oil and gas,” she said. “We’ve been doing it since the ‘50s; it’s part of our daily life, our political life and our personal life.” Still, while the region seems much more comfortable living with the industry day-to-day, the group’s focus is to combat the negativity that surrounds the
industry with education. About 30 standing members make up the group that Salazar said has as many viewpoints as people. “Our group is truly focused on the educational standpoint,” she said. “There are those groups on the other side who, at least appear to come from the position of ‘let us scare you into thinking this is bad for you.’ We’re about education and support. We’re bringing another side that hasn’t been as public as the negative side. We want to put the right information out there.” The non-profit group operates on donations, some of it from industry, and much of that as in-kind, connecting the group with industry experts and providing informational sessions. Salazar said in turn, some employers whose businesses support oil and gas have come to the Energy Council of East Weld requesting help in educating their employees, many of whom have not worked with the oil and gas industry before. “One of the educational components we provide is to encourage those employees to register to vote. As voters, we all have a responsibility to make informed decisions,” she said. “That’s an important part of what our group does - help people make responsible, informed decisions.” Salazar added that the group plans to become more involved in the political scene as ballot items regarding the oil and gas industry are likely to emerge in the coming months. “For Weld County, it is a huge revenue source. We certainly see the benefits of it purely from a revenue standpoint,” Salazar said, noting the statistics on the group’s web page state that more than $55 million in taxes collected from the oil and gas industry have been invested in education, public safety and other services, and $100 million has been invested in infrastructure improvements. “If fracking is banned or even more restricted, I don’t think people realize the number of jobs that would be lost, and that would have a domino effect, not just to that family but then to that town, that county, the state, the national economy.” Salazar said that as a former restaurant
COLORADO HAS SOME OF THE STRICTEST REGULATIONS IN THE NATION, INCLUDING THAT THE STATE’S METHANE RESTRICTIONS ARE MORE RIGOROUS THAN WHAT’S CURRENTLY BEING PROPOSED BY THE OBAMA ADMINISTRATION owner in Platteville, a great deal of her revenue came from the oil and gas workers who would stop by for breakfast and lunch every day. “It really gave me the opportunity to see them as they are,” she said. “They’re working a job, making a living, supporting their family just like the rest of us. This just happens to be what they do for a living.” She emphasized that Colorado has some of the strictest regulations in the nation, including that the state’s methane restrictions are more rigorous than what’s currently being proposed by the Obama administration. “There is a way to do this responsibly, and it’s important to acknowledge that we’re in a place where that is being done. We encourage people to get in touch with the resources out there -- and not just one side,” she said. “Dig a little deeper than the sound bites.” Her counterpart in West Weld is Amber Clay, the newly named chair of The Energy Council of West Weld. The group has about 10 people serving on its board, with the main mission also to educate. “Generally we see that eastern Weld folks are more at ease with fracking and more pro-energy,” she said. “We do see that here in western Weld people are concerned about water, methane emissions, the possibility of earthquakes happening, but I’d like to hear more from the community. My goal as the new chair is not to just assume what the concerns are.” The group also holds informational meetings open to the public, and Clay said she would like to see attendance and interest
grow. “We are definitely trying to get more community members involved, having them sign the pledge and being a part of the group. The more people we get involved, the better the level of education we can get out there.” Clay, who has a background in agriculture and farms on land with wells, said she knows first-hand how ag and oil and gas go hand-in-hand. “If community members have questions or concerns, we want them to reach out. I’m just a community member like anybody else. I don’t work for the industry. I care about what’s going on in our community. We want to be as transparent as possible. Getting that community interest and those conversations started is very important to us,” she said. “Of course we understand wanting to protect the environment and how passionate people can get about it,” she said, “but we’re really concerned about getting the right information out there. The anti-groups are really convoluting the message. They’re driven by emotion, not driven by science.” Looking to the west and north, The Larimer Energy Action Project sprouted from what was known as the Loveland Energy Action Project, which played a influential role in defeating a Loveland initiative to place a fracking moratorium in city limits in 2014. Former State Rep. B.J. Nikkel said that while she was in office, she began to notice mass emails about the oil and gas industry that were “hype and fear-based.” After she left the legislature she founded the Loveland
WE WANT TO BE AS TRANSPARENT AS POSSIBLE. GETTING THAT COMMUNITY INTEREST AND THOSE CONVERSATIONS STARTED IS VERY IMPORTANT TO US. AMBER CLAY chair
Energy Council of West Weld
WE WANT TO PRESENT RATIONAL, REASONABLE AND FACTUAL INFORMATION, AND STAY AHEAD OF THE MISINFORMATION CAMPAIGN BEING PUT OUT THERE. BJ NIKKEL
former co-chair
The Larimer Energy Action Project
OCTOBER 2015 ENERGY PIPELINE 33
I BELIEVE IN STRONG REGULATIONS, AND I BELIEVE THE INDUSTRY CAN COEXIST WITH REGULATIONS AND PROCESSES. I’M AGAINST EXTREMIST VIEWS ON EITHER SIDE. JEFF MARTIN co-chair
The Larimer Energy Action Project
SIMPLY IF A PERSON OWNS A PIECE OF PROPERTY, AND THEY OWN THE MINERAL RIGHTS BELOW THE GROUND, THEY HAVE THE RIGHT TO UTILIZE THAT PROPERTY IN THE WAY THEY CHOOSE.
THE GOVERNOR’S TASK FORCE ON OIL AND GAS PUT FORWARD NINE RECOMMENDATIONS, TWO OF WHICH FOCUS ON LOCAL COOPERATION WITH INDUSTRY OPERATORS group which then expanded their focus to include Fort Collins and Windsor, as well. “We want to present rational, reasonable and factual information, and stay ahead of the misinformation campaign being put out there.“ As Nikkel steps down from co-chairing the group, former State Rep. Ken Summers will step in to assist current co-chair Realtor Jeffrey Martin. The group also brings to the forefront, the issues of personal property rights related to fracking bans and moratoriums. Martin, who readily goes on record as a lifelong Democrat, said, “I believe in strong regulations, and I believe the industry can coexist with regulations and processes. I’m against extremist views on either side. The oil and gas industry isn’t going anywhere and neither will the people let industry run roughshod over their personal property.” Adding to Martin’s comments, Summers said, “Simply if a person owns a piece of property, and they own the mineral rights below the ground, they have the right to utilize that property in the way they choose.” Additionally, the trio agreed that the best way to control fracking at the local level is a combination of allowing statewide regulations to supersede with a strong emphasis on local
KEN SUMMERS
GET INVOLVED
co-chair
The Larimer Energy Action Project
ERIE FORWARD Search “Erie Forward” on Facebook 34 ENERGY PIPELINE OCTOBER 2015
governments working through their local planning commissions and city councils collaboratively with industry to create MOUs or operator agreements, similar to what Erie is in the process of doing. “A patch work of local regulations stymies the permitting and exploration process,” Summers said. In fact, the Governor’s Task Force on Oil and Gas put forward nine recommendations, two of which focus on local cooperation with industry operators: No. 17 recommends to facilitate collaboration of local governments, Colorado Oil and Gas Conservation Commission and operators relative to oil and gas locations and urban planning. No. 20 recommends to include future oil and gas drilling and production facilities in existing local comprehensive planning processes. COGCC issued a memo in June announcing outreach meetings to be held across the state in July and August. The memo stated, “The Commission and COGCC staff look forward to creating rules that enhance collaboration between local governments and industry and ensure Colorado’s oil and gas resources continue to be developed responsibly.” Stay tuned.
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Lifetime Achievement Pete Stark, a “giant among the men and ladies” in oil and gas, takes home COGA’s coveted award BY SHARON DUNN • SDUNN@ENERGYPIPELINE.COM
HE’S DELIVERED TECHNICAL PAPERS AND SPOKEN ALL OVER THE WORLD ON ISSUES INVOLVING THE GLOBAL OIL AND GAS MARKETS, ALL STEMMING FROM HUMBLE BEGINNINGS AS A ROUSTABOUT IN 1955. Databases he created over 40 years ago continue to inform the oil and gas industry to this day, and he’s one of the most quoted individuals in oil and gas in Colorado. Wherever Pete Stark goes, the 79-year-old senior research director and adviser for IHS in Englewood is greeted like a rock star. People wait politely in line amid a sea of admirers for a quick chat or a glad handshake. “He’s definitely a giant among the men and ladies in the oil and gas industry,” said Peter Dea, a longtime friend, ski buddy and colleague of Stark’s. “He’s widely recognized by everybody, and around the globe. I can think of a few people who know of me in Denver, but step out of the U.S., no one’s heard of me. He dedicated so much of his time to the American Association of Petroleum Geology, which gave him the global platform to share his technical papers. ... Any time he’s given a talk, everyone wants to be there. He’s the literal and figurative rock star.”
Stark’s celebrity status was on full display in late August at the Colorado Oil and Gas Association’s annual Rocky Mountain Energy Summit. There, he was honored with the Lifetime Achievement Award to a standing ovation at a packed Colorado Convention Center conference room. “I almost thought who is that masked man they’re talking about?” Stark said of winning the award. “I was looking for a phone booth where I could get into a red shirt with a big red S.” George Mitchell he was not, but Stark’s following in the Rocky Mountain community was evident as he received the standing ovation among hundreds of colleagues that echoed through the corridors. That last week in August, Stark had just returned from a week-long trip to fish the Togiak River for some silver salmon in Alaska. He was still suffering some ill effects from a December spine surgery, which had already curtailed his lifelong skiing obsession. He told the audience of colleagues and admirers he was speechless for the first time in his life after Dea introduced him and discussed Stark’s many accomplishments. Stark, Dea explained, was the man who was a technology pioneer, bringing geology, technology and new production trends to oil companies’ desktops.
OPPOSITE PAGE: Pete Stark at the University of Denver Security Conference. OCTOBER 2015 ENERGY PIPELINE 37
He revolutionized how oilmen got their information all over the world; in fact, he created a database in 1964 that was unheard of at the time, and which is still used today. “He’s always been a go-to guy to get vast amounts of data that’s been condensed down for lesser minds like myself,” Dea said of his acquaintance with Stark. Stark remains humble as he reflects on that day. “My head is getting big enough that I can accept the fact that I had a wonderful award,” Stark said. “I’m still ... Wow! This is fantastic. “ “It wasn’t even on my radar screen,” Stark said. “I always thought awards like that go to people who found and produced oil and stuff in the industry. I did a little bit of that a long time ago ... but my career was really on geological applications, computer applications. I designed and developed a whole bunch of applications that helped people find oil ... “I’ve done papers on heavy oil, I’ve done papers on global gas developments. I’ve done a heck of a lot of interesting things and shared a lot of that with the Rocky Mountain community. I inadvertently ended up with a pretty big following that I really wasn’t aware of.” 38 ENERGY PIPELINE OCTOBER 2015
Stark started his career in the oil business as a roustabout in 1955 in Oklahoma. He worked summer jobs in New Mexico and Texas on well site geology, and he spent his summers in graduate school, all for Mobile Oil. Dea, who runs Cirque Resources based out of Denver, a heavy hitter on his own with more than 30 years experience in the industry, is in awe of Stark’s longevity and amassed knowledge of the industry. “Pete is one of these guys who has had an amazing career,” Dea said of his colleague. “It’s almost unfathomable to think of what he’s accomplished. To boil all that down, simplistically, he’s really done an incredible amount of research and boiled it all down ... so it’s much more usable for a lot of different people, and in so doing, he’s really brought his world of data and resources to everyone’s desktops. It’s like he brought the world to us.” Stark studies data from all over the world, Dea explained, from Cameroon to Colombia, Denver to Dubai. “One of his great gifts is sharing all that knowledge to geologists and engineers around the world.” With a 60-year career, Stark purports he is slowing down - physically, at least. His spinal surgery in December
OPPOSITE PAGE: At 79, Pete Stark remains one of the top minds in the oil and gas industry, and is regarded as such throughout the world.
kept him off the slopes last winter for the first time in well, decades. Still recovering, he uses a cane to get around, but was able to fish in Alaska this summer to feed his wanderlust for the outdoors. He came back to his reduced workweek, and attempts to enjoy more of the good life. The problem is, life is good, and so is his work. “Last year, I went to a three-day work week thinking I’d slow down,” Stark said. “I ended up working five days a week for three days pay. This year, I have got it down to little less than four days. “It doesn’t make a difference to me. I do things I enjoy and I’m always happy to contribute. I’ll spend my weekends working on it.” And so, when he accepted his award, he promptly apologized to his wife and son for being an “unbearable workaholic” throughout his career. That came from years of working, dating back to his days a newspaper delivery boy. He remembers acutely the day he was delivering in the ice and rain, and his fingers were numb, and he decided to go home before the job was done. “I was crying and trying to get my hands warm,” Stark recalled. His father drove him through the rest of his route to finish the job. “The situation was, you have a responsibility, you have to live up to those responsibilities that you committed to and do your very best, no matter the circumstances,” Stark recalled. That perseverance rings through in all he does. There’s a lot to keep up with in today’s oil and gas industry, and that keeps this lifelong learner interested, engaged and busy. In this every changing industry, he can’t slow his mind down, even if is body drags a little behind. “It’s a day-to-day assimilation of a rapid amount of change in a lot of different parameters,” he said of the vast changes the industry sees almost daily. I guess the industry is now trying to pick up a wet watermelon seed. You reach down and squish it, and it pops out of your fingers.
“It’s very complex.” He’s been working scenarios for what the future oil industry will look like, in terms or pricing - perhaps the million dollar question He’s got the scenarios down to three possibilities, but those will change. “It’s been impossible to frame a perfect scenario,” he said. “In framing the scenarios, you have enough options in events that will impact oil and gas markets, that the combination of all the above tends to happen, but not in a way you think is most likely. It’s been really difficult to predict.” Chasing his theories indeed keeps him working, researching and answering the phones. He loves working on solving the riddle that is today’s oil and gas industry. So when the question of retirement came up 14 years ago, at 65, the age of retirement, he understandably, scoffed. “Retire? No. Good grief. I was still hyper healthy, robust and energetic,” Stark said. Now, at 79, Stark is like a kid in the candy store. Changes are happening daily in the world oil market. North America’s shale revolution has changed the worldwide game in the last threes so much so that it’s eclipsed decades of the industry’s continual, slow trudge up the hill. “I’m delighted to still be able to play a part in a very dynamic and hugely valuable industry,” Stark said. “This industry is still the driver for world economics. It’s a
He revolutionized how oilmen got their information all over the world; in fact he created a database in 1964 that was unheard of at the time, and which is still used today. driver for lifestyle and quality of life for people around the world.” He hopes he can last - well, he won’t put a time frame on it. “I want to be careful that my capabilities don’t slip further than my enthusiasm wants to accept,” Stark said. “So I guess I’ll have to try to make a judgment with my great colleagues at IHS as to when the right time is to hang ‘em up.” OCTOBER 2015 ENERGY PIPELINE 39
THE STORY BEHIND
BY LINDA KANE FOR ENERGY PIPELINE
IRAN AGREEMENT
SANCTIONS,
iran has faced sanctions for decades,
but those implemented in 2012 have taken a severe toll on the Iranian economy. Even if sanctions are lifted, it’s likely the global oil market will remain flooded late into next year, keeping prices low and employees out of work. In November 2013, Iran signed an interim agreement with China, France, Germany, Russia, the United Kingdom and the United States that provided some sanctions relief. The agreement, known as the Joint Plan of Action, allowed Iran access to $4.2 billion in previously frozen assets in exchange for limiting nuclear production and permitting international inspectors more access to sites. The JPA capped Iran’s crude oil exports at 1.1 million barrels per day, less than
40 ENERGY PIPELINE OCTOBER 2015
half its 2011 export level. The terms of the JPA will remain in effect until it’s verified that Iran has followed through on limiting its nuclear program, which will likely take several months. Meanwhile, international sanctions have taken a severe toll on the Iranian economy. In April, U.S. Treasury Secretary Jacob Lew estimated that Iran’s economy was 15 percent to 20 percent smaller than it would have been had sanctions not been imposed. He projected it lost $160 billion in oil revenue alone. In addition, more than $100 billion in Iranian assets have been held in restricted accounts outside the country. In January, then-Undersecretary of the Treasury David Cohen outlined the U.S. sanctions in congressional testimony.
“Our sanctions have drastically driven down Iran’s oil exports,” Cohen said. “In 2012, Iran was exporting approximately 2.5 million barrels of oil a day to some 20 countries; today, it exports only around 1.1 million barrels, and only to six countries.” More important, the sanctions have impeded Iran’s ability to acquire material for its nuclear program. “Iran in possession of a nuclear weapon would directly threaten U.S. and international security, increase the risk of nuclear terrorism, undermine the global nonproliferation regime, and risk setting off an arms race in the Middle East,” Cohen said. “From the outset of his administration, President Obama has made clear that we will do everything in our power to prevent Iran from obtaining a nuclear weapon.” Still, the nuclear deal reached is not ideal for either side, according to Richard Nephew, program director for Economic Statecraft, Sanctions and Energy Markets at the Center on Global Energy Policy. Nephew also served as the lead sanctions expert for the U.S. team negotiating with Iran, and from May 2011 to January 2013, he was the director for Iran on the National Security Staff, where he was responsible for managing a period of intense expansion of U.S. sanctions on Iran. The deal provides confidence, however, that Iran cannot get a nuclear weapon without immediate detection and response, Nephew said in a commentary on the nuclear deal with Iran. “The nuclear deal is therefore an improvement over the status quo and what Iran’s nuclear program would have become had a deal not been struck,” Nephew said. “New oil will not flow from Iran until 2016 and there will probably be less of it than optimists predict.” He estimates 300,000 - 500,000 new barrels of oil to be on the market within six to 12 months after a deal is signed. Sanctions relief will permit new business with Iran, but uncertainty over Iranian compliance and U.S. politics will deter longterm deals for the next 18 months, he said. Some have predicted Iran oil exports could reach as high as 1 million barrels per day. It’s hard to predict. “It looks like the agreement has a good shot of being signed now - so sanctions will be released as I understand it sometime
in first quarter of next year,” said Pete Stark, senior research director at IHS in Englewood. “And at that time and probably even before then, I’m sure Iran will cheat, there’s going to be some looseness in the system. But Iran, we feel, some people say will produce 1 million barrels a day - but ... we feel like Iran could add 600,000 barrels a day. Over six to nine months we’ll probably have a good slug coming on.” The World Bank predicted in early August, Iran will add 1 million barrels, lowering oil prices by $10 a barrel in 2016. “But who knows? There’s no real accurate information other than good educated guesses,” Stark said. “Moving oil back into the market is not just how you can pump, but how you can get it shipped around the world.” IHS provides global market, industry and technical expertise to businesses and governments in more than 140 countries. For decades, Saudi Arabia has maintained power over oil prices, Stark said, essentially dictating the price of oil in the global market. “Since the price of oil peaked in June 2014, the U.S., Saudi Arabia and Iraq have added 2 million barrels a day to the world production market. In the meantime, toward the end of last year, Saudi Arabia said, ‘Hey, we are no longer going to reduce our production to be responsible as the world’s swing producer, which they had done since the middle 1980s.” The recent crash in the oil market was mostly due to the Saudis flooding the market, along with other members of OPEC, the Organization of the Petroleum Exporting Countries. That’s where the United States comes in to play, taking over that “swing” role and reducing its production by 600,000 barrels, Stark said. “It’s up to the United States to reduce its oil production given the premise that Saudi Arabia will refuse to lower its production. Now, the 600,000 barrels we reduce will be offset by the 600,000 in a way that will come into the market from Iran,” Stark said. “And it’s difficult to predict how that’s going to affect world prices.” Several factors come in to play, such as China’s economy and whether it will have recovered any by then. “That is one of the many, many unpredictable factors in oil,” Stark said. At its peak, the price of oil is easily more than $100 per barrel. Prices lately have been in the $40-$50 range where they are likely
to remain into the first half of 2016, experts have predicted. Certainly, Iran will be able to put its stored oil - estimated at 30-40 million barrels - on the market, Nephew said in his commentary. “But, that is a lot of oil to discharge at once and Iran will take a price hit if it wishes to move it fast. After that, Iran will have to ensure that its new production increases, and it will be fighting for market share it lost three years ago. This would be hard, even in a higher oil price environment. At today’s price levels, it will be a major challenge.” Additionally, Iran will have to update its equipment and fields that have been inactive, slowing their production in the short term. Sanctions snap-back provides a threat, too. Companies and banks the develop business with Iran will have to be prepared to pull out immediately if Iran doesn’t follow the agreement.
THE WORLD BANK PREDICTED IN EARLY AUGUST, IRAN WILL ADD 1 MILLION BARRELS, LOWERING OIL PRICES BY $10 A BARREL IN 2016 The sanctions have many layers and will take time to remove fully. In the U.S., even though the amount of drilling has dropped there’s been only a modest reduction in supply. The reason production has held nearly steady is because oil companies have become super efficient. “Even with half the rigs, what they ended up with is the very best rigs, with the very best workers, in the very best spots,” Stark said. “That phenomenon has really raised eyebrows.” The American Petroleum Institute is in favor of lifting sanctions, according to John Felmy, chief economist with API. The American Petroleum Institute represents all aspects of the oil and gas industry. It was formed in 1919 at the request of the federal government. During WWII, much of the U.S.
military efforts had been run on coal. With new tanks and planes and other equipment, it recognized a need for better data on oil, Felmy said. API has been producing weekly statistics since 1929. “The forecast going out to 2030-2040 show significant growth in all forms of energy, but especially oil,” Felmy said. “Virtually all the forecasts show a growing use of oil. “Sanctions on Iran are a big deal. If you lift those sanctions and Iran is able to export oil, if they bring on 500,000 to 1 million barrels a day and that could create quite a challenge,” Felmy said. Even if sanctions are lifted, he said it will take time to get production going. “It’s not something that happens instantly,” Felmy said. “It’s not like they can just turn up a pump.” Places like Iran have such rapidly growing populations; they have to be thinking seriously on a final agreement, Felmy said. “Iran hasn’t been able to do much but sell what’s in storage,” he said. Even if sanctions are lifted, he agreed the process will be slow. “They’d have to revamp equipment again to get it going. They’d also have to have workers and sanctions reduced the workforce. “Even though oil prices have come down from last year, the longer term forecasts show the global oil market will grow from 92 million barrels a day to well over 100 in the next decade,” he said. “More oil is needed because of massively growing populations like in the middle east and right now oil is really the only thing that supplies transportation.” Until something is signed, however, nobody really knows what’s going to happen. “What you’re looking into is a very complex issue,” Stark with IHS said. It’s going to take cooperation from several countries to rebalance the market. “If Saudi Arabia and its key partners in the Middle East - OPEC - can make an agreement to moderate their overall production and I don’t think the Saudis will drop theirs at all - Kuwait, Abu Dhabi, Irag and Iran, they’ll have to get some kind of agreement to not go full-bore ahead,” Stark said. The point being, if China’s economy is still in a slump and Iran and Iraq refuse to compromise on producing the market will be oversupplied into 2017, Stark said. “If there’s some cooperation, we could balance out toward the end of 2016,” he said. The likelihood of that happening, though, he said, is anyone’s guess. OCTOBER 2015 ENERGY PIPELINE 41
Y H W Ban THE
BEHIND THE U.S. OIL EXPORTS
H.R. 702
A bipartisan bill to lift the 1970s embargo on crude exports, H.R. 702, was approved Sept. 10 by the House Energy and Commerce Subcommittee on Energy and Power. The resolution was introduced in February.
IN SUMMARY, THE RESOLUTION “Amends the Energy Policy and Conservation Act to repeal authority to restrict the export of: (1) coal, petroleum products, natural gas, or petrochemical feedstocks; and (2) supplies of materials or equipment necessary to maintain or further exploration, production, refining, or transportation of energy supplies, or for the construction or maintenance of energy facilities within the United States.
Prohibits any federal official from imposing or enforcing any restriction on the export of crude oil. Requires the Secretary of Energy to study and make recommendations on the appropriate size, composition, and purpose of the Strategic Petroleum Reserve.” The resolution still must pass the full House. - Staff Reports
BY LINDA KANE • FOR ENERGY PIPELINE
IN GENERAL, IT’S ODD FOR THE U.S. TO HAVE BANS ON EXPORTS
that’s according to john felmy, chief economist JOHN FELMY at the American Petroleum Institute. But, throughout chief economist, American Petroleum history, the U.S. has been dotted with embargoes and Institue sanctions across several industries, including oil. “In many cases that’s just not our policy,” he said. Felmy has been studying the subject since the early 1970s. “In oil in the past we have aggressively exported oil at certain times to help our friends. And so what happened was - going back into the early ‘70s, back then we had the OPEC embargo and at the same time the appearance of gas lines - people couldn’t get gas.” Going back to 1973, during the Nixon administration, the Arab-Israeli war was ongoing and members of the Organization of Petroleum Exporting Countries imposed an embargo against the United States as retaliation. OPEC was upset the U.S. had re-supplied the Israeli military. The embargo banned petroleum exports to the U.S. and produced cuts in oil production. Oil prices already were unstable and the embargo caused strain on the U.S. economy, which had grown dependent on foreign oil. What the nation saw as a result were long lines to the pump and hits to their pocketbooks. The price of oil quadrupled. The Nixon administration began negotiations with oil producers to end the embargo, but it took several months to finalize.
The 1970s brought with them the oil embargo that resulted in scarce gas supplies at the pump. The resulting long lines for gas helped form modern-day energy policy.
“Unfortunately, people interpreted the OPEC embargo as long gas lines. The knee-jerk reaction reveals a lack of understanding and why we should explore it. It’s a complicated situation,” Felmy said. Then came the Alaska pipeline, built from 1974-77, after the 1973 oil crisis caused such high prices. Because the United States imported approximately 35 percent of its oil from foreign sources, Nixon began to lobby for the Alaska pipeline. It was met with opposition from conservationists and natives, of course, but continued onward and transported its first barrel of oil in 1977. The Alaska pipeline didn’t have a major impact on global oil prices right away. This was partly due to the lengthy construction process and partly because U.S. production outside Alaska declined until the mid-1980s. During the early ‘80s, OPEC decreased oil production nearly in half to maintain high prices. However, production was soon surpassed by non-OPEC countries. What resulted was a serious oversupply of crude oil. The global price of oil peaked in 1980 and fell drastically in 1986 as a result of slower economic activity and energy conservation brought on by high fuel prices. It wasn’t until the late 1980s that gas lines dissipated. Ronald Reagan was in office then and he decontrolled the oil industry. He signed an executive order to remove market controls from petroleum products so prices would be determined by the free market. Oil exports were banned from Alaska in 1973 to protect domestic supplies and limit U.S. dependence on foreign oil. The ban lasted 22 years until the Clinton administration in 1995. “Our citizens will no longer be discriminated against and kept from selling the state’s most valuable resource in the world market,” Sen. Frank Murkowski said at the time. He was an Alaskan Republican and chairman of the Senate Energy and Natural Resources Committee. The Energy Policy and Conservation Act of 1975 allowed presidents to make exceptions in crude exports when market conditions called for
it. And according to Foreign Policy.com, former Presidents Gerald Ford, Jimmy Carter, Ronald Reagan, George H.W. Bush, and Bill Clinton all used executive authority to boost exports of refined products or crude oil. Maintaining balance of global oil production, supply and demand, has been an ongoing struggle and will continue to be a battle. A resolution in Congress, however, is gaining steam. HR 702, which calls for an end to the ban, was passed by the House Energy and Commerce Subcommittee on Energy and Power on Sept. 10. It still has to make it through both houses of Congress. The timing of it is certainly right. The American shale revolution has helped put a glut on the global market, reducing American imports. But the revolution is creating oil that is better suited for foreign refineries. American refineries were built to handle a different form of crude, and it would be expensive to tweak the programs to refine the “light, sweet crude” coming from America’s shale revolution. “The forecast going out to 2030-40 shows significant growth in all forms of energy, but especially oil,” Felmy said. “Virtually all the forecasts show a growing use of oil.” Longer term forecasts show the global oil market growing from 92 million barrels a day to well over 100 million per day in the next decade, he said. “More oil is needed because of massively growing populations like in the Middle East, and right now oil is really the only thing that supplies transportation,” Felmy said. He said the more opportunity to produce oil, the better. Its a job generator. “If an opportunity opens up, we think it’s good for both consumers and producers,” he said. That’s among the reasons the American Petroleum Institute supports lifting current oil sanctions. Another facet of the oil industry that’s under consideration is the final phase of the Keystone XL pipeline. The line would runs from Alberta, Canada, to refineries in Illinois, Oklahoma and Texas. Three phases of the project are complete, but the fourth and final phase is yet to be determined. Phase four would include a line from Alberta to Nebraska and run through Montana. This phase has generated the most controversy because it would travel over the Sand Hills in Nebraska. API encourages the sanctions be lifted. “We support lifting the export bans,” Felmy said. “Globally, if we make a decision to export, other countries are most likely going to buy into it and you don’t have export bans in other countries to my knowledge,” Felmy said. OCTOBER 2015 ENERGY PIPELINE 43
News Briefs NREL signs agreement with China’s national utility Representatives of the Energy Department’s National Renewable Energy Laboratory and China’s State Grid Energy Research Institute on Sept. 11 signed a first-ever memorandum of understanding between the two organizations. The State Grid Energy Research Institute, located in Beijing, is a subsidiary of China’s national utility, State Grid Corporation of China. China has announced plans to strengthen its national grid so it can more effectively deliver electricity generated by both conventional and renewable methods, according to a news release. “Clean energy isn’t solely a concern of the United States,” said Dan Arvizu, director of NREL, in the release. “It’s something that affects the entire planet, so it’s important to have researchers in China and other countries addressing the problems of supplying power from renewable energy.” The agreement between the NREL and SGERI lays out a general framework for coordination between the two organizations, and is intended to spark discussions for creating more specific R&D collaborations in the future. The scope of the agreement includes research project coordination, energy systems integration, power market design, site visits, and personnel exchanges. The agreement could result in the two organizations partnering to inform policymakers about energy and sustainable development, the release stated.
Colo. Attorney General Cynthia Coffman takes legal action to halt EPA’s Clean Power Plan DENVER -- Colorado Attorney General Cynthia Coffman will join a multi-state legal challenge to the Clean Power Plan, also called the 111(d) rule, which was issued by the federal Environmental Protection Agency on Aug. 3. “The rule is an unprecedented attempt to expand the federal government’s regulatory control over the states’ energy economy,” Coffman said in the release. “The EPA appears unwilling to accept limits set by Congress in the Clean Air Act and instead is pushing its agenda forward through regulatory rewrites that overreach its legal authority.” The case will be filed in the United States Court of Appeals in the District of Columbia when the federal government formally publishes the rule in the Federal Register. The federal government has not stated when that publication will occur.
NREL is the U.S. Department of Energy’s primary national laboratory for renewable energy and energy efficiency research and development. NREL is operated for the Energy Department by The Alliance for Sustainable Energy, LLC.
“There are immensely important legal questions at issue regarding the EPA’s sweeping new regulation. The face of Colorado’s economy could be forever changed and that will be reflected in lost jobs, higher utility rates, and an altered energy industry,” said Coffman in the release. “Before untold sums of public and private monies are spent on compliance with the Clean Power Plan, we need to settle the matter of whether it is even legal.”
- Staff Reports
- Staff Reports
44 ENERGY PIPELINE OCTOBER 2015
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News Briefs
Anadarko reaches Fort Lupton needy with heating help Energy Outreach Colorado has partnered with Anadarko Petroleum Corporation on a home energy program to help limited-income families and seniors in Weld County with their electric bills and energy efficiency needs, according to anews release. Anadarko will provide support for approximately 25 Fort Lupton households through energy bill payment assistance, as well as a free home energy efficiency kit and energyefficiency education, the release stated. Fort Lupton is about 40 miles south of Greeley along U.S. 85 and is in the heart of Colorado’s most prolific oi land gas development area, the Wattenberg Field. As the largest producer in the Wattenberg Field, Anadarko has invested approximately $8 billion since 2007 in Colorado and employs more than 1,500 people with offices in Denver, Evans and Platteville, the release stated. “Access to affordable and reliable energy is essential for all of us and often something that’s taken for granted,” said Craig Walters, vice president of operations for Anadarko in the release. “Our employees play a vital role in the cities and towns where we live and work, and we are grateful for the opportunity to support the Affordable Energy Program in Fort Lupton, helping our neighbors and making our communities stronger.” Anadarko also will fund EOC’s Energy Team to meet individually with participating households to install energy efficiency measures, discuss energy-saving behaviors and track energy consumption. EOC hopes to initiate similar programs in other parts of Colorado, the release stated. “We are excited to partner with Anadarko in support of Fort Lupton’s most vulnerable households in keeping up with their energy bills and reducing their energy costs,” said Enrique Hernandez, EOC’s energy assistance manager in the release. “By providing such comprehensive services, we hope to see these families gain the ability to move beyond needing financial assistance to keep up with their energy bills.” Energy Outreach Colorado is the only independent, nonprofit organization in the state raising money to help limited income Coloradans afford home energy through energy bill payment assistance, emergency home heating repair, and energy efficiency upgrades for affordable housing and non-profit facilities, the release stated. - Staff Reports
Baker Hughes lays off 114 The Brighton office of Baker Hughes laid off 114 workers in August as part of cost-cutting in a slumping oil and gas economy. The company, which has more than 460 employees in Colorado and a hub in Brighton at the base of the Denver-Julesburg Basin in south Weld County, made the layoffs quietly on Aug. 12. According to a required notice filed by Baker Hughes with the state Department of Labor and Employment, the company laid off 80 field operators, 11 field specialists, eight field engineers, a handful of mechanics and a smattering of administrative and field personnel. Company spokeswoman Melanie Kania issued the following prepared statement: “With market conditions remaining challenging, we have taken decisive actions to reduce our cost structure companywide while remaining focused on strengthening our revenue. Throughout 2015, we have lowered spending across the business, closed or consolidated facilities and made the difficult decision to reduce our workforce. We’ve made efforts to minimize reductions through alternative cost-cutting measures when possible, and all impacted employees will be eligible for severance benefits.” According to the notice it filed with the state, Baker Hughes laid people off with 60 days of pay, with benefits extending for three months. Baker Hughes has been in a merger deal with Halliburton for months. Antitrust regulators are sorting out details. Halliburton has proposed to buy out the company in a $34.6 billion deal. Halliburton has a field office in Fort Lupton, just up the road from Brighton. Layoffs have been announced intermittently for months another bigger players, such as Halliburton. Noble Energy, too, has sent more than 100 people home form its Denver offices, and 20 from its Greeley headquarters in recent months. The slump is due to a worldwide glut of oil, which has driven prices down. All expectations are for the downturn to last through the end of the year, and slowly pick back up in 2016. - Staff Reports
46 ENERGY PIPELINE OCTOBER 2015
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News Briefs Former state legislator joins LEAP
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Fort Collins resident and former State Rep. Ken Summers has been selected as the new co-chairman for the Larimer Energy Action Project. Summers will replace former State Rep. B.J. Nikkel, who founded and served the organization since 2013. Summers served House District 22 in Jefferson County for six years. During his legislative tenure he served on the education committee, local government committee and as the chairman of the health and environment committee. His legislative efforts were recognized by many organizations including the Colorado Nonprofit Association (Legislator of the Year) and the Colorado Medical Society, which granted him their highest recognition, “The Protector of the Patient” Award, according to the news release. Summers’ wife Debbie (a hospice nurse) is a native of Fort Collins and has family roots in area going back 50 years. Summers’ sister-in-law Sue Schmidt was a first grade teacher in the Poudre School District for over 30 years. “I have watched the growth of Fort Collins and Larimer County for more than 40 years and am pleased to be a part of a group of community leaders and concerned citizens who want to advance the economic well being and
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50 ENERGY PIPELINE OCTOBER 2015
MAKING HOLE A look back at the origins of oil and gas BY BRUCE WELLS • AMERICAN OIL & GAS HISTORICAL SOCIETY
Meteor crater oil discovery AS•TRO•BLEME (NOUN)
A depression, usually circular, on the surface of the Earth caused by the impact of a meteorite. From mid-20th century. astro- + Greek blema “wound from a missile.”
about 450 million years ago, a meteor struck
north-central Oklahoma, creating an impact crater - an astrobleme - more than 8 miles wide. Once a year the small community of Ames celebrates the crater below it. Thanks to an independent producer from nearby Enid, an unusual oil museum opened there in 2007 - the Ames Astrobleme Museum. Today, the Ames astrobleme is one of only six oil-producing craters in the United States. Created by a meteor about the size of a football, over time the site was buried by about 9,000 feet of sediment, making it barely visible on the surface. The crater remained unrecognized until 1991, when a prolific oilfield was discovered. Many geologists had believed impact craters were unlikely locations for petroleum. Harold Hamm, chairman and CEO of Continental Resources, thought otherwise. He defied experts with a major discovery oil well. Hamm, who had drilled wells in the Ames area since the early 1960s, was a skilled geologist. By
the end of the 1980s, he and other geologists at Continental Resources had found unusual structures at the impact site. “In a vast pasture there in 1988, his geologists gathered public drilling data and fed it into a computer to map where oil or gas might be,” explains a 2012 article in Forbes. “The results were perplexing.” A circular depression on the map seemed to indicate cow tracks, one technician said. Another correctly surmised Hamm had found an 8-milewide meteor crater with a strong potential for containing oil. In his modest office in Enid, Hamm later took a softball-size rock off a shelf and cradled it, notes the Bloomberg Business article. “This got blown into the sky and came back in rubble-sized form,” he says. Hamm pointed at perforations mottling the stone’s surface, “some nearly big enough to fit a pencil - evidence of extraordinary porosity,” the January 2012 article adds. “That’s why that oil would just flow.”
BRUCE WELLS, is the founder of American Oil and Gas Historical Society, a 501c3 nonprofit organization dedicated to preserving the history of oil and gas. He is a former energy reporter and editor who lives in Washington, D.C.
A meteorite struck Oklahoma 450 million years ago, producing a crater thousands of feet deep and eight miles wide. Image courtesy Judson Ahern, Oklahoma University.
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The man who found oil in the Ames crater, Harold Hamm (center) spoke at the Astrobleme Museum’s opening in August 1992. Photo courtesy Cherokee Strip Regional Heritage Center.
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Continental Resources drilled deeper than the normal wells in the region - about 10,000 feet. The 1991 discovery well produced about 200 barrels a day. By 2006, cumulative production figures showed oil production in the area approaching 11 million barrels. Harold Hamm had made astrobleme history. According to the American Association of Professional Geologists, the potential for petroleum production from impact craters, “seized the attention of the Oklahoma oil industry in the 1990s. Several new, deep wells in the Sooner Trend produced exceptional amounts of oil and gas.” Since Hamm’s discovery, more wells have been completed in the crater, some producing more than a million barrels of oil. “The Ames Astrobleme is one of the most remarkable and studied geological features in the world because of its economic significance,” notes fellow Enid independent producer, Lew Ward of Ward Petroleum. The impact site is one of the world’s largest producing craters today, with 20 million barrels of oil and 130 billion cubic feet of gas. Hamm, the primary developer of the unique Ames Astrobleme Museum, spoke at its Aug. 18, 2007, dedication during Ames Day, an annual fundraising event for the volunteer fire department. Unstaffed and open 24 hours, the Ames museum features all-weather video panels describing the impact site’s geological significance. The dedication ceremony included Charles Mankin, director of the Oklahoma Geological Survey. He described the crater’s significance to the community, petroleum geologists, U.S. oil and natural gas production...and American history. “Making Hole” is a term for drilling coined long before oil or natural gas were anything more than flammable curiosities. Read more petroleum history at the American Oil & Gas Historical Society’s website, www.aoghs.org.
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DATA CENTER
The oil and gas industry is a large part of Coloradoâ&#x20AC;&#x2122;s economy. Below, find statistics on energy pricing, drilling production, well permits, spills and rigs.
2015 DRILLING PERMITS COUNTY
RIG COUNT BY STATE
NO. (% OF STATE TOTAL)
Weld..........................................................................................1,280 (65.4%) Garfield...................................................................321 (16.4%)
State Sept. 4 Aug. Avg. July Avg. June Avg. Colorado 34 ........37 ......... 38................... 38 Louisiana 75 ........77 ......... 74................... 71 Oklahoma 106 ......105 ....... 106 ..............106 North Dakota 71 ........71 ......... 71................... 76 Texas 375 ......385 ....... 369 ..............363 Kansas 11 ........12 ......... 10................... 13 California 14 ........13 ......... 11................... 11 Utah 4 ..........4 ........... 7....................... 7 Alaska 12 ........12 ......... 10................... 10 Ohio 18 ........19 ......... 19................... 20 Pennsylvania 35 ........37 ........ 44................... 47 Source: Baker Hughes Rig Count Sept. 4.
2015 GAS PRODUCTION
COUNTY *YTD PRODUCTION (% OF STATE) Weld........................................241,411,108 (32.4%) Garfield......................................209,720,062 (28%) La Plata .....................................163,907,454 (22%) Las Animas ................................... 44,833,069 (6%) Rio Blanco .................................. 24,917,109 (3.3%) Mesa .............................................. 15,074,847 (2%) State .....................................744,407,657
Rio Blanco..........................................100 (5.1%) Mesa......................................62 (3.2%) La Plata..................60 (3.06%) Larimer................28
2015 OIL
Gunnison..........23
PRODUCTION
Adams...........18
COUNTY *YTD
State....................................................1,956 Source: Colorado Oil and Gas Conservation Commission as of Sept. 1.
US RIG COUNT
The U.S. rig count peaked at 4,530 in 1981 and bottomed at 488 in 1999. Area July Avg. June Avg. May Avg. April Avg. U.S. 864 894 866 861 Canada 187 206 183 128 Source: Baker Hughes Rig Count, Sept. 4.
PRODUCTION (% OF STATE)
Weld ...........49,802,918 (88.3%) Rio Blanco .....2,182,052 (3.9%) Arapahoe ..........951,333 (1.7%) Lincoln ............695,907 (1.23%) Garfield ...........667,104 (1.18%) Cheyenne..........627,626 (1.1%) Adams .............270,413 (0.47%) Moffat..............215,910 (0.38%) State......................... 56,395,689 Source: Colorado Oil and Gas Conservation Commission as of Sept. 10.
Source: Colorado Oil and Gas Conservation Commission as of Sept. 10.
COLORADO ACTIVE WELL COUNT 54 ENERGY PIPELINE OCTOBER 2015
Weld ..........................................................................22,569 Garfield .....................................................................11,027 Yuma ...........................................................................3,880 LaPlata........................................................................3,326
Las Animas .................................................................2,990 Rio Blanco ...................................................................2,914 36 others .....................................................................6,984 State .........................................................................53,690
Source: Colorado Oil and Gas Conservation Commission as of Sept. 1.
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