The Bakken Magazine - June 2015 - Water and Oilfield Waste

JUNE 2015

www.THEBAKKEN.comPrinted in USA

PlusSkid-Mounted Oil Recovery System

Page 38

AND Recycling Technology

for Drill Cuttings Arrives Page 22

Why gathering, storage and disposal efforts progressPage 28

All For Water

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Find a solution that fits at www.grinnell.com or contact us directly at [email protected].

Oil and gas companies don’t just need to comply with regulations at their facilities, they demand high performance and safety at every level.

THEBAKKEN.COM 5

CONTENTS JUNE 2015 VOLUME 3 ISSUE 6

Mechanical Products Safer. Smarter. Tyco.TM

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GRINNELL Mechanical Products are designed to meet the rigorous demands and challenging environments of the oil field industry. GRINNELL couplings and fittings can make pipe joining safer, faster, easier and cost effective by offering an efficient alternative to threading and eliminating the need for welding. Additionally, our specialty products allow engineers and owners to build extensive piping systems from a single source. GRINNELL Mechanical Products offer complete solutions for upstream oil systems.

Find a solution that fits at www.grinnell.com or contact us directly at [email protected].

Oil and gas companies don’t just need to comply with regulations at their facilities, they demand high performance and safety at every level.

6 Editor’s NoteBakken Water, Oilfi eld Waste DevelopmentsBY LUKE GEIVER

8 ND Petroleum CouncilFracking Debate Update BY TESSA SANDSTROM

10 Events Calendar

12 Bakken NewsBakken News and Trends

Pg 22 LOGISTICS

Delivering New Oilfi eld Waste Strategies

From new drill-cutting recycling projects to pending changes for TENORM regulations, the oilfi eld waste landscape is changing.

BY PATRICK C. MILLER

Pg 28 LOGISTICS

Managing Bakken Water NeedsLow oil prices have put a spotlight on water management fi rms and their abilities to handle, store, recycle and service oilfi eld water issues. BY EMILY AASAND

Pg 38 PRODUCTS & TECHNOLOGY

Th e New Name In Oil RecoveryTh e combination of off -shore tech with tried-and-true pump equipment could help producers and saltwater disposal facilities recover more oil from produced water. BY LUKE GEIVER

ON THE COVER: Enable Midstream Partners works on an oil and water gathering line for operator XTO Inc. PHOTO: ENABLE MIDSTREAM PARTNERS

The BAKKEN MAGAZINE JUNE 20156

Bakken Water, Oilfield Waste Developments

Luke GeiverEditorThe Bakken [email protected]

EDITOR'S NOTE

For the Latest Industry News:www.TheBakken.comFollow us:

twitter.com/thebakkenmag facebook.com/TheBakkenMag

Of all the topics we devote coverage time and energy to throughout the year, oilfield waste is one with the least appeal. While the topics of flaring and operator updates are always popular and well read, telling the story of naturally occurring radioactive material handling and disposal methods just doesn’t have the same readership ap-peal. But, consider this: Every year, roughly 2 million tons of new drill cuttings in the Williston Basin need to be managed. Until now, the massive amount of drill cuttings produced annually in the Bakken has been sent to landfills in and outside of North Dakota. A new technology and drill cutting approach has arrived, however, that re-cycles the material created during horizontal drilling into material similar to road base and flowable fill. Fortunately for our editorial team, release of the technology coin-cided with our monthly theme on oilfield waste, and fortunately for the entire Bakken community, it now has access to a process that will change the perception of sustain-ability in the play.

For his story, “Delivering New Oilfield Waste Strategies,” staff writer Patrick Miller spoke with Nuverra Environmental Solutions Inc. about its new Terraficient process before and after the company officially revealed its involvement in the Bak-ken, during a press conference at the Capitol attended by Gov. Jack Dalrymple, North Dakota Petroleum Council President Ron Ness and others. His story sheds light on Nuverra’s three-year research and roll-out effort to bring Terraficient to the Bakken through a government and industry-led effort, as well as other key issues in the oil-field waste segment of the Bakken play. We are confident it will be well read.

Along with oilfield waste, we also turned our monthly focus to water. Because the topic is broad, we approached the topic with this basic premise: any story on water needs to include input and insight on new management strategies or efficiency gains and cost savings incurred due to new technology. Guided by that premise and push to cover what is new, we were able to track down several unique perspectives from multiple water-linked firms. At first, each’s comments sounded like material we had already covered in the magazine, however, every conversation revealed something new about how water is managed, treated or looked at in the Bakken circa 2015.

On a broader level, the stories on oilfield waste and water contain a facet that the Bakken team discusses or thinks about daily. This month, in talking to oilfield waste experts and water gurus, we noted that common perspectives remain in place over long periods. But, also that any topic—from the mundane to the flashy—we research, recheck or reanalyze will undoubtedly reveal some new process, approach or equip-ment tweak in development.

THEBAKKEN.COM 7

www.THEBAKKEN.com

VOLUME 3 ISSUE 6

Subscriptions Subscriptions to The Bakken magazine are free of charge to everyone with the exception of a shipping and handling charge of $49.95 for any country outside the United States. To subscribe, visit www.TheBakken.com or you can send your mailing address and payment (checks made out to BBI International) to: The Bakken magazine/Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You can also fax a subscription form to 701-746-5367. Reprints and Back Issues Select back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more information, contact us at 866-746-8385 or [email protected]. Advertising The Bakken magazine provides a specific topic delivered to a highly targeted audience. We are committed to editorial excellence and high-quality print production. To find out more about The Bakken magazine advertising opportunities, please contact us at 866-746-8385 or [email protected]. Letters to the Editor We welcome letters to the editor. If you write us, please include your name, address and phone number. Letters may be edited for clarity and/or space. Send to The Bakken magazine/Letters, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203 or email to [email protected].

TM

Please recycle this magazine and remove inserts or samples before recycling

COPYRIGHT © 2015by BBI International

EDITORIAL

Editor Luke Geiver [email protected]

Staff Writer Emily [email protected]

Staff Writer Patrick C. Miller [email protected]

Copy Editor Jan [email protected]

PUBLISHING & SALES

Chairman Mike Bryan [email protected]

CEO Joe Bryan [email protected]

President Tom Bryan [email protected]

Vice President of Operations Matthew Spoor [email protected]

Vice President of Content Tim Portz [email protected]

Marketing & Sales Director John Nelson [email protected]

Business Development Manager Bob Brown [email protected]

Account Manager Austin [email protected]

Circulation Manager Jessica Beaudry [email protected]

Traffic & Marketing Coordinator Marla DeFoe [email protected]

ART

Art Director Jaci Satterlund [email protected]

Graphic Designer Lindsey Noble [email protected]

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In perusing Facebook the other day, a comedy clip came across my newsfeed that I’ve seen many times before and still makes me laugh. The clip, from acclaimed comedian Louis C.K., was focused on air travel complaints, and it also made me think.

“‘I had to sit on the runway for 40 minutes.’ Oh my god, really? What happened then, did you fly through the air like a bird, incredibly? Did you soar into the clouds, impossibly? Did you partake in the miracle of human flight and then land softly on giant tires that you couldn't even conceive how they [expletive] put air in them?...You're sitting in a

chair in the sky. You're like a Greek myth right now.”

I’m just as guilty about making similar complaints about incredible modern feats, including flights and the delays and misconnections that come with the process. This joke, however, is representative of other modern marvels– Internet, on-demand TV, sketchy cell phone service. We all complain about the “unreliability of it” sometimes, but think about a time before we had them.

In fact, we’ve become so accustomed to being introduced to a new marvel on a daily basis that we’ve become completely immune to some of them. Take, for example, the fact that we have

learned to take a chunk of dense rock and turn it into a liquid which is then turned into malleable, yet durable solids that have helped create the many comforts of our modern day life from modern medicine to the devices like smart phones and computers that we use to stay connected to our loved ones, complete our work, stay informed and play our games.

That marvel is made possible by one technology: hydraulic fracturing, or fracking. Fracking has been under attack by some for the past six to seven years despite the fact that fracking has been performed safely for more

than 60 years. Their belief—that has never been backed by science or facts—has always been based on the belief that fracking would ruin our water supplies. Fracking opponents have continued to stand by their belief, relying primarily on misinformation or emotional arguments often from people like Yoko Ono and Sean Lennon who have recognizable names but no scientific education or background, despite several elements of the argument for or against fracking. There has never been an occurrence of water contamination in 60 years. And, technology and the research of

NORTH DAKOTA PETROLEUM COUNCIL THE MESSAGE

UNDERGROUND VISION: The rendering here shows a sliding sleeve approach to hydraulic fracturing. In the image, the area outside the wellbore has been cemented to ensure the best location for each fracture network.

Fracking Debate Update By Tessa Sandstrom

‘The possibilities for innovation could be endless, but innovation can only exist in an environment where they are able to progress.’

THEBAKKEN.COM 9

NORTH DAKOTA PETROLEUM COUNCIL

chemists, engineers, and other scientists who have dedicated their professional lives to this area of study, continues every day.

Recently, fracking detractors received another blow against their argument when the U.S. Environmental Protection Agency released a report concluding that fracking does not have “widespread, systemic impacts on drinking water.”

This is something that those of us in oil producing states already know. North Dakotans are well-informed on this topic and understand that our state has put in place significant regulations to ensure development is done safely. We’ve seen that oil development can be done safely and efficiently. We also recognize that there are impacts and the EPA study acknowledged that as well.

Neither the industry nor the report deny that fracking is impact or risk-free. Nothing in our lives

is risk-free. The important thing is that we recognize that there are risks and work to mitigate them. As we speak, there are scientists and engineers within the industry who are exploring new ways to become more efficient, whether it is building even better safeguards, recycling and reusing more of the flowback or produced water, or should a spill incident occur, finding ways to remediate them.

For example, saltwater spills have been an area of concern in North Dakota, but a task force made up of scientists and industry professionals have been working over the course of the year to look into these incidences. They’ve put together documents and case studies showing the ways that these incidences can be cleaned up and the land remediated and producing in as little as a year. These documents will soon be released.

Meanwhile, other scientists

are exploring the use of carbon dioxide or nitrogen to frack instead of water. Others are looking into carbon capture and sequestration. The possibilities for innovation could be endless, but innovation can only exist in an environment where they are able to progress.

Despite the support of science, the long history of safe use and reports like that from the EPA, the debate of fracking will not end. The witchhunters who have dedicated the better part of a decade trying to persecute this technology will move on to other issues associated with oil development, and therein lies the witch they are out to hunt: oil and gas. The end goal for them is not to work constructively to mitigate risks or impacts; their endgame is to simply put up roadblocks against innovative solutions that can encourage better development.

But for those of us who enjoy our modern conveniences,

including our computers and smart phones, we recognize that science and innovation can unlock the technologies that will allow us to develop this vital resource even more efficiently, and we know it’s possible. After all, if scientists have figured out how to turn a chunk of rock into a smart phone, don’t you think there is at least one who can find solutions to our industry’s challenges? All they need is our support and the ability to operate under certainty, and the EPA report helps provide the insurance—and assurance—to do just that.

Author: Tessa SandstromCommunications Manager,North Dakota Petroleum [email protected]


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The Bakken magazine will be distributed at the following events: Unconventional Resources Technology Conference (URTeC)July 20-22, 2015San Antonio, TexasIssue: July 2015The Bakken magazine

The Bakken Conference & Expo July 27-29, 2015 Grand Forks, North DakotaIssue: July 2015The Bakken magazine

2015 North Dakota Petroleum Conference Annual MeetingSeptember 21-23, 2015Fargo, North DakotaIssue: September 2015The Bakken magazine

OilCommNovember 4-6, 2015Houston, TexasIssue: November 2015The Bakken magazine

Houston Oilfield ExpoDecember 9-10, 2015Houston, TexasIssue: December 2015The Bakken magazine

NAPE DenverDecember 9-10, 2015Denver, ColoradoIssue: December 2015The Bakken magazine


BAKKEN NEWS BAKKEN NEWS & TRENDS

IER: World shale energy resources greater than we know

While the U.S. has done more than any country in the world to capitalize on its oil and gas shale energy resources, the potential of shale energy is far greater than what’s technically and economically recoverable today.

“People have known for a long time that there’s a whole lot of oil and natural gas trapped in shale, but it doesn’t matter if it’s there and you can’t get it out in a cost-effective manner,” said Dan Simmons, vice president of policy for the Institute for Energy Research in Washington, D.C.

When oil prices are above

$50 a barrel and new technolo-gies such as improved under-ground imaging are combined with horizontal drilling and hydraulic fracturing, they provide access to resources that were previously unavailable.

“That’s pretty exciting because there are large amounts of oil and natural gas resources in the world, but if you don’t have the technological means of accessing them, it really doesn’t matter,” Simmons said. “That is one of the great things that the hydraulic fracturing revolution has showed us. Technology can change and improve to bring a lot of these resources online. In

the past, it was technologically and economically impossible.”

In an analysis of data from the Energy Information Admin-istration, IER says that hydraulic fracturing and horizontal drilling have led to “an oil and gas pro-duction renaissance” in the U.S. with more than 40 percent of production coming from shale formations.

An assessment of global shale and gas resources con-ducted by Advanced Resources International for EIA found 137 shale formations in 41 countries outside the U.S. Worldwide, the company estimates that 345 billion barrels of shale oil and

7,299 trillion cubic feet of shale gas are technically recoverable.

IER defines technically recoverable resources as oil and natural gas that could be pro-duced using current technology, regardless of price and produc-tion costs. In contrast, economi-cally recoverable resources can be profitably produced under current market conditions.

According to IER, only four countries have produced commercial quantities of oil and gas from shale plays. They are the U.S., Canada, China and Argentina. However, China produced only a small amount of shale gas and Argentina

natural gas(billion cubic feet per day)

crude oil(million barrels per day)

China

Canada

UnitedStates

Argentina

Canada

UnitedStates

0 15 30 45 60 75 Bcf/d 0 2 4 6 8 10mmbbl/d

TYPE OF ESTIMATED NATURAL GAS AND CRUDE OIL PRODUCTION IN 4 COUNTRIES, 2014

0.25 Bcf/d of shale gas

nonshale gas shale gas

0.25mmbbl/d of tight oil

nontight oil tight oil

SOURCE: INSTITUTE FOR ENERGY RESEARCH

THEBAKKEN.COM 13

produced just a small amount of shale oil.

“Out of the four countries, only the United States is a major producer of both shale oil and gas,” the IER analysis says.

EIR also notes that in the U.S., “a large portion of shale gas production is from the Ap-palachian Basin’s Marcellus Shale where gas production has more than tripled in the past three years from 4.8 billion cubic feet per day in 2011 to 14.6 billion cubic feet per day in 2014.”

Simmons reasoned that the amount of oil and gas in shale is far greater than current estimates, which will increase with more exploration, better economics and improved technologies.

For example, in 2002, he said the U.S. Geological Survey estimated the amount of techni-cally recoverable natural gas in the Marcellus formation was 2 trillion cubic feet. By 2011, the es-timate had increased to 84 trillion cubic feet. That wasn’t because the amount of gas increased, but because of changes in economics and technology.

“I believe that there are a lot more shale resources around the world, but what actually matters is being able to drill and to ex-periment. People are then able to figure out the best ways to pro-duce it,” Simmons said. “When you can look, you find a lot more resources than you knew, even in known areas.”

TOP 10 COUNTRIES WITH TECHNICALLYRECOVERABLE SHALE GAS RESOURCES(trillion cubic feet)

ChinaArgentina

AlgeriaU.S.

CanadaMexico

AustraliaSouth Africa

RussiaBrazil

0 200 400 600 800 1000 1200

1,115802

707665

573545

437390

285245

TOP 10 COUNTRIES WITH TECHNICALLYRECOVERABLE SHALE OIL RESOURCES(billion barrels)

RussiaU.S.

ChinaArgentina

LibyaAustralia

VenezuelaMexico

PakistanCanada

0 10 20 30 40 50 60 70 80

7558

3227

2618

1313

99

BAKKEN NEWS


BAKKEN NEWS

Oasis Petroleum Inc., an independent exploration and production company, announced that company total revenues were down in the first quarter of 2015, primarily due to lower oil and natural gas prices despite beating its previously set produc-tion predictions. In the company’s 2015 Q1 earnings call, Oasis reported a sequential quarter-over-quarter decrease in lease operating expense (LOE) per barrels of oil equivalent (boe), which was due to lower water volumes produced as well as more salt water disposal volumes going to Oasis Mid-stream Services disposal wells, de-creased workover costs and lower LOE on nonoperated volumes.

“Oasis exceeded production guidance of 47,000 barrels of oil equivalent per day (boepd) to 49,000 boepd in the first quarter of 2015, as new wells brought on during the first quarter exceeded

production expectations with over 60 percent of the wells completed with high-intensity stimulation,” said Thomas Nusz, Oasis chair-man and CEO. “Additionally, CapEx tracked in line with our budget, with drilling and comple-tion capital coming in at $216.6 million, or $8.3 million below our budget.”

Oasis brought on 23 gross operated and 0.9 net nonoper-ated wells on producing in the Williston Basin during Q1. The company has five rigs running and 91 gross operated wells await-ing completion in the Williston Basin.

“The White Unit in Wild Basin, our first multislickwater

test, continues to outperform the high-end of our type curve,” said Nusz.

The test included seven wells in a portion of a single drilling space unit (DSU), all completed with slickwater completions. Nusz added that the Middle Bakken well has produced approximately 256,000 boe through 216 days and the wells in the first bench of the Three Forks have produced on average 167,000 boe through 192 days. Oasis also completed its first high-volume proppant test in Alger.

“The Helling Trust has two new Middle Bakken wells that have produced on average 139,000 boe through 88 days and

a well completed in the first bench of the Three Forks wells that has produced 104,000 boe through 87 days. All of the Middle Bakken and Three Forks wells in both the White Unit and the Helling Trust have early time production that is trending over double our cor-responding production data for our 750,000 boe Middle Bakken type curve and our 600,000 boe Three Forks type curve, respec-tively,” Nusz said. “The continued outperformance of both of these high intensity completion tests continues to provide us with confidence in our plans to target our core area with high-intensity completions.”

Oasis exceeds Q1 production predictions

Design Slickwater High Volume ProppantStages 36 50Proppant type 100% ceramic 90% sand/10% resin coatedProppant volume 4.0MM lbs 9.0MM lbsTechnique Plug & Perf Plug & PerfLift High capacity High CapacityFluids pumped 220k barrels 150k barrels

DESIGN OF HIGH-INTENSITY COMPLETIONS

SOURCE: OASIS PETROLEUM INC.

OPERATIONAL HIGHLIGHTS: Oasis Petroleum has used new, high-intensity completions based on slickwater to produce more oil than it previously planned for. PHOTO: OASIS PETROLEUM INC.

THEBAKKEN.COM 15

BAKKEN NEWS

In QEP Resources Inc.’s first quarter 2015 financial and operating results, the com-pany reported a net loss from continuing operations of $55.6 million. The company’s ad-justed net loss was $8.7 million, compared with the adjusted net income from continuing opera-tions of $41.1 million for the comparable 2014 period. The decrease was due to lower than average crude prices, natural gas and natural gas liquids, par-tially offset by higher crude oil volumes, lower production taxes and higher oil volumes, lower production taxes and higher proceeds from realized com-modity derivatives.

“Our strong first quar-ter operational performance, coupled with our premier E&P asset portfolio and solid financial position, demonstrates the flexibility we have built into our business to manage through the current volatile commodity price environment,” said Chuck Stanley, chairman, president and CEO of QEP Resources. “We have significantly deceler-ated drilling activity to manage through the commodity price trough and we are continuing to actively manage the timing of well completions to take advan-tage of the contango in forward crude oil and natural gas prices.”

With the slowdown in activity, QEP has focused on providing more efficient opera-tions, which have provided suc-cessful results from its enhanced

completion designs in the Wil-liston Basin and Pinedale.

The company said it com-pleted three wells in western North Dakota in the quarter utilizing cemented liners with plug and perf completion technology to further evaluate optimum stimulation design. According to QEP, these wells were completed over 50 stages utilizing roughly 1,000 pounds of proppant per lateral foot. While production results are still being evaluated, QEP says early results indicate a modest improvement over prior offset sliding sleeve completions.

“Combining larger proppant volumes with more stages resulted in an average increase in cumulative produc-tion of about 75 barrels of oil equivalent in the first 120 days online compared to our original design,” the company said.

QEP began implement-ing enhanced well completion designs last year and initially switched from pumping roughly 350 pounds of proppant per lateral foot to approximately 825 pounds of proppant per lateral foot over 33 stages. QEP began pumping 1,000 pounds of proppant per lateral foot over 50 stages.

During the first quarter of 2015, QEP continued to work on a pilot program to evaluate high-density infill development drilling on its South Antelope acreage. The company said it drilled and completed a total of four pilot wells spaced at 400 and 600-foot intervals, between existing producing wells, in the Middle Bakken and first bench of the Three Forks. “We also drilled our first well in the sec-ond bench of the Three Forks. Flowback on these infill wells

began in April 2015 and initial production results are encourag-ing,” the company said.

At the end of the first quarter of 2015, QEP had 40 gross operated wells awaiting completion in the Williston Basin and four operated rigs running, including three on South Antelope and one rig on the Fort Berthold Indian Reser-vation. The company expected gross completed well costs in the Williston Basin to average $9.5 million during 2015.

QEP finds Q1 enhanced well completion success

0

20

40

60

80

100

0

20

40

60

80

100

120

140

160

180

200

0210906030

Well�C

ount�–do

tted�lines

Cumulative�Prod

uctio

n�(M

Boe)

Days�on�Production

Original Completions �-�30-35 Stgs; 3-4 MMlbs �-60 WELLS

Mid -Size Completions �-�31-34 Stgs; 7.5-9 MMlbs -17 WELLS

Most Recent Completions �-�48-51 Stgs; 9.5-10 MMlbs -10 WELLS

Mid -size well count

WILLISTON BASIN – SOUTH ANTELOPE – ENHANCED COMPLETIONS RESULTS

Enhanced�completion �infill �wells �are �outperforming �parent �wells �on�average

Most recent well count

Original well count

75 MBoe uplift

SOURCE: QEP RESOURCES INC.


BAKKEN NEWS

The North Dakota taxable sales increase streak first started in 2010 continued in 2014. The state’s tax department has reported that taxable sales and purchases for 2014 reached $28.2 billion, an 11 percent increase above the $25.47 billion recorded in 2013. The mining and oil extraction industry segment achieved an increase of nearly 19 percent at $806.4 mil-lion. Of the 15 major industry sectors, 10 saw growth from 2013 to 2014.

In addition to tracking industry sector growth, the annual report also records city and population area results. Dunn County led all counties in the state with an increase of 62.41percent over the previous year, followed by Bottineau at 44.33 percent, McKenzie at 39.44 percent, Slope at 29.78 percent and Bill-ings at 22.95 percent.

At the city level, several small communi-ties underwent major growth, an aspect of the report that Ryan Rauschenberger, tax commis-sioner, said shows the strength of the state’s economy. “All of the cities that experienced a near doubling of the sales tax bases are small,” he said. “Significant growth occurred not only

in the oil-rich western side of the state, but also throughout nearly every region of the state.”

The North Dakota cities of Burlington and Davenport each recorded more than 100 percent growth at 198.21 percent and 126.05 percent, respectively. The cities of Sawyer, Reeder and Des Lacs each saw increases from 2013 to 2014 above 80 percent. Major metro areas also saw an increase. Bismarck, Dickin-

son, Fargo, Grand Forks, Minot and Williston all recorded growth upticks.

“Eleven percent is a substantial increase in North Dakota taxable sales and purchases, well above the 2 percent rate of inflation,” Rauschenberger said. “This report shows a continuation of the rapid sales growth experi-enced nearly every year since 2010.”

ND’s economic increase streak continues

ND TAXABLE SALES & PURCHASES BY INDUSTRY2014 Total - $28.2 BillionNumbers Shown in Millions of Dollars

Educational, Health Care &Social Services: $62.1

Arts, Entertainment & Recreation: $103.4

Professional, Scientific, Technical & Management Services: $162.3

Utilities: $230.3

Miscellaneous: 250.4

Transportation & Warehousing: $400.2

Other Services: $593.9

Information Industries: $787.4

Construction: $965.2

Manufacturing: $1,527.9

Financial, Insurance, Real Estate,Rental & Leasing: $1,724.7

Accommodation & Food Services: $1,928.6Mining & Oil Extraction: $5,194.1

Retail Trade: $6,900.6

Wholesale Trade: $7,391.4

SOURCE: NORTH DAKOTA TAX DEPARTMENT

THEBAKKEN.COM 17

BAKKEN NEWS

The Dickinson, North Dakota-based Dakota Prairie refinery has begun operations, MDU Resources Group Inc. and Calumet Specialty Products Partners L.P., the joint-part-ner on the refinery, announced in May. The refinery is the first greenfield fuels refinery built in the U.S. in nearly 40 years.

“Over time, we expect that this refinery has the potential to be an important contribu-tor to the economic growth of the local and state economy.”

The refinery can process 20,000 barrels per day (bpd) of Bakken crude, resulting in a production slate which includes up to 7,000 bpd that can be sold from the plant to regional customers.

The Dakota Prairie refinery will also produce up to 6,500 bpd of naphtha, which is used as a diluent to transport heavy oil by pipeline or as a feedstock in gasoline produc-tion; up to 6,000 bpd of atmospheric tower bottoms, which can be used as feedstock for lubricating oils; and other refined products, the company said.

Construction of the facility began on March 26, 2013, on a 318-acre site that is located roughly four miles west of Dickinson. The original start date for diesel production

was slated for the end of 2014. The delay was partially due to late revisions made to electri-cal systems, the company said. At its peak construction, the site employed more than 800 workers, and since becoming operational, it now employs 80. MDU estimates the total cost of the plant to be approximately $435 million.

MDU is currently considering a second diesel refinery near Minot, North Dakota. “In the future, we expect there will be great opportunities to improve financial performance of the refinery through

debottlenecking and other strategies. We also will benefit from experience gained with this project to help develop future projects, such as a second plant,” Goodin said.

Dakota Prairie refinery begins Bakken operations

of ND’s diesel fuel is

imported

2 /3

20,000 bpd to be

processed at plant

7,000 bpd available for

sale6,500 bpd of naptha can be produced


BAKKEN NEWS

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Marathon Oil believes its U.S. uncon-ventional oil production guidance for the Bakken, Eagle Ford and Oklahoma Resource Basins will remain despite the exploration and production company’s activity and capital spending reduction plans. From the first quarter of 2014 to Q1 2015, the company has reduced production and other operating costs by roughly 25 percent. According to Lee Tillman, Marathon CEO, operation-related cost reductions come simply from hardwork. “There is no one magic bullet,” he said.

To reduce operations costs, the Marathon team has worked to coordinate deployment of contract labor, focus on compressor utiliza-tion, aggregate water systems and optimize its chemical programs. Savings from each area are durable, Tillman said, and can be made possible in any oil price scenario. The oil price environment has guided the team to adjust

activity levels based on cash flows, Tillman also said. Such focus could bring the sale of roughly $500 million worth of noncore assets. “Our plan is to hold this activity level for the remainder of the year,” he said.

In the Bakken, Marathon is now incor-porating its new fracture designs to all new wells. Its enhanced completion design is based on opti-mizing proppant loading, frack fluid volumes and stage density. The first 23 wells using the new design have recorded a 30 percent uplift in cumulative production volumes over the first 90 days. In 2015, Mara-

thon expects to bring 53 to 63 gross operated wells to sale. The company’s rig count in the Williston Basin for the rest of the year should average two drilling rigs.

Marathon Oil’s 2015 production guidance unchanged2015 NORTH AMERICA ACTIVITY U.S. RESOURCE PLAYS

CAPEX Average 2015 Rig

Count

Gross Operated

Wells Drilled

Gross Operated Wells to

Sales

Net Wells to Sales

$253MM 3 16-20 18-22 23-26


Count

Gross Operated

Wells Drilled

Gross Operated

Wells to Sales

Net Wells to Sales

$1,331MM 10 196-206 227-247 160-176


Count

Gross Operated

Wells Drilled

Gross Operated Wells to

Sales

Net Wells to Sales

$645MM 2 26-36 53-63 58-70

Oklahoma Resource Basins

Bakken

Eagle Ford

SOURCE: MARATHON OIL

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EOG Resources Inc.’s first quarter results were significantly impacted by low commodity prices. The world’s largest shale oil producer recorded a net loss of nearly $169.7 million, the company reported in its first quarter earn-ings conference call. Although EOG saw a fi-nancial decline, overall total company produc-tion increased nearly eight percent compared to the first quarter 2014. EOG says it will focus 85 percent of its 2015 capital spending on its top oil plays, including the Bakken.

In the first quarter, EOG focused activity on its Parshall core acreage in the Bakken where 500-foot spacing results were encourag-ing. The company reported that average well costs were down 14 percent in the first quarter compared to 2014 levels. EOG had a five-well pattern in the Parshall area which had an aver-age initial production rate per well of 1,235 barrels of oil per day (bopd) and completed a three-well pattern which had an initial produc-tion rate per well that averaged 1,345 bopd.

“EOG is on track to deliver a disciplined 2015 capital program that is focused on achieving strong returns on capital invested,” said William Thomas, chairman and CEO. “We continue to adjust to the lower oil price environment by reducing well costs and operating expenses and by making significant well productivity improvements through technology advancements.”

The company said it has no interest in accelerating oil production at the bottom of the commodity cycle. EOG’s goal for 2015 is to position the company to resume strong oil growth when oil prices improve. Falling in line with that goal, EOG chose to defer a significant number of well comple-tions in the third quarter.

“By deferring completions until prices improve, EOG increases capital returns and builds an inventory of uncompleted wells to

prepare for stoing growth in a better price environment,” the company said. “If prices continue to improve, EOG will begin to in-crease well completions in the third quarter.”

If oil prices recover, stabilize and recover at the $65 level, EOG is prepared to resume strong double-digit oil growth in 2016 with balanced capital spending and discretionary cash flow, the company said.

EOG defers well completions until crude prices rise

Oil78%

Core Well

NGLs11%

Antelope Well

Oil92%

NGLs6%Gas

2%Gas 11%


LOGISTICS

Government and industry are working toward effective regulatory solutions to deal with oilfield solid waste.By Patrick C. Miller

DELIVERINGNEW OILFIELD

WASTE STRATEGIES

THEBAKKEN.COM 23

LOGISTICS

BENEFICIAL USES: The Nuverra Environmental Solutions Terrafficient Processing Facility at Watford City was the first plant selected under a North Dakota pilot project to recycle drilling wastes by turning them into usable products.PHOTO: NUVERRA ENVIRONMENTAL SERVICES


LOGISTICS

Regulations governing solid waste disposal—in-cluding radioactive ma-terials—from drilling op-erations in the Bakken are getting an overhaul to im-prove efficiency and lower costs without endangering public safety or the envi-ronment.

New NORM reuse effortsAs Scott Radig, director of

the North Dakota Department of Health’s waste management division, puts it: “The philosophy and general policy of the depart-ment is that North Dakota should take care of its own issues that we generate here to the extent that it’s still safe for the public.”

Waste treated on the well site is regulated by the North Dakota Industrial Commission Depart-ment of Mineral Resources Oil and Gas Division. Waste trans-ported off-site for treatment or burial in landfills is regulated by the state health department.

Before the Bakken produc-tion boom in 2008, oil and gas had just one or two treating plants to regulate, says Mark Bohrer, Oil and Gas Division underground injection control manager. Now there are 20, which resulted in the regulations being updated in April 2014.

“We revised our rules and regulations to cover a myriad of facilities that might be out treat-ing or processing oilfield wastes to bring those under our juris-diction under our treating plant rule,” he says. “Every treating plant is different. It’s not like per-mitting an oil well where they’re pretty much all the same.”

In a state that produces up to 2 million tons of solid drill-ing wastes annually, one of the

few options until recently was to bury it in a special waste landfill. That changed last May when the North Dakota Legislature passed House Bill 1390. The bill autho-rized the state’s Department of Health to select one or more pilot project projects to recycle drilling wastes for beneficial uses.

On June 8, Gov. Jack Dal-rymple announced that the Nu-verra Environmental Solutions plant at Watford City, North Dakota, had been selected as the first pilot project participant un-der the new law. Using Nuverra’s Terrafficient solids management process, the plant will recycle drill cuttings for use in such applica-tions as road bases, gravel addi-tives, construction fill and flow-able fill.

“The problem that we looked at with the landfills was that it’s legal and it works very well, but you’re really not chang-ing the product itself,” according to Mark Johnsrud, board chair-man and CEO of the Arizona-based company.

Running the cuttings through the Terrafficient process not only turns them into non-hazardous useful products, but also recovers water and hydro-carbons for reuse while reducing carbon emissions, he explains.

“Changing the profile of the byproduct was really the direc-tion that we thought we needed to go,” Johnsrud says. “That’s how we could end up reducing or eliminating the risk for the opera-tors. We can make sure from an environmental standpoint that we can do what’s very earth friendly, and we just think that it’s a good overall management tool for companies to use today.”

The bill requires that a com-pany selected for the pilot project

“be supported by scientific find-ings from a third-party source fo-cused on the anticipated environ-mental performance of the end products.” On the science side, Nuverra is working with the En-ergy & Environmental Research Center at the University of North Dakota.

“It takes good solid eco-nomic and science validation in order for this program to be successful,” Johnsrud says. Nu-verra chose the EERC because the company had a good work-ing relationship with the center, it belonged to the EERC’s Bakken Optimization Program and be-cause of the EERC’s work with the North Dakota Petroleum Council.

Alison Ritter, public infor-mation officer for the state Oil and Gas Division, notes that one of the important aspects of HB1390 is that it removes the li-ability from a producer that gives its drill cuttings to a company for recycling. Previously, companies could treat only their own wastes products.

“The material actually has to be processed first and turned into the beneficial use before the liability is released,” she explains. “One company can now take waste from another company and turn it into something good; there’s no liability for the other operator.”

Although recent low oil pric-es have reduced the amount of drilling wastes being produced, Bohrer believes that the recycling option is a good long-term solu-tion.

“With the volume of waste that’s going to be generated throughout the life of the play, it just makes sense to reuse some of it,” he says.

Johnsrud says Nuverra’s Watford City plant has been ap-proved by the Health Depart-ment and is already processing drill cuttings from customers.

“We’re just trying to fine-tune our operations,” he says. “We anticipate that either by the fourth quarter of this year or the first quarter of 2016 that we’ll be commercially operational. We’re still doing our testing and ramp-ing up the process as we go.”

Radig says that the health department currently regulates 12 oilfield waste disposal facilities in North Dakota

“With the slowdown in drill-ing, the volumes going to those landfills has definitely decreased,” he says. “Over the long-term life of drilling in the Bakken, I would anticipate that there will be a number of additional special-waste landfills permitted. If this beneficial use and recycling takes off, that may change that picture.”

TENORM’s trekAnother waste product from

drilling is TENORM—techno-logically enhanced naturally oc-curring radioactive material. It’s typically found in areas where ra-dioactive waste tends to concen-trate, such as in filter socks, heater treaters, sludge accumulated in saltwater storage tanks and in the scale of old, corroded pipelines.

“Currently and previously, the limit was 5 picocuries per gram of radium,” Radig says. “Anything above 5 was consid-ered regulated material. No ma-terial regulated by the radiation control rules could be taken into landfills in the state.”

Currently, TENORM can only be disposed of by being trucked to far away landfills in other states such as Idaho and

THEBAKKEN.COM 25

LOGISTICS

Colorado—a very expensive pro-cess.

“The cost of transportation is higher than the disposal fee,” says Kathleen Spilman, manag-ing director of Keitu Engineers and Consultants Inc. in Mandan, North Dakota. “And this is done at a facility that’s permitted to take contaminated materials from a nuclear power plant. It’s like going gopher hunting with an el-ephant gun—it’s overkill.”

Founded in 2001, one of the Keitu’s specialties is helping producers properly handle and dispose of TENORM within state regulations. The firm has four trained industrial hygienists, including Spilman.

“We’re members of the American Industrial Hygiene Association,” she says. “It’s not something where you go to a class and declare yourself a radia-tion safety officer. It’s a practice area for us.”

In addition to making rec-

ommendations for TENORM metering equipment, training em-ployees how to use it and devel-oping protocols, Keitu also works for companies seeking to obtain permits for special-use landfills.

“We can complete the per-mit application itself and compile the engineering data, participate in the public hearings, work with the health department, oversee construction and audit the op-eration at the facility from time to time,” Spilman says. “All those types of aspects are being folded into the regulations associated with operating a special waste landfill in North Dakota.”

The TENORM disposal is-sue could soon change if new rules proposed by the North Da-kota Department of Health are adopted. One recommendation is to raise the level of radiation accepted in the landfills from 5 picocuries to 50. The higher level was based on a study conducted by the Argonne National Labo-

ratory for the health department using risk models and risk evalu-ation.

“They determined that a lev-el of 50 picocuries per gram of radium would be a very conserva-tive and a safe limit that the land-fills here could accept,” according to Radig. “Once this rule goes into effect, special waste landfills for large volume industrial land-fills in North Dakota could ap-ply to the health department to change the permit to accept that type of waste (TENORM).”

The rules call for a cradle-to-grave, record-keeping system that accounts for where the TE-NORM is generated at each salt-

water disposal facility or oil well, who picks it up and where it’s delivered for final disposal, Radig says.

TENORM emerged as a problem in 2014 when fil-ter socks were found illegally dumped in abandoned buildings and along roadsides. Spilman says the problem was partly caused by some producers not doing due diligence on businesses dispos-ing of TENORM and dishonest businesses taking advantage of the situation. She also believes the current standard of 5 picocuries for waste to be classified as TE-NORM is unreasonable.

“To put it in perspective,

SPECIAL DELIVERY: Nuverra designed trucks for the purpose of delivering wet drill cuttings for recycling to its Terrafficient processing facility. PHOTO: NUVERRA ENVIRONMENTAL SOLUTIONS

CHECK IT OUT: A Keitu Engineering employee uses screening equipment to check a waste storage tank for TENORM prior to disposal.PHOTO: KEITU ENGINEERING AND CONSULTANTS INC.


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LOGISTICS

under the 5 picocuries limit, technically you couldn’t dispose of Brazil nuts; you couldn’t throw them in a special-use landfill,” she says. “Even some coffee we’ve tested exceeded that level.”

Radig says 5 picocuries wasn’t originally intended to be the regulatory standard, and that’s why the new standard was set at 50 pico-curies based on the Argonne study.

Without making excuses for industry, Spilman says the dumping of filter socks

wasn’t a common practice, nor was it charac-teristic of how most producers operated.

“I will tell you that some of the oil com-panies we’ve worked with have been isolat-ing those socks from the get-go,” she says. “They’ve been putting them in containers and disposing of them properly in facilities that are permitted for much higher levels of radioac-tivity. Their socks have been properly isolated from being a threat to human health and the environment.”

Last year, the health department worked with Oil and Gas Division to implement an order requiring a special container designated only for filter socks or other TENORM ma-terial be on site at every saltwater disposal well and every well up through the point of drilling and completion.

“Any filter socks or TENORM mate-rial that was in those containers needed to be transported by a licensed company to a licensed disposal facility,” Radig said. “After that went into effect June 1 of last year—one year ago—the number of illegal dumpings in road ditches or abandoned buildings es-sentially went away. We’ve had only one since that time. I’m sure it was probably in that location before that requirement went into effect.”

“We’ve had comments from industry saying they’d like the North Dakota limit to be the same as Idaho or California or Colo-rado, which would be 1,500 picocuries per gram,” he says. “Our study—with the type of procedures we currently have—indicates that 50 is an appropriate limit at this time.”

Spilman says that one-size-fits-all solu-tions don’t work. Each problem requires a tailored solution.

“As an engineer, I still go back to what’s necessary,” she says. “The difference between engineering and science is that we’re always looking at the cost factor—we’re looking at the best alternative. If it’s not an adequate alternative, if we’re not providing adequate protection, it’s not even an alternative.”

Still, Spilman says the key is to provide industry with options at a realistic cost when it comes to TENORM disposal. “From the regulated community’s standpoint, the vast majority of the oil companies—if they have a reasonable cost and a reasonable alterna-tive—are happy to dispose of it properly because we all live here,” she explains. “We don’t want to contaminate where we live and where our kids are going to grow up.”

Author: Patrick C. MillerStaff Writer, The Bakken [email protected]

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THEBAKKEN.COM 29

Managing Bakken Water Needs

LOGISTICS

LAYING GROUND WORK: The first phase of Enable's Nesson gathering system is currently operational and serves wells in Williams and Mountrail counties of North Dakota. PHOTO: ENABLE MIDSTREAM PARTNERS LP

Longer lateral lengths and increased frack stages per well have midstream companies and water management and research teams working feverishly to keep up with industry water treatment and transportation needs. By Emily Aasand

Over the past few years, the oil and gas industry has seen an increase in the volume of water being used for hydraulic fractur-ing, due in part to longer lateral lengths and an increase in the number of frack stages per well. Bethany Kurz, senior research manager at the University of North Dakota’s En-ergy & Environmental Research Center, says there have been increases in the number of slickwater well stimulations which require three to four times the water volumes compared to gel-based fracks.

Kurz and her team at the EERC are well-versed in all things Bakken wa-ter. The EERC offers an array of water management services in western North Dakota. Past and ongoing projects in-clude working with producers to evalu-

ate saline water recycling and treatment technologies and reuse scenarios, evalu-ation of nontraditional water supply op-tions, brine spill remediation, pipeline materials assessment, saltwater pipeline leak detection options, saltwater corro-sion studies and evaluation of carbon dioxide storage capacity in brine forma-tions.

“We are actively involved in look-ing at past trends in freshwater demand and produced water generation to bet-ter predict future fresh water needs and disposal well capacity,” says Kurz. The combination of low oil prices and the constant push for new water treatment, handling and use strategies has made Kurz, and many other water-based enti-ties focused on the Williston Basin very busy. Their water work now could lead to major changes in the future.


Prime Time For Growth Low oil prices have made

the ideas of greater efficiencies and cost saving measures both popular terms. Pipelines and gathering systems are just one of many solutions to reduce cost for oil producers.

“There’s a need for water gathering. It’s an economical solution to producer’s require-ments,” says Brandon Hoselton, northern division gathering and processing director of operations for Enable Midstream Partners LP. “Pipelines aren’t restricted like a trucking entity is with regard to the number of hours a driver can operate. We are able to somewhat

base our employee base strategi-cally. We also see a benefit to pub-lic safety with the lack of trucks on the road. Pipelines offer more of a streamlined process and that’s one of our big benefits.”

“A key challenge with re-spect to water is how safely we transport and store brine to minimize environmental impacts, whether that involves pipeline transport of brine from well pads to disposal locations or stage of large volumes of produced water on well pads for use in hydraulic fracturing,” says Kurz. “In the past, as activity in the Bakken be-gan to ramp up, there were issues associated with access to fresh

water supplies. Those issues have largely been alleviated as a result of substantial improvements to our water supply infrastructure through water supply pipeline projects.”

LaMarr Barnes, vice presi-dent of marketing and business development at U.S. Water, says the current low price of oil is what’s driving U.S. Water deep into the Bakken right now.

“Our experiences, espe-cially in Colorado, with a few key midstream players have helped companies meet some of their requirements to reduce cost in production, so they’re really screaming for us to come help them do the same thing for Bak-ken shale play,” says Barnes.

AE2S Water Solutions pro-vides solutions to industry needs for freshwater delivery and pro-duced water collection systems, water treatment and reuse and fluid waste disposal, and they too see technology playing a big part in creating efficiencies and cost savings in the current price envi-ronment.

“Our instrumentation and controls group is busy program-ming and installing Supervisory and Control and Data Acquisi-tion systems,” says Andrea Boe,

business development and cor-porate resources director at AE2S Water Solutions. “Additionally, our operations technology team developed an operations software application called OpWorks that is a way for operators to be more efficient in their day-to-day work life through streamlined logging and reporting.”

Fulfilling Water NeedsIncreased slickwater wells

have resulted in increased vol-umes of produced water, causing a demand for safe transportation of such liquid. As a result, the need for water gathering lines continues to become more and more prevalent in the Williston Basin.

“As the number of Bakken wells has expanded, the volume of produced water being gen-erated as a result of oil and gas extraction has increased over 300 percent and has necessitated ad-ditional salt water disposal well locations,” Kurz says.

The EERC says many of its partners are interested in so-lutions to some of the pipeline-related challenges that they are experiencing, including improved pipeline leak detection methods, development of best manage-

BUILDING THE HIDDEN BENCH: Construction takes place on AE2S' Hidden Bench gathering pipeline system in McKenzie County, North Dakota. PHOTO: AE2S

LOGISTICS

CELLPHONE SERVICE: Grant Slick and other members of the AE2S team can monitor and control pipelines installed by the company from mobile devices.PHOTO: AE2S

THEBAKKEN.COM 31

ment practices for pipeline instal-lation and evaluation of various pipeline materials.

Enable Midstream Partners LP is one of many owners and operators of gathering systems who supply mitigation solutions to such clients.

Enable Midstream was formed as a merger of two mid-stream businesses, one that was owned by CenterPoint Energy Inc. and one owned by OGE En-ergy Corp. in 2013. CenterPoint began its work in the Bakken before the companies formed a joint venture and together ex-panded operations to 11 states.

“The Bakken was part of the legacy, CenterPoint, and that construction began in 2012,” says Hoselton.

“We think that when we brought these two companies together that the real value came from the fact the CenterPoint side was more involved in trans-portation and storage and the OGE side had more experience

in the gas gathering and process-ing side in different basins,” says Sandra Longcrier, communica-tions senior manager of Enable Midstream. “We brought those two companies together with very little overlap and we’re able to offer our customers more op-portunities because of that.”

Enable Midstream has two existing water gathering systems in the Williston Basin, both in various stages of operation, con-struction and commission. The Bear Den Crude & Produced Wa-ter Gathering System is located in Dunn and McKenzie counties in North Dakota and its Nesson Produced Water Gathering Sys-tem is in Williams and Mountrail counties. Both systems, when ful-ly built, will total approximately 160 miles of crude and produced water gathering pipeline.

“In the Bakken, trucking commodities is the predominant method of getting it [produced water] from point of origin to production facilities to an inter-

connecting pipe or rail terminal, so there’s a real need for infra-structure for gathering and trans-mission systems up in the Bakken and we’re very fortunate to be able to provide that,” Hoselton says. “Pipelines give 24/7 access to producers and provides a level of safety to the public that may not otherwise be there due to fac-tors such as weather conditions.”

Enable’s first gathering proj-ect, the Bear Den system, was completed in April and is fully operational. The company broke ground on the Nesson system last fall and started flowing oil into the system in March. The company began making deliveries to an interconnecting pipe via the Nesson system in May. The Nes-son system, along with the Bear Den system, services oil producer XTO Energy Inc.

“That process—from begin-ning to end—for that first phase was about seven months,” adds Hoselton. “Of course, we’re still in construction, but we are cur-

rently operating.”Phase two of construction

for the Nesson system began in April and is expected to be completed in the fourth quarter of this year. When completed, the system is expected to have a capacity of 30,000 barrels of oil per day with more than 69 origin points to gather crude oil and produced water.

“Our customers continue to have a need for the delivery of energy to key markets,” says Lynn Bourdon, president and CEO of Enable Midstream. “We have a proven track record of effectively and efficiently deploying capital to meet that need.”

While water infrastructure—pipelines—for transporting freshwater and produced water have come a long way over the past several years, there are still some areas in need of infrastruc-ture.

“The biggest issues right now is obtaining easement from landowners, and at a reasonable

DOWN TO A SCIENCE: U.S. Water developed PhosZero to reduce the amount of phosphorous in water that is being discharged in the environment. PHOTO: U.S. WATER SERVICES

LOGISTICS


cost, in order to continue placing this important infrastructure in service,” says Boe.

Integrated ServicesU.S. Water, an integrated

water management company, works directly with midstream companies to efficiently and ef-fectively maintain their abilities to operate pipelines. Those pipeline management issues are being ad-dressed through U.S. Water’s cor-rosion protection, deposit control and pipeline cleaning services.

“We’re an integrated offering company that offers sustainable chemistry equipment and engi-neering services,” says Barnes. “In the midstream oil and gas market, we are focused on pro-viding a more comprehensive ap-proach to asset integrity in pipe-line and a more complete attempt

to solve root cause problems in those pipelines.”

U.S. Water explicitly trains its field representatives to always look for a way to solve the under-lying problem so the company can give the best possible protec-tion to its midstream customers.

“We’re not just an equip-ment company, we’re not just a water treatment company and we’re not just an oilfield chemical company. We’re all three of those and sometimes we find oppor-tunities to provide a better com-bination of those solutions than you would be likely to get from three separate suppliers,” says Barnes.

According to AE2S, pipe-lines are still the safest, most ef-fective mode of transportation, and they create opportunities in improving the mode of transpor-

tation.“For us, it means installing

advanced technology so that we can monitor and control gather-ing systems from anywhere, even our cell phones,” says Boe. “It means creating solid risk manage-ment and crisis communication plans so that we could quickly re-act to any situation. Operations is

entering a new era in the Bakken and HB1358 laid the groundwork in guiding this process.”

The other side of U.S. Wa-ter’s business is traditional water treatment, which comes into play in the gas plants—cooling water, boiling water, and waste water treatment.

“We approach each water treatment opportunity as one-off engineering projects because the issues are so local,” says Barnes. “We’re usually involved when there’s some kind of treatment involved to improve the quality of the water to make it fit for use for whatever process or op-portunity has presented itself to dispose of the water.”

“Because the oil industry evolves so quickly and has such a strong desire to use water as ef-ficiently as possible, we see con-

‘There’s a need for water gathering. It’s

an economical solution to producers’

requirements.’Brandon Hoselton, Gathering and Processing Director of Operations

LOGISTICS

THEBAKKEN.COM 33

PERATIONS AE2

S

tinued emphasis on the research and advancement of recycle in the Bakken,” says Boe. “Although recycle isn’t quite a critical eco-nomical point right now, it is im-portant not to be short-sighted and proactively create an infra-structure system that could be easily adapted to a close looped system.”

Reacting to industry need isn’t the only element of water growth for firms like U.S. Water. Although the company hasn’t seen a direct impact on its oil and gas business from regulatory pressures, it is always cognizant that it could someday. What the company has seen is that dis-charge regulations for its industri-al customers, including gas plants, have required them to get more efficient with water—to reduce the amount of water that they discharge in the environment and in some cases reduce specific contaminants that have tradition-ally been able to discharge in the past.

“One thing we are seeing in the Bakken is regulations around

phosphorus discharge from a cooling system at a gas plant,” says Barnes. “The problem is that all traditional water cooling treat-ments contain phosphorus and phosphorus has become a signifi-cant contaminant of generating plant and algae growth for many lakes and streams. To address that issue, we developed a series of products called PhosZero with a specific blend of chemistries that we call E-FeX Technology.”

The team has found success with its PhosZero technology in Wisconsin when the Wisconsin State Department of Natural Re-sources made the determination to reduce allowable phosphorus limits to 0.075 parts per million (ppm) and as low as 0.04 ppm for facilities that discharge to more stressed waterways.

Future Water ConsiderationsKurz says that the EERC

will continue to play a key role helping the state and industry de-velop and implement cost-effec-tive water management strategies to improve overall operational

efficiency and to reduce the en-vironmental footprint of oil and gas-related activities.

“With the input and sup-port of our state and industrial partners, we are able to identify key water-related issues and uti-lize our diverse team of scientists and engineers to develop practi-cal, stakeholder-supported solu-tions,” says Kurz.

“We are participating in the stakeholder gathering committee being led by the EERC and hope that several of our existing and pending projects can help serve as pilot projects and leading ex-amples of how pipeline installa-tion, monitoring and leak detec-tion can be used successfully in the Bakken,” adds Boe.

For Enable, the future water needs of the Bakken present op-portunities for growth.

“We want to add additional sites and points to bring into our system, but, as production declines and the amount of pro-duced water increases, we just see the need for that service to increase over time,” says Hosel-

ton. “We try to build very robust systems with capacity that allows for expansion in the future with minimal environmental impact to the environment and for land-owners.”

If oil prices continue to stay low and companies aren’t drilling as many wells, there will be pres-sure to find ways to discharge produced water that might not have as many places to go, a trend that U.S. Water is watching closely.

“We believe that now, our focus on making oil separations better at the wellhead, solving pipeline midstream problems at their source, and really having a more complete approach to asset integrity to the pipelines, is going to have a very high demand in the near future,” says Barnes.

Author: Emily AasandStaff Writer, The Bakken [email protected]

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PRODUCTS & TECHNOLOGY

THEBAKKEN.COM 39


By combining proven technologies into a unique skid-mounted package, NOV has created a new dynamic oil recovery systemBy Luke Geiver

Oil Recovery

EXPLAINATION OF BENEFITS: WaterWolf inventor, Mark Wolf, at the control panel as he explains to a customer the unique, dynamic loop operating mode. PHOTO: NOV COMPLETION & PRODUCTION SOLUTIONS

More than 10 million barrels of oil are lost in pro-duced water every year. For unconventional oil producers or salt water disposal facility operators, oil lost to produced water injected into a disposal well is revenue uncaptured. With oil-linked entities looking to scrap out additional revenue streams from production already happening, many companies view water-based technology as a means to greater profit. National Oilwell Varco believes it has a technology capable of fulfilling the need of extracting more profit from a staple of the oil industry: water. After five years in the making, NOV has released a water treat-ment solution designed to filter water for increased oil recovery.

The New Name In


Although the WaterWolf system has yet to be deployed in the Bakken shale play, NOV (and many other entities) have the Williston Basin in their fu-ture product deployment plans. Already tested in Wyoming, Texas, California and the Gulf

of Mexico, the unique system highlights the role oil industry veterans and major energy ser-vice firms can play in tweaking tried-and-true techniques to service both new and old oil-field dilemmas. For any sector of the Williston Basin looking

for water-based solution equip-ment capable of filtering pro-duced water or sifting barrels of oil from large water sums, the WaterWolf system could represent one of the best new technology offerings in the play.

WaterWolf’s OriginAccording to Mark Wolf,

inventor of the WaterWolf and an oil industry veteran of more than 25 years, the name of NOV’s new water treat-ment equipment offering was an accident. At first, he says, “we decided to call it dynamic oil recovery.” But, the market-ing team wanted more, he says. “They [the marketing team]

threw up their hands and said to “give us something better.””

After offering up the name, the marketing team was on-board and excited. Given Wolf ’s time spent in offshore and on-shore oil and gas fields working with producers and water teams to help with filtration tech-niques, the name seems fitting.

The technology is based on the hydrocyclone, a system used to spin and separate suspended solids and oil molecules from water, and the progressive cav-ity pump, a system that moves fluids through a series of small cavities in a continuous pro-cess. Hydrocyclones have been used offshore for roughly 25

TECH FOR EVERY DROP: Sample from the recovered oil line of a WaterWolf operating at a Saltwater disposal facility in Texas.PHOTO: NOV COMPLETION & PRODUCTION SOLUTIONS


‘One of the really nice things about this equipment is it is all contained on a single skid, it can be ready to run in a single day.’

DAILY PRODUCTION: WaterWolf in Texas recovers 5-10 Barrels of oil per day for SWD operator.PHOTO: NOV COMPLETION & PRODUCTION SOLUTIONS

THEBAKKEN.COM 41

years and progressive cavity pumps have been in use since the 1930s. “My offshore customers kept telling me the same prob-lems they were having with their hydro-cyclones,” Wolf says. “They were having to put secondary and tertiary pieces of equipment behind them to get the quality of water output they needed.”

The inefficiencies of hydrocyclones stem from their need for continuous flow. “They need constant steady state condi-tions,” Wolf says. To create the steady, continuous flow of water through the system, Wolf added a progressing cav-ity pump to create a closed treating-loop effect. Although the water coming from outside the system may feed into the hy-drocyclone at inconsistent rates and pres-sures, the presence of the pump and the creation of a continuously pumped loop helps the hydrocyclone operate efficiently and remove suspended solids and oil mol-ecules out of the water stream at an ac-ceptable rate. The system is mounted on a skid and can treat up to 16,000 barrels of water per day. Recovered oil from the sys-tem is left untreated by chemicals and can be redirected directly into the separation process, according to NOV. The unit uti-lizes two hydrocyclones, one for desand-ing and another for deoiling, to create a water stream free from solids and oil.

The hydrocyclone uses the principal of centrifical force to spin a stream of wa-ter. Molecules that are lighter, or heavier than the weight of water, will be moved to the inside or outside of the stream and made available for removal. Wolf likens the process to filling up a water bucket with soap and a garden hose. Water fed from the hose that hits the edge of the bucket forces the water to spin. When soap, typically lighter than water, is added to the mix, it travels to the center of the spinning water body. “The same thing happens with oil because oil is lighter than water and it all collects in the center,” he says. In the WaterWolf system, produced water is spun within the hydrocyclone and fed with new produced water through the progressive cavity pump. The oil is then


SKID OPTIONS: The WaterWolf Dynamic Oil Recovery system combines desanding and deoiling hydrocarbons with the non-shearing action of NOV's Moyno progressing cavity pumps. PHOTO: NOV COMPLETION & PRODUCTION SOLUTIONS


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suspended into the middle of the horizontal water column and siphoned out.

“NOV actually already had a progressing cavity pump line. We presented it [the WaterWolf idea] to the management team. They gave us the go-ahead and some funding to get it out and run a test,” Wolf says, on his early days with NOV. After re-ceiving great results, the team moved into the launch phase and has since deployed the system in oilfields in the Eagle Ford and Wyoming along with a handful of saltwater disposal well sites. Operators and SWD facilities looking to produce more oil from produced water have each purchased and installed the system.

Teeth Behind WaterWolfDespite the current oil activity slowdown, the saltwater

disposal industry is still thriving. Current wells, along with new wells, all produce water that needs to be disposed. In the Bakken, the NOV team views the SWD market as a major opportunity for the deployment of the WaterWolf. They have even developed an optimized SWD facility based on the system. Because most SWD facilities remain profitable depending on the amount of crude oil recovered from the produced water before it is dis-posed of, the WaterWolf is attractive, NOV believes. According to Wolf, a typical saltwater well injects 20,000 barrels of pro-duced water per day. For every 10,000 barrels of water, roughly 10 barrels of oil are present. “That means that they are losing 20 barrels of oil per day into the disposal well,” he says, if no treat-ment method is used.

In addition to SWD wells, NOV also believes operators looking to increase their total oil production volumes can and will install the WaterWolf. “One of the really nice things about this equipment is it is all contained on a single skid, it can be ready to run in a single day. It only needs electrical power and piping connections,” he said. The typical payback period for the system is based on chemical savings, oil recovery and the reduction of injection well maintenance, and can be recouped in roughly 9 to 10 months.

After years of listening to customer complaints about water treatment systems, Wolf says he is excited for the system’s pos-sibilities. Both Wolf and NOV are happy with the unique name, but have already seen that clients are more enthusiastic about the technology’s performance in the field.

Author: Luke GeiverEditor, The Bakken [email protected]

All interested persons must submit the following to Human Resources, Williston State College, 1410 University Avenue, Williston, ND 58801. Application for Employment, letter of application, resume, and contact information for three professional references.

Please contact Brian Rencher at [email protected] with additional questions.

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The Bakken Magazine - June 2015 - Water and Oilfield Waste

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Transcript of The Bakken Magazine - June 2015 - Water and Oilfield Waste