PO BOX 1001 YOUNGWOOD, PA 15697
VOLUME 8 ISSUE 8
PRSRT STD U.S. POSTAGE PAID BECKLEY, WV 25801 PERMIT NO.19
SteelNation Relocates to Southpointe PG. 3
Mike DeWine Along with Most Republicans Win in Ohio PG. 6
What Can Public Data Tell Us? NEW TECHNOLOGY PG. 12
PG. 14-15
®
We’ve moved to serve you better! Positioned just off the Southpointe exit in Washington County, Steel Nation’s new larger headquarters will house our growing team. Our construction, engineering and facility services will be all under one roof, helping to serve our customers better! STEEL BUILDINGS
ENGINEERING
ENVIRONMENTAL
FACILITY SERVICES
100 Southpointe Square Lane, Canonsburg, PA 15317 724.225.2202 www.steelnation.com
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Each weekday Marcellus Drilling News (MDN) locates and shares news, along with a healthy sprinkling of commentary, covering the Marcellus and Utica Shale region. Over 50,000 people read MDN each month, making it an excellent barometer to inform ONG Marketplace readers which topics generated the most interest for those who work in the oil, natural gas and associated industries. Below is a summary of the top 5 stories that were most-read over recently on MDN. #1 Most Read: Mystery Seller of Ohio Utica Acreage to Ascent Finally Identified (Sep 27) At the end of June, Ascent Resources, a company founded by Aubrey McClendon after he left Chesapeake Energy, announced it is buying 113,400 Utica Shale acres along with 93 operating wells located in eastern Ohio for $1.5 billion. The new acreage tips Ascent over the 300,000 Utica acre line and catapults the company into one of the largest privately owned E&Ps in the U.S. The companies selling their Utica assets are CNX Resources and Hess (selling a joint venture they co-owned, each selling their share for $400 million each, for a total of $800 million), Utica Minerals Development (a subsidiary of First Reserve, a private equity firm headquartered in Greenwich, CT, and EMG), and a fourth, unnamed mystery seller. Now that all of the deals have closed, the mystery seller has been revealed. The fourth seller was Salt Fork Resources, a young company formed in March 2017 with backing by investment firm Riverstone Holdings. Salt Fork is headquartered in Canonsburg, PA, and each of Salt Fork’s management team members has called Ohio or western Pennsylvania home. The company website says they are committed to the region, and committed to developing oil and gas “environmentally.” To read more: https://goo.gl/6vrfrD. #2 Most Read: EQT Loses Post-Production Deduction Lawsuit to WV Couple (Oct 2) It’s this kind of story that makes our blood boil–we won’t lie. EQT tried to shaft an elderly couple in Ritchie County, West Virginia out of royalty money by slipping in not only post-production deductions never agreed to in the contract, but also by slipping in a deduction for WV severance taxes owed by EQT itself. Maddening! Arnold and Mary Richards, both now 85 years old, signed a contract with EQT in 2014 to allow the company to drill Marcellus wells on or under their property, which EQT did. In January 2017 when the Richards got their first royalty check, the red flags appeared. EQT was deducting what they should not deduct. The Richards asked EQT to refund the money and were refused. So they filed a lawsuit in Ritchie County court in February 2017. The case was eventually transferred to U.S. District Court. The Richards tried to settle with EQT out of court, but again, EQT refused– no doubt believing the company would win. In the end, the Richards got a jury trial and the jury ruled in their favor, granting the Richards $234,540 in back royalty payments. The lesson here is that other landowners need to stand up for their contractual rights–and sue. Landowners can go up against the biggest natural gas producer in the U.S. and win. This 85-year-old couple proves it. To find out more about this case: https://goo.gl/3yXdgV #3 Most Read: Dominion Sells 2 Gas-Fired Plants; Blue Racer Midstream For Sale (Sep 25) Dominion Energy has found a buyer for two of its natural gas-fired electric generating plants, one located in Pennsylvania, the other in Rhode Island. In July MDN told you that Dominion was shopping the two plants, hoping to raise $1+ billion. One plant, the Fairless Power Station, is located in Bucks County, PA near Philadelphia. The other, Manchester Street Power Station, is located in the People’s Republic of Rhode Island. So why would Dominion, a company that really digs natgas, want to dump two of its natgas power generating plants situated in large, urban areas? In a word, regulation, or
Northeast ONG rather lack of it. Both of the plants Dominion wants to dump are “merchant plants”–meaning they sell electricity on the open market, at market rates. Regulated plants, on the other hand, have their prices determined by quasigovernmental agencies. Selling electric that’s regulated means the potential upside is limited, but it also means you are guaranteed a certain price and can count on receiving that price year in and year out. In the lingo of high finance, being regulated “derisks” a company–makes revenue streams predictable, which investors like. So Dominion is on a mission to (a) pay down debt by selling assets like these two merchant power plants, and (b) provide more revenue certainty for investors. And it looks like they achieved their goal, selling the two plants for $1.23 billion to Starwood Energy. In the same Dominion announcement about the Starwood sale, the company said they will continue to shop their 50% ownership stake in Blue Racer Midstream, which is the first we’ve heard that Dominion is looking to unload their share in Blue Racer. Dominion says there is “strong interest” in buying it. To read more about Dominion's sale of these two plants, go to: https://goo.gl/op7xrM. #4 Most Read: Shell PA Cracker Already Attracting New Factories...to Ohio (Sep 28) The Stark County (OH) Economic Development Board has landed what is hopefully the first (of many) tenants from the plastics manufacturing industry. IML Containers was looking for a spot to locate a new plant near one of their big customers, Land O’Lakes (which has a facility in Cleveland). Stark County offered a small tax break, and the big advantage of being close to the under-construction Shell ethane cracker in Beaver County, PA. It’s also close to a likely second cracker plant in Belmont County, OH. IML makes plastic shipping containers for Land O’Lakes, and plans to set up “research and development, die cutting, molding, production and warehousing for packaging use with a variety of food products” at their Stark facility. IML is beginning now, at a temporary location (70 new jobs!) and will build a new plant in the next two years. In addition to a cheap source of plastics from the crackers, another advantage is being located within a six-hour drive of most of IML’s North American customers. It's nice to see the PA cracker bringing jobs to neighboring OH. To learn more: https://goo.gl/LTHWDw. #5 Most Read: How Much Does it Cost to Build a Pipeline in the Northeast? (Sep 25) The short answer to the question posed in our headline is, “Too much.” The reason it’s costing too much is because of a blizzard of frivolous lawsuits launched by anti-fossil fuel groups, funded with money from big foundations, and because of the heavy hand of government regulation. Those two things together–lawsuits and punitive regulations–drive the cost of pipeline construction in the Marcellus/Utica region to heights where it may not make sense, economically, to build new projects. How much per mile does it cost to build a major pipeline that flows 1 billion cubic feet per day (Bcf/d) or more of low-carbon, clean-burning Marcellus/Utica shale gas? These days, it costs anywhere between $2.9 million to a whopping $13 million *per mile* to build a new pipeline in the northeast. Yeah, way too much. How much did Atlantic Sunrise cost Williams to build per mile? And how much is Atlantic Coast Pipeline costing Dominion Energy to build? We’ve got the numbers in this post, which you can read here: https://goo.gl/ fP5rqf. Sign up to receive MDN's daily headlines email here: MarcellusDrilling. com/email-alert
Volume 8 Issue 8
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ONG SPOTLIGHT STEEL NATION RELOCATES TO SOUTHPOINTE, PA Since 2008, when President, Mark Caskey founded Steel Nation, he’s developed the construction business into a full turnkey operation. Steel Nation began as a company that designed and constructed preengineered metal buildings (PEMBs) for the coal industry. The organization, originally located on Route 19 in South Strabane, Pennsylvania, has grown rapidly and diversified, not only specializing in the cleanest, coolest, quietest, and safest PEMB’s for the Oil & Gas industry, but expanding its Professional Engineering, Environmental, and Facility Services for the water and wastewater, healthcare, and commercial construction markets. Caskey said, “We recognized a couple of years ago that due to the tremendous rate that Steel Nation was growing, we needed a larger, more efficient facility. The new Steel Nation headquarters needed to satisfy two requirements: more space and a more convenient location for our current clients and prospective customers.” Caskey and his partners, Mark Dooley and Alan Reid, made the decision to relocate to a renovated 10,000 square foot facility at Southpointe, a suburban business park located in Washington County, Cecil Township, near Canonsburg, Pennsylvania, 17 miles south of Pittsburgh. More than 300 businesses and many corporations are located in Southpointe. According to the Southpointe Chamber of Commerce, “Since the development of the Marcellus Shale energy program in the Appalachian region, Southpointe has become home for many of the largest natural gas producers, including Mark West, DTE, EQT, Range Resources, Eureka Energy, Chesapeake Energy, and Columbia Gas.” All of these companies are Steel Nation clients. “Steel Nation was working out of two locations: our original office in South Strabane Township, and our engineering facility in Wexford,” said Caskey. “With 36 employees and growing, we’ll now be better situated to serve our business partners and still have room to expand.” Mark Dooley, EVP/ CFO said, “Now we’ll have our Construction, Engineering, and Facility Services all under one roof. As a result, we expect to see process flow improvements as well as more efficient communications between customers and Steel Nation departments.” “We recently celebrated our 10-year anniversary,” said Alan Reid, EVP. “Steel Nation has come a long way since 2008 and every indicator points to the company’s continued growth and success.”
Steel Nation is comprised of four divisions: • Steel Nation Buildings specializes in steel buildings for natural gas compression, transmission, processing and storage facilities for leading mid-stream and transmission operations for Oil & Gas companies. Steel Nation offers specialized steel buildings that house an unlimited number of compressors, and every imaginable type of power plant in operation today. Whether electric, CAT, Waukesha, or solar turbine, Steel Nation Buildings has extensive experience with them all. • Steel Nation Engineering provides professional Civil & Structural, Mechanical, Electrical Engineering and permitting services. Steel Nation does complete structural designs and calculations for buildings, foundations, and other ancillary structures. Mechanical Engineering services include HVAC, plumbing, cranes, sound attenuation, and office build-out designs. Steel Nation’s Electrical Engineering department designs power distribution, lighting, instrumentation, SCADA, and custom control systems. Steel Nation’s Engineering staff is well-versed in the multiple codes, regulations, and ordinances affecting design and construction of buildings and systems. • Steel Nation Environmental offers land clearing services, erosion and sediment control, fencing, retaining walls and pavers, and a wide assortment of landscaping supplies. Steel Nation Environmental is located on Route 519, North Strabane Pennsylvania. Steel Nation Environmental is an authorized dealer for Allen Block, EP Henry and Lampus, offering the area’s widest variety of hardscape products. • Steel Nation Facility Services specializes in Preventive/Predictive Maintenance, Retrofit, and Repair services for steel buildings, doors, cranes, and HVAC and electrical systems. Facility-based training is available for safety, crane, rigging, manlift, and forklift operations. Steel Nation Facility Services offers installation of Lifeline protective fall systems. The new Steel Nation address is 100 Southpointe Square Lane, just off the Route 79 Southpointe exit in Washington County. Steel Nation’s new headquarters will offer easy access to Oil & Gas industry customers throughout the Marcellus and Utica Shales in Pennsylvania, Ohio, West Virginia, and beyond.
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Northeast ONG
ASSOCIATION MEETINGS IOGAWV Winter Meeting | January 22-23, 2019 Charleston, WV - www.iogawv.com
OOGA Annual Meeting | March 6-8, 2019 Columbus, OH - www.ooga.org
ADDC Northeast Region Meeting | April 25-27, 2019 Canton, OH - www.addc.org
COMING IN JANUARY, ONG EVENTS! Our event calendar emailed directly to you. If you've not been receiving our emails, let us know at info@ongmarketplace.com
TOGA Annual Convention | May 13-14, 2019 Gatlinburg, TN - www.tennoil.com
KOGA Annual Conference | June 11-13, 2019 Lexington, KY - www.kyoilgas.org
ARTICLES
ADVERTISER INDEX
INDUSTRY INSIGHT: Mike DeWine Along with Most Republicans Win in Ohio................................. 6
ALBERTA RIG MATS.............................................. 5 ALLEGHENY WOOD PRODUCTS........................ 11 ALPINE ELECTRIC................................................. 9 BEG...................................................................... 16 CORNERSTONE ENERGY SERVICES.................... 9 CST INDUSTRIES.................................................. 5 ERNST SEED........................................................ 16 HYDROSPRAY....................................................... 9 LEE REGER BUILDS.............................................. 9 LEE SUPPLY......................................................... 13 MID-ATLANTIC STORAGE.................................... 9 O'DONNELL CONSULTING.................................... 7 STEELNATION....................................................... 1 TOTAL SAFETY...................................................... 5 TD CONNECTIONS................................................ 7
NEW TECHNOLOGY: The Explosion of Edge Computing in Oil & Gas........................................... 8 INDUSTRY INSIGHT: Petroleum Engineering at Slippery Rock University ....................................... 11 NEW TECHNOLOGY: 5 Reasons Why Organizations Are Outsourcing Pipeline Control Room Services................................................. 12-13 INDUSTRY INSIGHT: What Can Public Data Tell Us?................................................................... 14-15
CALENDARS ASSOCIATION MEETINGS.................................... 4 NETWORKING EVENTS........................................ 9 UPCOMING EVENTS........................................... 10
CONTACT US FOR ADVERTISING, INFORMATION OR MAILING LIST CHANGES:
The Northeast ONG Marketplace PO Box 1001 • Youngwood, PA 15697 724-787-4451 E-mail: info@ongmarketplace.com
The opinions expressed in the Northeast ONG Marketplace are those of the authors and not necessarily those of the Northeast ONG Marketplace or its advertisers. Any warranties or representations made in the advertisements or articles are the responsibility of the specific contributor and not The Northeast ONG Marketplace. The Northeast ONG Marketplace will not be liable for any misprint in advertising copy which is not the fault of The Northeast ONG Marketplace. If a misprint should occur, the limits of our liability will be the amount charged for the advertisement.
Volume 8 Issue 8
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Northeast ONG
INDUSTRY INSIGHT
MIKE DEWINE ALONG WITH MOST REPUBLICANS WIN IN OHIO By: Ken Collins, Orion Strategies Republican Mike DeWine defeated Democrat Richard Cordray to become Ohio’s next Governor. Political pundits labeled the race a “toss-up” and pollsters had the race as a tie, within the margin of error leading up to Election Day. However, Governor-elect DeWine pulled away with a win of over 4 percentage points, 50.7% to Mr. Cordray’s 46.4%. With 52% of registered Ohioans voting, DeWine garnered the third highest vote count with over 2.1 million in the state’s history. Even in defeat, Mr. Cordray received the fifth highest vote count in Ohio’s history at over 2 million. Governor-elect Mike DeWine and his running mate, current Secretary of State Jon Husted will be sworn into their new positions leading Ohio on Monday, January 19th, 2019. Leading to the victory was DeWine’s overwhelming support in Ohio’s rural communities. DeWine won 79 out of Ohio’s 88 counties, with over two-thirds the vote in 35 counties. Cordray won nine of Ohio’s more populated counties including those that contain Cleveland, Cincinnati, Columbus, Toledo and Youngstown. Following the Election, political leaders from both parties rationalized DeWine’s victory to President Trump. Exit polls from Election Day showed 52% of Ohioans approve of the job President Trump is doing compared to 45% nationally. Overall Republicans did well in Ohio, with the “blue wave” skipping over much of the state. Republicans swept the non-judicial statewide offices, maintained their majorities in the Ohio General Assembly and held onto their incumbents in Congress. Current State Auditor Dave Yost defeated former U.S. Attorney General, 53% to 47%, to become Ohio’s next Attorney General. State Senator Frank LaRose will serve as Ohio’s next Secretary of State with a 51% to 46% victory over State Representative Kathleen Clyde. Former Ohio Senate President and current State Representative Keith Faber won race for Auditor over former Congressman Zack Space by a 50% to 46% margin. State Representative Robert Sprague defeated Cincinnati attorney Rob Richardson 54% to 46% and will serve as Treasurer of State. Democrats did receive victories in the two open seats on the Ohio Supreme Court. Eighth District Court of Appeals Judge Melody Stewart, by a 52% to 48% margin, defeated Justice Mary DeGenaro. Cuyahoga County Common Pleas Court Judge Michael Donnelly secured a victory over Fifth Court of Appeals Judge Craig Baldwin with a 61% to 39% win. In Ohio, judicial races do not include party affiliation on the ballot. However, in the next year, Republicans will hold a majority on court with a five to two seat majority. The makeup of the 133rd General Assembly will include 24 Senate Republicans, nine Senate Democrats in the upper chamber and 61 House Republicans and 38 House Democrats in the lower one. Democrats gained four seats in the Ohio House, with three from the suburbs of Columbus in Franklin County. Two seats in the Ohio Senate flipped. Republican Michael Rulli defeated current State Representative John Boccieri in the 33rdSenate District race. In the most surprising Election result in Ohio, Democrat Tina Maharath narrowly defeated current State Representative Anne Gonzales for the 3rd Senate District seat. Maharath’s victory was a surprise to political observers, as she was not endorsed by with the state or county Democratic parties.
With the Election concluded, the popularity contest to become the next Ohio House Speaker has begun. The current Speaker is Ryan Smith, who was selected last spring after Speaker Cliff Rosenberger resigned from the Ohio House under an FBI investigation. State Representative Larry Householder, who served as Ohio House Speaker years ago, has made it no secret he intends to challenge Speaker Ryan to control the caucus. It is unlikely the issue will be resolved before the next General Assembly commences in January. From a federal perspective, Senator Sherrod Brown easily defeated Congressman Jim Renacci. State Treasurer Josh Mandel was running against Senator Brown, but dropped out. All of Ohio’s Congressional incumbents were victorious including Congressman Troy Balderson, who was first elected during an August 2018 special election. Former Ohio State University and NFL football player Anthony Gonzalez won the seat being vacated by Congressman Jim Renacci, Ohio’s 16th Congressional District. Youngstown voters defeated an anti-industry charter amendment for the eighth time. From an oil and natural gas industry perspective, the new Administration offers a fresh opportunity to build a stronger relationship with Ohio’s leadership. Ohio’s rigorous but fair regulations should remain intact. Governor-elect DeWine has stated publicly that he does not want to increase the state’s severance tax. DeWine has also stated publicly that he does not support drilling on state lands. In September 2018, the Ohio Supreme Court upheld a lower court’s ruling in Dundics v. Eric Petroleum Corporation that oil and natural gas land agents are not exempt from needing an Ohio Real Estate Broker License. And in the opinion of the Court, it stated only a legislative policy fix could allow the exemption. Injection wells have been getting lots of attention in Ohio’s local communities, in the media and at the Statehouse. Two pending bills in the Ohio House would establish new setback requirements and limit the number of injection well permits that could be issued in a county. With all of this, 2019 looks to be a very interesting year to come.
Volume 8 Issue 8
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Northeast ONG
NEW TECHNOLOGY
THE EXPLOSION OF EDGE COMPUTING IN OIL & GAS By: Ian Eyberg, CEO, NanoVMS If there is one industry that has quickly adopted and embraced edge computing, it’s the oil and gas industry. In fact, oil and gas are quickly becoming leaders of edge computing. There are even conferences springing up on this very topic like the upcoming “Emerging Computing Technologies in Oil & Gas” in Houston in late January and there was a prior one in October of 2018. Why? There are quite a few interesting applications. Newer maintenance technologies are being used to predict work overs, rod changes and cleanings. When you have things like parted rods or leaky tubing those can leave pumps not pumping for days or even up to weeks. This type of software can drastically reduce downtime and prevent major repair costs, so it is obviously highly desirable. However, it doesn’t stop there - seismic interpretation is being enhanced with newer machine learning algorithms that can calculate salt classifications and lead identification on seismic volumes. What used to cost millions and was done by humans, software can now plow through. While there has always been a plethora of sensors on everything from catheads to mud buckets most of the sensors were relatively ‘dumb’ in the sense that they did simple things like threshold alerting. Then some companies started trying to feed some of this data back to their datacenters. While analysis done at this level can tell you a lot about what might have caused things like downtime this newer breed of software can actually predict equipment malfunction before it happens. How? By running the computational workloads next to where the data is produced. Why not just feed it back to the cloud though? Well it’s no secret that oil rigs don’t have great connectivity - sometimes they are using 3g, 4g or vsat communications. However, there are around 1.7M active wells in the US alone that can also be in remote places. Moving all that data around doesn’t really work. Even when there is a digital pipe leading back to your datacenter sometimes it is on and sometimes it is not. When you have equipment that is generating terabytes daily, and that number is growing quickly, it becomes cost prohibitive to send it out to some Amazon datacenter in Virginia if that’s where it’s going. But let’s revisit this notion of dumb sensors. Some of you might be wondering what’s the difference between IoT type of sensors that you might get from Honeywell and the edge? For example, say you have a blowout preventer that measures the pressure behind a piston. A lot of these older sensors might be analog sensors that perform one function. The newer breed is digital, and the difference is the edge style stuff actually has apps running there. It’s kind of like the software in your phone. It ties in all these data feeds and makes them interesting and powerful. Data by itself is uninteresting - it’s only when you apply logic to it that you can do something with it. When the water tank can ‘talk’ to the mud shaker through this software the business starts saving a lot of money and starts reducing a lot of downtime. Humans can be great operators with the data that they have available and there’s a lot of good intuition that experience brings but we’re now at the point where software can continuously make decisions with vast more amounts of data than a human could process by themselves and this software works 24/7/365 - no downtime. There are a few challenges in adopting this newer edge based software however. Challenges with security and manageability come to mind. The software has to live somewhere. Something we’re seeing go hand in hand with edge deployments is the practice of utilizing newer unikernel based infrastructure. Unikernels have many advantages over Linux as their isolation primitives thwart hackers’ attempts
to break into systems and come with a four point security model: 1) They don’t have shells. 2) They don’t have users with usernames and passwords. 3) They are single process systems. 4) They have a dramatically reduced attack surface. Essentially, they are stripped down systems with only the functionality necessary to make a given application work and nothing else. Security implications aside they simply run faster too. Many applications can run 20% faster since each application is isolated to a single virtual machine. There are other options as well like Clear Containers from Intel but since that still uses Linux as a base system it still has many of the same security and performance problems as the underlying Linux kernel does - not to mention that Linux is now north of 27 years old and predates both commercialized virtualization like VMWare and the ‘cloud’. There have been other attempts to deal with the wide adoption of container technology that some developers like to use but concerns about the incredible insecurity that containers like Docker and orchestrators like Kubernetes have, have led CISOs in general to be very wary of adopting container technology. So, if you are looking at leveraging some of the newer edge deployments and you want fast and secure systems ask your vendors if they are provisioning on Linux or unikernels. Edge computing is all over the oil & gas industry and it’s going to continue to spread simply because it massively reduces cost and increases value. The data that flows in this ecosystem is becoming as valuable as the oil flows throughout it. Companies that are not shy and fully embrace edge are going to outcompete those that don’t. For more information, visit www.nanovms.com. Written by: Ian Eyberg, CEO, NAVOVMS
Volume 8 Issue 8
Page 9
NETWORKING EVENTS December 18 APA Luncheon Canonsburg, PA | www.appalachianpipeliners.org December 18 PIOGA Mix, Mingle, and Jingle Holiday Party Wexford, PA | www.pioga.org January 9 YPE Pittsburgh Crew Change TBD | ypepittsburgh.org January 15 APA Luncheon Canonsburg, PA | www.appalachianpipeliners.org February 8 YPE Pittsburgh Casino Night TBD | ypepittsburgh.org February 19 APA Luncheon Canonsburg, PA | www.appalachianpipeliners.org March 6 YPE Pittsburgh Crew Change TBD | ypepittsburgh.org COMING IN JANUARY, ONG EVENTS! Our event calendar emailed directly to you. If you've not been receiving our emails, let us know at info@ongmarketplace.com
March 19 APA Luncheon Canonsburg, PA | www.appalachianpipeliners.org April 3 YPE Pittsburgh Crew Change TBD | ypepittsburgh.org
FOR MORE EVENTS VISIT WWW.ONGMARKETPLACE.COM/EVENTS
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Northeast ONG
UPCOMING EVENTS COMING IN JANUARY, ONG EVENTS! Our event calendar emailed directly to you. If you've not been receiving our emails, let us know at info@ongmarketplace.com
JANUARY
MARCH
10
21
WV Energy Infrastructure Summit
Utica Midstream
Charleston, WV | energyspeakswv.com
North Canton, OH | www.shaledirectories.com
26-27
FEBRUARY 3-5 SPE North American Student Symposium
SPE/ICoTA Well Intervention Conference The Woodlands, TX | www.shaledirectories.com
27-29 WEN National Conference Denver, CO | www.womensenergynetwork.org
Houston, TX | www.spe.org
5-7 SPE Hydraulic Fracturing Technology Conference The Woodlands, TX | www.spe.org
11-13 NAPE Summit Houston, TX | www.napeexpo.com
13-15 AESC Annual Winter Meeting New Orleans, LA | www.aesc.net
APRIL 3 Coatings and Corrosion Conference Clarksburg, WV | 304-400-9645
8-9 Marcellus to Manufacturing Morgantown, WV | www.iogawv.com
8-9 OGIS New York New York, NY | www.ipaa.org
9-10 AADE National Technical Conference Denver, CO | www.aade.org
Denotes National Event
Visit our website for links to these events
WWW.ONGMARKETPLACE.COM/EVENTS
Volume 8 Issue 8
Page 11
INDUSTRY INSIGHT
PETROLEUM ENGINEERING AT SLIPPERY ROCK UNIVERSITY By: Slippery Rock University Founded in 1889, Slippery Rock University has gained a trusted reputation for producing some of the best and brightest minds that strive to make a difference in the world. The Petroleum and Natural Gas Engineering program was established
qualified faculty also bring their professional, research and/or industry experience to the classrooms to enhance students’ learning experience. Program Highlights • A 128 credit program that can be completed in 4 years • Hands-on engineering design experience. • Several laboratories based courses including two advanced labs; Core Laboratory and Drilling Fluids Laboratory. • Internship opportunities • Face-time with dedicated teaching faculty. • Designed to meet ABET accreditation criteria. • Affordable: $33,500 to $86,700, less than other PNGE programs in the region.
Land for Sale/Lease in 2016 and is designed to produce highly skilled graduates equipped with solid scientific knowledge and professional skills to achieve a rewarding career in an industry of high demand. This is due to the fact that Slippery Rock University is dedicated to teaching excellence. And, of course, the best place to house such an institution is in beautiful Slippery Rock. The 660-acre campus is less than an hour north of Pittsburgh Aside from the main buildings, the campus also has libraries, athletic facilities, and housing. Petroleum and Natural Gas Engineering curriculum is designed to prepare students with solid scientific knowledge and hands-on exposure to state-of-art industry practices. Courses are designed to cover all areas in petroleum engineering including drilling, production, and reservoir engineering. Furthermore, courses related to production from unconventional reservoir engineering and hydraulic fracturing are included to train students on up-to-date petroleum engineering practices to further prepare them to succeed in the workforce. The petroleum engineering program includes several laboratories based courses including two advanced labs; Core Laboratory and Drilling Fluids Laboratory. All labs are equipped with stateof-art devices, several of which are used by leading energy companies. Our petroleum engineering program is designed to meet or exceed the requirements of Accreditation Board for Engineering and Technology (ABET) to ensure our program meets the quality standards that produce graduates ready to enter the workforce. Although internship is not required, students are encouraged to take summer internships during their four years. Petroleum engineering faculties actively seek internship opportunities from engineering companies, design firms, and governmental agencies for students. All courses are be taught by dedicated teaching faculty and in some instances by professional engineers. Our faculty is dedicated to teaching excellence they care about students’ success. The highly
Newport Ohio, Washington County 67 acres +/3/10 mile off the Ohio river Several warehouses/ MFG Facility Nice office on premises
For Sale by Owner 304-582-1378
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Northeast ONG
NEW TECHNOLOGY
5 REASONS WHY ORGANIZATIONS ARE OUTSOURCING PIPELINE CONTROL ROOM SERVICES By: Louis Krannich, CEO, Remote Operations Center A pipeline control room is the central nervous system of oil and gas operations continuously receiving and processing tremendous amounts of sensory data, quickly highlighting important information requiring action and using that information to coordinate and control operations to mitigate risks and optimize performance. With heightened public attention on pipeline assets, growing regulatory oversight over operations, increased market competition amongst operators, and an ever-aging asset base, the ability to effectively and efficiently manage all aspects of pipeline operation has become increasingly difficult. More than ever there is a pressing need to ensure each pipeline is operated safely, reliably and compliant with the latest regulations. Historically, oil and gas operators have managed pipeline control room operations internally. Yet, recent reports show an increase in outsourcing among organizations with cost as a major driver, but not the only factor. Many companies choose to outsource to augment in-house expertise, access specialty tools and processes, meet performance objectives, maintain compliance standards, manage volatile business cycles and expedite growth. There are value propositions and business cases for each of them. Houston-based Remote Operations Center (ROC), a leader in oil & gas control room operations, provides outsourced control room services to over 6,000 miles of pipelines, spanning crude, natural gas, saltwater disposal, and refined products. With top talent, rigorous process safety, and robust infrastructure, ROC delivers safe operations, compliance with the latest control room regulations and operational cost savings. There are five solid reasons why companies are outsourcing control room services for immediate and long-term benefits: 1. Reduced Spending Building a control center is a capital intensive project and ongoing control room operations requires significant annual expenses. The upfront investments to consider are: • Modifying an existing space or constructing a new space to meet control room security, reliability and fatigue management requirements • Purchasing hardware and software applications to support SCADA infrastructure • Configuring SCADA to incorporate specific pipelines • Configuring network infrastructure to establish communications • Developing compliance manuals, documentation and operating procedures • Completing training and qualifications for control room staff • Building an off-site disaster recovery center or backup control room • Complete system testing prior to operation When the control room is up and running, annual operating expenses kick in: • Payroll for enough controllers to meet fatigue management requirements, the control room manager, the SCADA/network manager, and compliance manager • Completing all CRM regulatory requirements (alarm management, workload analysis, system testing, training program) • Routine SCADA maintenance and troubleshooting • SCADA annual licenses and upgrades • Network expenses • Maintaining a cyber and physical security program
Outsourcing control room operations leverages the facilities, expertise, processes, and procedures for a fraction of the cost of an internal build, leaving savings that can be reinvested in a company’s core asset base. It also improves the predictability of expenses with contracts specifying fixed charges and avoiding what are often hidden operating expenses such as SCADA maintenance and upgrades, training requirements, equipment upgrades, and operational downtime associated with less reliable infrastructure. 2. Accelerated Schedule Outsourcing can be key for operators that are building or have recently purchased a new asset with a short transition period. Pipeline operators preparing to operate new assets have countless hurdles to cross before commissioning, including commercial arrangements, permitting, construction/upgrades, testing, and compliance documentation. Operators often underestimate the time and number of moving pieces that must come together to complete controls infrastructure and hire personnel to operate a control room. Given the criticality of controls for pipeline operation, interdependencies among people, processes, and technology involved, commissioning control room operations often becomes a critical path item in the project schedule. Outsourcing to an established and reputable control room provider with proven infrastructure and knowledgeable staff gives operators a significant schedule advantage. These providers can integrate control room operations on an accelerated schedule, which reduces integration risk and gets revenue flowing much sooner than building and staffing an internal control room operation. 3. Access to Experts When it comes to security, energy pipelines are defined as “critical infrastructure” by the National Infrastructure Advisory Council, part of the U.S. Department of Homeland Security. From a compliance perspective, the pipeline industry is standing on the precipice of large new regulations. In an environment of constantly changing security threats and regulations, companies are vulnerable to the risk of being caught behind the curve. Operators then find themselves spending unplanned dollars and far too many hours and resources trying to understand, catch up to and comply with the new regulations or recover from a security incident. Because control room operations is their core business, outsourced control room providers are inherently incentivized to remain on the leading edge of compliance and security. They can attract control room experts, network with thought leaders in the space, interact with regulatory agencies across the country and make large investments in security that would be cost prohibitive for individual operators. 4. Access to Established and Tested Processes Pipeline control room organizations are highly process driven. Failures in process adherence can contribute to catastrophic events, including the release of gas or oil resulting in major safety and environmental consequences. Every pipeline operator wants to reduce the risk of a safety or environmental failure. To properly manage the processes designed to prevent these failures operators must employ effective process controls. Control room operations are also subject to periodic regulatory audits including procedural reviews, documentation reviews, control room design assessments, employee interviews, and emergency drills. To avoid audit penalties, operators must demonstrate compliance with all aspects of control room regulations during the audit. Outsourced control room providers have a competitive advantage in process management and compliance management over internal control room operators. Outsourced control room providers operate diverse assets for many different operators across many different geographies, which allows them to draw on and
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implement best practices in process management from a large knowledge base. Additionally, outsourced control room operators interact with regulatory agencies on a more frequent basis than an individual pipeline operator, which gives these providers a quicker feedback loop from regulators allowing for more rapid execution of continuous improvement initiatives.
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5. Robust Infrastructure, Reduced Risk and Increased Flexibility Maintaining a control room is expensive, and mistakes are costly. If a pipeline owner owns and operates a control room, they own 100% of the risk and 100% of the liability. Often, pipeline owners would like to make additional investments to reduce the control room risk, but these investments are either cost prohibitive or lose out to other company priorities. Outsourced control room providers can help pipeline owners reduce risk and liability. Outsourcing facilities can use scale to invest in higher levels of reliability such as fully redundant power, communications, hardware, software and data storage. Control room service providers can also invest in advanced physical and cyber security protection with all customers enjoying the benefit. Working with an organization that provides outsourced control room services provides flexibility for the changing needs of a company, whether that involves the need to scale up or down quickly. Accommodations are also available for a rapidly growing company that needs additional capacity or temporary projects. In conclusion, although outsourcing services in general has always been an option in the energy industry, contracting control room services is a relatively new and growing space. Control room services offer pipeline operators the opportunity to leverage industry experts, robust infrastructure and established processes to reduce operational risk and remain in compliance while saving costs that can be captured or redeployed in other areas of the business. Outsourcing provides safer and more efficient pipeline operations – a win for the oil and gas industry.
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Northeast ONG
INDUSTRY INSIGHT
WHAT CAN PUBLIC DATA TELL US? By: Tom Foster, Foster Analytics You may be aware that each state makes data about oil and gas wells available to the public. In the Marcellus/Utica region they can be found at the WV Department of Environmental Protection, the PA Department of Environmental Protection, and the Ohio Department of Natural Resources. The information provided varies for each state but they all include the oil production and gas production for each well. Despite this information being publicly available, it’s not easy to aggregate or explore. It’s great if you want to study a single well. It’s the big picture that takes some work. Each state formats their data differently. For example, West Virginia and Pennsylvania record production on a monthly basis while Ohio does so on a quarterly basis. For each state, production can be found in one database while the well formation can be found in another. In order to look at the region as a whole, you have to perform a lot of reformatting and cleaning. This is sometimes called data wrangling, which should give you a sense of how this work feels.
Using the frac date retrieved from FracFocus and the values reported by each state, I calculated the well production for the following two quarters. For example, if a well was fracked in April of 2017, its initial well production was calculated using the next two full calendar quarters, July-August and September-Dec. I know that’s not the ideal way to calculate it but I was limited by the quarterly reporting method of Ohio. This was done for all of the wells in the region that were fracked in 2017. This first map shows the initial gas production of wells fracked in 2017. As expected, most of the production is near the intersection of the three states, but northeast Pennsylvania is still producing it’s share of gas. This has just been a glimpse at the regional data available if you work at it. If you’d like me to explore a particular aspect of this data, let me know. tfoster306@gmail. com.
I recently explored the data from all three states. I also accessed another set from a site called FracFocus.org, which has information about when the well was fracked and which chemicals were used. The purpose of the exploration was to predict well production from the publicly available data. I’ll go into the details of that in a later article. In short, I was usually able to predict the production of a well within 10%-15% accuracy.
This first map shows the initial gas production of wells fracked in 2017. As expected, most of the production is near the intersection of the three states, but northeast Pennsylvania is still producing its share of gas.
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This second map shows the initial production of oil for wells fracked in 2017. The success of the Utica wells in Ohio really stands out.
When looking at operators, Ascent and Antero produced the most gas from wells fracked in 2017.
For oil, Chesapeake was on top.
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Northeast ONG
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