November 2015 ENERGY PIPELINE 1
HERE TO WORK AS HARD AS YOU DO.
CAT® CT681 VOCATIONAL TRUCK NEED TO CARRY MORE LOAD to boost your productivity and profitability? Looking to mount attachments with ease to increase your versatility and flexibility? Want to do it all in comfort and style? Look no further than the CT681 Vocational Truck. This Class 8 set-forward axle model features a spacious and ergonomic cab, industrial styling, vocational-specific engine and transmission options, and bumper-to-bumper support from Wagner Power Systems. Like the other models in our vocational truck family, it’s a natural extension of the Cat product line—delivering all the power, performance and productivity you expect from Caterpillar. Find us on the web
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2 ENERGY PIPELINE November 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
|
: APC www.anadarko.comNovember | 2015 NYSE ENERGY PIPELINE
3
Features
30
34
BOOM OR BUST
ELECTRIC EXPERIMENT
Weld County is on track to top 100 million barrels of oil production in 2015.
Northern Colorado chosen as site of program to promote electric vehicle use.
By Dan Larson
By Amy Kegg
16
WORK TO BE DONE
Proposed oil and gas rules are not satisfying any one. By Sharon Dunn
18
STRATEGIC MOVES Encana dumps Colorado assets to focus on core plays in Texas, Canada. By Sharon Dunn
20
THROWING MONEY INTO THE WIND Vestas ramps up R&D to better compete in global wind market. By Linda Kane
22
A STUDY IN REDUCTION
Oil, gas industry investments in reducing greenhouse gas emissions largest among other U.S. industries. By Amy Kegg
4 ENERGY PIPELINE November 2015
24
HOT TOPICS
Comments from individuals on the inside of the energy industry.
ON THE COVER Design by Darin Bliss
By Sharon Dunn
26
TECH TALK
Water powered LED lantern and USB port. By Gary Beers
38
FILLING THE GAP Construction industry picks up lost oil, gas jobs. By Bridgett Weaver
42
NATURAL FRACKING U.S. Well Services brings clean fleet to Weld County. By Linda Kane
51
Departments 8
Support Company Profile
10
Field Worker Profile
12
Executive Profile
44
News Briefs
54
Data Center
MAKING HOLE
Science reveals the mid-continent field oil boom in Kansas. By Bruce Wells
Becker Safety and Supply
Meet Andrew Sperl, Extraction Oil & Gas
Meet Peter Dea, Cirque Resources LP
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 November 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 Dan Larson Bridgett Weaver Bruce Wells
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 November 2015 30-250 (2015-06)
November 2015, Volume 3, Issue 3. 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:
• • • •
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
November 2015 ENERGY PIPELINE 7
SUPPORT COMPANY PROFILE
Becker Safety and Supply
CORPORATE HEADQUARTERS 128 30th Street, Unit B Greeley, CO 80631 970.576.3988
NUMBER OF EMPLOYEES 10
WEBSITE www.beckersafety.com
SERVICES OFFERED We provide a wide variety of personal protective equipment along with pretty much anything else your company needs on the work site. Our extensive selection of products include but are not limited to gas monitors, FR clothing, footwear, tools, fall protection and absorbents. We have a fully stocked cargo trailer which will bring you the products you need when you need them. We are able to service you either at your location or ours. 8 ENERGY PIPELINE November 2015
HOW LONG HAS YOUR BUSINESS BEEN OPERATING IN WELD COUNTY? We started our family owned business in 1999 in the trunk of a Mercury Topaz. Today, we have grown to an 8,000 square foot warehouse and a fleet of delivery vehicles. We have been at our current location since June 2014.
WHY SHOULD CUSTOMERS DO BUSINESS WITH YOUR COMPANY? We strive to offer a well-stocked inventory with competitive pricing and second to none customer service. Whether you come in to the warehouse to pick up supplies or have us deliver them
to you, your needs are our top priority. We also have qualified and trained gas monitor technicians who can help you meet your company’s safety requirements by providing repairs, calibrations, on-site implementation, training, and technical support.
HOW LONG DO YOU ANTICIPATE BEING IN BUSINESS IN NORTHEAST COLORADO? We were born and raised in northeastern Colorado. This has always been our home and will always be our home.
IS YOUR COMPANY IN A GROWTH MODE? In our business we are
always in an organic growth mode. We continue to broaden our customer base by improving our technology and social media platforms. Our company’s focus is on the latest innovations, training and education, while keeping the customer’s needs in the forefront.
WHAT KIND OF SKILLS, EXPERIENCE OR EDUCATION DO YOU LOOK FOR IN EMPLOYEES? We look for hard working, willing to learn, self-driven, service-oriented team members who want to establish a relationship with our customers.
BECKER SAFETY AND SUPPLY For job opportunities, send an email to info@beckersafetyandsupply.com
TRUSTED EXPERTS IN DIESEL MECHANICS FOR 20 YEARS.
Empire Truck Center is a family owned full service diesel truck repair shop in Ault, Colorado. We offer onsite fleet service for all foreign and domestic vehicles and we take pride in offering our customers quality truck repair at a fair price. Our Certified Technicians go from start to finish to repair any kind of truck, tractor, trailer, boom truck, bus, forklift, drill rig, and fleet vehicle no matter what the problem. Our diesel repair specialists provide hydraulics, semi truck repairs, tractor trailers, brakes, oil changes, tune-ups, transmissions, DOT inspections, welding & fabrication, electrical, alignment, & diagnostics, etc. We are here to provide you with the best in reliable and exceptional diesel repair service for your vehicle, and all at the best competitive prices in town.
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(970) 834-1055 5 JOE P. MARTINEZ LANE AULT, CO 80610 November 2015 ENERGY PIPELINE 9
FIELD WORKER PROFILE
Andrew Sperl EXTRACTION OIL & GAS STAFF REPORT • FOR ENERGY PIPELINE
HOMETOWN Craig.
WHERE DO YOU LIVE? LaSalle.
HOW LONG HAVE YOU BEEN WORKING IN NORTHEASTERN COLORADO? Since 2007.
HOW DID YOU GET INTO THE INDUSTRY? I graduated high school with a young man whose grandfather owned a tubular inspection company. When commercial construction slowed down in 2008, I started looking into an oilfield job hoping to move beyond seasonal work.
WHAT IS YOUR JOB TITLE AND DUTIES? As a lease operator, I manage the exchange of 10 ENERGY PIPELINE November 2015
oil and gas sales, and I work to always maintain a safe and clean production site.
WHAT IS THE MOST INTERESTING THING ABOUT YOUR JOB? The most interesting part of my job is that I never stop learning. Whether someone has been pumping or optimizing oil and gas wells for one year or 20 years, they can all say that no two wells are exactly the same, and new tools and technology are coming out every day to help us improve what we know and how we operate.
WHAT IS THE BEST PART OF YOUR JOB? This job is a blessing; it provides me with a great way of living. I get to earn an honest wage and spend a quality amount
of time with my wife and two sons.
WHAT IS THE HARDEST PART ABOUT YOUR JOB? Time management and winter are the most challenging aspects. For time management, it’s crucial to stay ahead of schedule to keep a steady flow throughout the day. Wintertime brings a whole different set of challenges with its dramatic temperature changes from day to night.
WHAT DO YOU DO IN YOUR PARE TIME? VOLUNTEERISM, SCHOOL, SPORTS? My wife and I both rodeo in the summer; I volunteer in our sports ministry at church, often running the chains for a local middle school football team. I also play in several adult
recreation sports through the city of Greeley, including basketball, flag football and softball.
WHAT ARE YOUR FUTURE AMBITIONS IN THE INDUSTRY? I will continue to learn and grow in hopes that someday I can teach and mentor people like myself. The leaders at Extraction have been a great team to learn from. From the field to the street, they are a solid group of people with great fundamental teachings.
WHAT DOES THE WATTENBERG FIELD AND THE DJ BASIN MEAN TO YOU? The DJ basin is the place I call home. It is a place booming with opportunity, a place that is well cared for.
Between the corn and wheat is where I feel the most comfortable.
HOW DO YOU FEEL ABOUT THE CURRENT ENVIRONMENTAL DEBATE GOING ON WITH “FRACKING” IN COLORADO? It’s important to understand that the term “fracking” is being used interchangeably with drilling in Colorado in the sense that it is how we develop oil and gas in this country. Our industry creates a ton of jobs in our communities all over the Front Range, keeping the economy healthy and small businesses growing all while keeping our air clean, our water drinkable, and our people safe. Developing oil and gas can be done safely, while protecting the environment. Extraction’s operation is evidence of that.
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energypipeline.com
November 2015 ENERGY PIPELINE 11
EXECUTIVE PROFILE
CIRQUE RESOURCES LP President and CEO
Peter Dea
BY SHARON DUNN • SDUNN@ENERGYPIPELINE.COM
peter dea only had to follow his thumb to
find his dream. It was back in 1972. He had just dropped out of his freshman year at the University of Massachusetts, he had a couple hundred dollars in his pocket and his mother dropped him off at the highway. Fueled by the adrenaline of Warren Miller ski movies, he stuck out his thumb and began walking. He hitchhiked all the way to Colorado and found himself in Crested Butte. He promptly became a ski bum. Back then, adventure was on every ski slope, around every corner. He spent the next summer in Alaska, before hitchhiking back to his hometown and then opting to go back to school at Western State College in Gunnison. “The only logical place was this college 30 miles from a ski town,” he said from his Denver offices of Cirque Resources, an oil and gas exploration company with assets in northern Weld County and Wyoming. He’s led that company since 2007 and plans to wind it down by the end of the year. He’s worked, and climbed his way to the top, of the likes of Exxon, Barrett Resources Corp., and Western Gas Resources, since the 1980s. That early decision to follow his dream speaks volumes about this real-life adventurer who’s climbed every 14er in Colorado and traveled the world in different adventures. Dea, also the former president of the Colorado Oil and Gas Association, tells younger people to follow their passions, as they will learn much more about themselves. 12 ENERGY PIPELINE November 2015
In his harrowing experiences, he’s often found himself wondering if he would get out alive. “We were doing it for the fun of it, but fast forward to running a company and working with a lot of great people, I realized those were more than just fun, exhilarating adrenaline-junkie trips,” Dea said. “They were inadvertently helping me develop traits, like helping gauge risk vs. reward, which is what exploration is all about. Planning and organization skills and teamwork and loyalty with a team and leadership skills, realizing other people’s lives are depending on your actions, whether you’re on a 2,000-foot cliff that drops off both sides of a narrow ridge, or a group of people in an office. “I didn’t realize that until 20 years after those trips, that some of those foundational building blocks of who I am came from just pursuing my passion.” His passion for adventure became his career and life. He started out just wondering why the mountains were formed, and he majored in geology. After growing bored with his chosen field, he followed friends into the oil and gas industry, and found himself in Corpus Christi, Texas, working for Exxon. In 1985, he moved to Denver, with his first major project in Wyoming. Discoveries, it seemed followed him everywhere, as the industry continually improved on itself through the years.
“No one thought we could get commercial gas out of coal seams, and we proved them wrong. No one thought we could get gas out of our shales, and now we’re getting oil.” In 2007, he started Cirque Resources, focusing on development of acreage in the Rockies. The company hit it big with the Codell formation near the infamous Jake well, and has been winding the company down in recent years by design. The deal was to run five to seven years and sell. Today, the company is no longer drilling, and the end should really happen in the first quarter of 2016. Who knows what’s next? “I still love the industry and I take great pride when people ask me what I do for a living,” Dea said.
QA &
with Peter Dea
Energy Pipeline sat down with Dea to ask a few more questions:
Answers begin on page 14
He remembers fondly when he watched Bill Barrett’s reaction to discovering Cave Gulch field in 1994 in Wyoming. Barrett in 1968 discovered the Madden Field in Wyoming, one of the largest gas fields in the Rocky Mountain region. Barrett was probably in his 60s, Dea recalled. “Having that paper log out on my drafting table, just seeing that recessivity curve kick out to the right, thinking, ‘Wow, this is a major discovery.’ Bill’s colorful comment made me realize, this really is something,” Dea said. “We were both like little kids with the joy of a major new discovery ... That’s typical of what’s going on in these oil resource plays.” When he closes the doors to Cirque Resources later this year, adventure will likely await, personally and professionally. It’s hard to let the potential rush of new discovery die. “My challenge is to find balance, probably doing more activities outdoors, but still stay active somehow in the industry I love.”
ABOUT
Peter Dea SPOUSE Cathy Dea.
CHILDREN Drake, Austin and Cort.
CURRENT JOB TITLE President and CEO.
YEARS WITH CIRQUE RESOURCES LP 8 years.
CITY YOU GREW UP IN West Boylston, Mass.
CITY YOU LIVE IN NOW Golden.
SCHOOLS YOU ATTENDED/DEGREES Western State Colorado University, bachelor’s degree; University of Montana, master of science in geology; he also attended the Harvard Business School Advanced Management Program.
WHAT DO YOU DO IN YOUR SPARE TIME? Dea has been an active mountaineer, climbing many high altitude peaks up to
22,205 feet and participated in multi-week climbing, skiing and/or whitewater kayaking expeditions in North and South America, Nepal, Bhutan, Antarctica and Africa. He has also climbed all 54 of Colorado’s highest peaks above 14,000 feet.
LAST GOOD BOOK YOU READ “Alone on the Ice”; “The Moral Case for Fossil Fuels.”
24/7 HEAVY DUTY TOWING & ACCIDENT RECOVERY SERVICE
OIL FIELD CERTIFIED
50 TON WRECKER ALL WHEEL DRIVE
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970-775-4860 Dan Daniels - General Manager
BEST ADVICE YOU EVER GOT/GAVE Listen.
PROFESSIONAL HIGHLIGHTS He was president, CEO and a director of Western Gas Resources Inc., from 2001 through their merger with Anadarko Petroleum Corporation in 2006. He joined Barrett Resources Corporation in 1993 and was CEO from 1999 and chairman of the board from 2000 until the sale of Barrett in 2001 to Williams. Prior to joining Barrett, Dea held various management and geologic positions for Exxon Company USA. Most of his activity has focused on exploration and production in the Rocky Mountain basins in Wyoming, North Dakota, Colorado, Montana and Utah.
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Trucking Excavation Dirt and Water Hauling Location and Road Building
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November 2015 ENERGY PIPELINE 13
Jeff Hansen - General Manager
QA &
ENERGY PIPELINE: How did you get into the business? PETER DEA: I started out as a geology major in college. I ended up in Crested Butte from Massachusetts as a ski bum, and was curious how the mountains where formed and that led me to geology, and I went to Western State in Gunnison, Colo. After another year of ski bumming, I went to the University of Montana for grad school and was recruited to come back and teach geology at Western State for two winter semesters. I was also in a window of five years, doing mineral exploration in Alaska all over the state, and also in Oregon. I loved geology, but was I getting bored with different disciplines. I started talking with friends who had gone to work for the oil and gas industry out of college, and they were touting a pretty exciting career, which I never thought of going into. I started looking into I and got on with Exxon in Corpus Christi, Texas. I was hired as a geologist. It exceeded my totally naive expectations before I considered it ... after hitchhiking from Massachusetts to Colorado when I first came out. I remember going through Kansas and seeing these pump jacks in the oil field with a negative reaction. I knew I didn’t want to work in the flatlands of Kansas. I knew I didn’t want to do that. When I started with Exxon, it was more exhilarating and challenging than I ever imagined. The majors will typically take young bucks and throw us into multi-million dollar projects, which is almost intimidating. One of my first projects, ...we were just drilling infill wells into fields that had been discovered, we were also siting wells off shore. I got to witness my first blowout on an offshore oil rig. EP: What motivated you most in your career? PD: It’s just all very challenging and rewarding. All the way along, in just the whole variety of different types of geological
14 ENERGY PIPELINE November 2015
continued from page 12 environments. As a geologist your curiosity is never cured; you’re always wondering about the next geological feature, or structural interpretation, or how did that oil and gas get here. I was in Corpus for three years and they transferred me to Denver in 1985. I was here for them a total of 10 years. I then came back home, so to speak, but exposed to Rocky Mountain geology. The first assignment they sent me to here, was a well site for a 22,000-foot-deep test in Wyoming, looking for extension of another major field Exxon discovery. It seems like every project was a new horizon you’d be working on was new and exciting. EP: You’ve lived through a lot of oil and gas life cycles. How does this current downturn feel to you? PD: This one reminds me more of the ‘80s than the recession that we had in 2008-09. The distinction with the recession in ‘08-09, it wasn’t us. That was totally related to more of the financial market, the mortgage and banking crises, and not related to energy industry. Prices just totally collapsed because of that, but I think most of us at that time could see the light at the end of the tunnel, which did pan out because all the fundamentals of oil and gas were sound. We just had to get through the nation and somewhat global economic crises to come out the other side. This time, it’s all us. This downturn is all about, and only about really, energy. It does tie into the demand for energy in places like China, but it’s really a supply-and-demand driven downturn, where the cause is oversupply in the U.S. shale revolution and soft demand. It’s not so clear when we’re going to come out of this. Most of the brain trusts in the industry think 2016 as far as oil and natural gas will be pretty low prices, more supply than demand, and we have to get into 2017, perhaps even ‘18 before we’ll see a tightening of that supply and demand that will get prices up to a
more reasonable range. But the other thing I’ll point out, most of us in the industry are terrible at predicting. Very few of us see these things coming. We have a lot of laughs at our own expense. We have these $10 bets. Each of us puts in $10- $20 bucks. There are several of these around town and we bet on what the price of oil and natural gas will close at at the end of year or what the average price will be. It’s absolutely comical how far off we are. This last year, at the end of 2014, I think oil had closed around $58 at Dec. 31, 2014. And those fun pools I was in, five people said it would be over $100. The closest we had and he was a lone ranger, he was at $68 or $69. Most people were up on the $80-$90 range. This is the brain-trust of our industry. As far as predicting prices, we’re pretty bad. EP: You’ve mentioned the industry has reinvented itself several times. What’s the next big thing in your opinion? PD: There are always new things to look at. The remarkable thing of our industry, with the whole technology front, which continues to revolutionize the industry beyond our own expectations. Along with that is a greater understanding of the rocks. You still need good rock. You can’t get oil or gas out of bad rock. There’s just new ways to look at rock. Take conventional cores, some of the biggest discoveries that either I or our industry have made, often is right in the middle of a bunch of dry holes. The Cave Belch discovery in 1997, at 20,000 foot, there were either dry holes to north and three dry holes to south within couple of miles, where I drilled deep discovery wells. That makes it kind a fun. Someone else had a reason to drill here. What did I miss, and how can I interpret that differently? The fun part is reinterpreting old data or examining new data. It’s almost more challenging now in a way because there’s so much more data. ... Now, the industry takes that technology revolution to whole other level
and reversed a 20-year U.S. oil production decline, and we’re now rivaling Saudi Arabia. We don’t know what’s next. What you are seeing, with oil prices crashing, you’re seeing much more efficiency. There’s time again on oil plays where companies were getting 30-50 percent more production ... because we have to. With lower prices we have to get smarter, so many companies are employing efficiency gains to get more oil out. I think the answer... which is more in general, we’re still only recovering 6-8 percent of oil in place out of the rock now. So there will be a lot of the technology gains going forward will be to increase that recovery factor. I don’t know if we’ll get to laser beam drilling any time soon. But if you look at snapshot of five-year intervals, we look back and kind of amazed at ourselves in what happened in the last five years. Looking forward, it’s hard to predict. EP: After 33 years, have you thought about retirement? PD: I get that question a lot. I’m not sure what the word means for me. I’ve tried to do a good job of balancing life. I realized early on when I was a rookie at Exxon, there’s never a good time to take a vacation, so I might as well take it and live the American dream all through life as opposed to the notion I’ll work 30 years to retire and live the dream. That doesn’t’ pan out. I’ve done a good job of doing exciting trips through my whole carer, and balance that in with a rigorous work schedule. I still continue to do that. It’s not like I have this pent up frustration where I’ve worked 30 years and never taken a week off. But, I still really do enjoy the outdoors a lot. I’d still like to do more of that, but also like to keep my foot in the door with the industry. I’m on the board of Encana and that gives me a bit of the public company exposure and be tapped into a bigger well-run company. That’s rewarding.
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November 2015 ENERGY PIPELINE 15
WORK TO BE DONE Proposed oil and gas rules are not satisfying either side BY SHARON DUNN • SDUNN@ENERGYPIPELINE.COM proposed oil and gas rules designed to strengthen local
government’s participation in well siting in urban areas are striking fear in the hearts of all sides today. The Colorado Oil and Gas Conservation Commission, the regulatory agency charged with overseeing oil and gas drilling in the state, came out with proposed rules to implement concerns of the Governor’s oil and gas task force last winter that sought to cure the issues of companies drilling near neighborhoods and schools without mitigation and transparency to all involved. The COGCC issued its proposed rules on Wednesday to advance public hearings to hone the rules further. The first public hearing on the proposal is set for Oct. 14 in Denver. Within hours of issuing them, the COGCC began getting backlash from both sides of the issue. “These rules, as written, do not provide enough protections for Colorado families,” wrote Greeley’s Sara Barwinski, who was a member of the Governor’s Oil and Gas Task Force that sent its proposals to the COGCC for rulemaking. “I am afraid that once these rules are adopted, there will be more neighborhood drilling - not less. This draft is not what was called for by the Oil and Gas Task Force.” The talk along 16th Street on Wednesday - the chief area in which those in the oil and gas industry work in Denver - was concerning, said Matt Owens, president of Extraction Oil and Gas. “I’ve heard people on 16th Street saying it will make the process to get permits extremely lengthy,” Owens said, noting he hadn’t yet gone through the five-page document that could soon dictate his actions on future drilling locations. Matt Lepore, director of the COGCC, said he expected the proposed rules to be received as such. “It is a challenging process, and we had no illusions that we would succeed in making everyone happy,” Lepore said. “I’m not surprised people feel we didn’t go far enough in either direction.” In short, the rules would implement the task force’s proposals to include more local government participation in the siting of drilling and large storage facilities in urban areas. The proposals would: • Define a “large scale” urban drilling facility, which could potentially limiting a company’s drilling plans, as containing at 16 ENERGY PIPELINE November 2015
least eight horizontal wells, and storage up upward of 4,000 barrels of oil, which would be stored in eight to 13 tanks, depending on their sizes. But that description is clearly up for debate. “The thresholds ultimately established by the commission are not limits on either the number of wells or storage tanks that may be located on a facility,” Lepore wrote in a letter discussing the changes to interested stakeholders. “Rather, these metrics merely are triggers that require consultation between the local government and the operator concerning the siting of a proposed large (urban mitigation area) facility.” • Allow the COGCC director to put a time limit on drilling, though he didn’t suggest a specific time frame. He stated that such limitations could ultimately limit the number of wells at a site, and require a phased-in approach following required “quiet times.” • Require oil and gas operators to notify local governments of their intents to create a large scale facility at least 90 days in advance of applying for a state permit. • Require operators to notify adjacent communities of such facilities if they were within 1,000 feet of the proposed site, but the adjacent communities could not stop the process. Lepore noted that that wasn’t a part of the proposal that came out of task force, but it warrants discussion. “Staff elicits further discussion of this concept during stakeholder meetings,” he wrote. “Under the proposed rules, an adjacent local government would not have the right to request a commission hearing on a proposed Large UMA Facility outside of its jurisdictional boundaries, nor is an operator required to seek agreement with the adjacent jurisdiction for the siting of such a location,” Lepore wrote. • Encourage mitigation measures to reduce impacts to the surrounding areas, such as tankless facilities that pipe oil and gas out, rather than store on site. • Require operators to register with municipalities in which they have operations and provide five-year estimates on drilling plans.
While there was increasing public pressure to banish drilling from The proposals in question, known as 17 and 20, which the task urban areas, especially away from neighborhoods and schools, the task force devised to allow local governments more say when it comes force also had to acknowledge that drilling is a protected property right. to the industry entering and drilling large-scale facilities in their The proposals that came out of the task force never outright asked for communities, were meant to help facilitate early conversations a ban on urban drilling, but searched for ways to include more input between the industry and local governments before trouble brewed. from those affected by large-scale operations. Proposal No. 17 was to require industry officials to consult with local But the resulting rules didn’t go far enough Barwinski said. governments before choosing sites in urban areas in which to locate “I know why someone could read this and say they’re doing this, and a “large scale oil and gas facility.” Proposal No. 20 was supposed to this, but the bottom line is, mitigations don’t make a bad site good, and require oil and gas operators to register with municipalities and part of the hope is there will be the ability to look at what makes sense provide them with at least a five-year drilling plan in those areas. Those in terms of appropriate locations and choosing initial sites, not just plans would include a good faith estimate of the number of wells the trying to make a site more palatable,” she said. company planned to drill in that time. Lepore said that process is happening outside of the new rules, with The COGGC’s proposed rules took those a step further, said COGA’s the setback rules. Those within 1,000 feet are notified. Doug Flanders, by including notice requirements to governments “We have been doing the alternative location analysis already on adjacent to drilling areas and mitigation measure that “were never locations with 1,000 feet within a building,” he said. “We are doing that contemplated nor discussed during the task force” meetings. The actively now. Again, that’s an issue for local governments, that’s their issue proposals also would require companies to submit plans for drilling in to raise during this consultation process” outlined in the proposed rules. a jurisdiction’s growth management area and a requirement for private The proposed rules establish a framework that operators would have companies to provide notice of long-term plans, Flanders said. to follow to give ample notice to local governments prior to drilling in Barwinski said the rules didn’t even come close to the spirit of urban areas, and powers that each side would have, as well as establish the task force’s proposals, in that they don’t offer any means of that companies would have requiring companies to be more transparent to find alternative in terms of future drilling drilling locations. She on proposed sites. Those worked on moving discussions would have to some wells in Greeley, come before a state permit and said it shouldn’t be could be issued on drilling. incumbent on residents At present, the reverse to work so hard for is true, said Ed Holloway, alternatives, especially co-CEO of Synergy when technology allows Resources, based in companies to drill a Platteville. His frustration location from up to two MATT LEPORE, director, Colorado Oil and Gas Conservation Commission with the process has been miles away. ongoing, and goes as far “Responsible oil and gas back as when the task force was first created in 2014 to avoid costly industry partners choose the most responsible sites and locations, but battles at the ballot box. there’s nothing that mandates that,” Barwinski said. “Others choose the “We’re getting beat up because we’re not including municipalities, cheapest, easiest site, and only may be looking at economic criteria and and they’re saying we don’t want to be involved until you have a don’t look beyond to say, what creates the best balance here?” permit (from the state),” Holloway said. “The task force really didn’t As with any of these regulations, Barwinski said, the devil is in the understand that. They acted like that was something the oil industry details. And they’re written in a way that seems all-inclusive but are was doing to cities, but in reality it was cities’ process that required us actually exclusionary, taking away rights from local governments that to get (state) permits first, and then go talk to them.” are not “municipalities.” Already, the Colorado Oil and Gas Association, and Weld Air and “If a local government is not a municipality and the site in question Water, the residents’ group advocating for more protection against is not in an urban mitigation zone, there really is no opportunity to drilling in urban areas, have come out against the proposed rules. promote those discussions about locations in advance,” Barwinski said. “I COGA officials say the rules are too far-reaching. think in terms of one way to strengthen them would be to give whatever “It’s clear the draft rules far exceed the actual recommendations appropriate local government that ability to have standing in dialog.” put forward by the Governor’s Task Force, said COGA Director Dan Lepore said it may be that the rules need to be tweeked to change Haley in a news release. “We’re disappointed this draft seems to dismiss the definition of which local governments have a say. the hard work of the Governor’s Task Force, which spent nine months “We did not intend to exclude (small towns) so we may have to look deliberating and deciding on these recommendations.” at our definitions,” he said. The Colorado Petroleum Council weighed in on the new rules as well. Regardless the rules are a work in progress, and those interested will “Colorado jobs, revenue for the government and economic growth get a chance to lobby for changes in the upcoming meetings, which have been a part of thoughtful discussions within the governor’s may last through December, Lepore said. task force,” said Tracee Bentley, executive director of the Colorado “I think the architecture is there,” he said. “There are details to be Petroleum Council. “But it is critical that new rules don’t create worked through and we expect some of these issues to be raised in the needless roadblocks to responsible energy production. stakeholder process.”
“...we had no illusions that we would succeed in making everyone happy. I’m not surprised people feel we didn’t go far enough in either direction.”
November 2015 ENERGY PIPELINE 17
Encana Crop. announced a $900 million sale of its assets in early October, which includes 51,000 acres and 1,600 operating wells in northern Colorado. Photo for Energy Pipeline by Rick Kooker.
STRATEGIC MOVES
Encana dumps Colorado assets to focus on core plays in Texas, Canada BY SHARON DUNN • SDUNN@ENERGYPIPELINE.COM
for the last year, Canada based Encana
Corp. has slowly been moving its money out of Colorado and focusing on more strategic plays in Texas and Canada. After more than a decade of drilling in northern Colorado, the company - the No. 3 producer in Weld County behind Anadarko Petroleum and Noble Energy - pulled the plug on its northern Colorado assets, announcing in early October a sale to a newly formed company for $900 million. The deal involves more than 1,600 producing wells and 51,000 acres in northeastern Colorado. Most employees, officials say, will keep their jobs with the new company or find new homes working on different asset fields within Encana’s Texas and Canada operations. “The Denver Julesburg Basin is a highquality asset, but if you look at our land position and the scale we had versus some of the other companies, we didn’t feel we had the running room to grow that asset the way we do with our four core assets,” said Doug Hock, spokesman for Encana, based out of the company’s Denver offices. “Given that acreage position, this opportunity presented itself and it made sense.” 18 ENERGY PIPELINE November 2015
CASH PROCEEDS FROM DIVESTITURES THIS YEAR NOW TOTALS ABOUT $2.7 BILLION, WHICH IS EXPECTED TO HELP THE COMPANY ITS DEBT $3 BILLION BY YEAR’S END The announcement comes after a string of assets sales throughout the year, including an $850 million sale of its natural gas assets in August in Louisiana, an April sale of some of its Canadian assets for $353 million, and a $464 million sale of some of the companies Alberta assets in January. When combined with net proceeds from previously announced asset sales, cash proceeds from divestitures this year now totals about $2.7 billion, which is expected to help the company reduce its debt $3 billion by year’s end, the release stated.
The deal was a carefully devised play, orchestrated by The Broe Group of Denver, and the money behind Windsor’s Great Western Industrial Park, Great Western Railway and Great Western Oil and Gas. The Broe Group announced in other media outlets months ago a desire to become a strong player in the DJ Basin, which is the major basin from which operators drill in the Rocky Mountain region. It spans the entirety of Weld County and stretches into Wyoming, Nebraska and Kansas. When presented with the chance to buy the Encana assets, Broe officials shopped around for some financing and found the Canada Pension Plan Investment Board, which covered 95 percent of the price tag. Broe pumped in 5 percent and will be the operator of the assets under a new name, which has not yet been revealed. “You could characterize it as Broe being the managing partner or operators, and CPPIB as investors,” said Ron Margulis, a spokesman for The Broe Group. Encana’s DJ Basin assets were the original assets of the company when it formed out of a merger of two Canadian companies in 2002. Encana has been scaling back
its capital spending in Colorado all year, concentrating its efforts in its Texas and Canada plays, where production is much greater. The company started the year with one rig drilling in the DJ, but dropped that in the spring. Hock said the company did have some plans to drill in the fourth quarter last year, but that changed when prices dropped in late 2014. “Our strategy over the last couple of years has been to narrow our focus, narrow assets where we’re investing,” Hock said. “With the drop in oil prices at the end of last year, in 2015, we narrowed that even further, so we really focused on our four key assets.” For going on a year, however, Encana had been working to secure drilling in Erie, but problems cropped up early with noise complaints. The company in August announced a major deal with Erie to drill wells on eight well pads. The new company plans to honor that agreement, Hock said. “We’re very pleased with the fact that the buyer intends to honor that agreement,” Hock said. “We worked hard for and we believe that agreement and our efforts around that set a high bar for operators in Colorado.”
Encana officials plan to stick with their Denver offices, which serve as a hub for its U.S. operations. The company also has a field office in Firestone that houses about 80 employees. Hock said those employees will be retained by the buyer. Any employees who are not retained, Hock said, will likely be absorbed into other areas in the Denver office. “Because this is our U.S. headquarters, we have teams that work ( Texas assets). So, it may just man you’re moving up to the X floor to work with” one of those teams. Margulis said the new company will not only continue to operate existing wells, but invest money in drilling. “The salient point is that production will be concentrated on some of the newer areas where they may not be as many wells,” Margulis said. “There will be a drive to take advantage of production in areas that are undeveloped.” During the first half of 2015, Encana’s DJ Basin assets produced an average of 52 million cubic feet per day (MMcf/d) of natural gas and 14,800 barrels per day of crude oil and natural gas liquids. Based on Encana’s development plan at year-end 2014, estimated
This is one of the assets Encana Corp. will sell to The Broe Group and its Canadian investors in a $900 million deal announced in early October. Photo for Energy Pipeline by Rick Kooker.
proven reserves were 96.8 million barrels of oil equivalent (with over 40 percent natural gas). The sale of Encana’s DJ Basin assets is subject to normal closing conditions, regulatory approvals and post-closing and other adjustments. The transaction is expected to close in the fourth quarter of 2015, with an effective date of April 1, 2016.
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THROWING MONEY INTO THE WIND Vestas ramps up R&D to better compete in global wind market BY LINDA KANE • FOR ENERGY PIPELINE
vestas continues to make itself
relations for Vestas in Denmark. “So we’ll longest blade for onshore use. competitive within the realm of wind energy. see how that plays out.” The first turbine is expected to be Today, the company has its best minds Essentially, a final determination has installed at the Danish national test center working on a new turbine that will increase not been made on where the blade will for large turbines in northwestern Denmark energy output while reducing energy costs be produced. during 2016. It’s expected to be ready for while focusing on low-wind conditions and They’re promoting the new turbine serial production in the second half of 2017. lower sound emissions. globally, however, and “we’re sensing a Denmark is the company’s headquarters. The V136-3.45 MW turbine is the newest good interest,” Zarin said. The potential is Several distinctions set this turbine apart variant of the 3 MW platform, which Vestas there for it to be used in the United States, from others. continuously optimizes to strengthen its he said. But, for now, he can’t speculate as “The V136-2.45 MW strikes a compelling product offerings, according to a news release to when or where. balance between advanced technology and from the company. proven performance, “Raising the bar enabling us to increase for low-wind site energy output, reduce performance, the V136the cost of energy and 3.45 MW combines limit sound emissions Vestas’ largest onshore particularly in the lowrotor diameter, the Vestaswind market segment,” patented large diameter Zarin said. “V136-3.45 steel tower technology MW’s technological and our most advanced innovations include a MICHAEL ZARIN, head of external communications and media relations, Vestas blade design to date,” the new aerofoil blade design release said. “It enables and a higher torque Vestas to increase annual gear box, producing more energy production by more than 10 percent “We typically only comment on power with lower sound emissions and compared to the V126-3.3 MW, while at the orders when they become firm and ultimately lowering the cost of energy. same time decreasing sound emission levels.” unconditional,” he said. “But we expect “Combined with Vestas’ patented large For the time being, it doesn’t sound this turbine to be very competitive. We diameter steel tower, the V136-3.45 MW like this new turbine will impact the four have recently begun engaging with increases annual energy production by Vestas production facilities in Colorado. customers on the V136-3.45 MW turbine more than 10 percent and lowers the cost of But, that could change. and we see a good interest.” energy at low-wind sites.” “There are great advantages to The V136-3.45 MW turbine will be The aerofoil design, applied to the 66.7m manufacturing locally, but our combined with the high hub height long blades, enables a 10 percent increase in manufacturing plan will depend on local large diameter steel tower. Designed for annual energy production while at the same demand,” said Michael Zarin, head of low wind, it will also be ideal for spacetime minimizing structural loads. Advanced external communications and media constrained conditions. It will be Vestas’ aerodynamics, particularly at the blade tips,
“We have recently begun engaging with customers on the V136-3.45 MW turbine and we see a good interest.”
20 ENERGY PIPELINE November 2015
LEFT: Curious cows graze among the massive wind turbines that stand on the O’Hare Family’s property north of New Raymer. The cattle in the area have become accustomed to the groans and squeals of the turbines as they brake and turn on, treating them as just a part of the landscape. OPPOSITE PAGE: A wind turbine towers over Steve O’Hare on his land north of New Raymer.
decrease the maximum noise emission level relative to current designs. Vestas has 15 years of experience optimizing carbon blade application, and the V136-3.45 MW benefits from advanced use of carbon pultrusions, resulting in lightweight, highly robust blades with optimal performance. The industry leading lightning protection system and highly accelerated lifetime testing ensure high product reliability, according to Zarin. Vestas has four factories in Colorado: a blade factory in Windsor, blade and nacelle factories in Brighton and a tower factory in Pueblo. Vestas is one of the world’s largest wind-turbine companies. With average wind speeds ranging from 13 to 27 mph, Colorado is ideal for wind power. In fact, Colorado leads the nation for wind power manufacturing jobs and was ranked among the top three states for wind energy employment, according to the American Wind Energy Association. Colorado has more than 1,680 wind turbines, according to the AWEA, working in the opposite manner of a fan. Kinetic energy from the wind turns two or three propellerlike blades around a rotor, which then spins a generator to create electricity.
WITH AVERAGE WIND SPEEDS RANGING FROM 13 TO 27 MPH, COLORADO IS IDEAL FOR WIND POWER As of May 2015, Vestas had almost 3,000 full-time employees. However, the company was forced to cut roughly 700 jobs between 2012 and 2013 when Congress failed to extend the wind production tax credit (PTC). A primary element for financing wind energy projects, the PTC provides each new wind farm with a $22 credit for every megawatt-hour (MWh) generated. The tax credit was restored-but only after orders for wind turbines plummeted 92 percent and some 30,000 jobs were cut, according to AWEA. The AWEA said Colorado’s 2,330plus megawatts of wind energy accounts for more than $4 billion in economic
investment, while technological improvements and savings from local manufacturing facilities have cut the cost of wind energy in half over the last five years. “With a near-record amount of wind capacity under construction, this looks to be a strong year for American wind power,” said Tom Kiernan, CEO of AWEA. Vestas agrees that wind energy is a continuously growing market. “We think the future is bright for wind energy,” Zarin said. “Wind energy’s real costs have dropped 58 percent in the last five years, and are now in the same price range as coal and gas. Wind is a carbon-free hedge against energy price volatility and uses no water, making it highly attractive in today’s market. “The Pope and other powerful voices were in the United States (at the end of September) making the case that we have to meet the climate change threat. The good news is that wind energy is a readily available and economically strong technology solution. That’s also why major corporations like Google, Apple, IKEA, Walmart, Microsoft, Honda, and many others are buying wind power - it simply makes economic sense.” November 2015 ENERGY PIPELINE 21
A STUDY IN REDUCTION Oil, gas industry investments in reducing greenhouse gas emissions largest among other U.S. industries BY AMY KEGG • FOR ENERGY PIPELINE
the oil and gas industry spends more money to reduce
efficiency, reusing excess heat and sequestering carbon dioxide methane emissions each year, dwarfing even spending by the doing more than its fair share. federal government, contends a study commissioned by the Those investments, API reports, reduced 2014 emissions by the American Petroleum Institute. equivalent of 55.5 million metric tons of CO2 compared to the The report commissioned by national trade association, API, previous year, which is equal to taking 11.8 million cars off of the shows that oil and gas invested more in emissions-reducing road. The study, conducted by T2 and Associates, collected data from technology than any other industry to the tune of $217.5 billion 850 companies, federal budget documents and other public records. between 2000 and 2014. This includes shale gas, efficiency The report stated that the U.S. oil and gas industry invested improvements through combined heat and power, advanced roughly $217.5 billion in greenhouse gas mitigating technologies, technology for vehicles including shale gas, or and to a lesser degree, $90 billion without shale wind, biofuels and solar. gas investments form “This study 2009-14. Private industries demonstrates how invested an estimated market-driven, private$102.8 billion and the sector leadership can federal government achieve public policy invested roughly $111.3 goals more quickly and billion, or $110.3 more efficiently than billion without shale gas government programs investments in that time, and mandates,” said the report stated. API President and CEO The report showed Jack Gerard in a news that the $90 billion release. “By embracing the oil and gas sector JACK GERARD, president and CEO, American Petroleum Institute our nation’s energy invested topped the renaissance, we can automotive sector at lower costs, clean the air, $38.2 billion, electric and create more jobs here at home while providing an example to utilities at $37.1 billion, and agriculture and food processors at the world.” $13 billion. In August, the Environmental Protection Agency proposed Out of $87.6 billion total spending on non-hydrocarbon new rules to cut methane emissions from the oil and gas industry technologies during the 2000 to 2014 period, the oil and natural gas by 40 percent to 45 percent from 2012 levels by 2025. While the industry was responsible for $14.8 billion, according to the report. measures are still up for debate, API officials believe that the While Colorado has some of the strictest regulations for oil industry already is invested in capturing emissions, improving and gas production, a February 2014 decision gave the state
“By embracing our nation’s energy renaissance, we can lower costs, clean the air, and create more jobs here at home while providing an example to the world.”
22 ENERGY PIPELINE November 2015
ANADARKO HAS ALSO INITIATED THE USE OF TANKLESS BATTERIES THAT REDUCED THE NUMBER OF STORAGE TANKS NEEDED ONSITE. WITH ONLY ONE TANK NEEDED FOR SEVERAL WELLS, EMISSIONS ARE REDUCED ALONG WITH DUST AND NOISE, IN ADDITION TO SLASHING THE ASSOCIATED TRUCK TRAFFIC BY 75 PERCENT. the distinction of being the first to limit methane emissions, continuing its reputation as a model for the rest of the country. The largest producers in the state, including Anadarko, were at the table when the strong regulations were being drafted. While unable to reveal exact figures, Anadarko Public Affairs Manager Robin Olsen said the company spends hundreds of millions of dollars investing in new technologies to reduce emissions. “It’s hard to put a dollar amount on all of these technologies,” she said. “Technology in this industry is changing so fast. We are always looking at ways to continue to protect our people, our communities and the environment. We do it for the right reasons, and it also tends to be good business practices as well.” Korby Bracken, Anadarko’s director of Health, Safety and Environment in Anadarko’s Denver office, agreed that safety and reducing the company’s impact to the environment are primary driving forces for the company. Bracken said the company continues to innovate and test new technologies as they become available; however the successful application of those technologies is site-dependent. On the drilling end of development, Bracken said the company is able to use an electric drilling rig in the Wattenberg Field rather than diesel, which has reduced CO2 emissions by nearly 13 metric tons per day. But if they can’t use electric, Anadarko uses the most efficient and low-emission diesel engines they can find. Anadarko has also initiated the use of tankless batteries that
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reduce the number of storage tanks needed onsite. With only one tank needed for several wells, emissions are reduced along with dust and noise, in addition to slashing the associated truck traffic by 75 percent. The tankless batteries also minimize the size and height of the well pads, reducing the visual impact for neighboring property owners. Another improvement, he said, is what’s called a monobore drill. “Being able to use a single casing size, the drilling can be done much faster, which lets us get in and get out more quickly,” he said. Electric motors in the processing stage also reduce the company’s emission footprint. An added step toward reducing emissions is to have production facilities in the same location as the wells, which reduces the potential for venting, Bracken said. Additionally, infrared technology allows Anadarko to detect very small leaks and quickly mitigate them. “As an oil and gas entity it is, of course, in our best interest to keep the gas that we work so hard to produce in the pipelines,” he said. But more national regulations can tend to stifle development and use of new, cleaner technologies. “It can become more prescriptive, minimizing options we can take in this very progressive industry.” Olsen added, “What’s best for Colorado may not be best for Texas or Pennsylvania. We believe that each state knows best what works for them versus a blanket one-size-fits-all approach.”
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HOT TOPICS Comments from individuals on the inside of the energy industry BY SHARON DUNN • SDUNN@ENERGYPIPELINE.COM
the energy industry is laden with experts,
critics, pundits and those who just want to influence policy on some of the biggest issues of the day, which will continue to make headlines for some time until those in power come to grips with their decisions. So far in the last month, officials have been grappling with new EPA ozone standards which the federal agency recently ratcheted back to 70 parts per billion from the current 75 parts per billion. That means areas across the country will be required to reduce ozone that much more from levels established in 2008, and still haven’t been able to meet. The EPA also ruffled some feathers by enforcing tighter methane emissions restrictions on oil and gas, which Colorado air officials have said will be wash in this state, given the strict new emissions standards the state came out with last year. They also are watching as crude exports becoming a part of America’s energy policy, which could help stabilize crude prices at minimum, but put America as a functioning player on the global crude market. Officials also are still talking about the Keystone XL Pipeline, which would link existing pipelines form Canada to North Dakota to an existing framework that leads to Cushing, Okla., where most of the oil in the western United States is traded. Here are a few comments from movers and shakers on those hot topics:
24 ENERGY PIPELINE November 2015
WHAT THEY’RE ON EPA OZONE REGULATIONS JACK GERARD, CEO of the American Petroleum Institute, based in Washington DC: “Current ozone standards protect public health without further stifling jobs or harming our economy,” Gerard said. “Our nation’s air is getting cleaner as we implement the existing standards, but the administration ignored science by changing the standards before allowing current standards to work. It’s time for Congress to step in and block this unnecessary and costly regulation to protect American consumers.” PETE MAYSMITH, executive director of Conservation Colorado “We are encouraged by the Environmental Protection Agency’s new clean air ozone standards issued today. Countless studies have shown that ozone is a dangerous pollutant known to cause asthma and disproportionately harm our most vulnerable populations - children, the elderly and those with heart and lung disease. Colorado has made great strides in addressing our air quality challenges and together we can take on the persistent problem of ozone. In fact many policies already in effect, including addressing pollution from oil and gas facilities, vehicles, and coal fired power plants, will help Colorado in efforts to meet new ozone standards by 2025. “Keeping the status quo with ozone pollution is not an option for Coloradans’ health. Going forward, the EPA should seriously consider further strengthening ozone standards to bring them in line with their own independent scientific advisers. At the end of the day, Colorado has proven by cleaning our
air and tackling pollution we can have a strong economy and healthy communities.” MYRON EBELL, director of the Competitive Enterprise Institute Center for Energy and the Environment, based in Washington DC: The Obama Administration’s new ozone rule provides yet another obstacle to restoring growth to the economy. Ozone levels have been declining across the country, but some areas have still not met the 2008 limit of 75 parts per billion. The new standard of 70 ppb will put much larger areas out of attainment. Economic experts have predicted enormous compliance costs and major job losses in these areas, especially in manufacturing and resource extraction industries, while the health benefits will be negligible. The ozone rule on top of the greenhouse gas rules make President Obama’s Environmental Protection Agency the number-one job killer in America.” ALLEN SCHAEFFER, executive director of the Diesel Technology Forum, a non-profit group which represents diesel engine, vehicle and equipment makers, fuel refiners and suppliers of engine and emissions control technology. “Today’s announcement by EPA sets the bar higher for cleaner air. The increasing use of new generation of clean diesel technology will be an important asset for states in helping to achieve these more stringent standards. Expanding use of new clean diesel engines is a major factor in reducing ozone precursors like nitrogen oxides (NOx). Thanks to the availability of cleaner diesel fuel and advanced engines and emissions control technology, diesel has been transformed throughout the last decade in all applications, from heavy duty trucks and construction
SAYING equipment to electrical generators and passenger vehicles.”
ON THE KEYSTONE XL PIPELINE addressing the Democratic presidential candidates’ stances against the project
Statement by the NORTH AMERICAN BUILDING TRADES UNIONS With yesterday’s public announcement by Secretary Clinton, all Democratic candidates for President have now stated their opposition to the Keystone XL Pipeline. We find this development to be deeply disappointing not only for this vital energy infrastructure project, but for the future direction of the Party. All eyes now remain on the Obama Administration who, for nearly 8 years now, has dithered and lacked leadership on the issue by not taking a stand. The men and women of North America’s Building Trades Unions are looking for elected officials who will support measures that will put them to work. They are frustrated by and wholly reject, the false choice presented to them by extreme elements of the environmental community who claim that a balanced energy portfolio is at odds with environmental stewardship while they relentlessly pursue an agenda that has stalled development and construction of critical energy projects throughout the country that employ our members, regardless of the energy source. Moreover, they and their political supporters repeatedly demean our membership for promoting family sustaining wages and benefits associated with so called “temporary jobs.” This arrogance pushes the Party’s traditional blue collar base further and further away. We need real
leadership, not more empty rhetoric, to move us forward in a responsible manner.
ON THE EPA’S METHANE EMISSIONS STANDARDS
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in EPA public hearings on the proposed changes TRACEE BENTLEY, executive director of the Colorado Petroleum Council: “Even as U.S. oil and natural gas production has surged, methane emissions have declined significantly. Methane is natural gas, and our industry has voluntarily led the way in its pursuit of improved operations to safely maximize the recovery and capture of these valuable oil and gas resources.” MATTHEW TODD, API senior policy adviser: “This industry has also played a significant role in reducing carbon dioxide emissions from the power sector to 27-year lows. These trends are the result of free market measures and private sector investment. We urge EPA not to get in the way of this success by developing a one-size-fits-all regulatory approach. The last thing we need is a duplicative and costly regulation that could increase the cost of energy for American consumers and undermine America’s energy renaissance. API remains committed to working with EPA and the administration to identify additional cost-effective control opportunities that do not hinder the ability to provide the energy our nation will continue to demand for years to come.”
IndustrialWaterPermittingandRecyclingConsultants.com Water is always a RESOURCE
Contact: Gary Beers 303.748.0390 gary1beers@gmail.com
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November 2015 ENERGY PIPELINE 970-352-6418
25
TECH TALK
WATER POWERED LED LANTERN AND USB PORT BY GARY BEERS • FOR ENERGY PIPELINE
did you know that a glass of produced water can
provide electricity to power a LED lantern or a USB device for eight hours? When produced water (350 ml) from an oil well in Colorado is poured into the lantern, immediately the array of 10 LED (Light-Emitting Diode) lights came on (Figure 1). Also, the lantern’s USB connection can be used to power a cell phone or laptop computer. The 1.5 volts of DC power is enough to generate 55 lumens of light and 4.5 volts for charging USB devices. The lantern will operate for eight hours before the water in the internal tank must be replaced. The internal rod needs to be replaced after 120 hours of operation.
CLEVER APPLICATIONS OF ANCIENT SCIENCE The scientific principle behind this device has been known for centuries; that is, electricity is produced when two different connected metals are submerged in an electrolyte. The lantern uses salty water as the electrolyte, a magnesium rod as an anode, and a carbon rod as a cathode. The magnesium rod is slowly destroyed by electrolysis as the magnesium ions travel to the carbon rod, generating electricity. While seawater-activated batteries have been widely used for life-jacket lights, ocean-buoy beacons and undersea applications for more than a century, there is a recent breakout of new applications by entrepreneurs in Japan and other western Pacific countries. These applications have focused on low-tech, emergency sources of light since many areas (such as the 7,000 islands of the Philippines) have no access to electricity and life stops after dark. Further, many people in Japan have sought portable, reliable light sources after the devastating Tohoku earthquake and tsunami in 2011. Examples of the novel, very effective, lowtech devices for furnishing light for individuals are: 26 ENERGY PIPELINE November 2015
GREEN HOUSE SALT WATER POWERED LED LANTERN (shown in Figure 1) CAPABILITIES Power lantern (55 lumens) USB devices (4.5 volts) DURATION Replace anode every 120 hours Replace seawater every 8 hours COST $41
COUNTRY Japan
WEBSITE www.japantrendshop.com/ green-house-salt-water-powered-ledlantern-p-1504.html
SALT* LAMP (*Sustainable Alternative Lighting) CAPABILITIES Power lantern (90 lumens) USB devices DURATION Replace anode every 120 hours Replace seawater every 8 hours COST $35 (Projected, available late 2015) COUNTRY Philippines WEBSITE www.salt.ph/
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.
Table 1. TDS Ranges of Produced Water TDS Wells (mg/l) Number Percentage of Total Wells Less than 5,000 534 26.73 5,000 -‐ 10,000 10,000 -‐ 20,000
370 477
18.52 23.87
20,000 -‐ 30,000 30,000 -‐ 40,000 40,000 -‐ 50,000 50,000 -‐ 60,000 60,000 -‐ 70,000 70,000 -‐ 80,000 80,000 -‐ 100,000 More than 100,000
204 99 53 45 50 17 29 120
10.21 4.95 2.65 2.25 2.50 0.85 1.45 6.01
Water Classification Type Percentage of Total Wells Fresh (<1,000) Brackish (1,000 -‐ 5,000) Highly Brackish 79 (5,000 – 15,000) Saline (15,000 – 30,000) Seawater 5 Brine 16
Source of TDS and well data : “Produced Water Quality Characterization and Prediction for Watternberg Field”, H. Li, MS Thesis, Colorado State University, 2013
For comparison with another “green” lantern, a solar-powered, portable light with USB port is:
SUN KING PRO AN CAPABILITIES Power lantern (100 lumens) USB devices (5.5 volts) DURATION 45 hours of light on one day’s charge
Finally, for a larger power source, there is a portable, 12-volt seawater-powered battery made for boaters and campers.
ENVIRO-GEN 12 SALTWATER GENERATOR CAPABILITIES Lighting (1.5-12V), Radio (6V) Navigation gear (12V), CD player (9V)
COST $50
DURATION Replace anodes every 100 hours
COUNTRY India
COST $130
WEBSITE store.greenlightplanet.com/ products/sun-king-pro
COUNTRY USA WEBSITE dragonet.com/fhp/
PRODUCED WATER QUALITY For produced water to work as a replacement for seawater in the above devices, the salt concentrations (i.e., total dissolved solids, TDS) must be essentially the same as seawater or higher. Based on representative data from Colorado (Table 1), produced water from about 21 percent of the oil/gas wells is a suitable replacement electrolyte. Finally, the sample of produced water used to test the lantern (Figure 1) is from an oil well in western Colorado which has a TDS level of 305,000 mg/l, which is about 10 times the salinity of seawater. On this basis, produced water with a TDS of 30,500 will operate the lantern for the expected 8 hours. The lantern will light up when filled with produced water with a lower TDS (i.e.,7,500 mg/l), which is more representative of the majority of produced waters. However, the lantern will provide light for less than 8 hours due to the lower concentrations in the electrolyte.
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November 2015 ENERGY PIPELINE 27
Power Generation
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BMA | Brewer Steel’s manufacturing workshop in Greeley, Colorado opens up lots of opportunities. Contract manufacturing of all kinds, and particularly pressure vessels, are part of BMA | Brewer Steel’s everyday business. Take a look at our wide range of offerings – and contact us for all inquires!
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Visit us at 2985 1st Avenue, Greeley, CO 80631 or call 970 353 3770
30 ENERGY PIPELINE November 2015
BY DAN LARSON • FOR ENERGY PIPELINE
DESPITE A GENERAL SLOWDOWN IN OIL DRILLING ACROSS THE DENVER JULESBURG BASIN AND ELSEWHERE, PRODUCTION GROWTH IN WELD COUNTY THIS YEAR IS ON TRACK TO TOP
100 MILLION
BARRELS OF OIL. November 2015 ENERGY PIPELINE 31
OIL PRODUCTION GROWTH IN THE COUNTY CONTINUES TO CAST A LONG SHADOW OVER THE REST OF THE STATE, WITH MORE THAN 88 PERCENT OF THE STATE’S PRODUCTION THIS YEAR COMING FROM WELD, UP FROM 85 PERCENT IN 2014.
32 ENERGY PIPELINE November 2015
Industry analysts say operators are getting more oil from every well by drilling the best parts of the basin, employing improved well fracturing techniques and optimizing operations. “We are seeing a relentless drive to push down costs across the basin,” said Reed Olmstead, manager of North America Supply Analytics, Upstream Strategy and Competition at HIS Energy. “Improved productivity is an important part of well economics and in this price environment, only the best wells are getting drilled.” According to the Colorado Oil & Gas Conservation Commission, Weld County production peaked in May at 8,976,762 barrels for the month and that by June it had slid back to 8,591,639 barrels. The commission advised that production figures are usually revised for several months as updated reports from operators are submitted. For the first half of 2015, Weld oil production averaged 8.4 million barrels per month, up from a monthly average of 6.7 million barrels in 2014. Statewide oil production for 2015 through August was 64.8 million barrels. Of that, 57.2 million barrels, or 88.2 percent, were produced in Weld County. Rio Blanco is the second largest oil county in Colorado with 2015 production of 2.5 million barrels. Barring an unexpected drop-off in production, Weld County is on a pace to
produce more than 100 million barrels of oil this year, a remarkable milestone considering the county produced just 26.8 million barrels in 2011. In 2014, Weld County produced 81.4 million barrels, or 85 percent, of the statewide total of 95.2 million barrels. For Weld, that was an increase of 13.8 million barrels, or 19 percent, from 2013 production.
NATIONALLY RANKED And while Colorado oil production has significantly increased over the past five years, it is still dwarfed by the two big producing states, Texas and North Dakota. According June 2015 production data from the Energy Information Administration, Texas led the nation with an average 3.46 milion barrels per day of oil production with North Dakota in second place at 1.2 million b/d. Among the other top producing states, California ranked third at 542,000 b/d, Alaska fourth at 481,000 b/d, New Mexico fifth at 421,000 b/d, Oklahoma sixth at 356,000 b/d, Colorado seventh at 324,000 b/day, and Wyoming eighth at 246,000 b/d. If federal production from the Gulf of Mexico is included, it ranks second among the states at 1.4 million b/d. Olmstead characterized the Niobrara as a unique play in the U.S. due to the fact that
“Improved productivity is an important part of well economics and in this price environment only the best wells are getting drilled.” REED OLMSTEAD, manager of North America Supply Analytics, Upstream Strategy and Competition at HIS Energy.
more than half the oil production comes from just two companies, Anadarko and Noble. “Both companies are well positioned to weather the current market and continue to grow their production,” Olmstead noted. A recent report from the market analysis firm Ponderosa Energy shows Anadarko Petroleum produced an average 99,600 b/d for the first five months of 2015. Noble Energy ranked second with 65,700 b/d, Encana third at 27,700 b/d, Bonanza Creek fourth at 18,300 b/d, PDC Energy fifth at 16,300 b/d, and Whiting Petroleum sixth at 16,200 b/d.
PRICES FLAT Oil prices declined this year because the market was oversupplied, said Darrell Proctor, a market analyst at Ponderosa. “The 2.4 million b/d global supply overhang that caused prices to slide last year will take years to work off,” he said. As a result, crude oil prices will remain flat next year and only gradually increase over the next four. “We see an average of $56 a barrel in 2017 and $67 for 2018 through 2020,” Proctor said. As oil prices remain mired in the mid$40 per barrel range this year, market analysts continue to buzz about how rising debt and impaired cash flow will force many oil companies to divest assets or find a merger partner. And while several large mergers and acquisition deals were announced this year, the tidal wave M&A activity in the upstream segment has yet to materialize as buyers remain on the sidelines, wary of acquiring
commodity assets in a down market. On the other hand, the midstream and oilfield services sector has already seen several large mergers this year. In late September, The Williams Companies, a century-old natural gas pipeline and processing operator, agreed to an acquisition by Energy Transfer Equity, operator of gas, liquids, products and crude oil pipelines. The deal, valued at $37.7 billion, creates one of the largest pipeline companies in the country and, along with Shell’s acquisition of BG Group for $81.5 billion in June, is included in a list of the top five mergers so far this year, according to Dealogic. Merger activity still could increase later this year as upstream companies, unable to service the debt many built during the rapid expansion of the past 5 years or to find lenders willing to back new projects, are forced to extend a hand to potential suitors. As for new drilling projects, the outlook is not bright. At an industry conference in September, analyst Paul Y. Cheng, of the investment firm Barclays said, “It is clear that the governor of oil-drilling activity will be cash flow rather than drilling economics.” Yet even under a mantra of cash flow above all, companies must still prove that new well projects can be developed economically so they earn a reasonable return while generating cash. For some projects, where the well is located can have an impact on the bottom line. “It costs more to drill a well in Colorado than elsewhere,” Olmstead said. “Restrictions on well spacing, deeper well casing, water testing, permit notice requirements; these all add to the cost of
a well. While most companies see good community relations as an investment, there is an added expense that drives incremental increases in development costs.” Such considerations can result in reduced capital budgets and a continued slowdown in drilling activity. According to the weekly rig report from Baker Hughes, the number or drilling rigs declined sharply in September and early October reflecting a late summer drop in crude oil prices. Colorado’s count dropped by three rigs to 30 statewide for the week ending Oct. 2, Baker Hughes reported. That is the fewest rigs running in Colorado since March 21, 2003. The report noted the three rigs laid down in Colorado were all in the DJ Basin. Looking ahead, one forecast says the onshore rig count “will not regain its prebust levels for at least the next five years.” The October report by RigData projects a modest recovery in the first half of 2016 but that even by 2020, the rig count “will still fall short of its recent peak in 2014 by almost 25 percent.” Despite the steady drumbeat of bad news for the industry, there is cause for optimism. Former Colorado Gov. Bill Owens, managing director at Renew Strategies, a water resource management firm in Denver, said companies are using the slowdown as an opportunity to build efficiency and longterm plans. “The DJ will remain one of the best onshore basins in the country for many years to come,” Owens said. “Smart companies see this is an opportunity to build better systems that are more community friendly and sized for the long term.” November 2015 ENERGY PIPELINE 33
ELECTRI EXPERIMEN BY AMY KEGG • FOR ENERGY PIPELINE
Northern Colorado chosen as site of program to promote electric vehicle use
“
EV DRIVERS SAY some do it to save money on gas
prices. Some have environmental I love it. Great concerns. Many do it to reduce the nation’s dependency on foreign oil. performance, And some just think it’s cool. The wave very efficient. of the future is here, and it’s electric. Electric Vehicles, that is. I like the idea According to the Electrification of not being Coalition, 70 percent of the oil dependant on consumption in the United States is driven by the transportation sector, foreign energy.” which is 94 percent reliant on oil-based fuels. The Washington D.C.-based PASTOR JONATHAN WIGGINS DRIVES A BMW I3 nonpartisan, nonprofit group aims to facilitate deployment of electric vehicles on a mass scale, and they have chosen Loveland and Fort Collins to launch a first-of-its-kind electric vehicle deployment community initiative. “The goal is to create a replicable and scalable model here, then transfer it all over the United States,” said Annie Freyschlag, deployment community associate with Drive Electric Northern Colorado, the group responsible for energizing the EV initiative locally.
One of Drive Electric’s objectives is to increase the number of employers that install EV charging stations onsite. “We know that people are 20 times more likely to drive an EV if they have charging access at the workplace,” Freyschlag said. In addition to offering outreach and engagement, educational seminars on tax breaks, and acting as a resource to find grant funding, the group regularly hosts a Workplace Charging Challenge to encourage companies to find out more about the benefits of implementing EVs into the workplace. The most recent Workplace Charging Challenge, in September, brought about 30 local employers who are in various stages of adoption, Freyschlag said. Drive Electric already has 17 regional businesses on board with the goal of bringing that number to 20 by the end of the year. “It’s really about decreasing our dependency on oil, which is a national security issue, and increasing our environmental sustainability,” she said. “Providing plug-ins for employees costs less than providing a cup of coffee to that employee.” Data acquired from Energy.gov on Oct. 5 showed that the average price for a gallon of gas in Colorado was $2.59, while the equivalent eGallon was less than half that amount at $1.16. One of the community partners in the Drive Electric’s effort is Colorado State University. Alternative Transportation Manager Aaron Fodge said the university
RIC ENT has ramped up the number of charging stations on the Fort Collins campus to 14 connections at seven dual stations. “We definitely see that as the largest employer in northern Colorado, we’re helping to drive demand and serve demand by having chargers,” he said. CSU hosts campuswide drive and ride events, has several fleet vehicles along with four small EVs employees use for cross-campus trips. “Having those fleet vehicles for employees to use for workplace trips encourages people to carpool, take transit or ride their bike to work because they know they have a reliable vehicle available to drive for during the day,” Fodge said, noting the amplified benefits of having fewer cars on the road in general. As one who’s ‘been there done that,’ Fodge has advice for other transportation managers who are considering adding charging stations to their locations. “The closer you can get the charger to the power supply the better,” he said. “If you’re building new buildings, be very cognizant to get the electric in place, get the conduit in place.” CSU’s new construction plans include pulling conduit for charging stations, he added. “I think you’ll see all new construction, whether it’s residential or commercial, you’ll see them pulling conduit to parking lots for future expansion.”
Fodge also recommends collecting ABOVE: A flap lifts to reveal data to make expansion decisions. the plug for one of the electric cars on display at the Evans “Survey your employees. Ask them, Farmer’s Market on Thursday at ‘do you have, are you planning, or the Riverside Library and Cultural what are your barriers to making an Center. Photo by Josh Polson. EV purchase?’” A recent survey of CSU employees showed that about 30 people said they are considering a purchase within two-years. “You want to make sure demand drives expansion. Take a look at your employees. Figure out where your employees live. At CSU, 80 percent of our employees live in Fort Collins and 90 percent of our students do, which is really important to know because of the range of the vehicle,” he said. Lower-end EVs can travel about 60 miles on a full charge, while higher-end models can exceed 100-plus miles. Still, the term ‘range anxiety’ describes a concept that may keep some consumers from making the commitment. At Hewlett Packard in Fort Collins, EV charging stations fit right in with the corporation’s goal of being a good steward of the planet. Program Manager Doug Hatch was one of the first employees to own an EV and volunteered to lead the charge amongst fellow employees. When HP first added charging stations, there were only about five EV drivers, he November 2015 ENERGY PIPELINE 35
“
EV DRIVERS SAY
As a high tech person with solar panels on his house, essentially I removed myself from oil dependency. I like to say that I am driving my sun-powered LEAF - that’s a nature joke by the way.”
said. Within six months, the number of HP adopters jumped to nearly 30. The company now has 12 Level II charging stations that Hatch said see steady use. A volunteer with Drive Electric, Hatch said not only is it responsible for his employer to offer workplace charging, he views it as an employee perk. “Of course, HP is always looking to attract top talent. Potential employees are looking more and more for companies to provide these kinds of things, companies who are dedicated to reducing their carbon footprint,” he said. In Weld County, environmental sustainability is the driving force DOUG HATCH behind High Plains Library District’s DRIVES A NISSAN LEAF adoption of workplace charging stations. Both the Farr Library in Greeley and the Riverside Library in Evans have stations that are open to employees, patrons and the public. “About three years ago, as an organization we were searching for how to minimize our impact on the environment, so we developed a sustainability statement that includes making efforts to reduce consumption, using resources more wisely, and of course as a library, we want to provide the community with information and opportunities to do the same,” said Human Resources and Facilities Manager Eric Ewing. The Farr station was the first EV
MORE INFO 36 ENERGY PIPELINE November 2015
Drive Electric Northern Colorado www.driveelectricnoco.org
ABOVE LEFT: Joshua Martinez, 7, laughs as he hops in the driver seat of a Chevrolet Volt during the Evans Farmer’s Market. The cars were brought by Northern Colorado Clean Cities non-profit, an organization aimed at promoting cleaner more efficient vehicles in communities across northern Colorado. Photo by Josh Polson. ABOVE RIGHT: Drive Electric Northern Colorado and local car dealerships hosts event for Colorado State University faculty and staff to test drive plug-in electic vehicles.
charging station east of Interstate 25 in northern Colorado. “We’re willing to step out there and be a leader,” he said. “If not us, then who?” While usage hasn’t gone off the charts, Ewing said they have seen increases. “The heart of the matter is that adoption is slow on the uptake because of range anxiety and not having many places in Weld County to charge. We want to build that infrastructure so people will be more likely to view it as a viable option for them,” he said, noting that 70 percent to 80 percent of most people’s daily travel fits within the range of EVs. “We have to do something different to improve our air quality. Perhaps some of these ideas will go forward in meeting those clean air act requirements.” The EPA recently came with stricter ozone standards, which will drop to 70 parts per billion from 75 parts ber billion, a figure the Denver and northern Colorado area have not been able to meet in since it came out in 2008. Vehicle travel is considered a major source of ozone. If people are interested in workplace adoption, Ewing recommends they bring it to their management, or as residents, contact their local governments. “Any good change in our society seems to happen from the bottom up,” he said.
Public Charging Station Locations www.driveelectricnoco.org/charging-stations/
Northern Colorado Clean Cities northerncocleancities.org/
WHAT IS AN ELECTRIC VEHICLE
“
The library district charges $1 an hour because board members did not want public perception to view it as giving away electricity on taxpayers’ dimes, Ewing said. Pastor Jonathan Wiggins who leads a congregation of 3,000 church members and about 57 full-time employees at Resurrection Fellowship in Loveland, said he was first introduced to EVs by a congregant who thought a church would be a perfect place to locate charging stations. “Our sermons can go for quite a long time,” Wiggins said. “So, he got me thinking.” A few months later, Wiggins found himself investigating EVs and eventually decided to buy a BMW i3 for himself. “Some church members were giving me a hard time for driving an EV,” he said. “One told me, good-naturedly, that he was going to give me a ‘man card’ just so he could take it back.” But Wiggins, by all estimations is a progressive thinker and ties his calling to protecting the environment. He harkens to the works of John Muir. “Muir was the son of a pastor. He could quote most of the Bible. When he went to the outdoors, it sensitized him, and his faith was such that he saw the handicraft of God in nature,” he said. “Muir’s writing really brought the awakening of environmentalism in our country and it was very, very religious in its origins.
“I don’t see it as being disconnected from my calling as a pastor to encourage taking care of our Earth.” Wiggins said he has no plans to conduct a sermon on the merits of EVs but, “As a pastor of a church, I think it’s important to think how, a lot of times we guard against accepting innovation. I think it’s a good way of being an example, ready to jump into new things,” he said. The church received a grant from Charge Ahead Colorado for a dual charger and the church’s current expansion includes putting conduit in place for future stations. The charging stations at Resurrection Fellowship are open to everyone and there is no cost to charge. Another major local resource for information about EVs is Northern Colorado Clean Cities, which is a nonprofit sponsored by the U.S. Department of Energy. Co-coordinator Maria Eisemann said that Colorado is in a fortunate situation because grants are available to employers looking to offer workplace charging stations. Programs such as Refuel Colorado out of the Colorado Energy Office, the U.S. Department of Energy’s Workplace Charging Challenge, Wired Workplaces and Charge Ahead Colorado are just a few sources for information and possible grant funding. Additionally, federal and state tax incentives are available for those who purchase an EV, but the details can be somewhat complex and confusing, Eisemann said. “That’s why we are here to help,” she said. “We’re here. Call us. Ask us questions. We’ll help get the information people need to inform their decisions.” And while EVs may not be the best solution for everyone, she said, “EVs can be a good alternative. It decreases our dependence on imported petroleum, it’s good for the environment, and for a lot of people and companies it makes good economic sense.”
EV Charging Costs www.energy.gov/maps/egallon
Refuel Colorado www.refuelcolorado.com
ANSWER BY DRIVE ELECTRIC NORTHERN COLORADO
An "electric vehicle" (also called a "plug-in electric vehicle") is a car that uses power from the electrical grid stored in its battery. These vehicles fall into two primary categories: battery electric vehicles (BEVs) in which all power is stored in an on-board battery, and plug-in hybrid electric vehicles (PHEVs) which have a down-sized internal combustion engine in addition to the battery.
Levels of Charging Stations (from the Colorado Energy Office): Level I 2-5 miles of range per 1 hour of charging Level II 10-20 miles of range per 1 hour of charging Level III 60-80 miles in 20 minutes
Colorado Energy Office www.colorado.gov/energyoffice
EV DRIVERS SAY
The silent start and five-star safety rating, it’s just great. Then you go back to the roar and smell of engines and it’s just not so appealing anymore when you’re used to such a peaceful drive.” ANNIE FREYSCHLAG DRIVES A NISSAN LEAF
“
EV DRIVERS SAY
It feels good to know that when I go to pick up the kids from school, I’m not sitting there idling, putting exhaust into the air while the kids are standing around waiting for their parents.” MARIA EISEMANN DRIVES A NISSAN LEAF
Charge Ahead Colorado www.cleanairfleets.org/programs/charge-ahead-colorado
November 2015 ENERGY PIPELINE 37
FILLING THE GAP CONSTRUCTION
INDUSTRY
PICKS UP
LOST OIL
GAS JOBS BY BRIDGETT WEAVER • FOR ENERGY PIPELINE 38 ENERGY PIPELINE November 2015
LONG HOURS AND UNSTABLE WORK. THAT’S WHAT CAUSED COREY PEARSON TO LEAVE THE OILFIELD IN FEBRUARY OF THIS YEAR.
ABOVE: Coleman Wagy operates some of the equipment as he digs a leach field recently for a home in Ault. Photo by Josh Polson.
“i was working anything from 14- to 16-hour days, and I didn’t have much vacation,” Pearson said. In fact, the 25-yearold said he didn’t have much time off at all. Anyone from an oil town like Greeley can tell you most oil field employees work straight through most weekends and holidays. Most of all, when Pearson left earlier this year, he said work was unstable. “The oil field is a roller coaster, honestly,” he said. January and February was when the downturn in the industry started to hit hard. Companies were shutting down rigs, running out of work and laying off hundreds of employees. Despite a huge loss of jobs in oil and gas this spring and summer, employment numbers are showing an upswing in the mining, logging and construction category. A booming construction industry in Weld seems to be absorbing many of the lost oil
and gas jobs. In Greeley alone, building permits on single family homes are 60 percent higher this summer than last, after years of being idle. “It seems to me it kind of bounces back and forth,” said Chris Morin, earthworks supervisor with TCE Concrete and Earthworks, a homebuilding contractor in Greeley. “When the price of gas goes up and they’re cranking it out, you get more people leaving and when they’re shutting down rigs, you get an influx of people coming back for jobs.” There have been 216,000 layoffs related to oil and gas this year in the United States, said George Baker, executive director of Producers for American Crude Oil Export. Baker was on a tele-town hall conference call Monday with U.S. Rep. Ken Buck to talk about the outlook for oil and gas. He said more than 1,000 rigs have gone down, which is a loss of 200 jobs per rig and about 600 per rig in support staffing. November 2015 ENERGY PIPELINE 39
“Obviously they’re all hard workers. You have to be to be in the oil industry” CHRIS MORIN, supervisor, TCE Concrete and Earthworks
ABOVE: Coleman Wagy smiles as he lifts as he hammers in a stake while measuring out the leach field recently at a home in Ault. Wagy is one of the many former oil and gas employees that moved to construction in search of more stable hours and work. Photo by Josh Polson. OPPOSITE PAGE: Corey Pearson holds onto a measuring line as he and Coleman Wagy work on laying out the leach field for a home on recently in Ault. Pearson was also employed by the oil and gas industry before leaving for construction. Photo by Josh Polson. 40 ENERGY PIPELINE November 2015
But even with such large losses in oil and gas, employment numbers in the mining, logging and construction industry have risen steadily all summer - driven by construction. The state Department of Labor’s Chief Economist, Alexandra Hall, said it does appear construction is absorbing the oil and gas jobs. Hall said they have been “waiting for the other shoe to drop,” on Colorado’s economy, meaning they’ve been waiting to see the negative impact on the economy from the downturn in oil and gas show up in the employment numbers.
So far that shoe hasn’t dropped, and it’s looking like it might not be as dramatic as economists once thought, thanks, in part, to an increase in construction jobs. “So far, with all the information we have available, it appears it’s playing out that way,” Hall said. “Many of those employees who were laid off are finding jobs in other industries, including construction. It’s looking more and more like we’re able to absorb it.” Andrew Jackson, owner of TCE, said he’s seen a bunch of applicants this summer with past experience in oil and gas. “Last summer we started to see some guys that were tired of the excessive hours in the oil field, but overall I’d say no, this (summer) is because of the slowdown,” he said. Jackson said he has at least four previous oil field employees working for him now. Pearson is one of them. Although Pearson took a slight pay cut to leave the oil field, he’s happy with his choice.
“We were actually running really slow, hour-wise,” he said. “I just wasn’t making enough money. You make money in overtime.” Twenty-nine-year-old Coleman Wagy also left the oil industry to work for TCE because he was sick of the long hours. “I worked every day,” he said. “We were on call at all times.” Wagy left in January 2014. He’s been working with construction companies since. He said it was pretty easy to make the switch. Wagy has a CDL and other transferable skills. He said he’s appreciative of what he learned in the oil field, but he’s happy to be home at night with his wife. It’s always feast or famine in the oil and gas industry - there’s either work or there’s not. “The reality is, the oil fields’ cycle is such that they offer big money to meet their demands right away,” Jackson said. While, of course, he doesn’t wish any other
businesses ill will, he said the oil fields letting up have helped out in construction. Construction company owners noted how hard it’s been recently to find skilled labor. The industry took a huge nosedive in about 2010, when the rest of the nation’s economy was on the rocks. Many construction companies didn’t survive the tough years. When people started building again in 2013, most of the skilled labor had already moved into the oil field, where the jobs were plentiful. But with the tables now turned, the guys are starting to come back. “We appreciate the fact that as their market ebbs, it helps us keep our labor force full,” he said. This year is the first time in about five years the construction industry has been close to fully staffed. Morin said they’re happy to have the oil field workers with their company, and they’ll probably hire more.
THIS YEAR IS THE FIRST TIME IN ABOUT FIVE YEARS THE CONSTRUCTION INDUSTRY HAS BEEN CLOSE TO FULLY STAFFED.
“Obviously they’re all hard workers,” he said. “You have to be to be in the oil industry.” Jamie Baessler, owner of Baessler Homes, said they’re still looking for help. Baessler works with TCE and other trade companies to build homes in northern Colorado. “If there were additional layoffs, I know there’s several of our trade partners still looking for help,” Baessler said. “If layoffs are moderate, it would appear to us that construction could absorb some of those jobs.” November 2015 ENERGY PIPELINE 41
NATURAL FRACKING U.S. Well Services brings clean fleet to Weld County
STEP 1 Tap into existing natural gas line
STEP 2 Pump natural gas into turbine generator
STEP 3 Utilize generated electricity to power frac equipment
BY LINDA KANE • FOR ENERGY PIPELINE
one thing’s clear in the oil and gas
industry: it’s constantly searching for and devising new innovations. That’s certainly the case with U.S. Well Services of Houston, which is using technology that utilizes natural gas instead of diesel during the fracturing process. U.S. Well Services began work for Anadarko Petroleum in the Wattenberg field near Fort Lupton at the end of September and plans to continue through the end of October, possibly into November. The company calls its newest innovation Clean Fleet - which consists of a fleet of fracking equipment that runs on natural gas as opposed to diesel. The end result is a more environmentally friendly way to frac, according to company CEO Brian Stewart. “Emissions are much lower, and because we’re using electric motors as opposed to diesel motors, it’s much cleaner,” Stewart said. “It’s much better for the communities because it’s less noise and we don’t have the truck traffic.” Essentially, Stewart’s company taps into an already existing natural gas line; it’s pumped to a turbine generator and that generator produces the electricity used to power his frac equipment. This new Clean Fleet is about a year old.
Its first customer was in West Virginia and its second was the recent operation in the Wattenberg Field. U.S. Well Services is an oilfield services provider of well stimulation services to the upstream oil and gas industry. The company engages in high-pressure hydraulic fracturing in unconventional oil and natural gas basins. “It was interesting because we developed it thinking that our clients would be
His company has a temporary base camp in Greeley and Stewart hopes to get more business in Colorado as word spreads about his Clean Fleet process. “We identify Colorado as being one of those states that might see the benefit of a more environmentally conscious fracturing,” he said. Though based in Houston, Clean Fleet has not yet been tried in Texas. Again, the company is in talks with many oil producers throughout the country, but progress has been slowed by the crippled status of the industry. “The problem right now is the market is so saturated it’s very difficult to go into a new area and open a new opportunity,” Stewart said. “It’s restricted us in growing.” Of course, as crude prices increase and the market is in full-production again, Stewart said he believes his company will have many more opportunities for work. Clean Fleet is proven to successfully decrease emissions by 99 percent, Stewart said, and adds cost savings to operations. “The results experienced to date both validate and exceed performance and environment expectations,” he said. “The performance of this patented technology has exceeded expectations, especially as it relates to fuel savings, emissions, vibration and noise
“Emissions are much lower, and because we’re using electric motors as opposed to diesel motors, it’s much cleaner.”
42 ENERGY PIPELINE November 2015
BRIAN STEWART, CEO, U.S. Well Services
most interested in it because it has lower emissions,” Stewart said. “But, what we’ve found is just as important is noise emission. Because so many of these wells drilled are getting into urban areas, this is less disruptive to the community.” The company has about two monthsworth of work for Anadarko, Stewart said. They have 390 stages or jobs to pump for Anadarko at 12 well locations. “We certainly hope this will lead to a longer work commitment,” Stewart said.
THE CLEAN FLEET IS THE INDUSTRY’S FIRST FULLY MOBILE, FULLY ELECTRIC HYDRAULIC FRACTURING SYSTEM THAT IS POWERED ENTIRELY BY NATURAL GAS
reductions as well as increased reliability. We are also encouraged that this technology is being embraced by so many leading operators around the country. Testing of this technology by Anadarko for its Wattenberg Field operations further validates the commitment of many operators to conduct operations in a more environmentally compatible manner.” Fracturing has always been the core business of U.S. Well Services. They came up with the Clean Fleet technology while exploring more environmentally friendly ways to fracture. Clean Fleet is a patented system developed by U.S. Well Services that incorporates existing industry equipment configured to provide fracturing services with enhanced safety features, smaller physical and environmental footprints and reduced noise levels at a lower cost relative to traditional fracturing equipment. The Clean Fleet is the industry’s first fully mobile, fully electric hydraulic fracturing system that is powered entirely by natural gas whereby conventional diesel engines are totally replaced with electric motors, Stewart said. • Clean Fleet uses electricity produced by on site turbine generators fuelled by field natural gas, reducing fuel operating costs by 80 percent. • Clean Fleet mitigates environmental exposure by reducing NOx and CO emissions by 99 percent. • Clean Fleet eliminates 25 diesel truck deliveries to the well site for an average horizontal well completion, reducing traffic within communities.
• Clean Fleet significantly reduces noise emanating from the well site. • Clean Fleet incorporates advanced technology that reduces equipment and discharge iron vibrations by 80 percent, resulting in safer operations. The Clean Fleet offered by U.S. Well Services consists of 14,500 psi-rated technologically advanced hydraulic fracturing equipment manufactured by Stewart & Stevenson Manufacturing Technologies to U.S. Well Services specifications. “Anadarko’s work in the Wattenberg Field and greater DJ Basin represents a significant opportunity for U.S. Well Services. Not only is it work for a new client but also in a new basin, further expanding the USWS brand as we seek to provide fracturing solutions that surpass existing regulatory requirements,” Stewart said. The new technology offers opportunities to work with companies he might not otherwise been able to work with, Stewart said. “It gives us more opportunity and it’s a better product,” he said. “I think that’s why you haven’t seen our major competitors do this because they have a big enough market share. When you’re the new guy - the small guy on the block - you have to do something that gets people’s attention - and that’s essentially how we got to where we are today.” U.S. Well Services has been in business since 2012. “We expect this to allow us to grow the business and work for companies we might
TOP: U.S. Well Services reports its Clean Fleet technology, a patented system of electric motors and natural gas-powered fracturing equipment, will reduce fuel costs, reduce emissions and noise associated with hydraulic fracturing. BOTTOM: Houston-based U.S. Well Services has brought its unique electric hydraulic fracturing technology to the Weld County oil patch.
not otherwise have the opportunity to work for,” Stewart said. “The economics are worth-while. They make sense at the end of the day.” He said neighbors of the Anadarko wells has made positive comments. “Based on the results we’ve seen to date and based on the comments we’ve heard from Anadarko to date, we’re hoping for many more opportunities in the Denver and Greeley area,” Stewart said. He hopes the job opportunities will become so vast they can create a permanent office, possibly in Greeley. For more information, go to www.uswellservices.com November 2015 ENERGY PIPELINE 43
News Briefs Solar industry applauds Democratic energy bill The Solar Energy Industries Association in September commended Senate Democrats, including Senators Harry Reid (D-Nevada), Charles Schumer (D-N.Y.), Ron Wyden (D-Ore.), Maria Cantwell (D-Wash.) and more, for their inclusion of sjob-creating clean energy incentives in their newly-announced energy policy bill. “By providing long-term, steady federal tax and energy policy, this legislation provides the stability that businesses in the solar industry need to grow adding tens of thousands of new, well-paying solar jobs across the country, which today includes more than 174,000 Americans,” said SEIA President and CEO Rhone Resch, in a news release. “We also applaud the inclusion of programs that remove barriers for low-income Americans, making it easier for everyone to access clean, affordable, reliable solar energy.” If approved and signed into law, this comprehensive legislation would temporarily extend the federal solar investment tax credit (ITC), and then ease the transition afterward through the creation of long-term, technologyneutral clean energy tax incentives. According to Senate Finance Committee staff, this legislation would save Americans at least $20 billion over the next 15 years and create/support at least 3.5 million jobs, the release stated. “The United States deserves to be a world leader in cutting-edge technologies, and providing a long-term extension of the ITC will encourage massive investment in the U.S. solar industry. When you provide certainty to solar consumers and businesses with an energy tax code that promotes innovation and encourages the development of new and efficient technologies - America wins according to Resch in a news release. An analysis released earlier this month revealed the U.S. would lose more than 80,000 solar jobs during 2017 alone without an ITC extension. In addition, factoring in jobs losses in related industries, the analysis shows a total loss of more than 100,000 American jobs from failure to extend the ITC. - Associated Press
Terminal could ship natural gas from Colorado to Asia GRAND JUNCTION - A proposed liquefied natural gas terminal in Oregon that would give producers in the Piceance Basin an outlet to reach customers on the Pacific Rim is one step closer to approval. The Veresen Inc. terminal received environmental approval in early October, though the Federal Energy Regulatory Commission will have final say on the project in December, reported the Grand Junction Sentinel. Several western Colorado organizations back the development of the $7 billion Jordan Cove terminal on Coos Bay. “If we have this facility, it cuts nine days off the shipping time to Asian markets,” said Bonnie Petersen, executive director of the Associated Governments of Northwest Colorado. The terminal would export gas collected in northwest Colorado and sent to Oregon through the Ruby Pipeline. Natural gas could be shipped from the terminal as early as 2020. “Continued support from producers and producing states is always appreciated and helpful,” said Veresen spokesman Charles Deister. Last week’s environmental approval included an outline of actions necessary to offset the terminal, according to David Ludlam, executive director of the West Slope Colorado Oil and Gas Association. He said environmental effects would be minimal and that the terminal “would have a multitude of benefits for our area and for our economy.” Conservation groups and private landowners have challenged the pipeline that would carry the natural gas across Oregon to the terminal. Opponents have said they will take legal action to halt the project if necessary. - Staff Reports
44 ENERGY PIPELINE November 2015
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News Briefs
Halliburton to pay millions in back pay to employees Halliburton will have to pay more than $18 million to more than 1,000 employees for unpaid overtime in what the U.S. Department of Labor is calling one of the largest recoveries of overtimes wages in recent years. Of that, 70 Colorado employees will be paid $1.5 million in back pay. The department’s Wage and Hour Division investigated Halliburton as part of an ongoing, multi-year compliance initiative in the oil and gas industry in the southwest and northeast portions of the country, according to a news release from the Department of Labor. Investigators found Halliburton incorrectly categorized employees in 28 job positions as exempt from overtime, according to the release. The company did not pay overtime to these salaried employees - working as field service representatives, pipe recovery specialists, drilling tech advisers, perforating specialists and reliability tech specialists - when they worked more than 40 hours in a work week, in violation of the Fair Labor Standards Act, the release stated. The company also failed to keep accurate records of hours worked by these employees, the release stated. “The Department of Labor takes very seriously its responsibility to ensure workers receive the wages they have earned. This settlement will put millions of dollars where they belong - in the pockets of hardworking people and their families,” said U.S. Secretary of Labor Thomas E. Perez in the release.
46 ENERGY PIPELINE November 2015
Halliburton has a rather large presence in Weld County, with roughly 1,200 workers based out of its Fort Lupton office. If the Colorado employees’ back wages were divided evenly, that would equate to more than a $21,000 apiece. Halliburton spokeswoman Susie McMichael reported in a statement that Halliburton officials discovered the inequities in a cooperative look at its practices with the Department of Labor. “During a self-audit, Halliburton identified a certain number of jobs that were misclassified as exempt. The company re-classified the identified positions, and throughout this process, Halliburton has worked earnestly and cooperatively with the U.S. Department of Labor to equitably resolve this situation,” the release stated. Through the compliance checks and education, Wage and Hour Division officials hope to ensure industry employers comply with labor laws. “Our combined enforcement and education effort protects workers’ wages and helps employers comply with federal law,” said Betty Campbell, the division’s acting southwest regional administrator, in the release. “Ignorance is never an excuse for violating the law. ... We welcome and appreciate the cooperation of employers, like Halliburton, as we continue our investigations and educate employers about how wage violations hurt their industry and our nation’s economy.” Founded in 1919, Halliburton is one of the world’s largest providers of products and services to the energy industry. The company has more than 70,000 employees worldwide. - Sharon Dunn
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News Briefs
Shale oil production in Bakken, Eagle Ford flat in August Oil production from key shale formations in North Dakota and Texas increased marginally in August versus July, according to a news release from Bentek Energy, an analytics and forecasting unit of Platts, a leading global provider of energy, petrochemicals, metals and agriculture information. Oil production from the Eagle Ford shale basin in Texas remained relatively steady in August, jumping 23,000 barrels per day, or less than 1 percent, from July, the latest analysis showed. Oil production in the Eagle Ford basin has been growing between 1 percent to 3 percent each month since January, when production showed the first (and so far only) sign of decline when it decreased 16,000 b/d month over month, the release stated. Meanwhile, crude oil production in the North Dakota section of the Bakken shale formation of the Williston Basin remained little changed, decreasing 6,000 b/d, or less than 1 percent in August from July, the release stated. The average oil production from the South Texas, Eagle Ford basin in August was 1.7 million barrels per day. That’s up 17 percent from August 2014, or a little less than 240,000 incremental barrels per day, according to Sami Yahya, Bentek energy analyst. The average crude oil production from the North Dakota section of the Bakken in August was 1.2 million b/d, or about 66,000 b/d from last year. “While the discussion of the positive impact of efficiency gains on production levels is important, it is worth highlighting the completion deferment,” said Yahya in the release. “While the U.S. is able to drill more wells now with fewer rigs, some producers are opting to defer completing their wells until better
48 ENERGY PIPELINE November 2015
economic conditions are present. In other words, production could begin to decline even if rig activity and number of drilled wells remain steady. This is a crucial risk to current production numbers.” While in the short term completion deferment can hurt production levels, it can be viewed as an increasingly utilized cost-saving method in the present environment, Yahya said in the release. “In the past, producers tended to drill and complete wells one at a time, whereas now, more producers are drilling wells in large clusters and only after all wells are drilled do they complete them at a batch,” said Yahya, in the release. “By not having to bring completion rigs back and forth one at a time, they save money.” Bentek estimates approximately 60 percent of the drilling and completion cost lies with the completion process, which alone is a significant capital investment. Delaying completion can help producers hone their budgets until higher rates of return come about. Bentek analysis shows that from August 2014 to August 2015, total U.S. crude oil production increased by about 300,000 barrels per day. The extra production is reflected in lower prices, noted Luciano Battistini, Platts managing editor of Americas crude. “August was a month of bearish market sentiment,” said Battistini. “The outright market values of the two shale crudes hit their lowest points of the year. However, now that U.S. crude production has slowed, market sentiment has improved slightly, with expectations of some price recovery.” - Staff Reports
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MAKING HOLE A look back at the origins of oil and gas BY BRUCE WELLS • AMERICAN OIL & GAS HISTORICAL SOCIETY
Science reveals the mid-continent field oil boom in Kansas the science of geology played a vital role in the
1915 discovery of a Mid-Continent oilfield. Drilled by Wichita Natural Gas, a subsidiary of Cities Service Company, the Oct. 5 discovery well revealed the 34-square-mile El Dorado oilfield in central Kansas. The Stapleton No. 1 well produced 95 barrels a day from 600 feet before being deepened to 2,500 feet to produced 110 barrels of oil a day from the Wilcox sands. Other wells soon followed east of Wichita. Discoveries a year earlier in nearby Augusta had prompted El Dorado city fathers to seek a geological study of the area, according to Larry Skelton of the Kansas Geological Survey. By 1914, interest was growing in Butler County and southcentral Kansas. “A few positive finds had been made, but nothing exciting,” Skelton notes in “Striking It Big in Kansas” for the American Association of Petroleum Geologists. “Henry Doherty, founder of Cities Service in 1910, was seeking new gas reserves and opted for scientific exploration in lieu of wildcatting,” Skelton writes in the November 2002 AAPL Explorer article. Doherty hired geologists Charles Gould and Everett Carpenter in Oklahoma, sending them to Augusta, in Butler County. Gould had organized the Oklahoma Geological Survey in 1908 and served as its first director until 1911. According to Skelton, the geologists mapped prominent anticlinal structures in Permian Age limestone. By late 1914, several Augusta exploratory wells found commercial volumes of natural gas.
Several wells also found oil. These developments “chafed El Dorado city fathers.” About 15 miles southwest of August, El Dorado had unsuccessfully searched for hydrocarbons since the 1890s,” Skelton explains. The city now hired its own geologist, Erasmus Haworth, the state geologist and chairman of the University of Kansas geology department. “He mapped a large anticline on the same formations used by Gould and Carpenter at Augusta and selected a site that proved to be a dry hole,” Skelton reports. Undeterred, Cities Service subsidiary Wichita Natural Gas bought the town’s 790 leased acres for $800, verified Haworth’s work and began drilling in late September 1915. The Stapleton No. 1 well found oil within a week. “Using scientific geological survey methodology for the first time, Cities Service had identified a promising anticline,” Skelton notes. “His field work outlined the El Dorado Anticline.”
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 marker at the Stapleton No. 1 well commemorates the October 1915 discovery of the El Dorado, Kansas, oilfield, at the time one of the largest in the world. November 2015 ENERGY PIPELINE 51
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A large collection of drilling rigs - and a recreated boom town - are featured at the Butler County Historical Center and Kansas Oil Museum.
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Butler County’s geologic revelations encouraged Gulf Oil, Standard Oil, and other companies to secure leases around August and El Dorado. In addition to Henry Doherty, industry leaders like Archibald Derby, John Vickers and William Skelly established successful El Dorado oil-producing and refining companies. “So the idea from that point forward, no oil company in the world would go and drill a well without seeking the advice of a geologist first,” proclaims Warren Martin, executive director of the Kansas Oil Museum. “Before 1915, geologists were seen in the same vein as witching and doodlebugs. They were just charlatans,” he adds in a 2015 Butler County Times-Gazette article on the centennial of Stapleton No. 1. “It fundamentally transformed it from that point going forward. Geology was established as one of the great science industries.” With the influx of thousands of workers, even Wichita accommodations were overwhelmed. Butler County’s population, about was 23,000 in 1910, nearly doubled in 1920. To house its workers, Empire Gas &amp; Fuel Company (formerly Wichita Natural Gas) built a 64-acre town northwest of El Dorado. Although Oil Hill and its more than 8,000 residents, swimming pool, tennis courts and small golf course would disappear by the late 1950s, at the time it was called the largest “company town” in the world. When the United States entered World War I, development of Mid-Continent production escalated. In 1918, the El Dorado field produced almost 29 million barrels of oil, almost 9 percent of the nation’s oil. The Stapleton No. 1 well, which produced oil until 1967, today is visited by tourists - as is the Kansas Oil Museum, which includes 20 acres of rig displays, equipment exhibits and models of the region’s refinery history. In September, the museum added a 1970s Otek pump jack donated by Hawkins Oil Company. The unit, now the largest one on the grounds, will further educate visitors about the industry’s evolving production technologies. Visitors also can stroll Main Street and explore buildings depicting a Kansas boom town like Oil Hill. “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..........................................................................................1,393 (61.4%) Garfield......................................................................455 (20%)
State Oct. 2 Sept. Avg. Aug. Avg. July Avg. Colorado 30 ........33 ......... 37................... 38 Louisiana 66 ........72 ......... 77................... 74 Oklahoma 97 ........106 ....... 105 ..............106 North Dakota 65 ........69 ......... 71................... 71 Texas 357 ......367 ....... 385 ..............369 Kansas 10 ........10 ......... 12................... 10 California 13 ........14 ......... 13................... 11 Utah 5 ..........5 ........... 4....................... 7 Alaska 11 ........13 ......... 12................... 10 Ohio 20 ........18 ......... 19................... 19 Pennsylvania 30 .......34 ......... 37................... 44 Source: Baker Hughes Rig Count.
2015 GAS PRODUCTION
COUNTY *YTD PRODUCTION (% OF STATE) Weld........................................282,679,876 (33.2%) Garfield...................................254,437,047 (29.9%) La Plata ..................................185,650,720 (21.8%) Las Animas ................................ 39,531,095 (4.6%) Rio Blanco .................................. 26,278,351 (3.1%) Mesa .............................................. 17,027,936 (2%) State......................................................850,464,485
Rio Blanco..........................................100 (4.4%) La Plata..................................77 (3.4%) Mesa........................63 (2.7%) Larimer................28
2015 OIL
Adams.............45
PRODUCTION
Gunnison.......24
COUNTY *YTD
State....................................................2,268 Source: Colorado Oil and Gas Conservation Commission as of Oct. 1.
US RIG COUNT
The U.S. rig count peaked at 4,530 in 1981 and bottomed at 488 in 1999. Area Oct. 2 Sept. Avg. Aug. Avg. July Avg. U.S. 809 848 894 866 Canada 179 183 206 183 Source: Baker Hughes Rig Count, Oct. 2.
PRODUCTION (% OF STATE)
Weld 57,591,812 (88.17%) Rio Blanco 2,182,052 (3.3%) Arapahoe 1,081,991 (1.6%) Lincoln 797,010 (1.2%) Garfield 853,692 (1.3%) Cheyenne 730,172 (1.1%) Adams 334,256 (0.5%) Moffat 252,969 (0.38%) State 65,315,257
Source: Colorado Oil and Gas Conservation Commission as of Oct. 8.
Source: Colorado Oil and Gas Conservation Commission as of Oct. 8.
COLORADO ACTIVE WELL COUNT 54 ENERGY PIPELINE November 2015
Weld ..........................................................................22,695 Garfield .....................................................................11,012 Yuma ...........................................................................3,881 LaPlata........................................................................3,331
Las Animas .................................................................2,975 Rio Blanco ...................................................................2,908 36 others .....................................................................6,974 State .........................................................................53,776
Source: Colorado Oil and Gas Conservation Commission as of Oct. 1.
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