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NOVEMBER 2016 ENERGY PIPELINE 3
Features
14
10
FUEL OF LIFE
HVP
Cody Robinson, an Anadarko Petroleum employee, took the conversation about the importance of petroleum products to the internet, forming Fossil Fuels Life.
Setting the standard in oil transportation with high pressure gathering system By Matthew Van Deventer
By Luanne Kadlub
8 DUCS
ON THE COVER
DUCs have become a useful tool in companies’ production tool boxes.
Design by Joshua Aho
By Trevor Reid
12
EXECUTIVE PROFILE: BOB RANDALL
Colorado Department of Natural Resources Executive Director.
In Every Issue 18
Making Hole
21
Tech Talk
22
News Briefs
By Trevor Reid
4 ENERGY PIPELINE NOVEMBER 2016
The First Gas Pump and Station. By Bruce Wells
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ENERGY is your
BUSINESS PUBLISHER Bryce Jacobson EDITOR Randy Bangert GENERAL MANAGER Bart Smith BUSINESS MANAGER Doug Binder MANAGING EDITOR Sharon Dunn CONTRIBUTING WRITERS Luanne Kadlub Matthew Van Deventer Trevor Reid Bruce Wells Gary Beers
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ENERGY PIPELINE MAGAZINE 501 8th Ave. P.O. Box 1690 Greeley, CO 80632 For all editorial, advertising, subscription and circulation inquiries, call (970) 352-0211. Send editorial-related comments and story ideas to: editor@energypipeline.com For advertising inquiries, contact: bjacobson@energypipeline.com
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NOVEMBER 2016 ENERGY PIPELINE 7
ROCKY MOUNTAIN ENERGY SUMMIT
DUCs
DUCs have become a useful tool in companies’ production tool boxes BY TREVOR REID • FOR ENERGY PIPELINE
After the fall of oil prices in mid2014, companies increased their inventories of drilled but uncompleted wells, creating a backlog of wells that are waiting for completion like never before. When the U.S. Energy Information Administration released its monthly Drilling Productivity Report in September, it announced that it would begin including monthly estimates of drilled but uncompleted wells (DUCs), marking widespread industry interest. A press release explained the inclusion of the new DUC supplement. “When producers are under stress, as has been the case following the large decline in oil prices since mid-2014 that triggered a significant slowdown in drilling and completion activity since late 2014, changes in the number of DUCs can provide useful insight into upstream industry conditions,” the release read. To fulfill obligations to drilling rigs, landowners and mineral-rights owners, companies must often drill a well by a certain date. After drilling, companies usually hire crews to move into completion, the process that prepares a well for production, within at least six months. If market prices aren’t favorable to the overall cost of drilling and completion, however, a company might intentionally hold off before completing a well. Though the practice isn’t new to the industry, it has become more common in recent years, leading to greater numbers of 8 ENERGY PIPELINE NOVEMBER 2016
DUCs and greater interest in their effects. Denver-based oil and gas analyst Pete Stark, an analyst at IHS in Englewood, said the change in industry technology is responsible for the change in industry practice. “In the last year and a half, the situation has accentuated a bit because it’s the first time that the horizontal wells have been so dominant in the drilling picture. The cost of the completions represents a far greater percentage of the total cost of a well than did the cost of completions in vertical wells that
wells normally end, horizontal wells turn before reaching out about 8,000-10,000 feet farther. That increased contact with the target formation typically means more product. But it also means more drilling, materials and labor, all leading to steeper production costs. “You’re looking at several millions of pounds of sand instead of tens of thousands of pounds of sand, and water, time, equipment and everything else,” Stark said. Now that a single well can produce more oil and gas, a single well is a bigger
Source: Energy Information Administration
were drilled historically,” Stark explained. Horizontal wells have garnered praise for their ability to extract several times more oil and gas than vertical wells. Where vertical
investment. Coupled with the decline in prices, this trend has companies carefully sitting on much larger inventories of DUCs than the industry has seen in the past.
The unusually high number of DUCs is therefore considered uncharted territory, a source of anxiety for some in the industry. EIA program contact Jozef Lieskovsky said the DUC supplement the drilling productivity report is meant to help address these concerns. “We imply production based on the rig count and some people suggest that the rig count may not be as relevant today because we have this many DUCs,” Lieskovsky said. “I
THE UNUSUALLY HIGH NUMBER OF DUCS IS THEREFORE CONSIDERED UNCHARTED TERRITORY, A SOURCE OF ANXIETY FOR SOME IN THE INDUSTRY. believe the rig counts are still very relevant and they provide reasonable assumptions, but the future may be a little bit different than the history.” According to the EIA’s supplement, DUCs in the seven most prolific areas of the U.S. rose to their peak at 5,548 in January this year from 3,687 in December 2013. For the Niobrara region, which includes the Weld County oil patch, DUCs rose to 795 from 410 in that same time period. In its second quarter results this year, Noble Energy reported ownership of 36 DUCs in the DJ Basin region, which blankets Weld County.
COMPLETING DUCS HELPS OUT COMPANIES BOTH IN TIME AND IN MONEY. Though Anadarko has stopped reporting its DUCs, the company entered 2016 with 230 uncompleted wells, primarily in the DJ Basin. DUCs have generally been in a steady decline since the start of this year, meaning more companies are completing DUCs before drilling new wells. Since April, the
Niobrara region has consistently seen more wells completed than drilled, reducing the number of DUCs to 670 in September. Though the DUC count in oil regions just started declining this year, gas regions have generally seen a decline since December 2013. With five times more oil wells than gas wells, the variables affecting DUC inventories in gas areas can be difficult to pinpoint. “Those statistics in gassy areas could be highly impacted by availability of new pipelines, particularly in the Appalachian area where a very large percentage of new gas drilling is going on these days,” Stark said. “When new pipelines are completed and start picking up and they’re transmitting gas, then you get a lot more operators who will drill and complete their wells because you have a ready market for the gas.” Completing DUCs helps out companies both in time and in money. Drilling can take up to a month, so companies can respond to market fluctuations faster by completing wells in their DUC inventory rather than drilling new wells from scratch. Further, the cost of getting the oil or gas of a DUC to the market is significantly less than the cost of drilling a new well. As prices improve, companies are expected to complete DUCs before drilling new wells. As an example, in the first quarter of 2016, Anadarko Petroleum drilled 23 wells, but completed 46 with two drilling rigs in the DJ, according to earnings reports. In the second quarter, the company had gone down to one drilling rig, but completed 69 wells in the DJ. While better prices are a general motivator for completing wells, strategies vary from company to company. The larger a company, the longer it can hold
off before completing wells, creating more opportunities for higher prices. Smaller companies in need of cash flow have less flexibility when it comes to completing wells. Factors such as worker or pipeline availability also determine a company’s ability to move to completions. With so many factors in play, it’s less likely for companies to bring their DUCs online all at the same time – a scenario that would plummet prices further. Though DUCs might seem like an industry trend, companies have long used them as a way to seek out better market prices. Their decline this year certainly does not mark their end.
“It’s something companies have done to help deal with the low price market conditions and as market conditions improve, it’s one of those things that on the upside will be positive to not only boost supplies but also help companies restore their revenue flow,” Stark said. “It’s something we’ll see more of over this next year assuming the oil and gas prices continue to improve a bit.”
NOVEMBER 2016 ENERGY PIPELINE 9
HVP
Setting the standard in oil transportation with high pressure gathering system BY MATTHEW VAN DEVENTER • FOR ENERGY PIPELINE
investing in technologies to improve how they tap into natural resources while unveiled a new technology in oil gathering operating safely, efficiently and with less that could decrease the impact some well impact, according to Korby Bracken, sites have on their surroundings, potentially Anadarko’s director of health, safety and easing the sometimes strained relationships environment. between the industry and its neighbors. “One recent innovation we implemented When it will be available to all, however, is still is our High Vapor Pressure oil gathering unknown. system, which transports the resources at The technology, which was presented to a higher pressure, enabling us to operate the Colorado Oil and Gas Commission for without storage tanks on site,” Bracken said in an interview. “This technology greatly reduces surface and visual disturbance and improves safety by reducing associated truck traffic.” When HVP is in play, resources extracted at the well are piped offsite with most of the gas still mixed in. That liquid is piped to a Central Oil Stabilization Facility (COSF) — instead of to a separator at the This slide, taken from an Anadarko Petroleum presentation in July to the well site. The liquid Colorado Oil and Gas Conservation Commission, shows the evolution of an oil storage facility footprint. Anadarko is working to pipe oil directly to a is processed and centralized oil stabilization facility via high pressure piping, in a move to stabilized at the COSF eliminate storage tanks on well sites. and sent to the sale line. Oil gathering the first time in late July, could significantly and pipeline investments have significantly minimize the number of truck trips to and decreased truck traffic and other emissions. from a well site. For example, various water-management Anadarko Petroleum Corp. has been practices eliminated 1,500 truck trips per day,
Anadarko Petroleum Corp. recently
10 ENERGY PIPELINE NOVEMBER 2016
and in 2015 about 7 million miles of truck traffic were eliminated because of new water pipelines. Oil gathering pipelines, which transport the high pressurized oil to a centralized facility, eliminated 3.5 million truck traffic miles in 2015. Between oil gathering and water pipelines truck traffic has been cut by 50 million miles since inception, officials say. “The investments we have made in technology to reduce truck traffic, surface impacts and emissions make our communities safer, cleaner and healthier,” says Bracken. The Colorado Oil and Gas Conservation Commission has given the technology its blessing as well. In addition to eliminating truck traffic, says Matt Lepore, director of the COGCC, limiting the number of onsite storage tanks will eliminate emissions, improve the site’s aesthetics, and minimize fire hazard that may come with trucks connecting and disconnecting from the tanks. “So from all those points of view, being able to eliminate those tanks is a benefit as far as we are concerned,” said Lepore. Technologies like HVP are always encouraged by the COGCC, but when they can be enforced is a different story. According to a set of rules adopted by the commission late last year one of them, 604c4, requires oil operators to build large facilities as far as possible from existing buildings and they must “operate using the best available technology to avoid or minimize adverse impacts to joining land use.” However, Lepore said when the COGCC can enforce technologies like HVP depends
talking about the storage tank having been a model for decades. So transitioning to a different model is not likely to happen overnight.” Matt Sura is an oil and gas attorney who specializes in representing landowners and neighborhoods. He too is in favor of the new technology and sees it as a tool in improving relationships between the oil and gas industry and the In November 2015, Anadarko’s centralized oil stabilization facility neighborhoods in which they was under construction.The facility has since been completed and is drill. the end of the line for oil that the company is taking away from the At the same time he wellhead via high pressure piping. Anadarko is working to pipe all of its oilfield products to the facility, to put directly into the sale line. wants the state to require operators to use the best technologies available — such on many factors. For example, a smaller as with HVP — because drilling and fracking operator may not have the resources, such as may only impact neighbors for months, but a centralized facility or easement to lay pipe, the emissions and dangers from storage to economically implement a technology like tanks, truck trips and separators impact HVP. neighborhoods for decades. “We are trying to push operators toward Nevertheless, Sura said, “Anadarko’s pipelines, in favor of pipelines and disfavor commitment to HVP technology makes them of storage tanks,” Lepore said. “But we are
Straw Blankets
Straw Wattles
This heat-exchange tower is one of the innovations at Anadarko’s centralized oil stabilization facility east of Platteville. The company is working to pipe its oil to this facility via high pressure lines. Company officials are presenting it as a “best practice” that can become the standard in oil transportation in the industry.
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NOVEMBER 2016 ENERGY PIPELINE 11 10/5/2016 2:41:19 PM
EXECUTIVE PROFILE
COLORADO DEPARTMENT OF NATURAL RESOURCES: Executive Director
Bob Randall BY TREVOR REID • FOR ENERGY PIPELINE
As the new executive director for the Colorado Department of Natural Resources, Bob Randall holds a steady belief in the midst of the contentious debates involving the oil and gas industry. “A more enduring approach is that which enjoys the greatest support,” Randall said in a phone interview. “And that is achieved by making appropriate steps without always swinging for the fences.” With nine years at the Department of Natural Resources under his belt, Randall spent a majority of that time working closely with the previous director, Mike King. During that time, Randall said he has internalized King’s approach. “Outside of whatever battles of the day we’re dealing with, we have this duty to think through what is best for Colorado in the longer term,” Randall said. “I think we both have a sense that you are in these positions and can accomplish as much as you can so long as you don’t swing the pendulum too far in either direction.” Before serving as interim director in February, Randall was the deputy director for six years. When the department’s previous chief operating officer took a different position within the administration in 2014, Randall assumed responsibility for the agency’s operational aspects, such as Human Resources, personnel and accounting. Claiming few differences between King and himself, Randall puts their differences down to managerial style. Evidence of that difference can be found in the position Randall brought back and revamped: chief operating and performance officer. 12 ENERGY PIPELINE NOVEMBER 2016
“(It’s about) focusing on departmental performance — and that includes performance planning, performance metrics and tracking those — and just focusing on process improvement and better service to our customers,” he explained. Ten years before joining the Department of Natural Resources, Randall was a staff attorney for a public interest environmental law firm Trustees for Alaska. Working in natural resources law, federal land law and litigation on the National Environmental Policy Act, Randall is wellacquainted with the oil and gas industry. Despite his experience, Randall says he’s all ears as a commissioner on the Colorado Oil and Gas Conservation Commission. “I feel like I have a lot to learn from them,” Randall said. “People need to hear from the commissioners appointed due to their experience and expertise.” Randall’s history with the commission reaches back to 2007, his first year in the department. As Federal Lands Coordinator, Randall helped draft comprehensive amendments to the commission’s rules. “I really got to know the commission’s regulatory regime, so I have kind of a command of the COGCC’s rules that maybe other new commissioners might not have right away,” he said. When asked about Gov. John Hickenlooper’s statements after two oiland-gas-limiting measures failed to make the November ballot, Randall’s belief in mediation shined through. “The sentiments that led to these initiatives being considered for the ballot are real. It’s a complex matter that requires
our attention, otherwise we would not be talking about it,” Randall said. Randall pointed to an example in the commission’s past where the needs of concerned citizens were balanced with the needs of the oil and gas industry. A few years ago, he said, citizens were concerned about the contents of hydraulic fracturing fluids. After a stakeholder process and a public rulemaking hearing, a rule was established that required the disclosure of the chemical constituents used in hydraulic fracturing. “I’m really, really proud of what we’ve done here within the department and the administration with regard to energy development and our regulatory framework,” Randall said. “My desire would be for us to continue to enable an important economic driver in the state while also ensuring that our air and water and communities are protected.” Energy Pipeline sat down with Randall and asked a few more questions. Energy Pipeline — What do you think your biggest challenge in this role as leader of the Department of Natural Resources and how will you tackle it? Bob Randall — Among my biggest challenges is simply where I find myself on the calendar. With a little over two years left in the Hickenlooper Administration, I will be focused on solidifying the gains we’ve achieved in the last six years, while moving forward on issues important for Coloradans. I have no shortage of energy and ideas, and I have so many incredibly talented people working at DNR. I am excited to get to work. EP — How much do you think oil and
gas issues will play into your role leading the DNR? BR — Oil and gas issues continue to be important, and we’ll keep working with all parties on what remains a complex public policy matter. A lot of things can affect our daily involvement. It depends, in part, on the level of drilling activity, which these days is low due to a challenging price environment for industry. It also depends on the issues that arise. A few years ago, it was concern about the chemical make-up of fluids used in hydraulic fracturing, and we addressed that through a disclosure rule. After that, it was concerns about impacts to groundwater quality, so we implemented a rule calling for sampling of nearby water sources both before and after drilling. More recently, it was concern about the role of local governments in siting of large oil and gas facilities in urban areas, and we addressed that through the Governor’s Task Force and resulting rulemaking calling on operators to conduct early consultation with local governments. The governor and DNR remain highly engaged, and we’ll continue to be alert for ways to improve our regulatory framework. EP — What is your vision for how oil and gas is dealt with throughout the state? Should oil and gas be limited further than it already is to appease growing sentiment against urban locations? BR — I think Colorado benefits from a consistent set of regulations statewide, and I am proud of COGCC’s regulatory program. I think it is protective of the environment, responsive to concerns, and workable for an important industry in this state. My hope is that we can begin to focus more on the areas where things are working well – operators’ agreements with local governments, for example, and innovations in technology that can reduce impacts like noise or odors. I think the acrimony around oil and gas is less widespread than folks might be led to believe, and the more common (but less exciting) story is that these issues are often worked out amicably. EP — If this automatically places you on the Colorado Oil and Gas Conservation Commission, what do you think your role will be, and what do you bring to the table in such discussions? BR — Commission members have such diverse backgrounds and experiences – all of which are relevant to the business that comes before them at the COGCC – and I have a lot to learn from each of them. So I will ask a lot of questions and do a lot of listening. I also bring a somewhat unique perspective to the Oil and Gas Commission due to my past involvement with the agency. Early in my tenure at DNR, I staffed the Commission Director and Chair as the draftsman of the comprehensive rule revisions adopted in 2008. So I have worked directly with past Commissioners and staff and have relied on their expertise and perspectives in a very real, tangible way, and I have an intimate knowledge of the rules themselves. EP — In every job there’s a piece that’s really hard, or difficult to wrap your arms around. Is there a part of this job that you feel fits this bill? BR — Prior to the Governor’s appointment as Executive Director in June, I served as DNR’s Deputy Director for six years, overseeing all policy, program, and operational aspects of the department. I probably underestimated how different this job is than that one. I’ve been a technician in many respects in past positions – responsible for details – and this position is much more externally focused. I spend more time talking than typing, for instance, and that’s a big change for me.
EP — I see you previously served as an attorney for Trustees for Alaska. With that, you must have extensive experience with oil and gas issues. Do you think that shapes your feelings in the area of oil and gas? BR — I think my experience at Trustees for Alaska provides added perspective and a deeper understanding of oil and gas issues. Even today, Alaskans rely on the outdoors for sustenance (both caloric and spiritual) and income in a way that is very deep and very personal. Natural resource extraction is so deeply rooted in Alaska’s economic and political history, and so is the natural environment. This, of course, is not so unlike the situation in Colorado. But seeing that dichotomy – especially as a young lawyer – provided me with insight and understanding that I think are valuable in my role at DNR. EP — What would you say would be the perfect balance of interests in Colorado’s use/ regulation of natural resources. Is there a way to please all interests? BR — At DNR, we are so often charged with balancing competing interests – and whether we get that balance right is of course in the eye of the beholder. I try to take the long view, and think about how our actions are going to be viewed in the future, outside of the immediate conflict. Have we talked with everyone who might be impacted or might have a perspective? Is our approach based on the best facts we have today? Have we missed anything in our analysis? And then we weigh all of that information, and we make the best decision we can. If we’ve done our job properly, that decision will be fact-based and enjoy broad enough support that it can endure in the face of inevitable change. In many ways, my job would be simpler if we had rigid, numeric standards to apply, but it wouldn’t be nearly as much fun.
BIOGRAPHY Name: Bob Randall Current Business Position: Executive Director, Colorado Department of Natural Resources Age: 46 Wife: Kate Randall Children: Olive (7) and Frances (4) City you grew up in: Kansas City, Mo. High school you attended: Oak Park High School (Kansas City, Mo.) College attended/degrees: University of Missouri (Columbia, Mo.) Bachelor of Journalism (Dec. 1992) Bachelor of Arts (Honors College) in Interdisciplinary Studies (Dec. 1992) Lewis & Clark College, Northwestern School of Law (Portland, Oregon) Juris Doctor (May 1996) City you live in now: Denver, CO What do you do in your spare time: Spend time with my family – biking around Sloans Lake, skiing at Winter Park, camping (especially at Steamboat Lake State Park!), and hiking in Rocky Mountain National Park. Last good book you read: The Goldfinch, by Donna Tart Years with department: 9 years Years working with oil and gas industry: 19 years Best advice you’ve received: You’re never too busy or too important to be nice to people. Professional background: Attorney specializing in environmental and natural resources law NOVEMBER 2016 ENERGY PIPELINE 13
Cody Robinson waves a flag from his public awareness campaign, Fossil Fuels Life, a campaign on Facebook and Instagram to educate people about the many items we use in daily life that are made from petroleum products. He is a reservoir engineer for Anadarko Petroleum. Photos by ALYSON MCCLARAN/amcclaran@ greeleytribune.com.
FUEL OF LIFE:
Anadarko employee creates public awareness campaign on importance of fossil fuels BY LUANNE KADLUB • FOR ENERGY PIPELINE
C
Robinson likes talking about the oil and gas industry and enlightening others about all the good things that come from the industry. Like skis and bicycle frames, hiking shoes and backpacks, golf balls, to-go coffee cup lids, and even the equipment that harvests the hops that go into your favorite beer. ody
14 ENERGY PIPELINE NOVEMBER 2016
But one day he realized he could only have so many one-on-one conversations. Being a millennial, he did what millennials do best and took the conversation online. You’ll find Fossil Fuels Life on Instagram, where he has 2,000 followers, as well as on Facebook, where his page has been “liked” by 67. “Social media gives you a platform to talk
in a multiplying manner. Potentially you can reach an audience of hundreds of thousands,” he said. “This conversation is pretty important to me. Literally, I love the things in life that oil and gas provides.” While many companies keep a tight rein on how employees represent themselves online, even when it’s done on their own time,
and even when it has nothing to do with the company, Robinson’s employer, Anadarko Petroleum Corp., has purposely remained hands off. “It’s so genuine and authentic,” said Robin Olsen, public affairs manager for Anadarko’s Rockies Division in Denver. “We’re going to let him keep doing what he’s doing. Everybody who has seen it says, ‘Wow.’ We’re just proud he was here when he did it.” Robinson, however, does not have a marketing or communications background. Instead, he majored in petroleum engineering at Texas A&M University because, well, it sounded interesting. Upon graduation, he was hired by Anadarko and spent the first three years living in Wyoming. He’s now working as a reservoir engineer and works out of the Denver office. Anadarko also has a field office in Platteville. The response to his social media campaign has been positive overall, he said. “I haven’t had a single negative feedback.” He surmises that might be because his posts are positive in nature and read something like: “I am thankful for (fill in the blank) and for fossil fuels to make it possible.” One recent post, for example, read: “I really like mountain biking, made possible because of fossil fuels.” The “cooler feedback” has been interactions with local small businesses. “I thought while pointing out good things fossil fuels provide, why not highlight and tag Denver businesses?” That’s what he did with the small brewery in his Arvada neighborhood. “I posted pictures and talked about how they wouldn’t be able to transport hops, keep beer
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Every bolt and joist. Every permit and approval. It all needs to come together, quickly and efficiently. Choose a partner who will make each Every bolt and joist. Every permit and approval. It connection a strong one. needs to come together, quickly and efficiently. Cho
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Landmark Builders, Inc. Anadarko employee Cody Robinson created a public awareness campaign to help tell the story of the importance of petroleum products to everyday life.
970-330-8855 Joe Morton www.landmark-builders.com
NOVEMBER 2016 ENERGY PIPELINE 15
WORK
Cody Robinson, an employee of Anadarko Petroleum in Denver, sits in his front yard, surrounded by items made from petroleum products. He says: “You can make the moral case for fossil fuels that if you’re against reliable energy, you’re against mankind.”
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cool or have needed machinery to make the beer without fossil fuels. I’m pretty thankful because it makes good beer.” Most people don’t realize that 96 percent of every product is petroleum based. “Everything we do, eat, touch, wear … If you ride a bike, car or bus, it’s powered by oil or natural gas,” Robinson said. “When we take a ski trip, pack up our stuff, which is petroleum based, and put it in our bag, which is petroleum based, and other than the snow on the ground, from equipment to gear to car or plane to get to your destination, it’s all based on oil and gas. “Most people don’t have a full understanding (of) what comes from fossil fuels. Everyone I’ve talked to is really intrigued. They still have their concerns, and concerns are perfectly OK. No industry is perfect. We can all improve. But to take a stand against fossil fuels, you have to understand what you would be giving up. It’s always a big eye opener.” Robinson doesn’t mind getting on his soap box when necessary. “You can make the moral case for fossil fuels that if you’re against reliable energy, you’re against mankind. Three billion people – half of the world’s population
– still use wood-fired cooking stoves because they don’t have access to clean energy.” Another story he likes to tell is when he
MOST PEOPLE DON’T REALIZE THAT 96 PERCENT OF EVERY PRODUCT IS PETROLEUM BASED. TO TAKE A STAND AGAINST FOSSIL FUELS, YOU HAVE TO UNDERSTAND WHAT YOU WOULD BE GIVING UP. and his wife accompanied a group to drill a water well in El Salvador – where lack of clean water is responsible for incredible sickness.
“We flew down there on a plane powered by fossil fuels, traveled on a boat fueled by fossil fuels and drilled the water well using a rig powered off fossil fuels. This was a matter of life and death (for the residents there). If we didn’t have fossil fuels, there would be no way they would have access to fresh water.” To keep his social media posts fresh, Robinson makes sure to always have his phone with him to snap pictures while on hikes, concerts or just out and about living life. He is, in a way, a rebel with a cause. “My generation, every generation, likes to rebel against social norms. My dream is that being pro oil and gas would become the new antimovement.” He has another dream, too. “I want to do a joint fundraising campaign with Von Miller featuring Von’s Vision Foundation. His whole charity is about giving kids reading glasses. This is literally a perfect example of fossil fuels and how they wouldn’t have affordable eyeglasses if we didn’t have fossil fuels.” Adding additional fuel to the proposal, Robinson points out that Miller is also an A&M alum. So Von, the ball, literally, is in your court. Interested?
TOUGH CONDITIONS CALL FOR TOUGHER WIRELINE PROTECTION. USE CENEX SURE SEAL WL . ®
Oil and gas work can be brought to a halt by a wireline lubricant that failed to do its job. And I know keeping your operation running smoothly and safely is critical. You can count ® on Cenex Sure Seal WL to lubricate, seal and protect your downhole wirelines. Tough is as tough does. Its durable uniform coating properties inhibit corrosion and maintain a long-lasting tight seal to prevent leakage.
BEN BUCHANAN CHS OIL PATCH SPECIALIST B.BUCHANAN@CHSINC.COM
To learn more and find your local distributor, visit cenex.com/suresealwl. Contact Agfinity, your local Cenex Sure Seal WL dealer, for more information. Call 970-454-4094 to get started. ®
© 2016 CHS Inc.
NOVEMBER 2016 ENERGY PIPELINE 17
MAKING HOLE The first gas pump and station BY BRUCE WELLS • AMERICAN OIL & GAS HISTORICAL SOCIETY
The modern gas station with the first gas pump can trace its roots to a pump that dispensed kerosene at a grocery store in the late 1880s. S.F. (Sylvanus Freelove) Bowser sold his newly invented kerosene pump to the owner of the grocery store in Fort Wayne, Ind., on Sept. 5, 1885. Less than two decades later, the first purposely built drive-in gasoline service station opened in Pittsburgh, Pa. Bowser’s invention, which could reliably measure and dispense kerosene – a product much in demand for half a century – soon evolved into the metered gasoline pump. Originally designed to safely dispense kerosene as well as “burning fluid, and the light combustible products of petroleum,” early S.F. Bowser pumps held up to 42 gallons. The kerosene pumps used marble valves, a wooden plunger and an upright faucet. With the pump’s popular success at Jake Gumper’s grocery store, Bowser formed the S.F. Bowser & Company. He patented his invention in 1887. Within a decade – as the automobile’s popularity grew – Bowser’s company became hugely successful. The original Bowser gas pump consisted of a square metal tank with a wooden cabinet equipped with a suction pump operated by lever-action. Beginning in 1905, Bowser added a hose attachment for dispensing gasoline directly into the auto fuel tank. The popular Model 102 “Chief Sentry” with its secure “clamshell” cover soon followed. S.F. Bowser & Company’s “Self-Measuring Gasoline Storage Pump” was known to motorists as a “filling station.” With the addition of competing businesses such as Wayne Pump Company and Tokheim Oil Tank & Pump Company, Fort Wayne, Ind., became the gaspump manufacturing capital of the world.
FIRST SERVICE STATION The first drive-in gasoline service station was opened in 1913 by Gulf Refining Company in Pittsburgh, Pa. Although Standard Oil would cite a 1907 station in Seattle, and others argue about one in St. Louis two years earlier, most agree that when “Good Gulf Gasoline” went on sale, Gulf Refining opened 18 ENERGY PIPELINE NOVEMBER 2016
America’s first true drive-in service station. The motoring milestone took place on Dec. 1, 1913, at the corner of Baum Boulevard and St. Clair Street in downtown Pittsburgh. Unlike earlier simple curbside gasoline filling stations, an architect purposefully designed the
BRUCE WELLS, is the founder of American Oil and Gas Historical Society, a 501c3 nonprofit organization dedicated to preserving the history of oil and gas. He is a former energy reporter and editor who lives in Washington, D.C.
Sylvanus Bowser patented a pump designed to dispense “the light combustible products of petroleum.
pagoda-style brick facility offered free air, water, crankcase service, and tire and tube installation. “This distinction has been claimed for other stations in Los Angeles, Dallas, St. Louis and elsewhere,” notes a Gulf corporate historian. “The evidence indicates that these were simply sidewalk pumps and that the honor of the first drive-in is that
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S.F. Bowser & Company added a hose to gas pumps in 1905. The “Chief Sentry” model with its secure “clamshell” cover followed. Photo courtesy Library of Congress.
of Gulf and Pittsburgh.” The Gulf station included a manager and four attendants standing by. The service station’s brightly lit marquee provided shelter from bad weather for motorists. On its first day, the station sold 30 gallons of gasoline at 27 cents per gallon — and it launched a roadside revolution. “Prior to the construction of the first Gulf station in Pittsburgh
A
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and the countless filling stations that followed throughout the United States, automobile drivers pulled into almost any old general or hardware store, or even blacksmith shops in order to fill up their tanks,” notes the Pennsylvania Historical and Museum Commission. Gulf’s decision to open the first station along Baum Boulevard was no accident. By 1913 when the station was opened, the thoroughfare had become known as “automobile row” because of the high number of dealerships there. “Gulf executives must have figured that there was no better way to get the public hooked on using Gulf Refining Company opened the first service station (above) on Baum Boulevard in Pittsburgh. Photo courtesy Gulf Oil Historical Society. filling stations than if they could pull right in and gas up their new car after having just
Paul Taucher P.G. Owner/Principal Hydrogeologist
driven it off the lot,” notes a commission historian. In addition to gas, the Gulf station also offered free air and water – and sold the first commercial road maps in the United States. The first freely distributed oil company road maps also are credited to Gulf. “Making Hole” is a term for drilling coined long before oil or natural gas were anything more than flammable curiosities. Bruce Wells is the founder of American Oil and Gas Historical Society, a 501C3 nonprofit organization dedicated to preserving the history of oil and gas. He is a former energy reporter and editor who lives in Washington, D.C.
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TECH TALK
Environmental conditions can cause pigments to change colors BY GARY BEERS • FOR ENERGY PIPELINE
The amazing chameleon (Figure 1) has the marvelous ability to see the color patterns of their environment and can closely match these designs by changing the color patterns in their skins. Recent advances in pigment technology have produced “smart pigments” that change color in response to specific changes in local environmental conditions. These emerging products are finding valuable applications at aerospace, power, and manufacturing, and oil/gas facilities.
INTELLIPIGMENT TAPE CHANGES COLOR TO INDICATE HYDROGEN LEAKS A specialty tape containing proprietary colorchanging pigments can be wrapped around pipe fittings, flanges, valves, and storage/transportation vessels and will immediately change to black at locations where hydrogen gas is detected. Under a grant from NASA, researchers at the University of Central Florida develop a color-changing (chemochromatic) tape starting with a powder patented by Japanese researchers that changed color in the presence of hydrogen. The critical improvements by the Florida researchers involved adjusting the chemistry so that the color change was immediate and visible to the naked eye (NASA
Technology, Spin-Off, 2016). This research project received numerous awards including “NASA Commercial Invention of the Year” in 2016. The technology is licensed to HySense Technology which sells a product, Intellipigment tape, for detecting hydrogen gas leaks. The advantage of this chemochromatic tape is obvious and can save time and lives. Previously, workers would use electrochemical and combustible gas sensors to identify the presence of possible leaks in areas where many hydrogen transfer lines were present, but locating the specific leak of the colorless, odorless gas was time-consuming. However, with the lines wrapped, the location of the leak would be immediately located by the worker since the tape at the site of the leak would change from a tan color to a black color.
SMART PAINT SIGNALS WHEN EQUIPMENT IS TOO HOT TO HANDLE
For over 50 years, GARY BEERS, has worked in numerous fields of environmental science as a consultant, regulator and educator. This career included senior management position with major consulting, nonprofit and public organizations. He has founded several successful firms to capture emerging resource management markets. One of his latest ventures, EnviroScienceINFO, provides content for public media.
NOVEMBER 2016 ENERGY PIPELINE 21
A paint for use in coatings and packaging changes color when exposed to high temperatures – thus, delivering a visual warning to workers handling material or equipment with the potential to malfunction, explode, or cause burns when overheated. The coatings turn different shades of color from red to blue in response to a range of temperatures, beginning at 95 degree F. (New Jersey Institute of Technology, Press Release, 2014). Further, this material can indicate how long a substance has been exposure to high temperature high enough to comprise its functionality. Key applications include: • thermal-coated tools indicating when they have become dangerously too hot to handle. • warning to firefighters of the intensity of the fire on the other side of a door coated with thermal paint. These researchers are working on related “smart paint” technologies that would signal whether an item has been damaged by force, shock, or exposure to dangerous chemicals – such as carcinogens
SMART PAINT DETECTS STRUCTURAL DAMAGE There are paints that will transmit damage to a structure. Carbon nanotubes (which can carry electrical current and are powered by a battery) and fly ash are combined into a cement-like coating that can be sprayed onto any surface. When structural defects start to occur, the paint starts to bend and a change in conductivity is wirelessly transmitted to a remote computer (Smart Paint Could Make Bridges, Mines Safer. CNET, Tech Culture, January 2012). There are valuable applications of this smart paint for monitoring the structural status of storage vessels and pipelines in oil/ gas field operations, especially where the equipment is located at remote locations or where access is difficult.
SMART PAINT CAPTURES ATMOSPHERIC POLLUTANTS An interesting emerging technology involves embedding tiny particles of silver which capture atmospheric pollutants (Oi! You’ve Missed a bit. The Economist Online, February 2012) In related developing applications, • smart paints are able to change color in response to various gaseous mixtures of petroleum organic chemicals (i.e., benzene, xylene) at various temperatures) (Smart Pigments with Reactive Nanocolors Printed on Paper and Flexibles, 2009 International Conference onNanotechnology for the Forest Products Industry). • self-propelled tiny “microbots” with smart paint coatings can travel in wastewater and adsorb lead from a level of 1,000 parts per billion down to 50 parts per billion in an hour (InnovOil, Tech Radar, Innovation in the Oil and Gas Sectors, May 2016).
News Briefs HALLIBURTON COMPANY & U.S. SILICA HOLDINGS, INC. HOUSTON — Halliburton Company and U.S. Silica Holdings, Inc. in October announced the companies have moved a record-breaking unit train carrying nearly 19,000 tons of U.S. Silica frac sand from Ottawa, Ill., to Elmendorf, Texas. The train, the largest frac sand unit of its kind shipped to date in North America, arrived Oct. 13 via the BNSF railroad. Unit trains reduce transit time from mine to transload facility. “Utilizing sand unit trains enables Halliburton to respond to customers’ needs on a shorter timeline and deliver 22 ENERGY PIPELINE NOVEMBER 2016
cost efficient sand on location to drive the lowest cost per BOE,” said Richard Gonzalez, vice president of Production Enhancement for Halliburton. “Our extensive infrastructure along with a great working relationship with U.S. Silica highlights our strength in collaborating and engineering solutions to maximize asset value for customers.” “Unit train delivery, leveraging our combined logistical assets, is the most efficient and cost effective way to deliver high volumes of sand in the time constraints required,” said Don Weinheimer, senior vice president and president of Oil and Gas for U.S. Silica. “Unit train capability is increasingly critical
to our customers success as sand demand per well continues to ramp up.” The unit train, which originated at U.S. Silica’s largest plant in Ottawa, Ill., took five days to build and was loaded with 30/50 and 40/70 U.S. Silica frac sand. It was received at the Halliburton Elmendorf South Texas Sand Plant, which can handle two 115 car unit trains simultaneously and can hold 40,000 tons in its eight silos. The facility is located within the Alamo Junction Rail Park in Elmendorf, about seven miles from the company’s South Texas Operations Center in southern Bexar County.
DATA CENTER
The oil and gas industry is a large part of Colorado’s economy. Below, find statistics on drilling production, well permits and rig counts.
2016 DRILLING PERMITS
RIG COUNT BY STATE
COUNTY
NO. (% OF STATE TOTAL)
Weld...........................................................................................1,206 (61.3%) Garfield........................................................446 (22.7%)
State Oct. 14 Sept. Avg. Aug. Avg. Colorado 21 19 21 Louisiana 48 40 42 Oklahoma 73 66 62 North Dakota 30 28 28 Texas 244 244 231 California 6 5 5 Alaska 9 5 4 Ohio 14 14 14 Pennsylvania 25 22 17 Wyoming 13 13 8 Source: Baker Hughes Rig Count. Oct. 14
July Avg. 20 44 58 27 209 6 7 12 14 8
2016 GAS PRODUCTION
COUNTY *YTD PRODUCTION (% OF STATE) Weld........................................366,602,401 (36.8%) Garfield...................................290,561,340 (29.2%) La Plata ..................................182,354,039 (18.3%) Las Animas ................................ 45,692,300 (4.6%) Rio Blanco ................................35,470,321 (3.56%) Mesa ........................................... 20,904,295 (2.1%) State ......................................................995,400,720
La Plata.....................90 (4.6%) Jackson...........52 (2.6%) Adams............52 (2.6%) Rio Blanco...50 (2.5%) State........................................................................1,967 Source: Colorado Oil and Gas Conservation Commission as of Oct. 1
US RIG COUNT
The U.S. rig count peaked at 4,530 in 1981 and bottomed at 488 in 1999. Area Oct. 14 Sept. Avg. Aug. Avg. July Avg. U.S. 539 509 481 449 Canada 165 141 129 95 Source: Baker Hughes Rig Count, Oct. 14
Source: Colorado Oil and Gas Conservation Commission as of Oct. 12.
COLORADO ACTIVE WELL COUNT
Weld ..........................................................................22,814 Garfield .....................................................................11,131 Yuma ...........................................................................3,879 LaPlata........................................................................3,324
Las Animas .................................................................2,953 Rio Blanco ...................................................................2,893 State .........................................................................53,817 NOVEMBER 2016 ENERGY PIPELINE 23
Source: Colorado Oil and Gas Conservation Commission as of Oct. 1
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24 ENERGY PIPELINE NOVEMBER 2016