Western Interior Oil & Gas Report

Western Interior 2014 Oil & Gas Report Inaugural

The publication for the DJ Basin and Niobrara Region.

SOUTH DAKOTA WYOMING NEBRASKA

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COLORADO

KANSAS

Strike while the iron’s hot!

Big on oil:

The top development in the Niobrara

Exploration recap in the DJ Basin

Frack or fiction?

Shale gas brings economic wealth to nearby communities

Busting media myths on fracking

Ser vi n g t h e d J B aS i n

Supplying Water for the oil and gaS induStry Based in the heart of the DJ Basin, Grassland Water Solutions is a trusted provider of freshwater for oil and gas exploration in one of the country’s most promising oil and gas basins.

Infrastructure Development and Management GWS’s Pawnee Water Facility is home to an extensive network of infrastructure for water supply and delivery, including wells, pipelines, storage tanks and ponds, and a truck loadout facility.

Stakeholder Partnerships GWS works closely with area stakeholders to streamline delivery and keep projects reliable, safe, and economical.

Fresh and Produced Water Solutions In addition to freshwater solutions, GWS is developing disposal wells and recycling facilities to handle large volumes of produced water and lengthen the full-water lifecycle.

From the source to the site, GWS offers the most abundant, reliable, and economic water solutions for oil and gas companies in the DJ Basin.

To learn more, visit www.grasslandwatersolutions.com or call 970-232-3312.

TABLE OF

CONTENTS

27 39

14

pg

THE CITY OF GREENLEY:

A HOTBED OF ACTIVITY

7 Editor’s Message Shayna Wiwierski

26 Energy rounds out Goshen County economy

8 Wyoming Governor’s Message Matt Mead

28 Local Colorado election confirms fact trumps fiction in the debate on fracking

10 World-changing oil and natural gas

30 Need a hand?

developments continue in the DJ Basin

13 Encana’s hub facility aimed at reducing footprint, impact in DJ Basin 14 T he city of Greenley: A hotbed of activity 17 Is there a “war on oil?”

19 Ten practical points for permitting and developing the Niobrara shale in Colorado and Wyoming 21 Busting media myths on fracking 24 Niobrara Play producing more than just oil financial benefits abound

Western Interior Oil & Gas Report

is published by DEL Communications Inc. Suite 300, 6 Roslyn Road Winnipeg, MB R3L 0G5 www.delcommunications.com President & CEO David Langstaff Publisher JASON STEFANIK Managing Editor SHAYNA WIWIERSKI shayna@delcommunications.com Advertising Sales Manager DAYNA OULION

32 Study addresses why sleep is integral to productivity, safety, health, well-being 35 Liberty Oilfield Services brings operational excellence and new engineering practices to the Rockies 37 New aerator boasts unsurpassed performance 40 Applicant tool kit provides federal regulatory assistance before issues become problems 43 Index to advertisers

2014 Advertising Sales Representatives ROSS JAMES | GLADWYN NICKEL MIC PATERSON | GARY SEAMANS Contributing Writers SHEA CASEY MILFORD WAYNE DONALDSON MELANIE FRANNER JON HAUBERT | JAMIE LEIGH JOST WAYNE KOVACH | LEONARD MELMAN MICHAEL SANDOVAL Cover Design MEGAN ROSS Production services provided by: S.G. Bennett Marketing Services www.sgbennett.com

4 western interior oil & gas report

Art Director / Design kathy cable Advertising Art JOEL GUNTER | sheri kidd © 2014 DEL Communications Inc. All rights reserved. Contents may not be reproduced by any means, in whole or in part, without the prior written permission of the publisher.

While every effort has been made to ensure the accuracy of the information­contained in and the reliability of the source, the publisher in no way guarantees nor warrants the information and is not responsible for errors, omissions or statements made by advertisers. Opinions and recommendations made by contributors or advertisers are not necessarily those of the publisher, its directors, officers or employees.

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EDITOR’S MESSAGE

Shayna Wiwierski Nestled between four states, the DJ Basin is a petroleum natural gas development region that’s making some serious headlines.

Although not as robust as the Bakken, the DJ Basin and the Niobrara region are some of the largest natural gas deposits in the United States. With a “who’s who” list of some of the most prominent oil and gas companies in the country, including Anadarko Petroleum, Quicksilver Resources, Bill Barrett Corp., and many others, the DJ Basin is a proving to be a huge force to be reckoned with.

So with that, I would like to introduce you to the inaugural issue of the Western Interior Oil & Gas Report magazine, the publication covering the DJ Basin and Niobrara region. In this exciting first issue we take a look at everything from the towns and communities benefitting from fracking, to even the controversy behind it. We discuss 10 practical points for permitting and developing the Niobrara shale in Colorado and Wyoming, and how even some companies are reducing their environmental footprint and impact in the area.

I truly hope you enjoy this issue of the magazine, and if you have any questions, concerns, or story ideas, feel free to pass them my way.

Shayna@delcommunications.com v

2014 Inaugural Edition 7

Wyoming is leading the way It’s no secret that energy development is important to our state. The energy industry has been a part of Wyoming’s history since the early 19th century when explorers reported evidence of oil here. The first oil well was drilled near Dallas Dome when Wyoming was still a territory.

Energy is the number-one industry today and will continue to be number one in the future.

Wyoming easily exports more energy to the rest of the country than any other state. We are proud of this distinction because we are contributing to the nation’s energy needs. We understand the importance of affordable, reliable energy to the entire economy and to keeping the cost of living for Americans low.

MESSAGE FROM WYOMING GOVERNOR MATT MEAD

As we produce energy to power the nation, we recognize the attendant responsibility to safeguard the water, air, wildlife and lands.

We lead not only in producing power, but also in protecting those things that make Wyoming so special. We have created the right regulatory environment for development, providing both predictability and protections. The strength of the industry shows the success of our efforts.

Wyoming is approaching the burgeoning Niobrara play with balance and success in mind. The Niobrara formation has potential to help Wyoming and the nation’s economies grow even more. Jobs and revenue are already benefiting communities in southeastern Wyoming.

Investments in roads, schools and community services can be linked directly to oil and gas development. All those investments are needed to ensure that this latest energy boom has positive impacts that are lasting and position Wyoming well for the future.

When I took office in January 2011 I asked the people of Wyoming to join me in creating Leading the Charge: Wyoming’s Action Plan for Energy, Environment and Economy. This energy strategy, released in May 2013, was developed with a great deal of public input.

The strategy allows Wyoming to continue as “the” energy state of the nation and protects other natural resources that we all value – world-class wildlife, the cleanest air, open spaces and recreation opportunities. Please visit energy.wyo.gov to explore this strategy further and give feedback.

We are ready – and eager – for the next phases of the Niobrara Shale development and other emerging plays. Energy is critical to the nation and to our state. Wyoming will continue to be the leading energy producer and do it right. v

8 western interior oil & gas report

WORLD-CHANGING OIL AND NATURAL GAS DEVELOPMENTS CONTINUE IN THE DJ BASIN

by Leonard Melman The world is familiar with many historic “rushes” in search of untold wealth and glory. Events such as the California Gold Rush and the Klondike mania are well remembered, but a new kind of “rush” is now taking place in the American middle west and it may ultimately become the most sustained and economically dynamic of all. We are referring to rapidly expanding American and Canadian oil and natural gas exploration/ development fever, and one of the most important “ground zeroes” is the Denver-Julesburg Basin, also known as the “DJ Basin”, a petroleum natural gas development region which covers parts of no less than four states, including Colorado, Wyoming, Nebraska, and Kansas.

Potential recoveries of oil and oil equivalents in the DJ Basin could be truly enormous with some estimates ranging as high as nearly five billion barrels of oil. With stakes that large, it is no surprise at all that the number of participants and the level of activity are escalating steadily.

Geologically, the DJ Basin consists of a large asymmetric syncline of Paleozoic, Mesozoic and Cenozoic sedimentary rock layers trending north to south along the east side of the Rocky Mountain Front Range. The basin is deepest near Denver, where it reaches a depth of approximately 13,000 feet (3,900 meters) and then ascends very gradually to its eastern outcrop in central Kansas.

As a whole, prospective development of the DJ Basin is so favorable that it has recently been compared to the rapidly expanding Bakken Shale, which is transforming the energy development picture farther to the north in the booming region of western North Dakota.

Several important areas are contained within the DJ Basin, including the Wattenberg Gas Field, which is one of the largest natural gas deposits in the United States.

Fields within the Wattenberg have already produced 10 western interior oil & gas report

more than four trillion cubic feet (TCF) of natural gas and these include the Niobrara Formation, Codell Sandstone, J. Sandstone, Hygiene Sandstone and Terry Sandstone.

The Niobrara Formation, which extends into Yuma, Phillips and Washington counties in Colorado, as well as Cheyenne and Sherman counties in Northwestern Kansas, has been the scene of particularly heavy recent activity. As word of Niobrara’s potential began to spread, one energy company after another started buying up land leases in Colorado and Wyoming with similar activity also spreading into Western Kansas.

One of the particular attractions of the Niobrara Shale is the location of possible resources relatively close to surface with some resource development occurring at depths estimated to be only 3,000 feet. According to government geologic reports, many other natural gas basins are found at much deeper depths, often as low as seven to 10,000 feet. Given those figures, Niobrara appears to be particularly attractive in terms of exploration and eventual production costs. In fact, a comparison between drilling costs in the DJ Basin compared to the Bakken Fields in North Dakota shows an estimated expense of around $4 million at DJ compared to eight dollars to $10 million at Bakken.

Another very important factor is time savings, as it takes an average of about six days for drilling a hole at DJ compared to around 20 for Bakken.

The list of Niobrara development participants is now beginning to look like a miniature “who’s who” of petroleum resource companies, and a partial list of participants includes names such as Lilis Energy, Entek Energy, PDC Energy, Bill Barrett Corp., Bonanza Creek Energy, Armada Oil Inc., Southwest Energy Co., Summit Midstream Partners, Samson Oil & Gas, EOG Resources, Anadarko Petroleum, SM Energy, Noble Energy, Chesapeake Energy, Whiting Petroleum, Quicksilver Resources, MDU Resources, Synergy Resources, Bridger

LLC, and Crestwood Millstream. While this is only a partial list, it indicates the heightened levels of interest in the DJ Basin in general and the Niobrara Formation in particular.

Prices for natural gas have varied remarkably through the past quarter-century, moving into historic high ranges during periods of apparent shortage while dropping sharply during periods of apparent oversupply.

Specifically, the price per commodity contract of 10 billion British Thermal Units (BTU) generally held between a range of $2 to $3 from 1990 through the end of the 20th century, but then began a series of major rallies which established much-higher peaks of about $10 in 2001; $12 in 2003; $16 in late 2006, and just under $14 in mid-2008.

However, the tone of natural gas commodity trading began to change as the perception grew that enormous new supplies could be leading toward excess supply over demand and the price fell sharply to under $2 per contract by early 2012 before rallying somewhat to trade near $4 as of late summer 2014.

In terms of present and future supply of natural gas, the United States Energy Information Agency (EIA) estimates that there are 2,203 trillion cubic feet (Tcf) of natural gas that is technically recoverable in the United States. At the rate of U.S. natural gas consumption in 2011 of about 24 Tcf per year, 2,203 Tcf of natural gas is enough to last about 92 years.

One of the most important considerations for the DJ Basin, including Wattenberg and Niobrara, is the makeup of American natural gas production. Again, according to the EIA, throughout much of America’s NG production, the major sources were “tight gas” (primarily from sandstone and limestone); coalbed methane; natural gas recovery associated with oil production and both onshore and onshore non-associated sources. However, beginning near the year 2000, production from shale – the dominant production source in the DJ Basin – began to become much more important.

In fact, the EIA reports production from shale has grown from virtually nil in 2000 to 7.8 Tcf in 2011 and is expected to approach 20 Tcf looking beyond 2040.

Unquestionably new techniques, particularly horizontal drilling and “fracking” have been vital components of this growth. As EIA noted in their report, What is shale gas and why is it important, “...Over the past decade, the combination of horizontal drilling and hydraulic

fracturing has allowed access to large volumes of shale gas that were previously uneconomical to produce.

The production of natural gas from shale formations has rejuvenated the natural gas industry in the United States.”

As the use of fracking has expanded, several important environmental issues have been raised. These include the possible contamination of underground water supplies; diversion of water supplies from conventional drinking and agricultural consumption; and potential damage to important major aquifers, which are the chief source of water supply to the Central United States.

As is true for virtually all resource industries, laws and regulations – both actual and proposed – can be of significant importance and this is certainly true for the entire DJ Basin. For example, thanks to the reasons noted above, the environmental world has raised a great ‘hue and cry’ about the entire concept of fracking.

By late 2013, anti-fracking initiatives had been proposed for voting in four Colorado cities closely associated with the Niobrara Formation; Boulder, Broomfield, Lafayette and Fort Collins. The goal of these initiatives would be to prohibit fracking entirely. In addition, an organization known as the Colorado Community Rights Organization is seeking to amend the Colorado State Constitution to give local governments the ability to tighten control over their local areas. Many within the industry believe this could lead to a patchwork of regulations, which would add complications to future development.

As this is written in late summer 2014, it is clear that important forces are arrayed on each side of the regulatory question and the entire industry will be intensely watching both ballots and courts going forward.

It must be noted that the entire DJ Basin is also a major petroleum play thanks to that ultimate potential recovery of almost five billion barrels of crude. Intense attention has developed within the Wattenberg Field, with many companies concentrating their efforts at Niobrara, J Sandstone and Codell.

One of the issues that has been addressed by several companies is the cost of deep drilling, when near-surface resources are not available. In addition, extra complexity is added to the drilling equation since petroleum and/ or natural gas might be encountered at several different depths within the same drill hole.

2014 Inaugural Edition 11

WORLD-CHANGING OIL AND NATURAL GAS DEVELOPMENTS continued When the costs of land acquisition, exploration, drilling, wages, plus current and anticipated revenues along with taxation are contemplated, it can be seen that the entire oil and natural gas industries associated with the DJ Basin are big economic contributors. According to an article in the Denver Post, “...The discovery of an easyto-drill and oil-rich stratum fueled nearly US$4 billion in spending during 2013 by the top operators who have plans to spend and drill even more in 2014...More than US$1 billion is being spent on plants, pipelines and rail terminals to process and ship the oil.”

Benefits of this enhanced economic activity are not just confined to the oil and gas industries, but we learn that, “...These huge investments are benefitting everyone: fire districts, school districts, homeowners. Our hotels and restaurants are filled and Greeley’s [Colorado] 1.3 percent apartment vacancy rate is the lowest it has been in almost 20 years.” In addition, according to Upstate Colorado Economic Development president Eric Berglund, major corporate ‘players’ in the area, such as Noble Energy are contributing $1 million toward new

school buses for the Greeley-Evans School District.

Barring some unexpected negative development, the future for the DJ Basin appears bright indeed. By year-end 2013 50 drilling rigs were in operation, a 50 percent increase in just 22 months. One thousand new drilling permits were issued in the basin during 2013 and another 250 permits were pending as of spring 2014.

There have been other perhaps less tangible but still important benefits as well. Development of the Wattenberg Field, including Niobrara along with other areas in America, has resulted in that country`s domestic oil production exceeding the level of imports for the first time in 20 years, leading to diminishing reliance on politically uncertain areas for essential petroleum-related supplies.

Looking forward, there is little doubt that as development across the DJ Basin continues to accelerate; the region will take on ever-increasing roles in both economic and social development within their own specific area and across America as well. v

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We’re there when you need us.

Encana’s Hub facility aimed at reducing footprint, impact in DJ Basin three-phase produced oil separators for secondary separation. The separated water will be transferred to two produced water storage tanks. The vapor recovered from the produced oil separators will be captured by a booster compressor unit for sales. The separated oil will be flashed to a vapor recovery tower (VRT). Overhead vapors from the VRT will be recovered by a vapor recovery unit (VRU). Oil leaving the VRT will be cooled with an aerial cooler before entering the produced oil storage tanks, which will be fitted with floating roofs.

In an effort to reduce the impact of its activity on a nearby community, Encana is undertaking construction of a centralized gathering facility in the Denver –Julesburg Basin.

Known as the Hub, this central gathering facility will be located just east of Erie, Colorado in Weld County, the heart of the DJ Basin. Permitting is currently underway with construction expected to be complete by early 2015.

The Hub allows for most of the collection and processing equipment to be in one central location, thereby reducing typical well pad sizes by 70 percent from approximately five acres down to 1.5 acres. The Hub is designed to support as many as 24 pads in the nearby area.

The HUB offers several benefits to nearby landowners: • Produced oil and natural gas liquids are piped to the Hub, reducing truck traffic at each individual pad by about 70 percent.

• Water consumption is reduced as most of the produced water returned by the wells is piped to other sites for re-use in hydraulic fracturing operations.

• It helps reduce air emissions by eliminating emission sources – tank batteries – from individual pads.

Once at the Hub, oil passes from pipelines into heated,

After storage, the produced oil will be transported offsite via the truck load-out stations where the vapors coming from the trailers will be captured and sent to an emission control device.

The produced water-gathering pipelines will feed directly into 100 percent redundant, three-phase produced water separators to further separate any residual gas and oil from the water. The separated gas will be delivered to the vapor recovery unit while the separated oil will be pumped to the off-spec oil surge tank prior to being re-processed in the three-phase produced oil separators.

The produced water will flow into two produced water storage tanks.

Produced water that is not needed within Encana’s system for well completions is trucked from the produced water storage tanks to licensed disposal facilities.

“The majority of our 49,000 acre position is somewhat scattered across the DJ. This leasehold position brings with it some challenges. In the area surrounding the Hub, we have a more concentrated leasehold position which allows us greater flexibility in how we design our operating network through a project such as the Hub,” said Jeff Balmer, vice-president of western operations for Encana. “In areas where we don’t have a concentrated land position, I’ve challenged our engineers to get our tank counts down – essentially design better, more efficient ways of managing our liquids. So far, I like what I see – fewer tanks and further planned reductions in tanks as production volumes drop from their high IPs.” v 2014 Inaugural Edition 13

THE CITY OF GREELEY:

A HOTBED OF ACTIVITY

Sunset from the UNC University Center.

COURTESY OF THE CITY OF GREELEY/FLICKR.

by Melanie Franner With a population of close to 100,000 and a land area of 46.66 square miles, Greeley is the largest city in Weld County and one of the largest in the state. It is also one of the busiest, as of late, in terms of oil and gas activity.

“The oil and gas industry generated $3.3 million in tax revenue for the city in 2013,” says Mayor Tom Norton. “Over the next 25 years, it is projected to generate $421 million.”

Norton goes on to say that the oil activity increased significantly as of 2008 when Noble Energy first used horizontal drilling in the city. Other companies soon followed suit and today, there are close to 500 oil wells located within the city limits.

“We project that the number of oil wells within Greeley will probably reach 1,000 within the next 10 to 15 years,” says Norton, who adds that there will be fewer well sites than that would indicate because of the way industry consolidates its operations.

14 western interior oil & gas report

Some opposition “In my opinion, the oil activity has become more prevalent in Greeley over the last three years or so,” says Roy Otto, Greeley city manager. “It looks like it will continue to pick up going forward. This is an economic benefit to the city, at least that’s the position of city council and of the majority of folks here in Greeley. The challenge for Greeley, as with other communities across the country, is to balance the economic benefit with concerns about the environment and industrial uses next to residential uses.”

According to Otto, the city’s rich and extensive history in agriculture has long been complemented with oil and gas activity.

“There have been upwards of 2,000 people moving to Greeley in the last two years,” he continues. “It is an economic boom for the city, but as to how much of this is due to oil and gas alone, I couldn’t say. It has clearly had a large impact on Greeley and on the state of Colorado. A lot of people

AIMS Community College leased its mineral rights to Synergy Resources Corporation two years ago. The agreement involved 182.6 acres of the college’s campus land in Greeley.

COURTESY OF THE CITY OF GREELEY/FLICKR.

“ We project that the number of oil wells within Greeley will probably reach 1,000 within the next 10 to 15 years.” think the reason Colorado has recovered so quickly from an economic standpoint is because of the oil and gas industry.”

One group that isn’t as pleased with this activity is Greeley Communities United, a non-profit group of residents protesting the environmental repercussions of horizontal drilling and fracking.

“There was a time in the development of our country when oil and gas fueled the industrial revolution,” states Dr. Mark Schreibman, founder of Greeley Communities United. “The thing that fueled our development, in my opinion, is today’s number-one crisis facing the planet.”

Schreibman founded the group two years ago. He believes that the volume of extraction and the imprecise nature of fracking not only contributes to global warming, but puts the planet at risk.

“Our goal is to put an end to it, especially in high-density populated areas like Greeley,” he explains. “We’d like to see it stopped nationally and internationally too. But we’re losing battle after battle, permit after permit.”

Schreibman recently ran for council on a platform to stop future oil activity in the city. He lost to a proponent of oil activity.

Mayor Norton himself was recently re-elected on the platform of using oil and gas activity to fuel future economic development in the city.

“I ran on the premise that the basis of our economy for the next 10 years will be oil,” states Norton, who won by a 70 percent margin.

Both Norton and Otto actually put “their money where their mouths are”.

“We both live within 800 to 900 feet of a well that didn’t exist two years ago,” states Otto. “It doesn’t ultimately concern me. In fact, I don’t even know it’s there 90 to 95 percent of the time.”

An educated decision Another organization happy with the local oil activity is AIMS Community College. The college leased its mineral rights to Synergy Resources Corporation two years ago.

The agreement involved 182.6 acres of the college’s campus land in Greeley. In exchange, AIMS received $35,000 for the leasing rights, a one-time royalty bonus of $54,780, and it will be the recipient of 16.67 percent of the net royalty interest revenues over the five years of the agreement.

“We project that we will receive around $300,000 a 2014 Inaugural Edition 15

A HOT-BED OF ACTIVITY continued

year, over and above the money we have received in exchange for the mineral rights,” explains Bob Cox, chief business officer at AIMS Community College. “We had nine wells drilled on the Greeley campus last summer and have the capacity for 13 to 15 in total.”

According to Cox, the wells did not generate any protests from the 6,000 to 7,000 students who frequent the campus (most from Weld County). They are located behind the campus on the back end of the property.

“The company was really good about giving out information and putting up notices about the pending activity,” adds Cox. “I didn’t hear any complaints from the student population.”

Spreading the word Getting information into the hands of the residents is something that Greeley City Council is also committed to doing.

“We have spent a lot of effort on educating the folks,” explains Otto. “We have run a few ‘Frack Sense’ sessions, where we have experts from both sides available to discuss the issue, including representatives from the University of Colorado. We’re trying to give people the 16 western interior oil & gas report

information they need so that they can form their own opinions. We have another session scheduled to take place in September.”

According to Otto, each session has been well attended by the locals, with as many as 250 to 300 people coming out.

Along with educating the residents, city council is putting aside 17 percent of its previous year’s budget for those downturns in the economy when revenues may not be quite what they are today.

“For the most part, any new revenue is being used for infrastructure projects,” concludes Otto. “We do our budgets on the basis of two-year cycles and we try to incorporate some economic volatility. People always say the oil industry is a ‘boom and bust’ industry, but tell me an industry that doesn’t go through cyclical changes.

Even agriculture, which is the heart of Greeley, has its ups and downs. We’re trying to be responsible by putting money aside to help out in whatever situation we find ourselves. I think we’re fortunate to be in a position today where we can afford to put aside 17 percent, without having to eliminate important capital expenditures.” v

Is there a

“war on oil?”

by Wayne Kovach

The “war on coal” is alive and well under President Obama’s administration. In early June, the Environmental Protection Agency (EPA) announced a 30 percent reduction to the carbon pollution levels emitted by the country’s power plants by 2030. With nearly 1,000 power plants in the United States, intense regulations could cripple many of the nation’s biggest energy producers. Those in the industry are clearly nervous about the ramifications of this rule, especially when it comes to job security.

forward with a decision until after a pipeline-siting lawsuit in Nebraska is rectified, which they appear to be putting off until late 2015, conveniently after the fall elections.

The plight of Keystone XL

Bottom line

The Keystone XL pipeline is poised to bring crude oil from Hardisty, Alberta to Steele City, Nebraska, then down to oil refineries on the U.S. Gulf Coast. Since the project was proposed in 2008, the Canadian government has been lobbying Washington each year for approval of it. Seeing that it would cross an international border, TransCanada, the company in charge of the project, needs a presidential permit. A decision on the pipeline, last delayed in midApril by the State Department, still has not been made and likely won’t be made under the current administration.

Which raises the question, why? The department claimed in a January report that the pipeline would not worsen carbon pollution. However, they admit they won’t move

While oil is, and always will be, an easy target for environmentalists, it’s also a very practical and economical commodity. Drilling for, and production of, oil would not be growing at such an amazing rate were it not for its demand. Case in point is the graph below from the EIA.

Railcar safety

Railcars deliver oil through residential areas within the United States. Their safety is constantly questioned however, especially after the derailments and explosions in Casselton, North Dakota and Lac-Mégantic, Quebec.

Newly proposed rules include speed limits through How does this relate to the oil industry? Since urban areas, thickening of the tanks’ walls, pressure relief approximately 37 percent of the United States’ total valves, and complete phasing out of old cars altogether. annual energy consumption is supplied by petroleum (the It’s important to note that both of these recent tragedies leading source, by far), it resonates soundly. Fracking and were not caused by railcars or oil. In North Dakota, the horizontal drilling allowed the U.S. crude oil output to peak explosion was the result of a grain-hauling train that had in May at a 28-year high, but not everyone is convinced slipped off the tracks and blocked a neighboring section that fossil fuels are economically viable. And most are of the railway. In Lac-Mégantic, an unattended train rolled doing everything in their power to stop their continued downhill for 6.8 miles at highway speeds, exploding in the use. small town after sparks flew from the wheels.

Despite needing constant and updated regulations on railcar safety and ensuring Keystone XL’s safety if it’s built, it’s naïve to think oil is going away anytime soon.

And despite constant negative press about oil and its drawbacks, everyone uses it in some form or another.

Whether it’s deodorant, antiseptics, umbrellas, lipstick, shampoo, toothpaste, or a myriad of other things, oil is engrained in our daily lives and existence.

Until renewable energy technologies become reliable (if they become reliable), oil and other fossil fuels are the only choice. Instead of condemning the industry, we should be embracing it and working to improve it, instead of trying to shut it down.

Wayne Kovach has worked as the SEO specialist for Energy Curtailment Specialists (ecsgrid.com) since 2012. Holding degrees in printing and graphic design, his writing interests include coal, natural gas, oil, and new products.. v 2014 Inaugural Edition 17

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As with most things in life, there can be a dozen ways to solve a problem; but a workable solution does not necessarily equate to the best solution. Without effective communication, some of the best solutions remain unused tools. Jost & Shelton understands that our clients’ key to success lies in effective communication.

We value our relationships and work tirelessly to cultivate relationships built upon effective communication so we are always using the right tool for the job.

Many of the necessary steps land and legal departments must take during the exploration and development process are duplicative in nature. Add this to the scope of a sophisticated development plan in a large prospect, and you have the recipe for inefficiency, which can result in costly mi mistakes. Jost & Shelton believes you should never have to pay twice for something that has already been performed. Whether it is a notice list for a pooling prepared during a title examination, or a regulatory action that cures a title defect, Jost & Shelton marries the core oil and gas practice areas to ensure th that valuable internal knowledge is always put to efficient use.

Jost & Shelton believes that if client costs are reduced, it will free up capital so you can do what you do best: explore, produce, and develop energy. When clients are able to do this, our entire country benefits, and that is important to us. This is why we take great pride in en ensuring that all work performed is done effectively and efficiently, which, in turn, reduces costs and continues to place our country on the road to economic stability through energy security.

1675 LARIMER STREET, SUITE 420 • DENVER, CO 80202 • (720) 379 -1812 *Adam Shelton not licensed in CO. ** The Wyoming State Bar does not certify any lawyer as a specialist, or expert. Anyone considering a lawyer should independently investigate the lawyer's credentials and ability, and not rely upon advertisements, or self-proclaimed expertise. -- Rule 7.2, Wyoming Rules of Professional Conduct

Ten practical points for permitting and developing the Niobrara shale in Colorado and Wyoming

by Jamie Leigh Jost, managing shareholder, Jost & Shelton Energy Group, P.C. Oil and gas operators in Colorado and Wyoming are successfully developing the Niobrara shale play.

While operating under some of the most stringent air, water, and oil and gas conservation regulations in the nation, the theme remains the same: Colorado and Wyoming are “open for business”. Successful operators need to know how to navigate the regulatory myriad of permits, noticing and meeting requirements, mitigation measures applicable to each new well or facility location, and the various Colorado and Wyoming Oil and Gas Conservation Commission (COGCC and WOGCC) policies, guidelines, and regulations. This overview provides oil and gas operators, new and experienced alike, with 10 practical points to consider when initiating development of, or extending development in, areas of the prolific Niobrara Shale Play. #1. Meet the staff and commissioners of the COGCC and WOGCC A key point in any permitting and development plan is to have a point of contact at the state level that an operator can turn to for guidance when navigating the layers of permits associated with development.

Operators should make a concerted effort to know the commission staff, as well as the commissioners, who

will be reviewing the permits and applications for development. #2. K now the COGCC and WOGCC rules applicable to Niobrara Shale Understanding the rules of the COGCC and the WOGCC are critical to the efficient and economic development of the Niobrara shale. Expertise of the rules allows operators to properly analyze costs and timelines, as well as avoid permitting delays and costly enforcement actions. #3. K now the setbacks and exceptions applicable to the application for permit to drill and oil and gas location process Setbacks are a key component to an operator’s development plans in both Colorado and Wyoming.

Surface setbacks for wellsites and facilities vary greatly among surface property lines, building units, and subsurface setbacks. Properly waived or approved exceptions to setback requirements can be a true benefit to an operator. #4. K now the applicable mitigation measures and best management practices Mitigation measures and best management practices vary by state, as well as by the location of the well or facility within the state and by

target formation. Operators need to understand the measures and BMPs that will be applied as each will increase costs, affect timing, and determine certain locations. #5. K now the notification, meeting, and consultation requirements “Early, and often.” Communication and notification of oil and gas operations is key to ensuring a smooth development process.

Colorado and Wyoming have very specific notification, meeting, and consultation requirements that operators must comply with prior to receiving approval of applications for permits to drill and oil and gas locations. #6. K now the applicable local government regulations Many local governments have regulations pertaining to certain land uses within their jurisdictions.

Operators must review and understand the local land use regulations that may govern their operations within a given jurisdiction.

Like the COGCC and WOGCC, it is beneficial for operators to make a concerted effort to know the local government’s planning staff, council, or commission. #7. K now the applicable state policies and guidelines Operators are also subject to various 2014 Inaugural Edition 19

TEN PRACTICAL POINTS continued COGCC and WOGCC policies and guidelines that apply to the development and operations in the Niobrara shale. Specifically, the COGCC adopted policies regarding the use of modular large-volume storage tanks and an interim statewide horizontal well offset policy, which mandates an evaluation of all wells within 1,500 feet of any horizontal well, including

those proposed to the Niobrara formation. Knowledge of the policies and guidelines are crucial for operators to continue smooth project development. #8. Determine the types of commission applications needed for development and obtain approval from the appropriate commission

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20 western interior oil & gas report

Spacing and pooling of oil and gas interests are critical tools in the development of the Niobrara shale. The sizes, shapes, and types of units allowed by the COGCC and WOGCC vary, as well as the types of pooling available to operators.

An operator should be aware of the available options for spacing and pooling in order to protect and develop its valuable Niobrara assets. #9. Retain expert geologists or engineers, if not already inhouse, to assist in the scientific and technical development of the Niobrara shale play Any development of the Niobrara shale must be supported by scientific and technical evidence.

Colorado and Wyoming are home to some of the best geology and engineering experts, especially as their experience relates to the Niobrara shale. Operators will benefit from knowing these experts, and utilizing their expertise when considering Niobrara shale development. #10. Retain experienced regulatory legal counsel, outside or in-house Operators should consider retaining experienced legal counsel in Colorado and Wyoming to assist with the regulatory strategy, development and operations of an operator’s Niobrara shale assets.

A strong initial legal strategy can benefit operators as they explore, develop, and produce oil and gas from the valuable Niobrara shale.

For more information on the matters contained in this overview, please contact Jamie L. Jost, managing shareholder of Jost & Shelton Energy Group, P.C. v

BUSTING MEDIA MYTHS ON FRACKING

by Michael Sandoval

faucet” talking point, the media’s portrayal of fracking tends toward the “inflammatory,” as one critic, Energy In Depth’s Katie Brown, noted.

‘Cancer, Birth Defects and Infertility’ Take the recent study, published in the journal Endocrinology by researchers at the University of Missouri School of Medicine, focusing on drilling sites in Garfield County, Colorado.

“University of Missouri researchers have found greater hormonedisrupting properties in water located

Sensationalism

near hydraulic fracturing drilling

There is, perhaps, no more apt a way to describe the media’s treatment of the fracking industry. From headlines of articles to the manner in which the media portrays the evidence contained in them, the myths of a destructive extraction process are presented to an audience built on hype and speculation, not facts and results.

sites than in areas without drilling.

Sometimes aided by anti-fracking activists stocked with a slick grabbag of platitudes, many in the media appear willing to readily accept the accusations and assertions offered, often with limited context. Corrections and context often come much later, if at all.

But even when so-called “fractivists” are not offering up the latest “flaming

The researchers also found that 11 chemicals commonly used in the controversial ‘fracking’ method of drilling for oil and natural gas are endocrine disruptors,” the study’s release began.

Dr. Susan Nagel, an associate professor of obstetrics, gynecology, and women’s health at MU, outlined what the potential – not the conclusion – of the study should be.

“More than 700 chemicals are used in the fracking process, and many of them disturb hormone function,” she said. “With fracking on the rise, populations may face greater health risks from increased endocrinedisrupting chemical exposure.”

Cue the headlines “Drilling-area water found to contain hormone-disrupting chemicals” – Denver Post.

“Hormone-disrupting chemicals found in water at fracking sites” – Los Angeles Times.

Other outlets took a more direct approach, such as Denver’s Channel 7 News. “Fracking chemicals could cause infertility, cancer and birth defects, study finds,” the editors wrote.

In the Twitter era, headlines may matter more than ever. Social media outlets are flooded with “Upworthy”esque headlines that go more or less like this: “You won’t believe what this new fracking study shows!” exhort the antifracking pied pipers.

Most readers will not receive the necessary contextual evidence that the samples collected in Colorado had been from drilled areas where spills had occurred and compared to samples taken hundreds of miles away in Missouri. That was the case with the story from Channel 7 News, which also neglected to mention the sample sites were spill locations, and not normal drilling sites.

Mark Jaffe, the Denver Post’s energy reporter, noted the spills and offered input from the state’s Water Quality Control Division, Steve Gunderson.

2014 Inaugural Edition 21

busting media myths continued

More than seven days passed before the Post issued a correction to that front-page photo, noting that it was not the remnant of an oil spill, but was merely leftover floodwater.

Gunderson offered criticism of the study’s methodology.

“The geology, annual precipitation and overall environment of Boone County is extremely different than Garfield County,” Gunderson told the Post.

“I’m not an alarmist about this, but it is something the country should take seriously,” Nagel told the Times in response to criticism of the study.

Nagel’s comments in the study’s press release, quite often the only portion of the study that is written up by journalists on deadline, appear more alarmist than not.

But EID’s Brown pushed back against Nagel’s top line statements, noting that the study itself contradicted those conclusions.

“Interestingly, the authors of the report not only agree, but actually state that the EDCs [endocrinedisrupting chemicals] they examined could be coming from sources other than fracking,” Brown wrote.

She pointed to this passage in the MU study.

“Both naturally occurring chemicals and synthetic chemicals from other sources could contribute to the activity observed in the water samples collected in this study,” the researchers wrote.

Those and other mitigating, contextual qualifications went missing from most media outlets’ reports.

22 western interior oil & gas report

‘Media blackout’ or not?

In the days following September 2013’s catastrophic floods in Colorado, anti-fracking activists leveled a new attack at the media – with thousands of people displaced and trillions of gallons of water inundating the state – where was the concern about oil and gas spills that must have taken place during the aftermath of the storm?

No less that Rep. Jared Polis (D-CO) added his voice to the concerns raised about “toxic spills”.

“Not only have my constituents been dealing with damage to their homes, schools, and roads, they are increasingly concerned about the toxic spills that have occurred from the flooding of nearly 1,900 fracking wells in Colorado,” Polis wrote.

The Denver Post’s September 20 front page seemed to bear out those concerns as an overhead photo showed what appeared to be oil runoff, possibly from a damaged tank.

The above-the-fold headline blared: “Oil spilling into mix.”

The only problem: it wasn’t.

Doug Flanders, director of policy and external affairs at the Colorado Oil and Gas Association, told The Colorado Observer (TCO) that simply wasn’t true.

“There were no hydraulic fracturing operations functioning when the floods hit the region, no fracking

equipment at the well sites, no fracking chemicals on any site,” Flanders told TCO. “The 12 notable oil spills that did occur could fill five percent of an Olympic-size swimming pool and were the result of cracks in flowlines that connected to equipment,” Flanders continued.

“So, the fact people were saying we were having this fracking disaster is just completely and utterly false,” Flanders said.

TCO’s Audrey Hudson pointed to the media bandwagon, as CNN, Salon, and Rolling Stone – among others – rushed to share dramatic photos like the one headlined by the Post.

More than seven days passed before the Post issued a correction to that front-page photo, noting that it was not the remnant of an oil spill, but was merely leftover floodwater.

But when evidence of massive spills, contamination, and public health concerns touted by anti-fracking activists and eagerly gobbled up by a sympathetic media failed to materialize, media outlets went back to reporting the facts.

“Although much attention was focused on spills from oil and gas operations, it is reassuring the sampling shows no evidence of oil and gas pollutants,” Dr. Larry Wolk said. The Colorado Department of Public Health and Environment chief medical officer found no evidence of contamination from oil and gas

operations, including fracking.

“There were elevated E. coli levels, as we expected, in some locations.”

“By comparison, the oil spills represent about four percent of the 660,000 gallons it takes to fill an Olympic-sized swimming pool. The waste contained in the Evans plant alone would fill nearly two swimming pools,” the Denver Business Journal’s Cathy Proctor wrote.

The Associated Press added, “The river [South Platte] is a major source of drinking water and agricultural water but the state health department says the millions of gallons of sewage dumped into the river from broken sewer pipes and waste treatment plants pose a bigger problem.”

“Floodwaters quickly became a toxic soup of wastewater, raw sewage, industrial and household chemicals, agricultural waste and chemicals rushing downstream. Oil and gas releases, officials said, have been so small, it’s almost immaterial,” Mark Salley, spokesman for the state department of Public Health and Environment, told the Greeley Tribune.

The Environmental Protection Agency also came to the same conclusion.

“The total reported amount of reported [oil] spills is small compared to the solid waste that has spilled from damaged sewer lines and

household chemicals from destroyed homes,” Matthew Allen, EPA Region 8 spokesman, told Energywire.

to ban the extraction method, and

“It wasn’t user error or improper operations; it all falls in the act-ofGod category,” Allen said.

In November 2013, National Journal

City of Evans Mayor Lyle Achziger, whose town was devastated by floodwaters, told a side of the story not mentioned in the media.

moratoriums and local bans through

“In the opinion of all of us here, we could have no better neighbors and business members of our community than oil and gas,” Achziger said.

“Davis, a self-described ‘fractivist’

Achziger noted that oil and gas companies like Noble Energy and Anadarko were among the first responders in the aftermath of September’s floods. According to Achziger, the companies handed out gift cards for food and provided more than 200 port-a-potties due to a “noflush” order in the city. Equipment for hauling, digging, and cleaning were also made available to the city, providing critical infrastructural support in a time of crisis.

mainly on the public-health and

‘Media myths and fracktivists’

green energy issues, government

Resource developers should be under no illusion about the intent of those opposed to hydraulic fracturing.

With the media’s willing or unwitting assistance, their goal is not merely to study the effects of the process of hydraulic fracturing on health, geology, or local economies, but

eventually the entire oil and gas industry, outright.

(NJ) interviewed “fractivists” in Colorado pushing temporary ballot measures in four Colorado communities. They admitted their end game went far beyond mere concern.

whose full-time job is to mobilize people against fracking – and oil and gas drilling writ large – focuses environmental concerns. Ultimately, though, he is fighting to end fossilfuel production altogether,” NJ wrote.

Michael Sandoval is energy policy analyst and investigative reporter for the Independence Institute in Denver, Colorado. Sandoval was most recently an investigative reporter for the nation’s leading conservative think tank, The Heritage Foundation, where he specialized in coverage of waste, and social media strategies.

Sandoval’s work has been featured by the Drudge Report, The New York Times, Washington Post, Politico, Fox News, Fox Business News, Townhall, and dozens of radio outlets around the country, as well as blogs like MichelleMalkin.com, HotAir.com, and Instapundit.com. v

“The total reported amount of reported [oil] spills is small compared to the solid waste that has spilled from damaged sewer lines and household chemicals from destroyed homes,” Matthew Allen, EPA Region 8 spokesman, told Energywire.

“It wasn’t user error or improper operations; it all falls in the act-of-God category.”

2014 Inaugural Edition 23

Niobrara Play producing more than just oil; Financial benefits abound

by Melanie Franner

PHOTOS COURTESY OF NANETTE FORNOF, CITY CLERK, CITY OF FORT LUPTON.

Colorado may have a long history in oil and gas, but it’s the recent past, most notably the 2009 discovery of the Niobrara Play, that has added one of the more interesting and lucrative twists to the story. In fact, the Colorado Oil & Gas Association (COGA) credits the discovery of the Niobrara Play to helping Weld County maintain its debt-free status. This is a pretty significant achievement, considering it is the only county within the entire state of Colorado able to make this claim.

One for all and all for one

City of Fort Lupton Mayor Tommy Holton.

According to Upstate Colorado Economic Development (UCED), a public/private non-profit economic development corporation, Weld County covers an area of approximately 4,000 square miles and consists of 31 incorporated towns and cities – some of which are very tiny, such as the Town of Grover at a population of 137, and others which are rather large, such as the City of Greeley with a population of 92,000+.

“Weld County grew by 39.7 percent between 2000 and 2010,” states Eric Berglund, president and CEO of UCED. “We lead the state in the number of oil wells, with almost 22,000. Weld County’s job growth topped the nation in 2013. This shows the long-term success of being a place where companies can grow and expand from the construction side to oil and gas or manufacturing.”

The 250,000+ people who live throughout Weld County have experienced a lot of change over the years. Rollie Purifoy, president of the Purifoy Chevrolet dealership in Fort Lupton (population 7,300+), is one of these people. Purifoy purchased the dealership from his father, who initially started the business in 1960.

24 western interior oil & gas report

“The oil boom has come and gone over the years,” notes Purifoy. “But with the latest activity underway, it’s come back to full strength. And the large oil companies like Halliburton are saying that it’s here to stay for at least 25 more years.”

Purifoy estimates that the City of Fort Lupton has probably tripled in size since the days when his father first came to the area. The advent of horizontal drilling, fracturing and now, the Niobrara Play, have created a trifecta of opportunity.

“From the standpoint of an economic boost, I think it’s a wonderful thing,” he adds. “There has been an influx of people and truck traffic, which maybe isn’t as good in terms of quality of life, but I think we’ll soon learn how to do things better, like maybe re-routing trucks.”

Influx in infrastructure Being debt-free means being able to do a lot of things that aren’t otherwise possible. Take the example of Halliburton’s latest $45-million facility, a project that would not have happened without Fort Lupton’s Mayor Tommy Holton providing the company with $2.5 million in water and sewer servicing upgrades.

And thanks to being debt-free, Weld County can afford to do just this.

“Everybody here is doing well and is proud of the fact that we’re debt free,” states Holton. “We’re not like the Bakken in that we didn’t have the explosive growth and all of the issues that came with it, like work camps. We were lucky that a lot of the infrastructure was already in place to handle most of the growth. For the most part, most of the jobs being created in town are being filled by the locals.”

A viable future With activity in the Niobrara Play still very much in its infancy, Weld County is at the brink of what could prove to be a very lucrative period in its history. This could help cement its current debt-free status for many years yet to come. And, provided that the leaders continue to balance budgets and attract new investment, Weld County could also continue to lead by example to both politicians and residents alike. v

According to Holton, the $2.5-million investment not only secures one of the area’s largest oil-service companies, it also opens the door to almost 2,000 acres of property that can now be developed with other industry.

“When Halliburton first arrived, they built a $200,000 facility and employed around 125 people,” he explains. “Today, they have a $45-million facility and employ about 1,200 people. Investing in infrastructure is critical to maintaining our economic growth.”

2014 Inaugural Edition 25

Energy rounds out Goshen County economy Development of the Niobrara oil play in Goshen County, Wyoming, fits the economy: slow and steady.

Over the past few years, this county, known for being the leading agriculture producing county in Wyoming, has seen some development related to the oil and gas industry.

In May of 2012, 19 companies held 105 drilling permits in Goshen County. Production didn’t really take off, but instead, Goshen County saw the benefits from pipeline construction and a new crude oil loading rail facility at Fort Laramie.

Just a few miles west of the Goshen County line, the Guernsey crude oil pipeline hub is linked to the United States oil infrastructure that is going through a market reversal thanks to a “tight oil revolution” that is creating positive trends in the industry. As the nation’s fifth-largest trading hub, oil supplies that converge in the Guernsey area are transported by rail to the Gulf Coast, displacing foreign crudes.

Eighty-Eight Oil built a crude-oil rail loading facility at Fort Laramie in Western Goshen County with 35 employees to start. The average annual salary of $50,000 brings the total wage base of up to $2 million per year, plus benefits. Within three years the facility will bring an estimated annual payroll in 2016 to $4.29 million, according to an economic and revenue impact study prepared by the Wyoming Business Council. Business council projections show the cumulative total direct and indirect payroll from 2014-2023 will reach $39.3 million. Based on projections, the facility will have a consumer impact on the local economy of $13.49 million in sales per year. This means the entire region could accumulate $123.69 million in total sales over a 10-year period.

Tall Grass Energy is reported to employ about 300 in Goshen and Platte counties with its projects converting a natural gas pipeline to oil.

The rail loading facility and pipelines operated by Tall Grass Energy and Oneok spurred growth in the rural electric utility, Wyrulec Co. The co-op has built 26 western interior oil & gas report

Wyoming Governor Matt Mead speaks at the grand opening and ribboncutting ceremony for the Eighty-Eight Oil’s Fort Laramie Rail Facility, accompanied by Hank True (right), owner of Eighty-Eight Oil and True Companies and Matt Rose (left), executive chairman of Burlington Northern Santa Fe Railroad.

four new electric substations and installed more than 20 miles of sub-transmission line. Now, the peak summer load is 30 megawatts, and Wyrulec plans to add another 20 megawatts to its system.

During the oil exploration, Goshen County government was prepared to cooperate with the industry to mitigate the impacts on local roads and plan for emergency management. Goshen County coordinated its road-use permitting process with neighboring counties in an effort to streamline the process for the energy industry.

Goshen County Economic Development Corporation serves as a liaison to assist the energy industry with making important community connections, such as finding local sources for supplies and services. In addition, the economic development office maintains a list of commercial and industrial property.

The energy industry has complemented the agricultural economy, boosting Goshen County to a 33.5 percent increase in assessed valuation (from 2008-2013), and making it the fourth fastest growing county in Wyoming. v

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2014 Inaugural Edition 27

Local Colorado election confirms fact trumps fiction in the debate on fracking

by Jon Haubert, Coloradans for Responsible Energy Development (CRED) of oil and natural gas altogether.

In Colorado especially, there are already high standards and “best in nation” model environmental regulations in place to ensure that the health and safety of our communities come first. But getting that information into the hands of voters before the election was the task at hand. Eventually, with the facts on fracking in hand, voters chose the opportunity and benefit that oil and natural gas development can bring to a local community. And, the educational effort that the Coloradans for Responsible Energy Development (CRED) has developed is starting to catch on.

Many may not have noticed, but an important vote was cast in Loveland, Colorado that might impact everyone involved in the oil and gas industry.

As a part of the primary election held on June 24, 2014, residents in Loveland were asked whether or not a two-year moratorium on fracking should be enacted in order to further study the potential impacts. Those unfamiliar that we’ve been fracking since 1947, with over 1.2 million frack jobs under our belt, may be inclined to think, “sure, let’s wait until we know more – what’s the harm?” It’s a very reasonable approach.

28 western interior oil & gas report

But unlike the five communities of Boulder, Broomfield, Fort Collins, Lafayette and Longmont – which hardly had any oil and gas production to begin with – and had already voted for a ban or moratorium in past elections, Loveland changed course and immediately became a case study and microcosm in the national debate on fracking. Why? It’s clear that those previous decisions to halt fracking in Colorado communities were based on unfounded and hyperemotional claims meant to mask anti-fracking organizations’ true agenda of eliminating the production

Recently, the U.S. Bureau of Labor Statistics said that neighboring Weld County, Colorado – home to 85 percent of Colorado’s oil production and the heart of responsible energy development – is thriving and had the largest percentage increase in employment in the U.S. in 2013. Duke University separately drew attention to the tax revenue Weld County received from oil and natural gas development, increasing from roughly $50 million per year in the early 2000s to over $200 million in 2012.

Statewide, Colorado’s oil and natural gas industry supported more than 110,000 jobs, generated $29.6 billion in economic activity in Colorado and $1.6 billion in tax revenues that go to schools, roads, infrastructure, and other critical services.

Conversely, a study released by researchers at the Business Research Division of the Leeds School of Business at CU Boulder quantified the ill effects of a potential statewide ban on fracking in Colorado. The study, titled Hydraulic Fracturing Ban: The Economic Impact of a Statewide Fracking Ban in Colorado, showed that a statewide fracking ban would “result in 93,000 fewer jobs, $12 billion in lost gross domestic product (GDP), and an annual reduction of $985 million in tax revenue for local and state governments between 2015 and 2040.”

Additionally, the National Association of Royalty Owners (NARO) released a report quantifying the effect of a county-level ban on fracking in nearby Boulder County, concluding that such a ban would cost the county over $1 billion in compensation to mineral owners and those who receive royalties from energy development on their property.

Clearly voters in Loveland saw two paths before them, and supported the path of responsible energy development and the tremendous benefits that come with it, while rejecting the path of a future marred by lawsuits at the expense of taxpayers.

When voters have the facts on fracking, they are more than capable of making an informed decision about this critical economic driver, and shown the courage to rebuff attempts by extremists to outlaw fracking and oil and gas development. Fortunately, Loveland voters saw through the “delay tactics” behind the call for further studies, and hopefully other Colorado communities will follow their lead and learn more about fracking’s 60-plus year history. v

FRACKING FINDS OIL, GAS, AND OFTEN TIMES,

JOBS.

Fracking has become a $29 billion boon to Colorado.

More than 110,000 jobs have been created where average annual salaries exceed $100,000.

1

University of Colorado Boulder Leeds School of Business, Assessment of Oil and Gas Industry 2012 Economic and Fiscal Contributions in Colorado

1

Stay informed with the latest information. Sign up at: www.cred.org/get-involved/.

To answer your questions about fracking, go to: www.StudyFracking.com.

2014 Inaugural Edition 29

Need a hand?

A little over a decade ago, a handful of Halliburton Baroid employees organized a fundraising event in Houston, Texas. The friends raised roughly $24,500 for a fellow employee whose family savings had been drained as a result of several expensive surgeries.

That one gracious gesture sparked an idea. “What if we did this regularly for families in need?”

That’s when the idea of Oilfield Helping Hands (OHH) became a reality.

Today the non-profit organization has raised approximately $2.6 million in funds to assist individuals and families in the oilfield community who are in financial crisis through no fault of their own.

What started out as one clay shoot has now grown into a dedicated team of members, volunteers, and corporate sponsors who manage nine annual fundraising events throughout four chapters.

“Our events range anywhere from clay shoots to golf tournaments,” said Gary Brooks, OHH president.

“We’ve hosted fishing tournaments, car shows and nights at the ballpark. We couldn’t do anything without the support of our sponsors, member volunteers and corporate members. We currently have 23 corporate members who are dedicated and committed to providing what we need in order to help the communities in which we serve. With their 30 western interior oil & gas report

support, we have helped 235 families in need. And we’re looking forward to helping many more.”

The original OHH chapter began in Texas. Individuals in Oklahoma and Acadiana soon started chapters in their regions, and in early 2014, the Rocky Mountain chapter was launched.

“We are excited to announce to the oilfield community that OHH officially has a Rocky Mountain chapter,” said Jamie Dandar, OHH Rocky Mountain president. “Being a part of the oil and gas industry is a great privilege. Sometimes our industry is misunderstood. I’m honored to be a part of something that may only be perceived as positive energy! While no one expects crises to occur, they do happen. It feels good to be a part of something that can help those in need and further strengthen and support the character and integrity of the people in the industry.”

The Rocky Mountain chapter is based in Denver and covers the Colorado, Wyoming and Utah regions.

The organization will raise money through corporate memberships and fundraising events. The chapter members are already hard at work organizing a clay shoot for this fall.

“We launched our chapter in the spring and we already have 250 members,” said Jessica Sloat, OHH

Rocky Mountain vice-president. “Everyone has

In order to qualify for financial assistance, the

been extremely gracious and ready to help out in

recipient must live and/or work within the OHH

any way they can. It’s nice to be a part of a national

chapter area. The applicant must be nominated

organization that prefers to distribute chapter

by an OHH active member, and 75 percent of the

funds locally. So many individuals working in the

applicant’s family income and a minimum of five

Rocky Mountain oilfield are eager to give back to

years of verified employment must be derived from

the community any way they can. This is a perfect

the exploration and production side of the oilfield.

opportunity to get involved in a major way.”

“We know that it’s sometimes hard to ask for

Individual OHH membership is free. Active

help,” said Dandar. “We are a tough industry full of

members participate in fundraising events and

strong individuals. But sometimes it’s important to

attend monthly luncheon meetings. Not only are

remember that you have to let people in when it’s

members updated on upcoming events, but they

too much to handle on your own. That’s where we

hear firsthand stories of where OHH funds are being

come in. We encourage you to reach out because

distributed.

OHH will be ready to lend a helping hand.”

“What I like about OHH is that we meet people

To learn more about how you can join the Rocky

where they are in life,” said Sloat. “Hardship has

Mountain OHH chapter as an individual or

many faces, including medical issues and natural

corporate member or become a sponsor, visit the

disasters. If we can offer some sort of relief in a time

organization’s website at www.oilfieldhelpinghands.

of turmoil, it’s worth it.”

org/chapters/rocky-mountain. v

“Everyone has been extremely gracious and ready to help out in any way they can. It’s nice to be a part of a national organization that prefers to distribute chapter funds locally. So many individuals working in the Rocky Mountain oilfield are eager to give back to the community any way they can.

This is a perfect opportunity to get involved in a major way.”

2014 Inaugural Edition 31

Study addresses why sleep is integral to productivity, safety, health, well-being In the often-challenging environments of remote worksites in the oil, gas, and mining industries, providing workers with first-rate living and sleeping accommodations is essential to optimize job performance, enhance mental acuity and prevent injuries, Nancy H. Rothstein states in a white paper titled “Optimizing Sleep for an Optimal Workforce in the Oil, Gas and Mining Industries.” Sleep is as essential as oxygen or food to live.

Known as “The Sleep Ambassador®,” Rothstein lectures, consults, and educates about sleep wellness to Fortune 500 corporations, institutions, organizations, universities, schools and the public. She can be reached at nancy@thesleepambassador.com.

Best practices for healthy sleep In addition to providing workers with a comfortable mattress, bedding, privacy, and noise and light management, oil, gas and mining companies must also think “beyond the mattress” when it comes to ensuring that their workers are getting the sleep they require to perform their jobs safely and productively. Research has shown that there are many influences outside the bedroom that can greatly affect the amount and quality of workers’ sleep.

For oil, gas and mining companies, making the investment with a premier lodging company is an essential step on the road to good sleep for your workforce. In addition, empowering workers with a basic understanding of how to optimize sleep quality and quantity offers a strategy to ensure a vibrant, productive, and motivated workforce. These best practices for healthy sleep can be incorporated in their workforce training. Lodge sites may consider adding sleep tips in the literature they provide their guests.

Light-related strategies Put technology to bed or block the blue light – Exposure 32 western interior oil & gas report

to a television, computer, tablet or smartphone in the hour before bedtime can impair sleep due to exposure to blue-spectrum light emitted from these devices.

Just when the brain is getting ready for sleep, it receives a confusing signal to be alert. Blue-spectrum light suppresses the release of melatonin, the sleep hormone, potentially decreasing the quality of sleep.

Additionally, the brain stimulation from these activities further confuses the brain about transitioning to sleep.

If the content is stressful, relaxation for sleep is further compromised.

Away from home in a remote location, workers can’t be expected to tune out from technology in the hour before going to sleep. Wearing blue-light-blocking glasses can block 99 percent of the blue-spectrum light, thereby allowing melatonin to be released and the body to transition to sleep naturally.

Light exposure – Additionally, blue-light-blocking glasses can be useful to wear when returning to the lodge after a night shift if it is light outside on the drive home. The morning light tells the body to stay awake, just when the person is intending to go to sleep; wearing the glasses en route to the lodge preserves the melatonin for your sleep when arriving home.

Furthermore, after a good night’s sleep, getting daily exposure to bright light, especially in the first hour of waking, is optimal. However, for most of us, getting exposure to 30 minutes of direct sunlight on a daily basis is not practical and sometimes not available. Light therapy offers an alternative, especially on dark winter mornings to which many oil, gas and mining workers awaken. Such devices (see www.litebook.com) can also serve as a tool to increase alertness in the middle of a night shift when the circadian rhythm, the body clock, is “set” for sleep and the worker is struggling to stay awake. However, it is not recommended to use the light therapy too close to going to sleep.

Left: Tioga Lodge in North Dakota. Above: Judson Lodge in North Dakota.

Photos courtesy of Target Logistics.

Sleep-promoting habits and strategies

Action plan

Sleep quantity and quality – Though sleep needs vary

“Ensuring that oil, gas and mining workers have the environment, knowledge and strategies required for good sleep requires collaboration,” says Target Logistics founder and CEO Brian Lash. Target Logistics is a global provider of workforce housing and the largest turnkey operator in the United States. It currently operates 16 properties in the United States and Canada with more than 5,300 total beds.

across ages and are impacted by lifestyle, health and other factors, the National Sleep Foundation and most experts recommend seven to nine hours for adults. Sleep quality is also paramount to good sleep and dependent on many factors, a number of which are addressed in this white paper. Often, the quantity of sleep one requires is challenged, putting all the more focus on optimizing the quality of sleep you do get.

The employer

Exercise – Exercise is critical to wellness and helps to

Providing lodging that offers an optimal sleep environment is a primary step for the success of your workforce and of your company. Research supports a call-to-action to take sleep seriously as a vital component to maximize productivity, minimize health-care costs and ensure safety. Integrating sleep wellness into your employee wellness program and workforce training may be one of the most effective business investments you can make.

support healthy sleep. However, exercise should be avoided in the three hours before going to sleep, as the stimulation inherent in exercise can make falling asleep a challenge.

Relaxation and stress-reduction techniques – Stress during the day, or during the night if on a night shift, can impact the ability to fall asleep and stay asleep. Hence, providing opportunities and facilities for relaxation and stress reduction are important components of a sleepsupportive environment.

Nutrition – Good, healthy foods and beverages are essential to health, day and night. However, in the hours before bed, eating too large a meal can tax the digestive system and compromise sleep. Yet sleep-friendly snacks can help with sleep. Foods containing melatonin and/ or tryptophan are good choices, including bananas, oatmeal and almonds. Sleep elixirs such as chamomile tea and almond milk can help the body surrender to slumber.

Caffeine and alcohol – Limiting caffeine and alcohol several hours before bedtime is important. Caffeine acts as a stimulant and can interfere with the quality of your sleep. Alcohol may initially act as a sedative but can disrupt normal sleep patterns.

Metrics are integral to prudent decision-making and strategic planning. Combining sleep-related initiatives and sound research data offers an opportunity to gauge results and ROI to ensure that future program design, training, and results best serve your goals.

The employee While the sleep amenities provided in quality lodging are conducive to a great night’s sleep, each person makes behavior and habit choices that impact the outcome of sleep quality and quantity. As with any behavior modifications, sleep habits do not change overnight.

Guidance, accountability and experience can support lasting, positive changes in habits. Empowered with basic sleep knowledge, as well as strategies to “own” their sleep, workers can take full advantage of the state-of-the-art sleep environment provided, awakening refreshed, rejuvenated and ready to do optimal work.

2014 Inaugural Edition 33

STUDY ADDRESSES WHY SLEEP IS INTEGRAL continued The lodging provider

Conclusion

Providing a well-organized, professional lodging experience for oil, gas and mining workers includes an optimal sleeping environment, superior nutrition, fitness facilities, entertainment and relaxation amenities, strict security and excellent service. Combined, these attributes foster the balance of sleep-work-life, a requirement for optimal performance and well-being.

While getting the proper amount of sleep is important for any individual, the stakes are higher for oil, gas and mining workers whose health and safety is directly tied to the quality and quantity of the sleep they get.

Furthermore, the companies that invest in a high-quality sleep environment for their workers realize benefits that include greater productivity and safety and less attrition and sick days.

Hence, collaboration of employers, employees and the companies that serve them is key to achieving the best interests, safety and success for all stakeholders. Looking forward, it is essential for both employers and the lodging companies they entrust to house their workforce to explore and implement research-proven policies to ensure that workers have every opportunity to get the sleep (as well as the nourishment, relaxation and fitness) they need to support peak performance.

Oil, gas and mining companies have an opportunity to embrace sleep wellness, a critical component for the success of their workforce. It starts with the provision of lodging excellence and a quality sleep environment, along with a commitment to train and empower employees with the tools they need to get a great night’s sleep.

For further information, the complete white paper, which was published by Target Logistics, can be downloaded for free at http://www.targetlogistics.net/white_ papers.php. v

SAVE Denver, Colorado T H E Colorado Convention Center DATE March 31-April 2, 2015

About DUG Bakken and Niobrara

The DUG Bakken and Niobrara conference and exhibition is the ONE event that gives you an in-depth look at all of the action taking place in the Bakken, Niobrara and surrounding shale plays. Produced by Hart Energy – the creator of the DUG conference series – this event attracts more than 2,500 industry professionals working in the Rockies.

Attendees will walk away with new insights, proven best practices, and hundreds of new connections. Plus, through the event’s exhibition, you will get hands-on access to all of the newest products, services and technologies that are driving the future of the industry.

To ATTEND, SPONSOR or EXHIBIT visit DUGBakken.com 34 western interior oil & gas report

Liberty Oilfield Services brings operational excellence and new engineering practices to the Rockies Liberty Oilfield Services (LOS) is an innovative oilfield service company providing specialized stimulation services to optimize well production in the Rocky Mountain area. Since our inception in 2011, we have brought both operational excellence and novel engineering practices to the basins where we operate.

A novel “2C’s completion” approach was developed in 2010 for Central Basin Bakken wells that focuses on incorporating plug & perf technology with slickwater fluids and ceramic proppants. Liberty’s signature design can be more difficult to execute and is more expensive to complete, however, production results from more than 100 wells shows that this approach is superior in comparison to conventional ball-sleeve, gel and sand completions.

The improved production response for this completion approach benefits from creating more complexity (the first “C”) through distributed plug-and-perf initiation points and high-rate large-volume low-viscosity frac jobs; and, placement of higher conductivity (the second “C”), with smaller-size and stronger proppants, which more effectively prop open complex fracture networks filled with partial proppant monolayers. Multi-variate analysis

shows that change of these completion parameters generates the most “bang for the buck”.

As can be seen in Figure 1, different completion designs in the Middle Bakken can result in dramatically different production responses. As shown in Figure 1, a strategy with a ball-sleeve completion, sand and gel (represented by the yellow trend line) results in some of the poorest production results observed across the central basin.

One-year cumulative production increases on average by 75,000 bbl of oil over that approach when switching to the Liberty Design.

LOS started operations in the DJ Basin in May of 2013.

We have operated for more than a dozen DJ companies in the last 12 months and are adding a second frac spread to the basin that will become active in October 2014. Fred Miller, Niobrara district engineer, production & completions, Carrizo Oil & Gas, Inc., stated that “Liberty has provided our company with exceptional fracture stimulation services. The well thought-out nature of their performance ranges from bringing out equipment that has back-up features built in to ensure continued pumping minimizing downtime to sitting down with engineering to review design intentions and 2014 Inaugural Edition 35

liberty oilfield services continued

Figure 1 – Cumulative production after 365 producing days versus water cut percent for 1,046 Central Basin 1,280-acre Middle Bakken wells. Various types of completion designs follow specific trend lines, with slickwateronly (SW), 100 percent ceramics, plug-and-perf (P&P) designs resulting in higher production than gel, sand and ball-sleeve (BS) completions across a wide range of reservoir qualities. The Liberty Design designated by the red trend line results in 55,000 bbl of extra oil production in 365 producing days over average central basin 1280acre well performance.

to help look for potential improvements to both design and execution. Thank you Liberty Oilfield Services for setting the bar higher.”

pollution caused by pneumatic sand handling. LOS is

We are raising the bar by bringing in new pumping equipment with dual-fuel capabilities and the implementation of the SandBox sand management system, which eliminates the hazards of silica dust

and we believe that this is important to remain good

DEL

Communications Inc.

the first company to bring this dust-mitigation, noise reduction, and traffic reduction technology to the basin, stewards in the urban environment in which we operate in the DJ Basin while serving our customers’ need for steady increases in frac job size and frac intensity. v

Suite 300, 6 Roslyn Road, Winnipeg, Manitoba, Canada R3L 0G5 Toll Free:1.866.831.4744 | Toll Free Fax: 1.866.711.5282

www.delcommunications.com

DEL Communications Inc. has in excess of 100 years combined experience working for you. We offer outstanding personal service and quality in the areas of...

CREATIVE DESIGN • ADVERTISING SALES TRADE PUBLICATIONS • QUALIFIED SALES & EDITORIAL TEAM 36 western interior oil & gas report

New aerator boasts unsurpassed performance Introducing a state-of-the-art aerator for frack flowback water

by Shea Casey Installing air turbine into frack tank.

Wastewater engineers have long known that dissolved oxygen is one of the keys to remediation of contaminated water. The challenge has been to find an aerator which can overcome the shortcomings of the myriads of aerators on the market. Now, a new turbine aerator, offered by FracCure LLC, has emerged which represents a revolutionary breakthrough in aeration technology.

The appeal of the turbine aerator is its utter simplicity combined with its durability. It has no internal moving parts. It has no diffusers which can clog. It creates a mild current within the body of water. It creates extremely small oxygen clusters making it appear as if an underwater cloud is being formed. And, finally, it entrains dissolved oxygen by forcing air into water, and not water into air.

Simply stated, the turbine aerator combines the physics principles of precession (as applied to the rotation of fluids) and centrifugal force. Using precession, the rotating sub-surface turbine (disc) creates a low-pressure zone within its internal chamber. This zone is then filled with air forced down an air tube by surface air pressure.

As this air is gathered within the disc, it is immediately expelled by centrifugal force into the surrounding water.

In the process, the rotating turbine actually sheers the clusters of oxygen molecules into very small, micro-sized particles, thus increasing their retention time in the water.

The result is an immediate, continuous, unbelievable barrage of dissolved oxygen that saturates the water.

A typical model can discharge 18 liters of air per second into water. This volume of air is generated with a three horsepower motor, not a seven to 10 horsepower motor.

2014 Inaugural Edition 37

NEW AERATOR continued The centrifugal force slings the air outward at a high speed in a lateral direction in excess of a 100-foot diameter. Tests in a clear water tank have shown that the dissolved oxygen is also pushed downward over 10 feet below the surface.

Due to its design, efficiency, portability, and performance, the turbine aerator is equally at home in aquaculture settings, horticulture irrigation lagoons, municipal waste treatment plants, confined animal feedlot lagoons, and wineries. However, one of its most exciting applications is in frack tanks and frack pits. Frack operators are finding that the turbine aerator is the only aerator on the market which lets them aerate a portable frack tank. This makes it possible to pre-treat flowback water before it is sent to more intense treatment systems.

Finally, the air turbine aerators require no routine maintenance since there are no bearings to be greased. The aerators use foam-filled, UVprotected, polyethylene pontoons guaranteed not to sink. The motors are heavy-duty, industrial-grade, and are designed to run 24/7.

The airshaft is made of a stainless-steel tube that has a quarter-inch-thick wall. The rotating turbine is made of fiberglass resin, which is both corrosion and wear resistant.

FracCure aerators in Purestream frack tanks.

Due to its design, efficiency, portability, and performance, the turbine aerator is equally at home in aquaculture settings, horticulture irrigation lagoons, municipal waste treatment plants, confined animal feedlot lagoons, and wineries.

38  western interior oil & gas report

The three-horsepower air turbines have replaced up to 20-horsepower propeller-type selfaspirating aerators on a one-for-one basis in municipal wastewater lagoons. The result was an increase in dissolved oxygen from four-to-five ppm to five-to-seven ppm. These results, though seemingly impossible, were carefully recorded over several weeks of daily lab tests.

This amazing aerator is offered to the oil and gas industry by FracCure LLC near Austin, Texas.

FracCure has been the exclusive distributor for VaraCorp LLC, the manufacturer, for the past three years.

For more information, go to www.fraccure.com or call Shea Casey, manager of FracCure LLC at 512-847-5026. VaraCorp can be reached at www.varacorp.com or by calling Richard Owens at 325-245-9783. v

FracCure aerators in QEP pit in Oklahoma.

INTRODUCING THE STATE-OF-THE-ART AERATOR WHICH CAN OUTLAST AND OUTPERFORM OTHER AERATORS WHICH HAVE FIVE TIMES THE HORSEPOWER • Cuts power consumption in half • Never needs to be greased • Virtually clog free • Has no internal moving parts • Requires no maintenance • Made of corrosion-resistant materials

Works great in Frac pits and Frac tanks as well as municipal treatment plants, aquaculture farms, wineries, breweries, animal feedlot lagoons, and more.

FracCure LLC is a distributor for VaraCorp LLC.

Go to www.fraccure.com or call 512-847-5026 (Shay) or 325-245-9783 (Richard). Toll free at 866-802-2455.

2014 Inaugural Edition 39

Applicant tool kit provides federal regulatory assistance before issues become problems

by Milford Wayne Donaldson, FAIA The National Historic Preservation Act (NHPA) and its impact on your organization as you navigate the federal application process may be unfamiliar to many in the oil and gas industry, but being aware of its provisions can save you serious time and money.

The Advisory Council on Historic Preservation (ACHP) is here to help you as proponents of projects that require reviews under Section 106 of the National Historic Preservation Act (NHPA) avoid unnecessary delays and make your dealings with its requirements more efficient. Using these reviews to ensure that your projects are designed from the outset to respond to and respect the values and interests of affected communities will likely earn greater support from these communities and enhance your organization’s reputation and effectiveness.

It is worth noting that the NHPA was created and enacted in 1966 – in large part due to the sustained efforts of the U.S. Conference of Mayors and private citizens – because of massive federal infrastructure programs, namely creation of the Interstate Highway System and urban renewal in the 1950s and 1960s. The legislation’s purpose was to create a place at the table for communities, organizations, and individuals who were concerned with the sometimes heedless destruction of heritage sites that were important to local interests. Under the NHPA, a federal agency proposing an action such as building a road, permitting a transmission line, or funding a redevelopment project must consider potential impacts on historic properties.

Today this process also gives companies and applicants a place at the table to discover ways, in concert with affected parties, to design projects so that their immediate objectives succeed while promoting the overall health and vibrancy of communities and the nation’s heritage. It’s not a perfect process and we are continually improving it, but it’s a valuable and proven process and of fundamental importance to our republic.

With the boom in energy transmission and pipeline corridors, traditional and renewable energy development, and demographic and population changes, being aware of the NHPA and its requirements is vital for those planning projects that can potentially impact historic places. It’s important to know what the NHPA requires before you make plans that involve federal permits, funding, or direct participation in projects. These requirements extend to projects both on and off public lands.

The NHPA also created the Advisory Council on Historic Preservation 40 western interior oil & gas report

(ACHP) to oversee the Section 106 process and we appreciate this opportunity to share our experience and increase your understanding of the NHPA. As for being here to help you, that’s actually taking up a good amount of the agency’s time and resources these days and underscores an important trend within the federal government.

President Barack Obama issued Executive Order 13604 on March 22, 2012. The text of the entire order can be found at http://www.gpo.gov/fdsys/pkg/FR-201203-28/pdf/2012-7636.pdf but for our purposes the critical information is as follows: “The quality of our Nation’s infrastructure depends in critical part on Federal permitting and review processes, including planning, approval, and consultation processes. These processes inform decision-makers and affected communities about the potential benefits and impacts of proposed infrastructure projects, and ensure that projects are designed, built, and maintained in a manner that is consistent with protecting our public health, welfare, safety, national security, and environment. Reviews and approvals of infrastructure projects can be delayed due to many factors beyond the control of the Federal Government, such as poor project design, incomplete applications, uncertain funding, or multiple reviews and approvals by State, local, tribal, or other jurisdictions.

Given these factors, it is critical that executive departments and agencies (agencies) take all steps within their authority, consistent with available resources, to execute Federal permitting and review processes with maximum efficiency and effectiveness, ensuring the health, safety, and security of communities and the environment while supporting vital economic growth.”

As part of our response, the ACHP created and posted what we call the “applicant tool kit” to assist those who need to understand how Section 106 of the NHPA functions in the application process. It can be found at http://www.achp.gov/apptoolkit.html.

The ACHP developed this toolkit to provide information and guidance on the Section 106 process for parties who seek federal licenses, permits, assistance, or approvals that require such reviews. While the federal agency is directly responsible for conducting Section 106 reviews and making ultimate decisions, the ACHP oversees the process and provides assistance to it users. Our decades of experience in administering Section 106 can be of great assistance to applicants, improving their

understanding of the law’s provisions. It is also important that applicants know how the ACHP and other federal agencies are working to improve coordination between Section 106 and other environmental reviews that may be necessary to complete a federally approved or assisted project.

In the past, where Section 106 was improperly applied or where the process began too late, the result was too often unnecessary delays and costs to applicants.

We don’t want that to happen to you. Applicants often shoulder the burden of complying with the initial steps of the Section 106 process, and they can benefit from being informed and involved at the earliest possible stage.

By better understanding Section 106 requirements, applicants can make informed decisions about project design, resulting in improved outcomes and avoiding delay. The toolkit provides an overview of the Section 106 process and its four-step process, complete with information on consulting with states and Indian tribes, engaging stakeholders, and avoiding inadvertent actions that may harm historic properties.

The essential player in the Section 106 review process is the federal agency that is responsible for the ultimate decision on the federal action. The applicant is the party that requires a federal approval, license, or permit or seeks federal funds for a project. The nature of applicants varies widely, from individual property owners to large corporations; they may also be local or state government entities. Regardless of their status, the ACHP’s regulations give applicants the right to participate as a consulting party throughout the process if they so desire, a status applicants generally greatly appreciate.

The agency and the applicant generally take the lead on stakeholder outreach. In doing so, they engage other parties, including the respective state historic preservation officer (SHPO); tribal historic preservation officer or representatives of a federally recognized Indian tribe and native Hawaiian organizations; local governments; and, occasionally, the ACHP. Other parties that should be involved include local organizations like neighborhood associations, preservation organizations, and the public.

It is critical that applicants understand the Section 106 process and the nature of their potential participation and responsibilities. They should be prepared to actively participate with the involved federal agency. To do so, applicants should contact the appropriate federal 2014 Inaugural Edition 41

APPLICANT TOOL KIT continued agency early in their project planning to determine the

applicants’ tool kit is the ACHP’s contribution to

procedures they must follow and which actions they

achieving that. The national historic preservation

may carry out on behalf of the agency. In some cases,

program has provided exceptional economic,

the agency may delegate initial steps of the Section

environmental, cultural and educational benefits to the

106 process to an applicant. Early awareness of historic

country and we are eager to see those benefits not

preservation responsibilities is the key to successful

only continue, but increase. Understanding the Section

navigation of the Section 106 process.

106 process and the important role that they play in

While compliance with NHPA may seem opaque to

it is essential to project applicants meeting their own

the uninitiated, its requirements are straightforward

objectives while contributing to that national goal.

and follow a logical order. The purpose of EO13604

Milford Wayne Donaldson is the presidentially

and related measures is to create greater transparency

appointed chairman of the advisory Council on Historic

and efficiency to federal permitting processes without

preservation, former California state historic preservation

jeopardizing good environmental outcomes. Our

officer, and a distinguished architect. v

index to

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42 western interior oil & gas report

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#Canvest14 2014 Inaugural Edition 43