PO BOX 1001 YOUNGWOOD, PA 15697
VOLUME 8 ISSUE 6
PRSRT STD U.S. POSTAGE PAID BECKLEY, WV 25801 PERMIT NO.19
CHANGE SERVICE REQUESTED
Communicating the Basics PG. 16
Hurricane Harvey - One Year Later PG. 18
Mountain Valley Pipeline Resumes INDUSTRY INSIGHT PG. 12
PG. 22
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Northeast ONG
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Volume 8 Issue 6
Page 3
ONG SPOTLIGHT JUNIOR ACHIEVEMENT: ENERGY'S FUTURE As the workplace has changed, so have the delivery models and program offerings of Junior Achievement. With the need to better educate and inspire our young people about careers in STEM fields, Junior Achievement is working with schools and companies to provide programming that will open our students’ eyes to potential careers in these high growth, high demand fields. Through the JA Careers in Energy® program, thousands of students in our region are learning about the important role they can play in the workforce of the future. As important to the STEM education occurring in our schools is the STEM inspiration that needs to take place so that our students pursue careers in these fields. Through the JA Careers in Energy® program, students receive a better insight into the energy industry from those who have already pursued careers in the field. A unique aspect of this program, as with all JA programs, is the nature in which the program is delivered. Trained JA volunteers from the industry and the community enter classrooms across the state to instruct students using materials and lesson plans provided by JA. Through the formation of an advisory committee, Junior Achievement has worked with key government, community and industry stakeholders, educators and school officials to select lesson content that has created age-appropriate lessons that open students’ eyes to the opportunities both inside and outside of the industry that they might one day take advantage of. The lesson content: • Introduces students to the types of energy we consume in this country and how that energy is produced • Explains what is unconventional shale gas exploration and production and why it is important to our state • Identifies jobs and skills sets needed by the industry and associated partners
• Identifies the economic impact of the natural gas industry in Pennsylvania • Explores and discusses the economic and environmental influence of unconventional shale gas exploration • Explores environmental effect, including: science, safety and business ethics • Explores the relationship between energy companies and associated industries • Recognizes the relationship between education and future employment Since the program’s inception, over 6,000 students in our region have participated. Sponsors of the program have included CNX Resources, Huntley & Huntley, Steel Nation, EQT, Burns White, Range Resources, Williams, Shell, Southwestern Energy and Westinghouse to name a few. To further bring the energy industry together, and to help promote professional development opportunities, JA is partnering with a number of companies and professional organizations for the inaugural Great Energy Gathering, on October 3rd. Energy companies, industry trade organizations and non-profits supporting the energy industry are invited to spend the evening at TopGolf’s newest location in Bridgeville, PA, for a networking and educational event that will highlight the impact of the energy industry in our region. The goal for the event will be to bring together nearly 400 industry professionals to learn about the various trade and non-profit organizations supporting the industry and why and how they should get involved. Sponsorships for the event are still available. If interested in being a sponsor or attending the event, please respond to Junior Achievement’s Vice President of Development, Bill Lucas, at blucas@jawesternpa.org, or call 412-208-4747 X 140.
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Northeast ONG
ASSOCIATION MEETINGS
WVONGA Fall Meeting | October 1-2, 2018 Morgantown, WV - www.wvonga.com
C O M PA N I E S
Ed Northrop Business Development
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IOGA Fall Meeting | October 5, 2018 Mt. Vernon, IL - www.ioga.com
PIOGA Oktoberfest and Annual Meeting October 17-18, 2018 | Seven Springs, PA - www.pioga.org
IOGANY Annual Meeting | November 1, 2018 Ellicottville, NY - www.iogany.org
AVAILABLE NOW 24,000 ACRES of deep gas
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ARTICLES
ADVERTISER INDEX
ONG SPOTLIGHT: Junior Achievement.................... 3
ALBERTA RIG MATS............................................ 22 ALPINE ELECTRIC............................................... 10 AUDUBON.............................................................. 4 BEG........................................................................ 6 BUSINESS MANAGEMENT SOLUTIONS............ 20 CST INDUSTRIES................................................ 12 DAN NEILLY......................................................... 12 ENERCORP SAND SOLUTIONS............................ 6 ERNST SEED........................................................ 17 GREEN MOUNTAIN CONSTRUCTION................ 22 GUTTMAN............................................................ 23 HICKORY ENERGY SERVICES.............................. 1 HYDROSPRAY..................................................... 10 KERR.................................................................... 10 LEE REGER BUILDS............................................ 10 LEE SUPPLY......................................................... 20 MACH PARALLEL.................................................. 7 MCCLUSKEY........................................................ 10 MID-ATLANTIC STORAGE.................................. 10 NEW PIG................................................................ 2 O'DONNELL CONSULTING.................................. 17 POLARIS.............................................................. 15 STEELNATION..................................................... 22 TOTAL SAFETY.................................................... 22 TD CONNECTIONS.............................................. 12
MARCELLUS DRILLING NEWS............................... 5 PIPELINE NEWS: Long-Tern and Short-Term Economics................................................................. 6 INDUSTRY INSIGHT: Ethane Storage Hub – Working Together to Secure more Growth for our Region....................................................................... 12-13 NEW TECHNOLOGY: The White Tail Fence Marker A Wildlife Impact Mitigation and Fencing Safety Device© .................................................................... 14-15 INDUSTRY INSIGHT: Communicating the Basics.... 16 SHALE CRESCENT NEWS: Hurricane Harvey- One Year Later. Why We are So Important!...................... 18-19 INDUSTRY INSIGHT: Stopping Corrosion Under Insulation in Global Oil and Gas Facilities.................. 20-21
CALENDARS ASSOCIATION MEETINGS.................................... 4 NETWORKING EVENTS...................................... 10 TRAINING & WORKSHOPS................................ 17 UPCOMING EVENTS........................................... 11
EVENTS JUNIOR ACHIEVEMENT........................................ 3 MARCELLUS UTICA HOUSTON.......................... 17 NEW HORIZONS................................................. 19 SHALE INSIGHT.................................................... 9 WV ENERGY EXPO.............................................. 24
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 6 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 the past 30 days on MDN. #1 Most Read: FERC Shuts Down ALL Work on Mountain Valley Pipeline in WV, VA (Aug 6) The radical Sierra Club can claim a new temporary victory in its war to stop a major natural gas pipeline. We previously told you that the Clubbers, who use money from donors to weaponize our own court system against us, convinced the U.S. Court of Appeals for the Fourth Circuit to overturn permits issued by the U.S. Forest Service (USFS) and Bureau of Land Management (BLM) that allows EQT Midstream’s 303-mile Mountain Valley Pipeline to cross 3.5 miles of Jefferson National Forest in West Virginia and Virginia. The court says USFS and BLM didn’t come to the right conclusion about sedimentation and erosion impacts of MVP. The judges (who don’t know a thing about these issues) say USFS and BLM’s contention that impacts can be adequately mitigated is in error. Because the project is stopped at that one tiny 3.5-mile location, the Federal Energy Regulatory Commission (FERC) issued a stop work order for the entire project. At least for now. In the stop work order, FERC indicates they think the USFS and BLM will soon reissue the permits overturned by the Fourth Circuit, and when that happens, work on the rest of the project will resume. But FERC can’t predict when that will happen, so in the meantime, all work (except to stabilize certain areas to protect against erosion) must stop. What gripes us is that Sierra Club radicals were able to shut down an entire project by concentrating on a technicality at one, small point. MVP issued a statement to say the the pipeline will get built, and will likely keep its schedule of going online in the first quarter of 2019. [Update: Two weeks later FERC lifted the stop-work order for 77 miles of the project, and at the end of August, lifted the order for all but 28 miles of the project.] To read more, go to: https://goo.gl/VUofZR #2 Most Read: Eclipse Resources Merging with Former Magnum Hunter (Aug 28) Some big news breaking: After months of teasing by Eclipse Resources that it’s working on selling itself--it finally has. The buyer is Blue Ridge Mountain Resources, the renamed remnant of Magnum Hunter Resources. Magnum Hunter filed for bankruptcy in December 2015, emerging from bankruptcy in May 2016 minus CEO Gary Evans. Looking to shed the image of the past, the company renamed itself as Blue Ridge in January 2017. Blue Ridge, headquartered in Texas, has 99,000 acres of leases (mostly undeveloped) in the Marcellus and Utica Shale plays. Eclipse, on the other hand, is headquartered in State College, PA and has 128,000 acres, focused 100% on the Marcellus/Utica. Eclipse is renown for having drilled the world’s longest onshore lateral wells. Why do we say Blue Ridge is buying Eclipse when the announcement talks about a merger and on paper Blue Ridge will become a subsidiary of Eclipse? Because Eclipse is doing a 15 to 1 reverse stock split (combining shares to boost the per share value) and Eclipse CEO Ben Hulburt is nowhere to be found in the management structure of the newly combined company. Blue Ridge President and CEO John Reinhart will become President and CEO of the newly combined company. Eclipse’s top engineer Oleg Tolmachev--the guy who figures out how to drill those super-long laterals--will become Executive Vice President and COO of the combined company. No word yet on which name (or new name) they will use for the newly merged company. To read this breaking news, visit: https:// goo.gl/yYw7q6.
Page 5 #3 Most Read: Oilfield Serv. Co. Relocating Office & 200 People from WV to PA (Aug 6) In early 2017, Baker Hughes (prior to GE buying them) spun off its North American shale fracking business (“pressure pumping”) into a new, standalone company called BJ Services. The “new” company involved investments and assets contributed from both Goldman Sachs and CSL Capital Management, in addition to Baker Hughes. BJ Services used to exist as a standalone company before it was purchased by, and merged into, Baker Hughes in 2009--for $5.5 billion. BJ remained its own separate division within Baker Hughes, but then got spun out again, back into its own company. We know, a bit confusing. Here’s what you need to know. In March 2016, Baker Hughes closed its BJ operation in Mill Hall (Clinton County), PA and moved it to Clarksburg (Harrison County), WV. Now the reverse is happening. BJ, the standalone company, announced it is closing the Clarksburg operation and relocating it back to Mill Hall, along with some 200 people. To read more about the reverse relocation and the reasons for it, visit: https://goo.gl/SMwfFi. #4 Most Read: Antero 2Q18: 2.5 Bcfe/d; $136M Loss; No More Utica Drilling This Yr (Aug 3) Antero Resources released its second quarter 2018 update in early August. Antero is one of the largest drillers in the Marcellus/Utica with massive amounts of acreage in West Virginia (and elsewhere). Revenue was up in 2Q18 to $989 million, compared to $790 million in 2Q17. However, profits were down. In 2Q17 Antero lost $5.1 million, while in 2Q18 they lost $136 million. Antero produced a record 2.52 billion cubic feet equivalent per day (Bcfe/d) of natural gas--27% of that was liquids, including oil. In 2Q the company drilled 22 new Marcellus wells and brought 25 Marcellus wells online. They drilled 6 Utica wells and brought 5 Utica wells online. The company is pausing any new OH Utica drilling for the rest of this year in order to concentrate on the liquids-rich Marcellus region. Antero would have drilled and produced more except there is a trucking shortage in WV. Antero uses trucks to get its crude to market, and lack of trucks meant 100,000 barrels of crude are stored and can’t be moved, and that means the company has curtailed production in a number of WV wells. Antero expects the situation to improve by September. One more noteworthy item from the update: During 2Q Antero drilled what is (so far) the longest lateral for a WV shale well--15,100 feet! Read more about Antero's 2Q performance, including a full copy of the financials, here: https://goo.gl/M8STbP. #5 Most Read: Top 25 Producing Gas & Oil Wells in Ohio Utica for 2Q18 (Aug 29) Somebody must have lit a fire under the Ohio Dept. of Natural Resources (ODNR). The ODNR issued first quarter 2018 production numbers for shale oil and gas production a little over a month ago, in July. Which does seem a bit late. ODNR made up for it by issuing production numbers for 2Q18 barely a month later. Natural gas production was up an astounding 42% over the same period last year (after being up 43% in 1Q18). Utica natgas production broke record, hitting a new all-time high of 554.3 billion cubic feet (Bcf) in 2Q18. Unlike 1Q18 when Utica oil production was down 3.6%, in 2Q18 Utica oil production was up, a big 11%! Ohio’s oil production has seesawed up and down over the past few years. Once again Ascent Resources, founded by the late Aubrey McClendon, dominated the top 25 highest-producing gas wells, with 18 of the top 25. Eclipse Resources grabbed a majority of the top 25 most-producing oil wells, with 12 of 25 wells on the list. The top 6 oil wells were all Eclipse wells, all located in Guernsey County. In this post we included the ODNR’s high level overview of the numbers, along with MDN’s own exclusive analysis showing: the top 25 producing gas wells, the top 25 producing oil wells, and then the top 25 gas and oil wells as ranked by average production per day. We also include a link to the complete list (Google spreadsheet) of 2,035 wells included in the 2Q18 ODNR report, in a more useful format than that provided by ODNR. Click to get your copy: https://goo.gl/pizwo4.
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PIPELINE NEWS
LONG-TERM AND SHORT-TERM ECONOMICS By: Ray Keller, National Sales Manager, Pipeline Division, BEG Group, LLC As a freshman at Lycoming College in 1970, one of my very first classes was Economics 101. At that point in time I really had no clue as to what economics was. My best guess was that was something akin to the Home Economics course my mother made me take in high school. A class mostly filled with girls who were interested in sewing, preparing meals, and the like. Boy did I have a rude awakening when our professor, Dr. Robert Rabold, stood up and stated as his first sentence to the class, "We will only study short-term economics in this class because in the long-term, you’re dead. " I learned two things immediately. First there were two types of economic studies, long-term and short-term, and secondly, like it or not, we were all, at some point in life, going to die. So, let’s apply some short-term economics to our discussions about the energy industry as a whole and how it impacts our lives every day. If you took a 36" yardstick as being the time line in which the earth has existed and looked at all the 1/64th" hash marks as some period of Earth’s history, man would show up somewhere on the very last 1/64" hash mark. Makes you feel small doesn't it? But it really gives you an ideological sense of what short-term economics is all about. Man cannot live without energy, food and water, and, in others' opinions, laptops, cars, and pool boys. In short-term economic theory, we will need ALL types of energy available to us as a human race. There is no one energy source that will supply all of man kinds needs forever. Wood, coal, oil, gas, wind, water, nuclear, and electric all will play a role. I'm willing to bet that there are even energy sources yet to be developed in the future we can't imagine today. I think it's about time we all stopped fighting with each other over which energy source is best and which ones should be ostracized. Economics will play a major role, if not the dominating role, in which sources of energy come to the forefront and at what periods in time. We here in the United States are fortunate enough to have access to all the sources and should put our collective efforts together and come up with an energy policy we all can live with. Just my opinion. The 2018 construction season has been an upbeat season to say the least. In the coming year, oil production in the Permian Basin will come to the forefront, while natural gas production, and pipeline construction will continue to be strong in the northeast. Natural gas exports into Mexico will continue to grow after the commissioning of several key pipelines in Mexico. Those exports exceeded 5 Bcf/d for the first time in July of this year. The following is a peek at what the 2019 pipeline construction season is shaping up to be. Please be advised that at this point in time, two major projects already underway have been stalled due to permitting issues of various types. They are Mountain Valley Pipeline and Atlantic Coast Pipeline. These projects will begin/resume some limited construction in the 3rd. & 4th. quarters, but a majority of it will take place in 2019. In some respects, this is not a bad thing considering the lack of available labor and equipment within the industry as a whole. Quite a different point of view if you are on the financial side of this process. Anticipated Major 2019 Northeast Pipeline Construction Projects EASTERN SHORE NATURAL GAS 5.1 MILES 10" 1.6 MILES 10" All projects Sussex County , DE 2019 TBD 5.0 MILES 10"
NATIONAL FUEL GAS 14.2 MILES 12" McKean County PA 3rd. QTR 2018 OTIS EASTERN SERVICE 4.50 MILES 12" Beaver County PA 2019 TBD 96.0 MILES 24" Sergent Twp. PA/Elma, NY 2019 TBD WASHINGTON GAS LIGHT 15.8 MILES 24" Prince George County 3rd. OTR 2018 INFRASOURCE ENERGY TRANSFER 28,3 MILES 12" Erie County PA/Ashtabula, OH 2019 TBD LIBERTY UTILITIES 27 MILES 16" Manchester, NH 2019 TBD EQT 5.0 MILES 12" Harrison County WV 2019 TBD 21 MILES 20" Waynesburg, PA 2019 TBD 47 MILES 30" Waynesburg, PA 2019 TBD MARK WEST ENERGY 41 MILES 20" Bridgeville, PA 2019 TBD TRANS CANADA 13.5 MILES 12" Mineral County WV/Alleghany Cty. MD 2019 TBD MOUNTAINEER GAS 29 MILES 12" Jefferson County WV 2019 TBD SHELL P/L * 93 MILES 12" Cadiz. OH/Monaca, PA Houston PA/Monaca PA 2019 TBD *This is in addition to Falcon PL already on the books COLUMBIA GAS 64 MILES 36" Vinton/Burlington. OH 2019 TBD DUKE ENERGY 12 MILES 30" Hamilton Cty OH. 2019 TBD
Volume 8 Issue 6
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MOUNTAIN VALLEY P/L 72 MILES 24" VA/NC 2019 TBD In January of 2018, the PLCA began reassessing its drug and alcohol testing standards to further comply with DOT standards for workers on the pipeline. This will now include opioids, THC, and several other drugs and substances that may influence a worker’s ability to perform his/her job competently and safely. They may include fit for duty testing. These new standards will be in place for the 2019 construction season not only for pipeline work but any worker who falls under the DOT footprint. Safety and environmental concerns are now the number one focus of the Department of Energy for new construction in the pipeline arena. I will focus on these new regulations and testing procedures in the next article. RAY KELLER
Big Switch® is extremely user friendly making our laborer’s job safer and it’s the environmental wave of the future! -Jimmy Joyce Project Manager/Otis Eastern Services
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Patent Pending
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Northeast ONG
ONG SPOTLIGHT
ANALYTICS TO HELP YOU WORK SMARTER
SHALE INSIGHT 2018 – Pre-Conference Workshops Announced! SHALE INSIGHTTM 2018 will offer pre-conference workshops on Tuesday, October 23 from 3:30 p.m. - 5:30 p.m., subject matter experts will provide in-depth, two-hour interactive demonstrations and presentations that will delve into complex technical topics within the oil and gas industry. Opportunities for participation and Q&A will be facilitated during each session to enhance the growth and learning experience. Separate registration is required for pre-conference workshops at a nominal fee. If you have already registered for the Conference, please revisit your registration account to add a pre-conference workshop; otherwise, please click here to begin the full registration process. Energy Transactions in the Marcellus and Utica Shales: Where have we been? Where are we going? Sponsored by Steptoe & Johnson The evolution of the Marcellus and Utica shales has occurred in several phases. Industry insiders in the energy, business and legal worlds will discuss strategies necessary for the completion of successful energy transactions in today’s market as well as what future opportunities and challenges they see for the region. This interactive workshop will allow participants the opportunity to apply the strategies discussed to real-world situations. Reducing Methane Emissions: How State and Federal Agencies are Regulating Methane Emissions Sponsored by Woodard and Curran State and federal agencies have recently implemented changes in regulations on the natural gas industry for reducing methane emissions. This workshop will include a discussion of the changes; how the industry will navigate the new regulations and permits, such as the Pennsylvania GP-5/5a permit, and how to implement new Leak Detection and Repair (LDAR) technologies to monitor and report compliance. Technology Showcase The annual Technology Showcase provides suppliers of emerging technologies an opportunity to introduce their innovations to the natural gas producer, midstream/pipeline, downstream and service communities. The MSC Research Collaborative solicits applications for these technologies and awards top applicants with an opportunity to present. SHALE INSIGHTTM 2018 guarantees a front row seat for the most important discussion on shale development, featuring some of the most prominent industry and government leaders. Become a sponsor, host an exhibit, or register for the conference today by visiting www.ShaleInsight.com and capitalize on this unique opportunity to gain unprecedented industry access. We look forward to seeing you in Pittsburgh!
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Volume 8 Issue 6
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Northeast ONG
NETWORKING EVENTS September 11 APA Golf Outing Midway, PA | www.appalachianpipeliners.org September 13 PIOGA Clubs & Cocktails Bridgeville, PA | www.pioga.org September 21 WEN Drake Well Tour Titusville, PA | www.womensenergynetwork.org September 21-22 IOGAWV Sports Weekend Morgantown, WV | www.iogawv.com October 3 YPE Crew Change TBD | www.ypepittsburgh.org October 3 YPE Crew Change TBD | www.ypepittsburgh.org October 11 ABGPA Clay Shoot Seven Springs, PA | www.abgpamidstream.org October 17-18 PIOGA Oktoberfest and Annual Meeting Seven Springs, PA | www.pioga.org/events October 17-18 SOOGA Fall Clay Shoot Whipple, OH | www.sooga.org
FOR MORE EVENTS VISIT WWW.ONGMARKETPLACE.COM/EVENTS
Volume 8 Issue 6
Page 11
UPCOMING EVENTS SEPTEMBER 10-12
OCTOBER 4-5
Mid-Continent LDC Gas Forum
NGA Fall Operations Conference
Chicago, IL | www.ldcgasforums.com
Saratoga, NY | www.northeastgas.org
11-12 IADC Advanced Rig Technology Conference & Exhibition
7-11 AAPG – SPE Joint Eastern Meeting Pittsburgh, PA | connect.spe.org/pittsburgh/home
Austin, TX | www.iadc.org
12-13 US Water Treatment Conference
9-10 IADC Contracts & Risk Management Houston, TX | www.iadc.org
Chicago, IL | www.lmnpower.com
16-18 NARO Appalachia Annual Conference
10 OGIS Chicago Chicago, IL | www.ipaa.org
Wheeling, WV | www.naro-us.org
18-22
14-19
ADDC Convention
SEG International Exposition and Annual Meeting
Evansville, IN | www.addc.org
Anaheim, CA | www.seg.org
20
23
SOOGA Fall Trade Shows
New Horizons – Appalachian Basin
Marietta, OH | www.sooga.org
Canonsburg, PA | www.kallanishenergy.com
20
23-25
ABGPA Midstream Appalachian Regional Conference
Shale Insight Pittsburgh, PA | www.shaleinsight.com
Washington, PA | www.abgpa.org
24-26 SPE Annual Technical Conference and Exhibition
NOVEMBER
Dallas, TX | www.spe.org
7-9 IADC Annual Meeting New Orleans, LA | www.iadc.org
9 Marcellus to Manufacturing Conference Pittsburgh, PA | www.pioga.org
Denotes National Event
Visit our website for links to these events
WWW.ONGMARKETPLACE.COM/EVENTS
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INDUSTRY INSIGHT
ETHANE STORAGE HUB – WORKING TOGETHER TO SECURE MORE GROWTH FOR OUR REGION By: Teresa Irvin McCurdy, President of TD Connections, Inc. There are a lot of people diligently working behind the scenes to advance the ethane storage hub, site a second cracker plant, and expand the plastic manufacturing industry. PA State Representative Eric Nelson of Westmoreland County has taken the lead, with support from his regional State Senators and Representatives, in spearheading a group called the Labor and Energy Alliance which is comprised of labor unions, state government, natural gas operators, midstream companies and a few related associations. Rep. Nelson said, "the group was formed to bring government, industry and labor together to advance a common goal to greatly expanding the plastic manufacturing industry in Southwest PA.” On March 21, 2018, Governors Tom Wolf of Pennsylvania, Jim Justice of West Virginia, and John Kasich of Ohio announced the extension of the Tri-State Shale Coalition, a three-state agreement to collaborate on efforts to maximize the use of the shared natural gas resources in the Appalachian Basin. Formed in 2015, the Coalition has been active in trying to advance the use of ethane in a cracker plant as well as downstream manufacturing and vendor related businesses. It was noted during the meeting that there is enough ethane being burned by natural gas electric generation plants to support a second cracker plant, if the area had enough ethane storage. One of the crucial hurdles is siting the underground storage location. The first formation the group focused on was salt. The problem with storing ethane in a salt formation is that as the salt formation is being developed to hold more ethane, it would continuously produce massive volumes of brine water that would need to be treated or disposed. I was invited to join the meeting to see if I might be able to present any solutions due to representing a natural gas wastewater treatment facility, Hydro Recovery, since 2011 who recently developed their own evaporator with the ability of making salt. It was also due to my leadership role as the Subcommittee Chair of Water and Waste Management for PIOGA’s Environment Committee and my past role in the MSC’s Water subcommittee. Although it would not be impossible to remove the salt and create pure water, the real issue is the sheer volumes of brine that would be produced daily. When asked how much brine would be generated daily, the lead researcher from West Virginia University stated, “an amount equal to one day’s worth of all the flowback and produced water generated in Pennsylvania.” The PA waste report for June 2018 showed ~5,544,072 bbls of wastewater was produced or 184,802 bbls per day on average. Since there are no analyticals, we made a few assumptions about the salt content of the brine and it is estimated that 184,802 bbls would generate ~9,000 tons of salt per day.
1. Marketing – How do you market the tri-state area to the rest of the world for investment purposes? The Tri-State Coalition is developing a new name for the area along with new marketing material so that hopefully when people hear the new name when released everyone will soon relate it to the Marcellus-Utica play/ development. 2. Infrastructure – There is a need for both pipelines and site preparation. a. Pipelines - Regardless of where the ethane storage hub will be located, pipelines will be needed to transport the ethane to the hub. This will create jobs and economic opportunities for all. b. Siting for a second plant – It is estimated that a cracker plant would need about 650-800 acres of land. Unlike Shell who chose to develop its own plot, the Coalition is looking for ideal locations to locate a second plant; one with the necessary infrastructure already in place or more easily put into place to reduce the obstacle for a second cracker plant. 3. Workforce – Thousands of jobs are going to be need filled that require skilled trades such as pipefitters and iron workers. There are a few colleges and tech schools that offer degrees for these types of jobs; but the local unions such as the Operating Engineers, Iron Workers, Plumbers & Pipefitters and IBEW have apprenticeships and/or trade/training facilities within their organizations to train new recruits the skills necessary to perform high quality work while maintaining high safety standards. There was also talk about the need for more CDL drivers and how to attract more people to that line of work. 4. Research and Development – Although there was talk about how universities where helping to advance some R&D, it was brought up that some state regulations/ laws could be modified to make it easier for small companies to do R&D with less red-tape. 5. Permitting, fees, taxes, doing business – Each state has its own intricacies when it comes to these issues, but here are just a few examples of items discussed:
Although technology has been developed to generate 99.999% pure salt, not at that large scale yet. What do you with that much salt? Rather than treat this as a waste and take it to landfills or injection wells, we need to beneficially reuse the salt by creating more jobs to turn the salt into products.
a. PA DEP permitting fees – PA DEP is in the process of proposing higher permit fees almost across the board. So, whether you need an air, mining, water or drilling permit most likely you will be seeing a higher fee once DEP continues with the process of seeking an increase. There were two bills introduced in the House (HB 2304 by Rep. Fritz and HB 2253 by Rep. Wheatley) to introduce the concept of multi-well permits. HB 2253 contains several issues which includes the multi-well permit fee concept giving DEP broad authority in developing it and creates a severance tax. HB 2304 tightens up the parameters and scope that DEP would have to follow when implementing a multi-well permit and provides some language regarding well bore deviation. However, like the other bill it too is languishing in committee. Although the concept could save time and money for both sides, the devil is in the details and hopefully they can be worked out and get on the Governor’s desk before the end of session in November.
The second formation they talked about was limestone. Limestone mines could be mined using the pillaring method thus reducing the chances of subsidence while beneficially using the limestone and not having the waste stream the salt caverns would have. Most of the limestone locations identified are in West Virginia. Perhaps the answer is a combination of the two.
b. Taxes – Even without a severance tax, the Dept. of Community and Economic Development stated that it cost about 5% more to do business in PA than in the Gulf Coast. Some of that has to do with the high taxes and/or impact fees on businesses. If PA wants to change its image, then it has to do better for businesses trying to operate in the state.
Here are a few of other issues the group discussed:
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c. Permits – Just recently I was informed that an operator in Ohio would like to drill under the state-line into West Virginia, but Ohio doesn’t allow it. If the Coalition is looking to advance the shale play, then they should develop permits to allow operators to drill under state-lines and for that matter to have an ethane storage hub sit across state-lines.
Tanks & Domes
6. Money - The Appalachia Development Group is pursuing a $1.9 billion loan guarantee with the Federal Department of Energy. This potential funding will be used to fund the storage hub and pipeline system necessary for development of the petrochemical industry across Pennsylvania, Ohio, and West Virginia. The estimated cost of this project is $3.4 billion but it is estimated that it will generate another $36 billion of investment in other related businesses. There will be more to come from this group who all want to advance economic growth while protecting the environment and its citizens.
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Page 14
Northeast ONG
NEW TECHNOLOGY
THE WHITE TAIL FENCE MARKER A WILDLIFE IMPACT MITIGATION AND FENCING SAFETY DEVICE© By: John Przepiora, Polaris Wildlife and Fencing Devices, LLC White Tail Deer are the most abundant and adaptable woodland species in North America. They can accelerate to 40 MPH, cruise at 25 MPH and jump a 12 foot high fence. They are the most admired and beautiful of all the creatures in our woods, brush lands, deep forests and sometimes are unfortunately found in our landscapes and gardens. They are most easily adapted to our urban settings and commonly seen there as well. Given these three facts; 1. White Tail Deer were very rare and nearly extinct in parts of North America between 1880 and 1950, due to over hunting and the changing rural habitats of that era. 2. Agricultural, Urban, Commercial and Industrial growth in our nation has only given White Tail Deer an opportunity to adapt and flourish among the communities that formed around those growth centers. 3. There are more White Tail Deer now in North America than there were at the beginning of the settling of this nation.
Tail Deer exhibit when alarmed and or indicating the presence of a potential threat. Other domestic and woodland species likewise are alerted by this “Tail Flagging”© in their environment. It is a universal and understood signal for flight or attention to a possible threat. The WTFM© will let wildlife know that the fence is THERE. It is readily seen and recognized by most woodland species and even humans. They will adapt to this presence and easily jump or fly over the obstacle avoiding impact injury. The White Tail Fence Marker© can be produced in reflective white and other colors, although white is the preferential color to address wildlife impact mitigation. It is made of recycled plastic suitable to resist outdoor environmental conditions, with a printed area for your logo and emergency contact information, which is customized and applied specifically to your order. It has two choices for simple attachment to a typical 12ga high tensile fence wire on any manner of typical fencing styles for differing applications.
All three facts relate to requirements that fencing must be installed in areas where White Tail Deer Habitat is impacted by human activity. Fencing when installed and maintained for such reasons as boundary lines, livestock grazing, crop planting and harvesting, parks and recreational areas and the most often cited requirements of all, SAFETY, creating wildlife impact with these installations where they are required. As the Energy Industry is growing and developing in our nation and also in order to supply the energy needs of growing communities and renewal of industry and cities, the consideration of the industry image in the eye of the public becomes paramount. The way in which Safety is applied in addressing human and animal impact on our installations must be approached in a way that is obvious to both the public and wildlife communities equally. Fencing being installed for safety in these growth areas is increasing. Safety, that is performed in a manner which will address human, domestic animal, livestock and wildlife impact on such installations, is an important factor in the eye of the public and will send a message of stewardship of both our environmental and wildlife habitations impact mitigation. There is a product that enhances both the public perception and effectiveness of these efforts that is focused on the most visible and perhaps controversial impact on wildlife, which is the need for fencing that is installed for the safety of all. It is the White Tail Fence Marker©.The White Tail Fence Marker© is a product that mimics nature in motion, color, and shape as an alarm and presence indicator to wildlife. The WTFM© is the same color as, is shaped like, and achieves mimicking the motion of a White Tail Deer reflex action known as “Tail Flagging”© that White
The WTFM© is available in 12 inch, 8 inch and 6 inch long designs and is equally effective in each size and can be attached to any fence with a choice of the two devices. The first device is a wire tie that is made of 6/6 Nylon with a recognized ultra-violet ray inhibitor, and that was developed for and is used in the Solar Energy products installation exclusively for indoor or outdoor application. The cost of this attaching device is low. The longevity of this attaching device is about 3 to 5 years in an outdoor application without maintenance. This device is suitable for areas of long term or temporary use without maintenance. The second device is of a vinyl coated woven wire with a crimp locking fastener all made of stainless steel. This device has also been developed for the Solar Energy products installation for outdoor harsh use industrial applications. The cost of this device is more than the standard wire tie. The longevity of this device is exemplary. It may be used in an application with a very low maintenance cost. It is a permanent installation. The design of the product itself is in the shape and bright white color of a White Tail Deer’s tail. Being of 16 ga thickness Polypropylene material, 12 inches, 6 inches or 8 inches long with a taper shape. There is a hole pierced in the product to install a stainless-steel grommet and a 130 pound test fishing line swivel also made from stainless-steel that give the WTFM© it’s designed action in a slight breeze to flutter,
Volume 8 Issue 6 wave and spin while installed on a fence, mimicking the motion of a White Tail Deer reflex action known as “Tail Flagging”© The White Tail Fence Marker© is available in quantities suitable for any infrastructure for industrial, mining, highway, civil, commercial and energy installations such as Right of Way, Access Sites and Roads, Well Roads, Well Site Pads, Field Site Installations, Storage Sites, Transmission and Gathering Pipeline Fencing for
Page 15 Installation is by the Solar Equipment Grade nylon wire tie or alternatively using the Solar Equipment Grade non-corroding vinyl coated stainless woven wire tie that is of a high industrial grade and is permanent. This method of attachment includes an American made crimping tool when order quantities allow. We decided that the product should be designed and made of materials and parts that are made in the U. S. A. For example, the 130 pound test stainless-steel Swivel is made by the ONLY swivel company in America that has made them since 1926. The stainless-steel Grommets are made by a 166 year old American company that started in a small building in Lower Manhattan in 1852. All design, testing and manufacturing operations that produce this product and others in our line, from start to finish, are done in the heart of the Appalachian Basin and White Tail Deer Country. The names White Tail Fence Marker©, WTFM©, this article content, and all related articles, art work, images, logos, pictures, publications, methods and processes used or described herein or in other documents or sources owned or produced by Polaris Wildlife Fencing Devices, LLC, are the property of Polaris Wildlife and Fencing Safety Devices, LLC and are protected by trademark and copyright.
the purposes of bringing safety and co-habitation with wildlife in our and their environment. The completed product is robust and of an industrial application grade of construction, giving long service and use with little or no maintenance. The installation is quick and simple, being of a very strong and efficient means.
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The White Tail Fence Marker© is a product that mimics nature in motion, color, and shape as an alarm and presence indicator to wildlife. • Available in different sizes and colors • Suitable for any infrastructure for industrial, mining, highway, civil, commercial and energy installations • Quick and easy installation • Robust construction with a Stainless Steel Swivel and Grommet • Can be printed with your Logo or contact information
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Northeast ONG
INDUSTRY INSIGHT
COMMUNICATING THE BASICS By: Brittany Ramos, Orion Strategies Having solid fundamentals are key to any activity be it physical, mental or emotional. Playing a guitar is impossible without an understanding of how to strike the strings to elicit a certain chord. Calculus is impossible without an understanding of arithmetic. And yet, once we achieve these basics in any activity, we often continue on a path of constantly advancing through more difficult challenges. Rarely do we take a step back and appreciate the basics that brought us here. We become comfortable with what currently is happening and move forward from this point without retrospection. All of this comes into play when the oil and natural gas industry talks about what it does and tells its individual stories. The current environment is vastly different than it was at the start of the Marcellus and Utica plays in 2008. Over the last decade, technologies have advanced and appear to constantly be improving on what the industry has achieved. Regulations and legislation governing the daily operations of companies across the supply chain have been introduced, rewritten or removed. The only true constant in the last ten years has been constant change. And because of that, it is so easy to be swept up in what is happening in 2018 and moving forward into the future. Such as what multiple ethane crackers in the tristate region would mean for communities up and down the Ohio River. Or what would happen if pipeline capacity opened up to New England and eastern Canada. Or even guesses on which operator will be next lay claim to having the longest lateral in the basin. But we cannot forget to talk about the basics. Why is the production of oil, natural gas and natural gas liquids necessary for our standard of living? What products do we use daily that would not be possible without hydrocarbons? How does the economic impact from the industry truly ripple out into the community through subcontractors, restaurants, insurance companies, schools and nonprofit organizations? What does it actually mean to be sitting on top of the life-changers that are the Marcellus and Utica shales?
new employees within the industry and those who may not be exposed to this information day in and day out. Understanding the core concepts should start at home with the industry’s direct employees who can then speak intelligently and passionately as to why their jobs matter. A fantastic recent example of this return to basics is a new report from the American Fuel and Petrochemical Manufacturers (AFPM) called “Fuel and Petrochemical Supply Chains – Moving the Fuels and Products That Power Progress.” AFPM is a national association whose members include refiners and petrochemical manufacturers who transform feedstocks such as crude oil and natural gas liquids into the fuels and consumer goods that Americans use every day. AFPM’s report takes the approach of gathering all of the background information on transportation by rail, truck, boat and pipeline and combines them into an effective, 38-page primer. Rob Benedict, the Director of Transportation & Infrastructure at AFPM, explained the report was not designed to contain any new research or survey data. The goal was to create a document which could be a basic building block of knowledge by amassing the information from the U.S. Department of Energy, The American Society of Civil Engineers and other publicly available sources. Further, the language in the report is specifically designed to be easy to understand by a wide variety of audiences. Industry jargon and buzzwords are notably missing and the lifecycle of transportation in the industry is condensed into a one-page chart showing the flow of oil, natural gas and natural gas liquids throughout their lifecycle. With the report compiled and easily adaptable to numerous audiences, AFPM has also embarked on a coordinated and integrated communications campaign to make sure it is viewed by as many individuals as possible - working with its government affairs and communications departments to follow the report with outreach to the media and legislators while creating social media content for the general public. There is even a podcast series with leading industry experts that discuss the importance of each segment of midstream infrastructure in the content of the refining and petrochemical industries. This industry is vast, complicated and often technical – especially to those who have no previous experience. And even that experience is often limited to certain aspects and without equal knowledge across the supply chain or even various departments within the same company.
Communication from companies and related associations within the industry should always be prepared to come back to these ideas whenever the audience calls for it. And, a solid case can be made that conversations, fact sheets, websites and other ways of communicating these basics are in constant need, simply due to turnover rate in both the audience and the communicator.
Those of us working in the industry or with the industry in any capacity will greatly advance the understanding of the importance of what we do by coming back to the fundamentals as often as possible. If we do not promote an understanding of why the Marcellus and Utica shale industries are one of the biggest life changers in modern history, then who will?
For example, a total of 28 new legislators were sworn in for the 2017-2108 legislative cycle in Pennsylvania and an additional three were sworn in during special elections. That is a total of 31 new elected officials in just one year who are now determining issues that directly impact this industry and its operations through taxation, regulation and legislation.
For more information, contact Brittany Ramos at bramos@ orion-strategies.com
Of course, turnover affects more than just legislators. Political changes often come with changes within regulatory departments at a state level. Turnover rates of reporters are notoriously high as individuals often jump from beat to beat and to other media markets as they climb their career ladders. And one of the most overlooked opportunities to really highlight the fundamentals is with
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TRAINING & WORKSHOPS
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Northeast ONG
SHALE CRESCENT NEWS
HURRICANE HARVEY- ONE YEAR LATER. WHY WE ARE SO IMPORTANT! By: Greg Kozera, Shale Crescent USA As a high school soccer coach for over 20 years, one of the things we teach our players is to pass the ball not to where their players are but to the space where they want them to be. We usually have one of our Captains playing at midfield who is a master at this and almost always will lead our Team in assists. The same is true in football. When a quarterback throws a pass, he leads the receiver and throws the ball so the receiver can catch it on the run making it easier to score. In both cases the people on the end of the passes score a lot of points if their leader is skillful, unselfish and focused on the success of the Team. Companies like Apple, Amazon and Disney are creating the future with amazing customer experiences from new products and ideas that most of us have never even considered. They don’t just do what their customers want, they anticipate future needs their customers didn’t even think possible. Sometimes we take it for granted. My iPhone is smaller and more powerful than my two-year old PC. At Walt Disney World, the new Avatar ride is like “Soaring on steroids”. It isn’t just a ride it immerses the rider in an experience. Typical wait time is over two hours. This is more than customers asked for because they didn’t know it was possible. Amazon has taken purchasing products online to a new and unanticipated level. You can buy almost anything and have it in a day or two. When Shale Crescent USA went to Japan in January I paid my wife, Lynnda’s, travel expenses so she could come and be part of the experience. She became our photographer during the trip. One of our surprises in Japan was their heated toilet seats. We had one in our hotel room. We were surprised that even public toilets had heated seats. Lynnda loved them. Shortly after we returned from our trip, on a Saturday evening at about 10 PM, Lynnda decided she wanted one and went straight to Amazon. She found one made by Toto at a cost of $375 and ordered it. The seat arrived on Monday and my buddy and I installed it. My buddy’s plumbing expertise was important because it does more than just heat. The point is, who would have thought such an unusual product could be ordered and delivered so quickly! Amazon, Apple and Disney are leaders. We can do the same in our businesses and for our Region. It has been a year since Hurricane Harvey devastated the US Gulf Coast. Recovery is continuing. On my last trip to Houston the rebuilding efforts were evident. Winds of 135 mph tore through Houston. Over three feet of rain fell in the Houston area. Some parts of Texas had over 4 feet of rain. That is a lot of water. The Gulf Coast is home to about 90% of the nation’s plastic producing capacity. The crackers on the Gulf Coast produce the pellets that are turned into everyday household products, pharmaceuticals, industrial products and even military equipment, weapons systems and uniforms. Most of the companies that turn these pellets into products are in the Shale Crescent USA Region. A 2018 IHSMarkit Study showed “the Shale Crescent USA Region is in close proximity to over twothirds of US polyethylene consumption.” Following Harvey, roughly 60% of U.S. ethylene and propylene capacity went offline. Because of high water finished product couldn’t be shipped. Manufacturers in our Region couldn’t get the raw materials they needed to continue making their products. My son is the manager for a plumbing and heating distributor. They could not fill building contractor orders for plastic pipe because the local company that made the pipe couldn’t get resin. Those that could get polyethylene and polypropylene resin pellets found the price up 25%. One company in the Ohio Valley had a railroad car full of their resin in Texas underwater. The resin pellets were destroyed. The shortages and increased resin prices lasted into 2018.
Natural Gas Production Most of the growth is projected to be in the
Crescent USA
Shale
comprising the Marcellus and Utica shales.
With such a large part of our petrochemical industry on Gulf Coast a Hurricane like Harvey has serious economic and even national security implications for our country. The petrochemical industry continues to make improvements to protect facilities but it is hard to run a facility in a major hurricane. Trains and trucks can’t operate in 4 feet of rain. We can’t prevent hurricanes. The question isn’t if another hurricane will come but when. We can do our best to prepare. It makes sense for our Country’s economy and national security to have an alternative to Gulf Coast. We now have one called, The Shale Crescent USA. Our organization has known this for the last two years. Like Amazon, Apple and Disney, we know what our prospects need. We spent the last 2 years letting them know the Shale Crescent USA has it. The IHS study, released at this year’s World Petrochemical Conference (WPC) in Houston, Texas, Benefits, Risks, and Estimated Project Cash Flows: Ethylene Project Located in the Shale Crescent USA versus the US Gulf Coast, told the World what we already knew. IHSMarkit is highly respected global organization. It they say something, it is true. In April following the release of the Study at WPC, Yahoo Finance, Yahoo Finance Canada, Oilprice.com and several other websites ran an article about Shale Crescent USA with the title, Shale Boom Creates New Petrochemical Hub. They said what we already knew but our prospects will believe them. Recently, I was back in Washington DC with Bob Miller, President of the Marshall County Commission. We met with high level people in the Department of Transportation, Department of Energy and the Department of Commerce. These meetings were a result of our White House meeting in July. Bob’s goal was to move an I-68 expansion from Morgantown to the Ohio Valley and on to I-77 forward. Shale Crescent USA’s role was to provide data to justify that expansion. All of the agencies were incredibly attentive, helpful and supportive, just like our White House meeting. Mr. Miller now has a guide of what needs to be done so that he can hopefully inspire the State and Local leaders of Ohio and West Virginia into action. Shale Crescent USA’s role in DC was also to inform. We told the story of our cheap, abundant natural gas and natural gas liquids (NGLs). We showed them our transportation/ location advantage. We gave them the Executive Summary of the IHS study that said the Shale Crescent USA is now the most profitable place in the world to build a petrochemical plant. The Shale Crescent USA has 32% lower ethane costs than the Gulf Coast because the ethane is here. 60% of the cost of ethane on the Gulf Coast is the transportation to get it there. Plants in the Shale Crescent USA can avoid this cost. These savings result in a 4 times higher cash flow
Volume 8 Issue 6
Page 19
advantage for the Shale Crescent USA and savings in the billions of dollars for large ethane crackers.
looking for places to economically grow and expand. We have the solution to both problems and we are letting them know.
The agencies knew we had a lot of natural gas. They did not know that the Shale Crescent USA was 30% of the US natural gas supply. They did not know that if Shale Crescent USA was a country, only the rest of the USA and Russia produce more natural gas. No one had put together Regional data. We wanted to give them the information they needed to make good decisions for our country and our region. The agencies got it! They told us about the national security, geopolitical and economic importance of what we told them.
We have a Region that needs high wage career type jobs. We have producers that need higher margins on their gas. The best way to achieve this is increased demand here close to the wellhead. Every E&P company in the basin knows what their margin will be if they can avoid most of the pipeline charges. Increased local demand helps producers. Creating a 2nd petrochemical hub in the Shale Crescent USA solves these problems. Amazon, Apple and Disney have been able to create a delightful future for their customers who had no idea it was coming. We can do the same right here in the Shale Crescent USA. Thoughts to ponder.
We know we have abundant, economical natural gas and natural gas liquids that are literally right under the plants in our region. The Shale Crescent Region is responsible for all of the growth in US gas supply. New gas production in the rest of the USA is only replacing the decline from existing wells.
Greg Kozera is the Director of Marketing for Shale Crescent USA www.shalecrescentusa.com . He has over 40 years of experience in the energy industry. Greg is a leadership expert with a Masters in Environmental Engineering and the author of four books and numerous published articles.
We know that we are close to almost 70% of the companies that turn pellets into products we use every day. We are close to 50% of the US population that uses these products. We know that we also have abundant water resources and an experienced workforce. This combination of advantages does not exist anywhere else in the World. The main advantage the Gulf Coast currently has is existing infrastructure which includes the storage of ethane, propane, butane and other molecules. Producers can sell products into the storage hub at market rates. Plants can buy ethane and other products from the storage hub at market price. This is not that different than agriculture. Farmers sell grain into a market and the grain is stored. Companies that use grain like Kellogg’s or General Mills buy the grain from the market and make our breakfast foods. We are working on the Storage Hub and other infrastructure needs. Progress is being made on this storage hub and other infrastructure. We can’t wait for infrastructure to be built. The marketing of the Shale Crescent USA Region has already started. For national security reasons and economic reasons our country needs a second petrochemical hub. Companies around the world are
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Page 20
Northeast ONG
INDUSTRY INSIGHT
STOPPING CORROSION UNDER INSULATION IN GLOBAL OIL AND GAS FACILITIES By: Gaye Jacobs, Power PR When traditional corrosion protection fails, a new approach can dramatically extend life in upstream, midstream, and downstream applications Corrosion Under Insulation (CUI) is the root cause of many of the global petrochemical industry’s most serious problems including forced shutdowns, lost production, early repair and replacement, as well as safety and environmental consequences that can cost millions of dollars per incident. CUI, which involves the corrosion of vessels or piping beneath insulation due to water penetration, is insidious because it can remain undetected until the insulation is removed for inspection or leaks occur. Water penetration can result from many causes including monsoons, rain, flooding, wash downs, and sprinkler systems, as well as exposure to steam, humidity, or frequent condensation and evaporation of atmospheric moisture. From upstream wells, risers, drilling rigs, or offshore platforms, to midstream pipelines, storage, and liquefied natural gas (LNG) terminals, to downstream refineries, fighting CUI and major corrosion has been an uphill battle and a major cost in the operation of oil and gas facilities, according to NACE International’s “International Measures of Prevention, Application and Economics of Corrosion Technology (IMPACT)” study. Fortunately, even when traditional coatings have allowed CUI and corrosion to occur, a new approach can stop the corrosion to dramatically extend facility and equipment life in oil and gas industry applications. Stopping Existing Corrosion and CUI Traditional corrosion protection typically involves applying polymer paints and rubber type coatings. Such methods create a physical barrier to keep corrosion promoters such as water and oxygen away from steel substrates. However, this only works until the paint is scratched, chipped, or breached and corrosion promoters enter the gap between the substrate and coating. Then the coating can act like a greenhouse – trapping water, oxygen and other corrosion promoters – which allows the corrosion to spread. Some of the world’s largest petrochemical companies, including China Petroleum & Chemical Corporation, however, are finding success with a new approach toward stopping CUI and corrosion. China Petroleum & Chemical Corporation, commonly known as Sinopec Corp., is one of the largest integrated energy and chemical companies in the world, with upstream, midstream and downstream operations. In Sinopec’s Jianghan Oilfield projects, located in China’s Jianghan Plain in Hubei province, there are numerous facilities for oil and gas extraction, transport, and storage. However, with Hubei’s sub-tropical monsoon climate, CUI and corrosion are serious issues that shorten equipment life and require excessive maintenance. In this environment, traditional coatings have been ineffective, and stopping corrosion that is already underway is often the last resort. To extend production and the service life of assets already experiencing serious CUI or major corrosion, on two sample projects Sinopec turned to EonCoat, a spray applied inorganic coating from the Raleigh, North Carolina-based company of the same name. EonCoat represents a new category of tough, Chemically Bonded
Phosphate Ceramics (CBPCs) that can stop the corrosion, ease application, and reduce production downtime even in very wet, humid, monsoon prone conditions. In contrast to traditional polymer coatings that sit on top of the substrate, the corrosion resistant CBPC coating bonds through a chemical reaction with the substrate, and slight surface oxidation actually improves the reaction. The surface of steel is passivated as an alloy layer is formed. This makes it impossible for corrosion promoters like oxygen and humidity to get behind the coating the way they can with ordinary paints. Although traditional polymer coatings mechanically bond to substrates that have been extensively prepared, if gouged, moisture and oxygen will migrate under the coating’s film from all sides of the gouge. By contrast, the same damage to the ceramic coated substrate will not spread corrosion because the carbon steel’s surface has been chemically transformed into an alloy of stable oxides. Once the steel’s surface is stable (the way noble metals like gold and silver are stable) it will no longer react with the environment and therefore cannot corrode. Visible in scanning electron microscope photography, EonCoat does not leave a gap between the steel and the coating because the bond is chemical rather than mechanical. Since there is no gap, even if moisture was to get through to the steel due to a gouge, there is nowhere for the moisture to travel. This effectively stops atmospheric corrosion and CUI on carbon steel assets. The corrosion barrier is covered by a ceramic layer that further resists corrosion, water, fire, abrasion, impact, chemicals, and temperatures up to 400 °F. Beyond this, the ceramic serves a unique role that helps to end the costly maintenance cycle of replacing typical barrier type coatings every few years. “CUI is the silent killer,” explains Merrick Alpert,” President of EonCoat. “The insulation creates a terrarium on the steel in which corrosion is guaranteed to occur if traditional coatings are used. And the insulation then hides the corrosion from being detected until it’s too late.” Sinopec’s first sample project using the CBPC coating involved addressing CUI on a 500 cubic meter petroleum storage tank in an oil-extraction facility in the Jianghan Oilfield. While the storage tank’s original coatings were wrapped beneath a mineral wool insulating layer, due to rain, condensation, and moisture invasion through the damaged insulating layer, these coatings had failed, allowing CUI in a number of areas. After peeling off the insulating layer, the metal surface underneath was prepared by sandblasting, then the CBPC coating was applied. The application has effectively stopped the CUI issue and is expected to extend the storage tank’s functional life for years to come. After the success of the first project, Sinopec opted to utilize the CBPC coating to address serious corrosion on a container-type water injection pumping station in another Jianghan Oilfield facility. Because of the pumping station’s outdoor location with very high saline alkali content soil, along with a very humid container environment, shutdown for corrosion maintenance was typically required every three years.
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A traditional three coat system was routinely used to maintain corrosion protection for the pumping station, so coating application took at least three days to allow drying time for each layer. Including surface preparation, total required maintenance downtime was at least seven days, which hindered production. One of the greatest benefits of the CBPC coating, however, is the quick return to service that minimizes facility downtime. The time saved on an anti-corrosion coating project with the ceramic coating comes both from simplified surface preparation and expedited curing time. With a typical corrosion coating, near white metal blast cleaning (NACE 2 / SSPCSP 10) is required to prepare the surface. But with the ceramic coating, only a NACE 3 / SSPC-SP 6 commercial blast is typically necessary. With traditional coatings, extensive surface preparation is required and done a little at a time to avoid surface oxidation, commonly known as ‘flash rust’, which then requires re-blasting. But with the CBPC coating, the flash rust is actually desirable. There is no need to ‘hold the blast’. The reason for this unique CBPC characteristic is due to the presence of iron in the rust, which helps to create the magnesium iron phosphate alloy layer. It is this alloy layer that allows CBPCs to so effectively protect carbon steel from corrosion. In contrast, a corrosion resistant coating for carbon steel utilizing the ceramic coating in a single coat requires almost no curing time. Return to service can be achieved in as little as one hour, which can potentially save hundreds of thousands of dollars per day in reduced oil and gas facility downtime. Because of these unique properties, total coating application including surface preparation of the Sinopec pumping station will take two days and the asset can be put into service immediately. With CUI and corrosion a perennial problem for oil and gas facilities with massive carbon steel structures, utilizing CBPC coatings that can control corrosion for decades and reduce downtime will only help the bottom line. For more information, call 754-222-4919; visit www.eoncoat.com; or write to EonCoat, LLC at 551 Pylon Drive, Unit D, Raleigh, NC 27606.
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ONG SPOTLIGHT WORK RESUMES ON MOUNTAIN VALLEY PIPELINE The FederalENERGY Energy Regulatory Commission (FERC) recently permitted SERVICES construction to continue on the Mountain Valley Pipeline. This 303-mile pipeline will run from Northwestern West Virginia to Southwest Virginia. Earlier in the summer of 2018 FERC had issued a stop-work order on the project. In a recent letter FERC noted a U.S. Bureau of Land Management analysis concluding the pipeline’s earlier approved route through the Jefferson National Forest is the best of several alternative routes considered for the project. There are two exceptions still in need of a permit for the Pipeline. One is for a 3.5 mile stretch through the Jefferson National Forest and the other a segment in Braxton County, West Virginia. Mountain Valley must obtain a new permit from the Forest Service for these two sections. Mountain Valley states FERC’s authorization to resume construction confirms the existing route will minimize environmental impacts as well as cultural/ historic resources. Completion of the $3.7 billion project is expected during the 4th quarter of 2019. For additional information about the Mountain Valley Pipeline project please go to: https://www.mountainvalleypipeline.info/ Respectfully submitted by Robert Johnson President ADKL LLC
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MISS A DELIVERY BECAUSE YOUR FLEET DIDN’T HAVE FUEL? NOT ON OUR WATCH. Guttman Energy delivers comprehensive Bulk Fuel and Fleet Card solutions to keep your fleets fueled when and where you need it — both onsite and over the road. With an extensive network of 65,000 fueling stations nationwide and an experienced team, you can count on getting competitive fuel prices to stay on time and on budget. It’s not just intuition or instinct that make us a reliable, integrated fuel distributor. It’s experience, it’s know-how, it’s market intelligence. Go to guttmanenergy.com/transportation to see a video on why Guttman is the right choice for your operation.
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