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Keeping pace with a changing industry-pg. 10
Living Large Tiny Homes
Paragon Automation thinks outside the industry - pg. 13
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Two names that are inseparable when heavy equipment is involved - pg. 23
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Table of Contents
5: WELCOME
18: Crude Haulers
Duchesne County Commissioners Kevin Van Tassel
Oil keeps moving even in downturn.
20: Coexistence in the Oil Field
6: Future Looks Good
Energy producers and wildlife experts get together.
Enefit oil shale projest edges forward.
8: Oil Benchmarks and Basin Production The reality with the Basin’s waxy crude.
23: Wheeler Cat
Two names in heavy equipment that are inseparable.
26: Coal lives on
10: UBATC
No death notice for coal, yet.
Keeping pace with a changing industry.
30: The Fracking Fight
13: Living Large Tiny Homes
Environmentalist want to stop fracking in Utah.
Paragon Automation owners look outside the industry.
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Together we can keep the Basin strong Welcome to our 2016 spring edition of Profiles in Energy. It is with great pleasure we share stories from the Uintah Basin. People like Greg and Yvonne Gardner who are thinking outside the industry with their new endeavor, Living Large Tiny Homes. Companies like Wheeler Cat who have a strong history throughout the Uintah Basin and Utah. We are also pleased to share a story on how the oil field and local wildlife managers are working together to ensure that wildlife and the energy industry can coexist and thrive. The Basin has a strong tradition of hard working people and with technical schools like UBATC leading the charge that tradition will continue for years to come. In this edition we also take a look at the struggles of coal and what is being done to keep that industry alive. We also talk to some crude haulers. Even though the industry might be down, the oil is still flowing and we need to get it to market. If it were not for these hard working individuals the oil would be stuck in the Basin. Even though the oil industry is in a bust cycle you do not have to look far to see that the people of the Uintah Basin are resilient and know how to survive. For this we are proud. We hope you enjoy this issue as much as we enjoyed putting it together.
On The Cover
A big rig makes its way along U.S Highway 40 near Vernal.
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Sen. Kevin VanTassell
It’s no secret that the Uintah Basin has been sensitive to economic fluctuations in the world’s energy markets over the past year. We’ve undoubtedly had to make some tough adjustments. From what I’ve seen, energy producers across the Basin are looking at ways to cut costs. We have reason to be optimistic about our future and the long-term growth of our economy for many reasons – not the least of which is that we have great reserves of rich natural resources.
Duchesene County Commissioners
While the reality of what Duchesne County is going through is hard, exceptional leadership and economic strength is still at work in the Uintah Basin. We have seen amazing advances in infrastructure such as communications, power and transit. We have also seen advances in water, law enforcement, housing, education, healthcare, local amenities, new retail offerings and recreation. It is important to note that almost every one of these advances can be directly linked to the prosperity that flows to the state of Utah and local counties directly from a robust energy industry. Agriculture has been stable over the last five years and has seen several good annual increases. Strong prices have allowed producers to upgrade machinery and expand operations. All Utah producers would agree that while the future is uncertain and fragile, agriculture will continue to be a major contributor to the overall wellbeing of Duchesne County in Utah. Tourism and recreation promotion and visitor services are a top priority for
As a legislature, we looked this year at a number of options for revitalizing and diversifying the Basin’s economy, including partnering with entities which would enable us to more accessibly ship our coal, LNG, agricultural products and even crude oil internationally, thus strengthening our infrastructure development tax incentives and the economy at large. These efforts will continue. My priority will be to do whatever I can to keep the Basin strong.
Sen. Kevin VanTassell
Duchesne County. Stakeholders are meeting regularly to find both immediate and long term strategies to enhance destination traffic to Duchesne County. Duchesne County is home to the beautiful High Uinta Wilderness, world class fishing and hunting, Nine Mile Canyon, Starvation State Park, Ten destination resorts and the highly acclaimed Roosevelt Golf Course just to highlight a few. Additionally two new event centers were added to compliment of venues available for use for destination events, conferences and meetings. One of the new event centers is the Grace Event Center in Roosevelt, which is privately owned. The second is the Centennial Event Center and Arena in Duchesne City which is owned by the County. There are several pipeline and upgrader projects being considered that would provide better access to the markets for Uintah Basin crude. Large drilling projects are being considered by the BLM for Newfield in the Monument Butte area and for Crescent Point Energy in Duchesne and Uintah Counties. EP Energy is still drilling in the Duchesne area. We express our sincere appreciation for the efforts and support we have received from the State of Utah at every level. We are overwhelmed at the outpouring of attention and willingness to bring solutions to the table. We would also like to also express our sincere appreciation for all of the support from our county residents during this challenging time.
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Enefit American Oil to continue making progress towards a long series of additional future permits needed to ultimately develop its private oil shale holdings 40 miles southeast of Vernal along the Colorado-Utah border.
Enefit oil shale project edges forward Recent action by the BLM is a significant step forward that allows Enefit American Oil to continue making progress towards a long series of additional future permits needed to ultimately develop its private oil shale holdings 40 miles southeast of Vernal along the Colorado-Utah border. The Utah project consists of more than 27,243 acres. Of that, 18,033 acres are private property, 4,090 acres are state property and 5,120 acres are federal property. According to the project proposal, the Utility Corridor Project would provide access, natural gas, electricity, and water to, and move processed oil from, EAO’s “South Project,” which is planned on private land and minerals owned by EAO. The EAO’s planned South Project is a non-federal connected action which will include development of a commercial oil shale mining, retorting and upgrading operation located in Uintah County, Utah. “We have worked closely and cooperated fully with the BLM and other federal, state and local agencies since the environmental review process began in late 2012,” said EAO CEO Rikki Hrenko-Browning on the company’s website. “Many issues and concerns were identified during the process, and we believe they have been sufficiently addressed to advance approval of the ‘Proposed Action’ to allow the utility corridor.” While EAO’s energy project would be developed on private property the company owns, utilities to serve it must cross federal land, which requires an environmental review process. Uses for the utility corridor include water and natural gas supply lines, electricity lines, road improvements and an oil
product pipeline, states a news release posted on their website. The BLM notes that granting the corridor, greatly reduce potential environmental impacts, such as reduced air quality, could result from trucking in water and fuel for electricity generation – the BLM’s suggested alternative to EAO’s requested corridor. “The Enefit American Oil utility corridor is designed to mitigate environmental impacts, enjoys widespread community support, and advances Utah’s and the Bureau of Land Management’s goals of providing significant benefits to the local economy,” said Dr. Laura Nelson, executive director of the Utah Office of Energy Development, in a letter of support. “[OED] supports the Enefit American Oil utility corridor, and Enefit’s environmentally sound plan to contribute to Utah’s and the nation’s economic health and security.” According to EAO data, at full buildout the project may create 2,000 stable, long-term jobs in the Uintah Basin along with thousands of indirect jobs in the supply and service sector – at least two indirect jobs for every direct job based on well-established industry precedent. EAO that the Utah project can meet one-third of Utah’s liquid fuel demand. “Enefit American Oil is well qualified to contribute to Utah’s energy security, create long-term jobs and help meet community goals,” Hrenko-Browning noted. “Our 30-year track record of producing liquid fuels in an environmentally responsible and economically viable manner demonstrates our commitment to environmental stewardship and desire to work together with our community to develop this project in the most responsible manner possible.”
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Oil benchmarks and Basin production By RICHARD SHAW Contributing writer Utah was 11th in oil production in the country in 2013 and oil output from the state has increased every year since 2004, until recently. Before that, the industry had been in decline for years. In 2011, the state produced 26.3 million barrels. Most of that comes from the Uintah Basin, but there is steady growth in other places too, including Grand County. Many people don’t understand that oil has many different forms and types. The oil from one field will almost always vary from another. Even the oil within the same field will be different. The casual consumer of the news will hear terms like light sweet crude, West Texas Intermediate, Brent Blend and many others in the media. But what does all that mean? The explanation of all the different kinds of oil, grades and types that are extracted can be complicated. The pricing on crude is dependent on a lot of factors, but one of the most important is how much refining it will take any particular oil so it can be moved to the market as a consumer product. Oil is used for everything from making gasoline for cars to making the plastic that goes into the construction of those same vehicles. Oils by-products and its waste products are important when looking at a barrel of crude (a barrel is about 40 gallons). The first thing to understand is the difference between when oil is termed sweet or sour. Sweet crude oil contains less than .42 percent of sulfur in any given unit. Sour crude has more sulfur than that. Getting the sulfur out of oil for use is one of the refining challenges companies have. Sweet crude oil contains small amounts of hydrogen sulfide and carbon dioxide. High-quality, low-sulfur crude oil is commonly used for processing into
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gasoline and is in high demand, particularly in industrialized nations. Light sweet crude oil is the most sought-after version of crude oil as it contains a disproportionately large fraction that is directly processed into gasoline, kerosene and diesel fuel oil. The names of sweet and sour came from the early days of oil extraction. The taste test was used by early oil men to see if the oil was good. Sweet crude does have a sweet taste and that is how they determined the quality, by actually tasting it. Another important factor in oil out of the ground is its API (American Petroleum Institute) gravity. This measure compares an oil’s density to water. The scale that is used to measure the gravity of an oil ranges from 10 to 70 with the lighter oil having a gravity that is high on the scale. So when one sees the term light sweet crude it means crude oil that is low in sulfur, high in gravity, and therefore more desirable because the refining process is simpler and easier. Hence it is also more valuable. The other terms that people hear such as West Texas Intermediate (WTI), Brent Blend, Bonny Light, Dubai crude, etc. are called benchmarks. A benchmark serves as a reference point for when an oil stands in connection with other oil, in relation to market price. Reportedly, there are about 200 different crude oil streams with names. Many consider West Texas Crude, which largely comes from the oil fields of the central United States, to be the best in the world. It is also the most widely used oil in the United States. Brent Blend is benchmark for oil that comes from the North Sea oil fields (north of Britain and into the Scandinavian countries). It is largely used in Europe in conjunction with oil from the middle east. There are also many other benchmarks from the Middle East, east Asia and from Latin America as well. While West Texas Intermediate is often considered the best crude oil in the world (and the highest priced), even its consistency changes. Oil is probably
90 percent of what perfect WTI will bring. the most important and valued commodity The water tank must be drained off at least in the world in this day and age, so having monthly by a truck that picks up the liquid and the best is an advantage. hauls it away for proper disposal. This water The oil that comes out of the ground in either goes into evaporation ponds or is used in Utah varies. Some of it is sweet, and some further well injection processes. sour. Sometimes the same well can produce The operation of treating and recycling both at different times. waste and slop oil is not an exact science. The difference between the oil that is proTherefore to do it properly the operators must duced in the rest of the state and that from do testing samples and determine the physical the Basin is substantial. The oil that comes properties of the material. In the process of doing out of the ground in most of the state flows, recycling the waste, various chemicals are used while that from the Basin, creeps. That is beand processes followed. cause most of the oil from the Basin contains After a number of years, the production tank a lot of paraffin, or as it is known in the inmust be taken out of service for cleaning and dustry, “black wax.” It almost looks like shoe polish when it is at room temperature. It has This photo shows the difference between the oil from the Uintah maintenance. When that is done, another tank is a 15 percent wax content. Because of the way Basin and oil from around the Price area. On the left is Green brought in so that production is not lost. While the oil in the Basin is of the waxy it naturally occurs it is reportedly worth only River Crude from Newfield Production Company’s Monument about 80 percent of that of WTI. Butte Field. With the container tilted one can see that the type, and requires special refining, it is very desir To get that kind of oil out of the ground material does not move. It is literally like shoe polish are room able oil because of its high quality and low sulfur. At present, there are many wells out of prorequires special equipment and it is costly. It temperature. The other container has oil from a Pride Venture must be heated in the ground to pump it out, well in Carbon County. When tilted it is much like any liquid. duction in the Basin. And in some cases the wells then it must be heated in surface tanks while However even this oil has paraffins in it that must be refined out. are rotated into production while others are idled. With the downturn, wells are being maintained awaiting for transport to the Salt Lake City in many areas so that when the price comes back refineries by truck. up, oil can once again be pumped. But despite all the extra steps, the oil de The Salt Lake refineries continue to add more capacity for the oil from the rived, while having a very low API number, is also very low in sulfur. The oil Basin, but with the potential so high for that oil when the price rises again, produces good quality products. the trucking of the oil to Carbon County for load out onto train cars will con Once a well is drilled and is producing and the crude is pumped to the surtinue at a high rate once things turn around. A couple of proposed pipelines face, it is placed in a production tank (also called a Gun Barrel) where it sepamay eventually take the oil to the load outs too. rates into sediment on the bottom, water in the middle and oil on the top. The future of Uintah Basin oil is bright, but when that shining light will The oil on the top goes into an oil tank next to the production tank. That is where the oil is taken from periodically by truck to a refinery or pipeline. That glow again is still up in the air. oil can vary in consistency. Most of the time the oil brings a price of about 80-
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ROBERT DeBERRY, UB MEDIA
Uintah High School students put shingles on the roof of a newly contructed doghouse during their UBATC carpentry class at the Vernal Campus.
Even in downturn UBATC strives for best education possible
tion or to be tempted to leave before graduation,” said UBATC Vice President Bob Peterson. nnelson@ubmedia.biz “I think we’re seeing students stay in school because there’s not that attraction. Our height No one likes a poor economy, but there’s ened increase in secondary numbers are attribsomething about hard times that makes uted not only to successful recruitment efforts individuals reflect and strive to become betin the area high schools, but also because of the ter. That is just what many people across the current economic climate.” Uintah Basin are doing. With the oil bust While secondary enrollment is up, adult enand the economic downturn, many are using rollment is down approximately 10 percent this this time to reevaluate their career goals and year. Officials say the reason for the decrease is maybe even go back to school. because of the short-term training programs the “I think education is the key to success,” school provides to companies in the energy sersaid UBATC President Aaron Weight, “it’s vices industry. If one was to exclude the energy the key to opportunity, it’s the key to imservices field, officials say there is actually an provement in our lives, it’s the key to be able increase in adult enrollment also. to give back to the community; education is “We have a bundled package of short-term ROBERT DeBERRY, UB MEDIA what drives it all.” trainings that we provide to industry, which Energy Services Director Wes Porter The number of high school, or secondary, are directly related to their current workforce students attending the college this year is up about 6 percent. Last year high needs,” Weight said. “Examples of these trainings are our OSHA classes, safeschool enrollment was up about 15 percent. “I think one of the reasons we’ve had an influx in secondary students is SEE UBATC on 11 because there aren’t those readily available jobs to go to right after gradua-
Nichole Nelson
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UBATC
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out what industry wants right now,” Peterson said. “We try to hear what industry wants and we go after it. We’re always in a position where we are looking at new programs based on what industry needs.”
ty classes and new hire training. We’ve had a program called Safety School, which was designed specifically for A Shift in Focus Halliburton, now that they’re not hiring, this program While enrollment in energy services programs has been suspended until the need returns. However, if might be down, UBATC officials sat down last year and you remove that pocket of training from the mathematdecided to change their strategy. Instead of focusing on ical equation, everything else is up.” new hire training for companies like Haliburton and While courses in the energy services sector are seeing Newfield, they decided to begin focusing on new hire drops in enrollment, programs like nursing, welding, training for individuals looking for work. accounting and business are seeing big increases in “We’ve shifted our focus from new hire training to enrollment. giving people the education they need to get hired down “It’s all growing, just outside that sector of shortthe road,” said Energy Services Director Wes Porter. term trainings,” Weight said. “We often see a shift to “Now we focus on training individuals so they can go healthcare when something like this happens because apply for a job and say they’ve already got their new it’s a very stable industry and those needs are always hire training done.” there and growing. Those are workforce areas that just As part of this shift, officials say the school is focuscontinue to grow.” ing on teaching students what they call “soft skills” to Adult enrollment hours in the nursing assistant help ensure students get the best education possible. program have more than doubled since last year – from Campus officials say they now offer new programs that 5,933 hours in 2015 to 12,888 hours in 2016. That’s a teach things like leadership skills and team building. 117 percent increase. That same program has also seen As teams shrink because of layoffs, it’s even more imbig growth with high school students this year. In 2016, portant the people know how to work together. the program has seen an additional 3,800 secondary ROBERT DeBERRY, UB MEDIA “We understand that there are going to be some new hours, an almost 84 percent increase. leadership in the industry with the bulk of the leaderUBATC Vice President Bob Peterson Officials say business and accounting courses ship in the industry right now looking at retirement or also have seen higher enrollments this year. UBATC looking on at different places,” Porter said. “We have to launched a new culinary arts program in fall 2015 and say they are pleased make sure that we focus on these new leaders and help them out.” with how that program is growing. Officials are getting ready to launch the In addition to offering leadership and team building training, officials have new police academy training program in May and say that there are other also updated programs to focus more on the needs of the students to make possible programs that may come to the college in the coming months. “We are always looking at having scoping meetings designed at figuring SEE UBATC on 12
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sure they are armed with the knowledge and additional skills they need to be successful. In addition to teaching oil technical standards, Porter says they also teach the industry history and economics of oil to help students understand how the oil economy works. Students learn about what a boom and bust cycle is and how oil is a product that doesn’t just go away. During the course, students learn what a bust means, how long it takes to recover and take a look at historical trends. “If you look at historical trends, right now I can tell you between every eight to 10 years there is always a bust and you’ve got a bust for anywhere from six months to three years,” Porter said. “Then it comes roaring back and you’re good for another eight to 10 years.” By understanding the boom and bust cycle, people can better prepare for the inevitable busts that come. For a lot of people, this is their first bust and they just weren’t prepared for it, they didn’t see it coming. By understanding the historical trends of the industry, people can be more prepared. “The companies understand that, but I like to just push that out there to the normal oilfield worker so that he or she can be understanding and not be hopeless, but also be prepared,” Porter said. “They can know this will last for an amount of time and can be prepared for it. They can also diversify their skill set to be more valuable when the company starts shrinking a little bit.” Technical College vs Traditional University A benefit to attending a technical college rather than a university is the ability technical colleges have to adapt quickly. UBATC is able to respond to the economy quicker than other educational institutions, which allows them to meet the needs of industry quicker than most. So, when the oil and gas industry started to slow down, UBATC was able to flex and change their programs to meet the current need. Officials say their focus is to make their
current product, their students, better by providing them with all the skills they will need to become successful. “In the Uintah Basin, UBATC definitely fits the needs of area residents,” Peterson said. “There is certainly the need for higher education, but we need to be proud and confident when it comes to the technical skills that we deliver. We are a great choice for the residents of the Basin.” There is often a negative connotation regarding technical colleges. Some say that universities are better; however, the two institutions play critical roles in the country. Just like university students, technical college students go through rigorous training programs. And while the program might not take four years, the skills students are required to learn can be very difficult. “Technical colleges are at the same level as universities, we just have different jobs,” Porter said. “And I dare say we are very flexible and can meet the needs of the community a lot faster than most other institutes. And that’s what we’re doing.” One of the biggest differences between technical colleges and traditional universities is universities teach mostly theory while technical colleges teach both theory and offer hands-on training. “I really feel like we offer the same skills, the same hard classes, we just package it in a way that is a little more user-friendly to our clientele,” Porter said. “And I think that’s really the only difference between the two entities.” Officials say UBATC is in a good position. The school hasn’t lost any state funding and enrollment, for the most part, is up. People throughout the Basin are eager to learn, to gain the skills they need to provide for their future and their family’s future and UBATC is pleased to be able to be part of that process. “Our mission, no matter what the industry, is to provide the education and skills necessary for individuals to fulfill their job,” Weight said. “No matter what industry comes to town, we’re going to be a part of it. And in this case, obviously oil and gas is a huge sector to the Uintah Basin. We have been a part of it for 50 years and will be a part of it for the next 50 years. Our goal is to provide the best employee that they can have.”
With all the energy in the Uinta Basin, we still want to encourage conservation.
REMEMBER:
“If you conserve, you can save.”
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4/7/2016 3:39:44 PM
Greg and Yvonne Gardner inside one of the company’s tiny homes.
ROBERT DeBERRY, UB MEDIA
Paragon Automation owners think outside the industry Robert DeBerry rdeberry@ubmedia.biz
Greg and Yvonne Gardner started Paragon Automation in 2005, a company that provides automation and instrumentation for the oil field. Technology that measures tank levels, pressures, temperatures and how much and what is coming out of the ground. For the upstart company the future looked bright and steady. According to Greg the Bureau of Land Management mandates that the equipment is calibrated every quarter.. “A big portion of our business right now is calibrating those meters.” said Greg. “But the automation and instrumentation stuff is pretty much dead.” Both Greg and Yvonne know the industry will return, but when and how strong is the unknown. For now Paragon is surviving, but both know at some point that could change. “We have a little bit going on but even for those companies there is going
to be an end. We are hoping if we can last through this we will be in a good position when things pick up,” said Greg. For a lot of small service companies weathering the storm has become the mantra and Paragon Automation is no different. Greg said they had hoped the downturn would not last very long. “Initially we thought it would be fairly short term. We thought we would just try to hang on and weather the storm, but this looks like is it going to go on for quite a while. We've had to lay people off and bring people back to do other jobs.” According to Yvonne, 2015 was when things got hard. “After January of last year is when it really hit,” she said. “Close to 50 percent of our customer base was gone in January. We had Travis doing sales so we picked up a little of what was left. Different kind of stuff because all of our big customers put the brakes on.” For the people in the Basin the oil industry boom and bust cycle is. nothing new. The latest has been compared to the late 1980 bust. Businesses SEE TINY HOMES on 14
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company grew from $75,000 that first year so did their employees. Continued from 13 “We started with myself and a year later we hired another guy and a year later we hired another guy,” said Greg. come and go and a lot of times it is the Eventually Paragon found themselves sitstrong ones that survive. ting around $4 million in revenue and 18 Travis Oldham, genemployees. Right where the two entrepreeral manager of Living Large Tiny Homes neurs wanted to be. Expanding and not agrees. “These downturns are always a shrinking. With that expansion came the weeding out process. It's been my experineed to move into a bigger space. ence that you have these boom cycles and it Greg said they had decided to get brings in a lot of different people and cominto business with Blue Tech owner Tren panies. It is the long-term people that ride Horrocks. The idea was to start a welding it out. They always land in a good position. and fabrication business and move Paragon Oil will shine again—it has to.” Automation into the same building. Paragon hopes to land in that good posi“We bought this building,” said Greg, “to tion when the industry returns and keeping do welding and fabrication.” Then we were qualified employees is paramount. Yvonne going to move Paragon in here as well.” ROBERT DeBERRY, UB MEDIA and Greg know this all to well. “We need But as luck would have it things fell apart Travis Oldham, general manager of Living Large Tiny Homes. to keep our good employees,” said Yvonne. rapidly. Greg said by the time the building “If you have your trained employees right was purchased the bottom was totally out when it picks up again then you are ready and there was no welding to be had. “So we were sitting here with this welder to go.” and this big building and wondering what are we going to do.” But being ready to go is not alwaysINTERNATIONAL easy. EspeciallyTRUCK in the oil business. | ALL MAKES WARRANTY REPAIR | FABRICATION | TRAILER REPAIR Not one to shy away from a fight or hard times the four started looking at Paragon had survived the downturn in 2008 mainly because their business different opportunities, was based around calibrations. “That downturn did not affect usINTERNATIONAL too much AND ALL-MAKES PARTS and for Travis giving up is not in his vocabulary. “You can either lay your hands off and sit in your office and sulk and hope because all we were doing was calibrations,” said Greg. “Almost 100 percent you weather the storm or go out and look around and see what people want,” of what we did was calibration and those don't go up or down because they said Travis. “If there is an idea out there then you capitalize on that idea. are mandated by the government. As long as the well is producing they have INTERNATIONAL TRUCK WARRANTY | ALL MAKES | FABRICATION | TRAILER REPAIRpeople are trying to destroy That isREPAIR what capitalism is all about. Even though to calibrate.” it. If you can figure out something you can go make money on, heck go do As long as the| oil flowing REPAIR the money was still coming in to keep the TRUCK WARRANTY ALLis MAKES | FABRICATION | TRAILER REPAIR INTERNATIONAL it.” AND ALL-MAKES PARTS company going. Which was good for Paragon because by 2008 they had INTERNATIONAL grown considerably andAND had ALL-MAKES a great crew.PARTS In 2005 when the company started Greg was the sole employee. As the SEE TINY HOMES on 15
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partsthat andService service support for International customers in the area. enters is happy to announce we’ve added Titan Truck Service will now offer International Truck warranty repair and parts in additionmakes of Cars, Light Duty Pickups, to their existingTrucks. parts and service ah as an Associate Dealer for International Titancapabilities Truck that include: all makes truck repair, and Construction fabrication, trailertoin repair and all makes inventory. Rush Truck Centers happy announce that we’veparts added Titan Truck Service ow offer International Truck warranty repair andis parts addition inadded Vernal, UtahTruck as makes an Associate Dealer for International Trucks. Titan Truck Equipment. is happy tocapabilities announce that we’ve Titan Service TITAN TRUCK SERVICE gh Truck partsCenters and service that include: all truck repair, We feel confident that we can work together with Titan Truck extend Service will nowTitan offer International Truck warranty repair andServices parts in to addition Vernal, Utah as an Associate Dealer for International Trucks. Truck parts and service support for International customers in the area. brication, trailer repairTruck and warranty all makes parts inventory. to their existing parts and service capabilities all makesUT truck repair, ice will now offer International repair and parts in addition 1382 East 1300 Souththat |include: Vernal,
fabrication, trailer repair and all makes parts inventory. eir existing parts and service capabilities that include: all makes truck repair, fabrication, trailer repair and all makes parts inventory. TITANtoTRUCK SERVICE ent that we can work together with Titan Truck Services extend We feel confident that1382 we can work together Titan UT Truck Services to extend East 1300 South with | Vernal, parts and service support for International customers in the area. nd service support for International customers in the area. eel confident that we can work together with Titan Truck Services to extend Main | 435-260-7257 parts and service support for International customers in the area.
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TINY HOMES
if they want to hook onto it and drive away they can.” Continued from 14 Travis is right. There is a movement sweeping across the country for smaller homes with a smaller footYvonne and Greg both knew they print. Size does matter and that size had the business experience to get needs to be small. something started but more impor “We wanted to capitalize on the tantly they knew the Basin had the tiny house craze,” said Travis workforce. Yvonne said a big Although Travis, Greg and Tren see part of the process was trying to it as a viable business, Yvonne has the figure out how we can keep working. vision, and a grand vision it is. Yvonne “We have an expert welder, we have sees beyond the building aspect of someone with building experience the tiny homes. She is thinking on a and we have a whole community of little bit larger scale. Like a tiny home skilled people that can do things. subdivision. Lets see if we can find a niche for Yvonne said she can see see a piece Vernal.” of property on main street with trees According to Greg and tren, in the front, a park for kids and big Yvonne was the one that started community center. “A place where mentioning tiny houses, but Yvonne people have their own space. They can disagrees. She sees it as a collaboragrow a little garden.” tive effort to move forward, survive ROBERT DeBERRY, UB MEDIA Yvonne's vision has an ulterior moand put others to work. Welder Tren Horrocks inside the Living Large Tiny Homes shop in Vernal, Utah. tive that isn't all business. Although Greg said all the money for Living she said she would love to be one of Large Tiny Homes is coming from the first ones that has a “cool little tiny house subdivision,” she also sees this Paragon Automation. But it is a chance he and Yvonne are willing to take. as a way for people that have lost their good jobs to still afford to live nicely. Greg said taking risks is part of business. That vision is infectious to the group and gets them excited. Especially Yvonne agreed saying if we did not take a risk we are going to be in the Travis. “That is exciting to me. That is something that would be fun to same boat anyway. “So we just decided to try and make it work and figure build.” out what we had to do to build these tiny houses.” Living Large Tiny Homes was born both out of necessity for work, skill set Still building a tiny home isn’t easy. There are no instructions. Greg and Travis agree there has been a learning curve to building tiny homes. Travis available in the Basin and the increasing desire for tiny homes. “There is a need,' said Travis. “The big thing driving it is everybody wants to SEE TINY HOMES on 16 make their carbon footprint smaller. Everybody wants a cool little space and
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TINY HOMES
composting toilets, septic, heating, tongue and groove siding, wood floors. Just about anything,” said Yvonne. Yvonne and Travis both like to point out that all the customization equates to people in the basin having work. From painters, framers, insulators, electricians, plumbers, cabinet makers and flooring. We try to pull in people to help us and get them steady work as well said Yvonne. For Greg and Yvonne the oil industry is either going to make or break them. For now they are surviving, but with that comes stress. Yvonne and Greg agree that is a big concern. “Just keeping the cash flow going is hard,” said Yvonne. “It has been a huge stress because we are getting to the end of our funds.” She said they have already paid out almost 2/3 of their funds for their initial build with nothing coming in. “We need money coming in to keep the ball
Continued from 15
said when they started he reached out to some contractors for advice. “Having visited with some of my friends that are general contractors, a lot of these people don't want to build tiny homes because in reality it is the same amount of work as a big home. Just a little harder,” said Travis. “Setting up for a sheet rock job on a 5000 square foot home is easier than setting up for a 230 square foot home.” Still they knew it was possible and the help was out there. Greg said he knew that with Travis’ experience on large houses and Tren’s experience with welding there was a solid foundation. ROBERT DeBERRY, UB MEDIA That foundation is where it all starts. Inside one of the tiny homes built by Living Large Tiny Homes in Vernal, Utah. The tiny homes sit on trailers or steel frames welded up by Tren. From there comes the framing, roof and exterior. rolling.” The key to the homes Living Large Tiny Homes is building right now is cus But really the belief in what they are doing is keeping the ball rolling. “We tomization. didn't do this to be able to just get by,” said Travis. We are doing this because Travis said he can see three different models with similarities but really it is a viable business. That is the only reason I stayed.” the company would like to do custom tiny homes. “I think it is best if the Greg knows a lot is at stake but he also believes that with the crew he has people customize it. I'd rather do them custom.” and the contractors he has access to Living Large Tiny Homes is the best Travis also said the options are endless; it is just a matter of figuring how to tiny home builder out there. He believes it so much he is willing to risk it all. make it work. “You have to take risks when your in business or you do not grow.” Tiny homes run anywhere between 200 square feet and 600 square feet. With that, these resilient oil field types are building the largest tiny home Although Travis thinks 600 square feet is on the large side. company Vernal has ever seen. Tiny homes also are full functioning homes. “Bathroom, showers, kitchen, Visit www.livinglargetinyhomes.com for more information.
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A loaded tanker makes its way up Indian Canyon
Richard Shaw, Contributer
Crude haulers keep going despite downturn
By RICHARD SHAW Contributing writer When people talk about the energy downturn in the Uintah Basin they usually talk about fewer rigs punching holes or less exploration. While those certainly set the stage for energy stability and a continuation of oil production, it is the support industries that suffer, even though many of the wells in the area are still pumping out the crude. “The number of trucks we have on the road hauling crude is down by about 50 percent,” said Jeff Chugg, the safety director for ITL Tanklines of Roosevelt, recently. “Most of the trucks we have been running are owner/ operator rigs. The majority of those guys have taken other jobs and are just waiting for the business to come back. They are working other places, but this is what they like to do, so I expect most will be back when things pick up.” That optimism, that things will come back, is in most crude hauling companies manager’s minds. But right now things are tough and who knows when the recovery will come. Many of the production companies in the area have shut down their wells and closed them up. Some are still pumping and others are having support companies acidize their wells to assure continued flow for the future. Acidizing is a treatment of an oil reservoir’s formation with a stimulation fluid
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containing a reactive acid. This fluid reacts with the soluble substances in the formation to enlarge or dissolve it and in turn creates more flow. Regardless, less production of oil right now, means less to haul. The result is obvious, both on the road and in employment. On the road trucks that once passed about every minute down Highway 40 toward the Salt Lake refineries are now many fewer. And over Indian Canyon, where crude haul trucks could be seen crawling up the summit toward Willow Creek and Carbon County continually a year and a half ago, they are almost non-existent. In fact, of the three railroad load outs in Carbon only one is presently doing small shipments to the gulf or west coast. But despite that, the crude haul industry is hanging in there. Understanding what these companies and their employees do is important to understanding the dilemma they are in. The way the oil is gathered and dispatched to refineries is much like watching humming birds gathering nectar. The trucks, some of different types and kinds depending on the loads and the areas they have to go, stop at tanks that are connected to wells in an area where the waxy crude from the Basin area is stored once it is raised from below ground. They load the crude from the tank where the oil flows to. Most pads or group of pump pads have three or more tanks (called a tank battery) on them. The first tank usually holds everything that is brought up out of the ground. It is called the production tank. Water, dirt, chemicals and other junk almost alway comes up with SEE CRUDE on 19
CRUDE
Continued from 18
oil so in that tank the oil floats to the top of the tank. This separates it from the water and what is called crude crud. The oil is drained off the top into the oil overflow tank where the truck picks it up. In some cases, the trucks also have attached another tank that takes on the water that goes into a third tank. That work water is either later put into a basin where it evaporates or is used somewhere for an injection process into another well. The tanks on the truck are different from one another and cannot be interchanged; oil can only be hauled in oil tanks and water in water tanks. Some firms also haul in fresh water to sites at times as well. In the early days of oil, all producers realized when the price for oil was low, that hauling it to market was sometimes higher than getting it out of the ground. It didn’t matter how it was moved, it was costly. Even when pipelines were finally put in, the cost was higher than many thought it should be. But with so many wells scattered across the Basin, truck transport makes sense, along with the pipelines that exist. In some cases all classifications of trucks have been used to haul oil in the area from pickup trucks to heavy trucks with multiple axles. Oilfield trucks may haul everything from a hundred barrels of oil to 10,000 gallons. Pick up times at tank batteries vary based on the production of the well. New high yield wells many need a number of trips a day to serve them. Once peak production passes, the yields change. Based on information from the U.S. Energy Information Administration of about 350,000 active oil wells in the United States, the average production is only about 15 BPD (barrels per day). When a crude truck pulls up to a tank battery the operator is usually alone with the well and truck. Therefore the driver does literally everything that needs to be done. All drivers must have a CDL with a hazardous materials endorsement. Most companies will also make sure drivers have a completely clean record and they can have no controlled substance violations. Drivers
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must be adaptable and meet all federal agency standards. They must also be willing to work with schedule changes, and waiting around is sometimes part of the job. Depending on the operation, drivers do a lot of different things. They may have to be part chemist and part pump operator. They may have to do paperwork that resembles what an accountant may do. And of course, they must be ready to respond to any situations that confront them. As a driver they must keep travel and hour logs to adhere to laws that regulate their driving time. And of course, they must drive that truck on different types of roads in various conditions, both nature- and man-caused. Patience is a virtue in this profession. Crude hauling companies find themselves trying to hang onto good people, while holding on with scant financial returns. In a meeting of the Utah Trucking Association on April 19, in Ballard, a lot was discussed about the state of the crude hauling industry in the basin. While not every company can do it, Scott Ruppe the CFO of Brady Trucking suggested that diversification could work for some firms, among other moves. “Some of the other things that could be done over the long term is to watch how much a company is leveraged, keep profits in the company, learning to right size for any downturn and being sure that in the beginning a company chooses the right financial partners.” While some companies have been trying to diversify it was pointed out that many of the trucks that are used in oilfield hauling cannot be used for such things as over the road dry hauling. Many of the trucks are heavy, have different kinds of power plants for pulling liquid weight and are not streamlined to be efficient for long distance hauling. In the long run they could not compete with trucks are are built just for over the road transport. It was also brought out that if companies decide to diversify, that should be outside the oil industry. But for now, for most, the advice is too late for this particular lull in the oil business. While prices on oil are climbing slowly, when it will return to the point that well producers begin to open up production and new holes are punched in the ground at a good rate, is anyone’s guess. In the meantime, crude haulers across the Basin are holding on as best they can. www.jonesanddemille.com 800-748-5275
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A herd of sheep cross Red Wash Road near Vernal.
Richard Shaw, Contributer
Coexistence— Energy Producers and wildlife experts get together JOHN SERFUSTINI Sun Advocate Editor While the fossil fuels industries in Castle Country make their money from what lies deep underground, they’ve been spending some of that money protecting – and in many cases improving – the natural habitat on the surface. The team of national and state wildlife agencies and energy industries are racking up some success stories. “We visit on site with the companies and they pretty much tell us, ‘Give us a recommendation and we’ll see what we can do,’” says Nicole Nielson, Reclamation Biologist with the Utah Division of Wildlife Resources. She has been working with the companies for years on various projects, including those aimed at keeping the Greater Sage Grouse off the Endangered Species list. These efforts don’t come cheap. DWR Southeastern Region Habitat Manager Daniel Eddington tells of an instance at Sage Flat on the Tavaputs Plateau, where full-field natural gas development has been happening. One road had been cut through sage grouse habitat. When advised of the situation, the company reclaimed the road and rerouted a new one through the pinyon-juniper thicket nearby. Elsewhere, teams including companies, private landowners, various hunting and fishing associations, and government agencies have financed projects to improve habitat for wildlife. Recently, a project on Cottonwood Ridge near Nine Mile Canyon treated some 2,000 acres by removing pinyon and juniper trees so sage and other flowering plants could flourish. There have been reports that sage grouse are already moving into the new turf. Big game also benefit. Thousands of acres in Carbon County have been cleared of pinyon-juniper to allow more browsing and grazing land. Gigantic chains hauled by powerful bulldozers have ripped trees out, chain saws have
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cut them down and a mean piece of equipment called a bull hog has reduced them to mulch. Once the trees are gone, the cleared area is seeded with native flowering plants. The projects always leave thickets of trees on either side of the clearings so deer and elk have places to hide and relax. Years ago, when the drilling and production began to intensify, companies contributed a certain amount per well into a federal Fish and Wildlife mitigation fund. This was administered by the BLM in this area, and the federal agencies in cooperation with state counterparts analyzed and allocated funds for projects. “We’ve used that mitigation money where impacts occurred. We won’t use it except there,” Nielson explained. Although there are regulations and standards that must be observed, “Every situation is different and every one is evaluated on its own merits,” Eddington explains. Aside from preservation and mitigation, he says that companies have also helped with surveying wildlife. Regulations require that companies not interfere with nests and roosts of birds of prey and keep activity away from those areas. That means the companies must finance regular raptor surveys, sometimes by helicopter, in the rugged canyon country where the birds call home. The data are shared with wildlife managers, who use it to keep tabs on bird populations. Multiple use of resources is nothing new. Back in the early 20th Century, Utah Power developed hydroelectric power plants along the Bear River in Southeastern Idaho. The dams impounded water in small lakes, which created habitat for sport fishing and irrigation for agricultural products such as sugar beets. Years later, Electric Lake in Emery County and Lake Viva Naughton in SEE COEXIST on 21
COEXIST
Continued from 20
Southwestern Wyoming were constructed to provide water for coal-fired steam power generators. The regulated flow out of Electric Lake made a year-round habitat for trout in Huntington Creek, which transformed the creek from a seasonal, put-and-take fishery into a Blue Ribbon Stream. (It suffered a severe setback from a lightning-caused forest fire in 2012, but is recovering gradually.) Wildlife is not the only beneficiary of environmental compliance and contribution. Nine Mile Canyon road, which winds its way past what may be the world’s longest outdoor art gallery of prehistory painting and carving, was once dirt, subject to mud and floods when wet and dust when dry. Because of increased heavy truck activity to support natural gas development, Bill Barrett Corp. contributed major funding for paving the road, while local and state agencies supported by mineral lease royalties made up the difference. The result has been a well-designed, paved road that has opened the canyon for tourism. It has also led to archaeological discoveries of ancient Native American settlements. Equipment operators were all trained in signs of archaeological sites, and on occasion the road was rerouted or reinforced to protect existing and newly-discovered sites.
Antelope make their way along a ridge in the Ouray area.
ROBERT DeBERRY, UB MEDIA
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Because you need every minute of production you can get, Wheeler is at the ready for all your parts, repair and machine maintenance needs. With expertly trained technicians and a large parts inventory, Wheeler maximizes your uptime. Optimal support for maximized productivity, we’re built to make it happen.
OPTIMAL SUPPORT FOR OPTIMAL PERFORMANCE Ryan Devey, Sterling Don Excavation
Watch the video to hear what Ryan and other customers are saying about Wheeler’s parts and service capabilities. Visit wheelercat.com/service © 2014 Caterpillar. All Rights Reserved. CAT, CATERPILLAR, their respective logos, “Caterpillar Yellow,” the “Power Edge” trade dress as well as corporate and product identity used herein, are trademarks of Caterpillar and may not be used without permission.
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wheelercat.com | 800-662-8650
Richard Shaw, Contributer
The service team at the Vernal Wheeler shop includes Clif Harrison, shop manager, Lon Snow, service manager and Kelly Brinkerhoff, the field service manager.
The names are inseparable, Cat and Wheeler By RICHARD SHAW Contributing writer In Utah some names are almost inseparable from one another when it comes to business. For years Kennecott meant copper, Geneva meant steel and Browning meant firearms. In the world of business there are also business relationships that seem inseparable. One of those instances is Wheeler Equipment Company and Catepillar. That’s because the manufacturer, Catepillar,. and Wheeler, the dealership, literally grew up together. Before World War I, there were more than 200 manufacturers building track-type tractors that were used in agriculture and industry. Tractors were replacing horses and mules on farms and construction sites all over the country. In 1925, two prominent tractor manufacturers, C.L. Best Com-
pany, and Holt Manufacturing Company, merged to form Caterpillar, Inc. The new enterprise had just three products to sell: their 2-ton, 30-ton, and 60-ton tractors. Caterpillar established a good dealer organization and developed a dependable supply of parts and service readily available for the products sold. In 1926, Herbert Landes acquired the first Caterpillar dealership in the Intermountain West and Jesse Wheeler, a retired Studebaker dealer, came out of retirement to help him run the business. In 1929, Jesse’s son, J.K. Wheeler, joined the firm as a sales representative and sold Caterpillar products throughout the Intermountain West. Landes sold out to Don Robinson in 1944, who then sold out to J.K. Wheeler and Walter Kershaw in 1951. Wheeler and Kershaw’s new corporation, the Wheeler-Kershaw Company was formed. J.K.’s son, Don Wheeler began working in the shop and yard in 1947 while attending the University of Utah. In 1956, Lyle Campbell was hired as the administrative assistant to J.K. Wheeler. Kershaw sold his interSEE WHEELER on 24
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are dedicated to the oil and gas industry. And the service employees are a multi-talented group. “We can work on just about anything,” said Snow, Continued from 23 “and we work on all brands. We know that it is imporest to J.K. Wheeler in 1957, and the company’s name tant to give customers good service regardless of the was changed to Wheeler Machinery Company, the kind of equipment they are using.” name it is known by today. A walk through the service shop shows that. Ev For 90 years this company has served the needs erything from large earth movers to a Uintah County of Caterpillar customers in the intermountain area, School bus was in the work bays on the day this constantly updating their facilities and expanding author took the tour. them as well. One of those expansions took place But because of the specialty of the oil and gas inin 1975, when the company opened their facility on dustry, the field service people do not restrict themHighway 40 in Vernal. selves to just working in the Basin. They also work in And almost like the story of the two companies Wyoming, New Mexico and Colorado as well. themselves, Lon Snow, who is the service manager of As with every business in the Basin, the downturn the local facility, almost grew up with Wheeler in the in oil and natural gas has made for a harder go of it. Uintah Basin as well. Snow said that while their business has slowed down, “I began with the company in 1973 in Salt Lake,” the Wasatch Front Wheeler shops have been so busy he said in an interview in mid-April at the facility. that at times they cannot get the work done that cus“In 1977 they moved me over here.” tomers need in a timely manner. Consequently Snow Snow has spent literally his whole working life said that the company has been bringing work from serving the customers of Wheeler. And the facility he Salt Lake to the Vernal shop for repair so that customnow manages has grown by leaps and bounds over ers can get their equipment back in a timely manner. the years, due to the growth in business. An addition He pointed out one large earth mover that was from to the shop was made in 1978 and in 2008 a large the metro area and said that they are completely readdition was put on the building which resulted in a building that machine in the local shop. much bigger warehouse for parts, more bays in which “For customers down time is important,” he said. to perform service, a training area for employees and Richard Shaw, Contributer “They are making money when the machines are runrevamped office space. Chris Harrison puts together Cat 3600 cylinder ning, so getting it back to them quickly is important.” Today the shop boasts 18 service bays, a large parts heads. Snow said that in the present economy the compaarea and a rental center. Thirty employees work out ny understands the need to be valuable to customers of the facility. at prices that fall in line with what they can afford. But not all the service work is done within the large shop area. Seven ser SEE WHEELER on 25 vice trucks constantly are helping customers out in the field. Four of those
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Patton is the manager and he has three others working with him. Continued from 24 At the rental desk, across the lobby from parts is Mike Karren the rental “We work with them and try to dismanager. This section of the business count where we can,” he said. “Comis huge because the company rents petitiveness in the market is the key.” everything from heavy equipment to And of course new technology plays smaller machines. a role in all of it as well. Equipment The facility also has sales represenrepair and service have changed a great tatives that sell equipment to customdeal over the years. Saving time and ers as well as product support personmoney ties right in with what can be nel. done nowadays. Caterpillar itself has many divi “We have a system called Product sions, because the world of heavy Link which allows us to monitor equipequipment is so diverse. Wheeler ment out in the field,” said Snow. “A deals with all of those including power customer can call into us with a probgeneration, residential construction lem and we can analyze what may be equipment, mining equipment, quarry going on right where they are located.” and aggregate, oil and gas, agriculture Snow said that Wheeler has people and other heavy construction equipin Salt Lake that are dedicated to this ment. Wheeler also handles other operation. With some equipment that lines of equipment that supplement Caterpiller manufactured having seven the Caterpillar brand as well. Richard Shaw, Contributer on-board computers, the analyzation In the local market, Snow says that of problems becomes a snap. That Parts department personnel at the Vernal facility include Aaron Patton, manager, mining equipment is huge business, means when a problem is detected, Brandon Stubbs, Steve Whaley and Tyson Roush. along with the oil and gas industry. service personnel can be sent out with And power generation is also a big the right parts and preparation to take business since so many of the work care of the situation on site on the first trip. This saves the customer a lot of sites customers have are remote and need electricity to run them. money and down time as well. It also makes Wheeler ’s service department With over four decades of service in the Uintah Basin, Wheeler Equipvery efficient. ment is a stalwart in the local economy. And along with its dedicated staff While the service is a huge chunk of the business for Wheeler in the Bain the area, it will continue to serve the Basin for many years to come. sin, so are the parts. The parts department stocks thousands of units. Aaron
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Richard Shaw, Contributer
The Bonanza Power Plant that is located south of Naples about 25 miles. That plant is powered by coal, which comes from the Deserado Mine near Rangely, Colorado.
No death notice for coal, yet
By Richard Shaw Contributing writer While coal may not seem to important to those who are now under the pressure of low prices for natural gas and oil in the Uintah Basin, it plays a more integral part in the economy of the area than many realize. The effect of a down turned coal industry has hit the counties of Carbon and Emery county hard. And the fact that oil is not traveling near as much by truck through Indian Canyon to load outs in Carbon, which had provided new jobs for the area, has just added to the frustration of a county that once boasted 42 coal mines. Today only two mines are operating in Carbon and only two with one more projected to reopen this summer are running in Emery County. The biggest coal mine in the state, SUFCO, is in Sevier county, just over the Emery County border. The world is still using a lot of coal, largely for power generation. The United States has dropped its segment of coal usage for generating power a great deal, but the rest of the world is still clamoring for the hard black resource for its industries. With even Utah, which at one time was provided
26 - ubmedia.biz
over 80 percent of its power by coal, now declining in coal power production over the last few years, foreign markets are becoming ever increasingly important. But many of the same forces that have combined their legions against using coal for power generation in this country (as well as against oil and gas development) are also now looking to prevent the coal produced in the United States from going overseas for use there. Those groups have been pushing for closing off ports that can ship coal out of the country while at the same time pushing for conversion to green energy for homeland power. While natural gas has been taking up some of the slack as coal plants shut down, which bodes well for production in the Basin, most who oppose coal also are holding their nose looking for natural gas to only be a “bridge� to solar, wind and other types of green power. Recently eyebrows were raised in many places in the country when the Utah State Legislature adopted a very large appropriation so that Carbon, Emery, Sevier and Sanpete Counties could invest in a new bulk port loading facility in Oakland, California. That bill (SB 236) was sponsored by Senator Stuart Adams (R District 22) and Representative Mike McKell (R District SEE COAL on 27
who would be grasping at any straw to stop it, in conversation with legislators, SB 246 was Continued from 26 drawn up. 66) and it made available $53 million Mineral lease money is for investment in a deep water port in set aside for both the the CIB Oakland, California, for commodities and other funds, such as funds to be shipped from Utah to overseas to special service districts in connections. Some called the bill a counties, along with a few other “shell game” or a “money laundering small entities. The CIB money is scheme” set up by the state legislature. used to help with sewer systems, Even supporters say the bill, which roads, water development and passed 52-17 in the House on March other things in any county. The 10 and was sent to the Governors ofprocess set up through SB 246 for fice for signature, was “unorthodox.” the money for the port will work The original proposal on this project like this. The CIB already has the was made to the Permanent Com$53 million set aside, but instead munity Impact Board a little less than of sending it directly to the proja year ago. The CIB uses money from ect, the legislature appropriated royalties that are returned from the A new bulk port loading facility in Oakland, California will make it possible for com- funds that will be put in the Utah federal government for aide to help Department of Transportation’s modities such as coal to be shipped from Utah to overseas connections. communities impacted by extraction coffers. UDOT will then put that industries. The CIB had already put money in an Enterprise Fund away some reserve money to build a rail line from Carbon County to Duchthat was set up by the bill. That money will be split over two years (2016 esne and Uintah Counties to transport crude oil to load outs in the Carbon and 2017) consisting of $26 million the first year and $27 million the secarea. When the estimate to build that line went into the billions of dollars ond year. When return on investment comes back to the state based on the and that project was halted, the money was just sitting there. The involved business the port does, that money will be paid back to the Enterprise Fund, counties came upon the fact the port was looking for investors and asked the which will then be used by the CIB to grant or lend money to counties for CIB for money. infrastructure and other projects. It is also good to remember that the port The CIB approved the money but then there were questions whether it that the counties will be investing in is based on commodities of all kinds, was lawful for the agency to do that. The CIB and the counties asked for an not just coal. Alfalfa cubes, potash, phosphates and other bulk products can opinion from the Utah Attorney General’s office but that opinion was never also be shipped through to the deep water port. issued. With concerns mounting about directly using federal money for such a project and opposition to the project coming from environmental groups SEE coal on 28
coal
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coal
Continued from 27
Locally, while many in the Uintah Basin may not know it, they depend on the power of coal more than they realize. While some municipalities are served by Rocky Mountain Power, which is constantly changing their system to include more green power and gas powered generation, much of the Basin’s power comes from the Bonanza Power Plant that is located south of Naples about 25 miles. That plant is powered by coal, which comes from the Deserado Mine near Rangely, Colorado. The plant uses between 240 and 270 tons of coal per hour when producing nearly 500 megawatts of power, which is what its full capacity is. This amounts to about 120 pounds of coal per second. The plant burns around 5,000 tons of coal a day. The coal is transported from the mine by train to Bonanza. While the mining jobs are not located in Utah, the power plant is manned by around 100 local workers who reside in the Basin. The Deserado Mine has around 150 workers and the rail line that transports the coal has a couple of dozen employees. Transmission lines are also a part of the mix, because they must be maintained as they are hooked up to the power to the grid. There are between 10 and 20 employees that help with that maintenance as well. While salaries vary from the coal mine to the plant, the average workers make in the vicinity of $60,000 to $70,000 per year, which is a support to the local econony. The plant is owned by Deseret Generation, a cooperative that includes Bridger Valley Electric, Dixie Escalante, Flowell Electric, Garkane Energy, Moon Lake Electric and Mt. Wheeler Power. The company also sells surplus power to other users, and the system affects five states. The cooperative also owns about a quarter interest in the Hunter Power Plant in Castle Dale. But the Bonanza Plant is its primary generating source. Challenges to the plant’s operation have been voiced since it opened in 1985. It is one of the newer coal fired plants in Utah. Most of the complaints by groups are based on air pollution problems the opposition views
as a threat not only to the northeastern Utah/northern Colorado area, but also to the climate. Last fall an agreement between environmental groups and Deseret Generation was announced. Under the terms of the settlement, Deseret Power will install additional pollution control equipment at the Bonanza unit, and according to company sources it will result in a significant reduction in nitrogen oxide (NOx) emissions. The cost of this environmental upgrade will be passed on in rate increases to Deseret’s members. The agreement also calls for an eventual lifetime limit on the total quantity of coal to be consumed in the plant if it is not fully upgraded by the year 2030. Alternatively, the unit may see a longer period of service but at reduced operating levels beyond 2030, which was its projected retirement date. Coal fired power plants have generally been expected to have a life of about 50 years, but some have survived much longer than that. The Carbon Power Plant, owned by PacifiCorp and located in Price Canyon just north of Helper, closed last year after 62 years of operation on its first unit and 58 years on its second. The plant was a small generator of power, but was important in the grid that Utah Power and Light put together during the post war boom. The lost generation capacity from the closed plant has mostly been replaced by gas powered plants that have been constructed along the Wasatch Front. But while opposition to the operation of coal power plants continues there is one fact that remains that is indisputable. Power grids must have base power systems to be able to provide power when customers and users need it. At the present time, neither solar nor wind can provide that. Nuclear power is one option, but the cost of building nuclear plants is very expensive and the cost of operation is also high. Thus power from these plants is much more expensive, which is of concern to users. Natural gas plants, another base, have been opening and providing more power, but the conversion of gas power to electricity is not as efficient as coal. Hydro plants can also provide base power, but when drought strikes and water flows are turned down that can affect their production. The fact is coal is still the lowest cost, best energy source to produce electricity as a base. That may not be true for the future with new technologies being advanced for producing power every year. To paraphrase Mark Twain’s famous statement, “The reports of coal’s death have been greatly exaggerated.”
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Environmentalists want to prohibit fracking in Utah by Katie Rhoton Courtesy The Daily Universe
“We’ve become so successful (at fracking) in the last 10 years that we’ve started to supply our own needs,” Morris said. “There’s a flood of oil out there More than 45,000 acres of public land in Utah was approved for fracking in on the market, and that’s why oil and gasoline are so cheap right now.” 2015, prompting several environmentally focused companies to file formal proThe lower cost of gas and oil allows consumers to spend their money elsewhere, tests. In spite of the petitions, the land was approved for fracking by the Bureau and industries that are dependent on refined oil are able to produce their prodof Land Management in January. ucts at a much lower price, according to a BBC World Service economics corre Some of the parcels went on sale Feb. 16. The remaining parcels are set to go spondent. to auction sometime in May, according to the Bureau of Land Management. The oil industry also creates jobs. According to IHS, a global information The sale includes parcels of land from the company, “The unconventional oil and natuBureau of Land Management’s Moab, Price, ral gas value chain and energy-related chemiVernal and Fillmore field offices in central and cal activity together supported more than 2.1 eastern Utah and within the Fishlake Nationmillion (American) jobs in 2012.” al Forest in Sevier County. While fracking has its benefits, the Utah During a fracking job, fresh water is used to Chapter of the Sierra Club claims it poses a crack rocks underground and release natural variety of environmental issues, including gas in a chemical mixture known as frackwater contamination, harmful air emissions, ing fluid. Each fracking well uses between two damage to landscapes and wildlife, and leaks. and five million gallons of fresh water accordLiving Rivers, a company focused on ecologiing to Clean Water Action. Once the water cal restoration while meeting human needs, is is mixed with the chemicals needed to break one of the companies that has filed a formal down rocks, it becomes permanently contamprotest against selling Utah land for frackinated and must be stored in disposal wells. ing. John Weisheit, conservation director for Thomas H. Morris, a BYU geology proBYU geology professor Thomas H. Morris Living Rivers, mentioned some of the risks fessor and director of the department of associated with fracking. geological sciences, said fracking has helped Utah’s energy sector become self “Fracking means we are running out of fossil fuels and do not have the coursustaining. While fracking concerns environmentalists, there are socioeconomic age to make the transition to other kinds of reduced-impact energy developbenefits to the process. Fracking increases the rate at which oil and gas can be ment,” Weisheit said. “Fracking means we are willing to cause more damage to extracted, increasing the current available supply of oil significantly. This has led a damaged atmosphere and hydrosphere. Fracking means we are not willing to to lower oil prices on a global scale according to Investopedia, a website “devoted accept the limits of nature.” to investing education.” Another concern is earthquakes fracking may cause. After water has been pumped into wells to break rocks, the drilling fluid is extracted and placed in disposal wells encased in concrete thousands of feet underground. StateImpact, a reporting project of the NPR, claims when these disposal wells are placed along fault lines, the drilling fluid acts as lubricant that can cause a fault to slip, trigUBMedia.biz gering earthquakes. As the fracking industry continues to grow, companies look for new places to expand, including public lands such as national and state parks. This has led to UBMedia's UBM an uproar from many environmental groups, including the Center for Biological Diversity and Living Rivers located in Salt Lake City, which has filed a formal protest against the impending auction. Utah isn’t the only state to face fracking protesters. A national movement UBMedia.biz involving more than 400 organizations called “Keep It in the Ground” has encouraged President Obama and federal officials to halt oil and gas auctions slated for Utah, Washington, Nevada, Wyoming, Colorado and Alaska. “We live in a hydrocarbon society, so it’s a little bit of a trade off,” Morris said. UBMedia's UBM “Not that we shouldn’t be pushing for better energy fuels, better energy sources. But to try and shut down oil and gas production, we couldn’t survive as a country.”
“Not that we shouldn’t be pushing for better energy fuels, better energy sources. But to try and shut down oil and gas production, we couldn’t survive as a country.”
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