Manufacturers trying to find their niche in oil industry

WILLISTON, N.D. – A product a North Dakota manufacturing company began making for one oil customer is now exported to several states.

The success story of a product from Steffes Corp., with locations in Dickinson and Grand Forks, served as an example this week for regional manufacturers trying to break into the oil and gas business.

Steffes, which eight years ago began making tanks and walkways for the oil industry instead of ag hopper bins, had one customer that wanted a better flaring system, said Todd Mayer, new product development and sales manager.

Steffes developed a natural gas flaring system that burns cleaner, with less volatile organic compounds released into the air, and the company anticipated the customer would order one or two a month, Mayer said during a Manufacturing and Logistics Conference held in Williston.

The company never marketed the product, but word of mouth prompted demand for the flaring system to spread. Steffes now sells it to other companies in North Dakota as well as Texas, Colorado, Wyoming and New Mexico, Mayer said.

Manufacturing companies from the region, including several from eastern North Dakota, attended the conference to learn how they, too, could make products for the oil and gas industry.

“I would say there’s very little that we can’t make here,” said David Lehman, manufacturing engineering extension specialist with North Dakota State University.

The event served as the launch of a new initiative from Williston Economic Development to reduce costs for companies operating in the Bakken by offering more products and services locally.

But it can be challenging for local manufacturers to get a foot in the door with oil companies, which typically make purchasing decisions at the corporate level.

Economic Development Director Shawn Wenko said his office will lead an in-depth study to understand the challenges the oil companies face and identify opportunities for manufacturers.

Oil industry representatives said during the conference that delays getting equipment or parts shipped in from other states often create costly delays.

“Time is money,” said Dave Ruffie, production foreman for Continental Resources.

North Dakota manufacturers have increased how much oil and gas business they’re doing over the past five years, Lehman said. But there’s room to do a lot more.

“What we’re doing is a fairly small percent of the entire supply chain,” Lehman said.

TrueNorth Steel, with corporate headquarters in Fargo, has produced oilfield tank products since the 1980s, said sales manager Scott Johnson. The company tries to stay innovative by spending time in the field to see what’s working and what’s not.

“It’s a lot more expensive to fix problems in the field than it is in our factory,” Johnson said.

In addition to oilfield tanks and catwalks, TrueNorth produces a steel containment system to contain oilfield spills that takes less time to install in the field than competing products, Johnson said.

Other North Dakota companies have begun doing oilfield work more recently.

Brad Odegard, owner of FlexTM in Wahpeton, said he first explored opportunities in the Bakken in 2011, spending the night in the Williston Walmart parking lot because he couldn’t find a hotel room.

Odegard said he found business in the Bakken by listening to what the challenges were and seeking expertise from the industry. One company representative in Denver was impressed that they could do weekly deliveries to the Bakken, he said.

Dana Wiertzema, sales manager for AIM Machining in Wahpeton, said for the past few years the company has manufactured products and reworked tools used by the oil industry. Some of company’s success has come from attending national oil conferences and reading trade magazines to find ideas, he said.

Attendees at the conference said they think the low oil prices and a slowdown in agriculture manufacturing provide opportunities for the two industries to work together.

“In the middle of the economy that’s slowing down, there’s opportunities,” Wiertzema said. “Why can’t we be part of that next success story?”


Study highlights oil’s economic impact on ND, but also shows how oil money trickles out of state

File photo by Dustin Monke / Forum News Service

File photo by Dustin Monke / Forum News Service

WILLISTON, N.D. – While a new economic impact study shows that the oil and gas industry contributed $43 billion to North Dakota’s economy in 2013, it also highlights that several billion dollars left the state.

About half of what the oil industry spends to drill and complete new wells in North Dakota — about $15 billion in 2013 — was not captured in the state’s economy, according to the study by North Dakota State University researchers.

More than $7 billion generated from North Dakota oil and gas exploration in 2013 went to out-of-state companies that provided goods and services for drilling, fracking or well completion, the study says.

A new initiative spearheaded by Williston Economic Development aims to capture more of those dollars in North Dakota.

“I think there’s opportunity for North Dakota to get more out of the petroleum industry than we have to date,” said Dean Bangsund, NDSU research scientist and co-author of the study.

The Enhanced Bakken Supply Chain Initiative seeks to reduce costs for oil companies while expanding manufacturing and business development in North Dakota.

Jeff Zarling, organizer of a Manufacturing and Logistics Conference being held in Williston this week, said oil companies often have no choice but to pay high transportation costs for a product because they can’t get it in North Dakota.

He compares it to ordering Ziploc bags from for $1.50 while paying $7.50 in shipping.

“It sounds funny, but that’s exactly what’s happening,” said Zarling, president of DAWA Solutions Group in Williston.

Economic impact

The oil and gas industry directly contributed $17 billion to North Dakota’s economy in 2013, according to the study by Bangsund and Nancy Hodur of NDSU’s Department of Agribusiness and Applied Economics.

The study also estimates that for every $1 the petroleum industry spent in North Dakota that year, another $1.43 in additional business activity was generated. With the addition of $25.7 billion in secondary impacts, the total economic impact of the industry was estimated to be $43 billion in North Dakota in 2013.

The North Dakota Petroleum Council has commissioned this study every two years since 2005.

The study also showed that the industry directly supported 55,137 full-time jobs as well as 26,403 secondary full-time jobs.

Ron Ness, president of the industry group, said it was interesting to see that the amount of dollars spent on production in 2013 was about equal to the amount spent on exploration, an indication that the workforce is becoming less transient.

“Those are the people that need to live here, that have their families here,” Ness said of the production workforce. “They have to be within a mile of that well.”

The oil and gas industry also generated $4.4 billion in government revenues, primarily in taxes.

In addition, the industry paid an estimated $4 billion in 2013 in royalties to private mineral owners. But more than half of those dollars left the state, the study said, because an estimated 60 percent of private mineral owners live outside of North Dakota.

Another area where dollars left the state was in infrastructure investment.

The study estimates the oil and gas industry spent $3.2 billion building gas processing plants, installing pipelines, constructing rail-loading terminals and adding other infrastructure in 2013.

But the portion of those dollars that was spent in North Dakota is unknown, the study says.

The researchers estimated that figure using data from other studies, which showed that constructing specialized facilities typically requires bringing that equipment in from out of state, Bangsund said.

The study estimates that about 44 percent of the dollars spent on infrastructure stayed in North Dakota, or about $1.5 billion.

Opportunity from efficiencies

The industry added 2,183 new oil and gas wells in 2013, spending just under $7 million to drill and complete each well, the study said.

That is an improvement from the average cost of $9.1 million the industry spent on each well in 2011.

In addition to labor and housing costs being high in North Dakota, operators have to spend more money to transport materials that are only manufactured several states away. In some cases, the operators also have to send tools or equipment out of state to be repaired or refurbished.

“It makes the Williston Basin a more costly operating environment for our producers because they have to source all these materials,” Zarling said.

With today’s low oil prices, companies now have more incentive than ever to try to reduce expenses.

“The industry is all of a sudden very interested in pursuing technologies and sources that can be more efficient than what they’ve been doing,” Bangsund said. “There may be opportunities there, may be substantial opportunities, to do something in state for a little less.”

For example, the industry currently spends a lot of money having mud motors used for directional drilling sent out of state to be refurbished.

“Instead of spending all the money to send mud motors to Houston, how do we do that in Williston?” Ness said.

If operators can significantly reduce expenses, that could make drilling in fringe areas of the Bakken more economic, Bangsund said.

The Manufacturing and Logistics Conference, being held Wednesday and Thursday at Williston State College, aims to bring together manufacturers, suppliers and other stakeholders with the energy industry to explore the opportunities.

“This is planting the seeds for something that’s going to take 10, 15 and 20 years to evolve into creating industry, diversifying our economy and leveraging this economic opportunity,” Zarling said.


Economic contribution of the oil and gas industry in 2013

$43 billion in direct and secondary impacts

–          $17 billion were direct impacts

–          $25.7 billion in secondary impacts

For every dollar the oil and gas industry spent in the state, another $1.43 was generated in additional business activity

About 40 percent of royalty owners live in North Dakota. They received more than $1.4 billion in royalties in 2013.

The industry directly contributed 55,137 full-time jobs and supported another 26,403 secondary full-time jobs

The industry contributed a total of $9.3 billion in personal income.

The petroleum industry generated $4.4 billion in government revenues, primarily taxes.

Industry spending 2013

$7.6 billion on exploration

$7.7 billion on production

$957 million on processing/transportation

$1.5 billion on infrastructure

Source: NDSU economic impact study of petroleum industry. Read the complete study at:


If you go

What: Manufacturing and Logistics Conference

When: March 25-26, with registration starting at 7 a.m. each day

Where: The Well at Williston State College

Info: Cost is $325

For more information:

Williston expands women’s clinic in response to rapid growth

Tara Lantis, who is 21 weeks pregnant, discusses her ultrasound with synographer Robert Moore during the grand opening of Mercy Medical Center's Women's Health Clinic on Tuesday, March 24, 2015, in Williston, N.D. Amy Dalrymple/Forum News Service

Tara Lantis, who is 21 weeks pregnant, discusses her ultrasound with sonographer Robert Moore during the grand opening of Mercy Medical Center’s Women’s Health Clinic on Tuesday, March 24, 2015, in Williston, N.D. Amy Dalrymple/Forum News Service

WILLISTON, N.D. – As Williston prepares for another year of record births, Mercy Medical Center celebrated Tuesday the completion of a new Women’s Health Clinic.

A record 804 babies were born in Williston in 2014, and practice manager Tim Olson said officials project that births could exceed 900 this year.

The newly renovated clinic adds two new OB/GYN physicians and a nurse practitioner to serve the rapidly growing community.

“It’s greatly needed and it’s going to be a huge asset to this community,” Olson said.

Mercy Medical Center recruited physicians Dr. Fareed Kadum, most recently of Atlanta, and Dr. Eugene Meade, most recently of Jamestown, for the new clinic, along with local nurse practitioner Heidi Grondahl.

As a former labor and delivery nurse in Williston, Grondahl recalls when the city used to see about 30 births a month. The booming economy resulting from oil development has caused that birth rate to nearly triple.

Tara Lantis moved to Williston two weeks ago with three kids and a fourth on the way. She was relieved to learn this week about the new clinic, and was among several mothers-to-be who got ultrasounds during an open house of the facility on Tuesday.

“It’s nice to know they have high-risk doctors here,” said Lantis, whose husband’s job brought the family from Montana to North Dakota.

Kadum added that the clinic will not only serve pregnant women, but also deal with all facets of women’s health care.

Mercy Medical Center CEO Matt Grimshaw said it took about six to nine months to recruit the doctors to Williston. Mercy has a great relationship with an independent women’s health clinic in Williston, Grimshaw said, but the growing population prompted Mercy to add the new providers.

“We really feel that the future is bright for OB services and the demand will continue to grow as Williston grows,” Grimshaw said.

Halliburton to close Minot facility

MINOT, N.D. – Halliburton will suspend operations in Minot starting April 1 and close the facility, a spokeswoman confirmed Tuesday.

The oilfield services company will transfer a majority of Minot employees to Halliburton locations in Williston and Dickinson, spokeswoman Susie McMichael said in a statement.

She declined to answer questions about how many jobs were cut or being transferred.

“Halliburton is closing the facility as a result of changing business needs from its customers,” McMichael said in the statement.

In response to low oil prices, Halliburton said in February it would cut between 5,200 to 6,400 jobs worldwide. Halliburton has declined to comment on how many jobs have been eliminated in North Dakota.

Earlier this month, Lynn Helms, director of the Department of Mineral Resources, estimated that low oil prices have led to the reduction of 3,000 to 4,000 oilfield jobs in North Dakota. The number of drilling rigs operating in North Dakota on Tuesday was 100, down about 80 rigs from mid-December.


Spill reported at Bottineau County site with history of spills

MAXBASS, N.D. – A company involved in a legal action with a Bottineau County landowner reported another spill Wednesday at the same saltwater disposal well with a history of spills.

Petro Harvester reported that a piping connection leak caused 285 barrels, or nearly 12,000 gallons, of brine to release from the Peterson 2 saltwater disposal well, said the North Dakota Oil and Gas Division.

The well, about six miles north of Maxbass, is on property owned by Daryl Peterson, who has long complained that brine spills involving that same location have not been properly cleaned up.

“It’s frustrating and disappointing,” Derrick Braaten, a Bismarck attorney representing Peterson, said of the latest spill.

Peterson, seeking to have his land fully restored, has filed an administrative action against Petro Harvester and other companies. He claims that continued leaks and spills have led to severe contamination of nearby farmland and attempts to clean it up have been inadequate. Hearings are scheduled to begin in June.

The latest spill occurred Tuesday afternoon and was reported to state authorities Wednesday morning, a spill report shows. A Petro Harvester spokesman said in a statement the company initiated cleanup within 90 minutes of discovering the spill and has successfully vacuumed up the brine. The cause of the hose leak is under investigation, the company said.

An Oil and Gas Division inspector had been to the location, the department said.

Petro Harvester and the Oil and Gas Division said the spill was contained within the dikes of the well site. Braaten said it appeared from photos Peterson took that most of the spill was contained but some may have left the location.

Peterson’s legal action also names companies Sagebrush Resource and Ballantyne Oil, previous owners of the well.

Brine is an unwanted byproduct of oil production and is considered an environmental hazard by the state. It is many times saltier than seawater and can easily kill vegetation exposed to it.

Pipeline company offers reassurances after recent spill

WILLISTON, N.D. – The company responsible for the largest saltwater pipeline spill in North Dakota’s history answered questions Wednesday about lessons learned as it proposes to build new crude oil pipelines in the state.

Meadowlark Midstream and Epping Transmission Co., both subsidiaries of Summit Midstream, presented to the North Dakota Public Service Commission plans for a 14-mile transmission pipeline in Williams County.

The proposed project, which would convert an existing 10-mile gathering line and add an additional four miles of new pipeline, would transport crude oil from the Epping Station to the Little Muddy Creek Station, which is about 10 miles northwest of Epping.

Zack Pelham, an attorney representing the PSC, asked what the company learned from the pipeline rupture discovered Jan. 6 north of Williston. The incident, which remains under investigation, spilled nearly 3 million gallons of produced water and contaminated nearby Blacktail Creek, the Little Muddy River and the Missouri River.

John Millar, who testified at the hearing for Meadowlark Midstream, said the proposed crude oil pipeline has a lower “risk profile” than the produced water pipeline that ruptured.

The oil pipeline would be made of steel, much stronger than the composite material called FiberSpar LinePipe the produced water pipeline was made of, Millar said.

The pipeline also would have safety systems, including shut-down valves and pressure and flow sensors that would be monitored 24/7 by a control center in Texas, he said. In addition, the pipeline would be monitored twice a month by air patrol and every week by ground patrol, Millar said.

“I think right-of-way patrolling is something we’ve learned to do probably better,” Millar said. “We’re still trying to figure out why with the patrols we did have in place we didn’t see this spill. We think that’s going to be a more prominent part of our surveillance.”

The company also is making improvements to how pipelines are monitored from the control center, Millar said. The crude oil transmission pipeline would have fewer inlets than the saltwater gathering system, making it easier to monitor for imbalances, he said.

The PSC does not regulate gathering pipelines, including produced water pipelines, but the January spill will factor into the commission’s deliberations to ensure that the company is working to prevent future leaks, Chairwoman Julie Fedorchak said.

“I felt pretty comfortable with the responses that the company offered today,” Fedorchak said after the meeting. “We will do our best to make sure the company has the right plans in place and has changed their procedures to avoid future accidents.”

No members of the public testified at the hearing. Millar said the company has obtained all the necessary right-of-way agreements for the project and he’s not aware of concerns from landowners.

The company requested a 55,000 barrel storage facility as part of the project but Williams County denied the zoning permit.

Administrative law judge Wade Mann presided over the hearing because of scheduling conflicts the three-member commission had this month with the legislative session. Mann will issue a recommendation and the commission will accept, reject or modify the application, a process Fedorchak estimates will be complete in 30 days.

Meadowlark Midstream also is proposing a 46-mile crude oil transmission line in Divide and Burke counties in northwest North Dakota. That hearing, scheduled for 9:30 a.m. March 30 at the community center in Crosby, is expected to attract public input, Fedorchak said. All three members of the commission plan to attend, she said.

The North Dakota Industrial Commission and the North Dakota Department of Health are investigating the brine spill discovered Jan. 6. Director of Mineral Resources Lynn Helms has said preliminary information indicates that the pipeline was leaking for more than 12 days when the rupture was discovered, but the investigation is ongoing.

Low prices prompt 3 percent decline in ND oil production

BISMARCK – North Dakota oil production dropped 3 percent in January to just shy of 1.2 million barrels per day, the Department of Mineral Resources said Thursday.

Low oil prices are prompting more operators to delay bringing new oil wells online, Director Lynn Helms said, causing monthly oil production to drop from last month’s record high.

The low prices also have led to a rapid decline in the number of drilling rigs operating in North Dakota, which was 111 on Thursday, the lowest since April 2010.

The rig count is expected to bottom out around 100, Helms said, about 20 lower than he predicted a month ago. The state’s record was 218 rigs operating in May 2012.

Drilling contractors have cut at least 800 full-time jobs in North Dakota, Helms said, and will cut more as additional rigs become idle. Helms estimated the total jobs lost at 3,000 to 4,000.

“It’s becoming painful for them out there in the Oil Patch,” Helms said.

Crews completed 47 wells in January, according to the preliminary numbers, compared with 183 wells that were completed in December.

Helms estimates that the state needs to have 115 wells drilled and completed each month to maintain production of 1.2 million barrels per day.

While additional months of declining production are expected, Helms said he anticipates a surge in production in June.

The state now has an estimated 825 wells that are drilled but waiting for hydraulic fracturing crews. Those wells need to be completed within a year, and the deadline for 125 of those wells is at the end of June.

“We anticipate June to be a really big month in terms of completions and production increases,” Helms said.

A tax incentive referred to as the “large trigger” could take effect in June, also contributing to an increase in production that month.

If the West Texas Intermediate oil price is less than $55.09 for five consecutive months, the large trigger kicks in and provides an exemption from the oil extraction tax for the first 24 months of production.

Tax Commissioner Ryan Rauschenberger said Thursday that about 70 percent of the state’s oil production is from wells less than 24 months old.

“It has quite a large fiscal impact,” Rauschenberger said.

A new state revenue forecast that is expected next week assumes the large trigger will kick in this June and stay in effect at least part of next biennium, Rauschenberger said. The revised forecast also will take into consideration lower sales tax, income tax and corporate income tax revenue associated with fewer wells being drilled.

While a month earlier Helms said he didn’t think the state would hit the large trigger, he said Thursday he has since changed his attitude based on crude oil inventories nationwide that will have an impact on WTI prices.

The percent of natural gas flared in North Dakota decreased to 22 percent in January. Companies beat the January target set by the North Dakota Industrial Commission by 1 percent.

Flaring on the Fort Berthold Indian Reservation was lower than the rest of the state for the first time ever, Helms said. Flaring on trust lands within the reservation, which historically had been greater than the state’s average, was 20 percent.

The improvement largely resulted from companies adding more natural gas compressor stations last year, Helms said.

Some companies had to voluntarily curtail oil production in order to meet gas capture targets, an amount Helms estimated to be 12,000 to 15,000 barrels per day.

Also Thursday, the Dakota Resource Council and the Dacotah Chapter of the Sierra Club called on state legislators to do more to reduce natural gas flaring.

The organizations cited a recent poll conducted by the Social Science Research Institute at the University of North Dakota that found that 65 percent of respondents said mineral owners should be paid royalties for natural gas that is flared.

State investigates improper disposal of oilfield waste in Williston

Used filter socks were discovered this week next to the shop of an oilfield service company in Williston, N.D. Cleanup of the waste will begin on Friday. Photo courtesy of the North Dakota Department of Health

Used filter socks were discovered this week next to the shop of an oilfield service company in Williston, N.D. Cleanup of the waste will begin on Friday. Photo courtesy of the North Dakota Department of Health

WILLISTON, N.D. – State officials are investigating about 100 filter socks that were improperly disposed of in north Williston, the Department of Mineral Resources said Thursday.

Clean-up is expected to begin Friday to remove the new and used filter socks discovered by a citizen who reported the oilfield waste to authorities on Monday, said department spokeswoman Alison Ritter.

Used filter socks, a waste product of oil and gas production, contain low levels of naturally occurring radioactive waste and need to be transported out of state for disposal under current rules.

The filter socks were on trailers parked next to a shop within Williston city limits.

Green Diamond Environmental Services rents the location where the filter socks were found and agreed to cover the cost of cleanup and disposal which owner Lee Farris said is more than $12,500.

Investigators are still working to determine who is responsible for the waste, Ritter said, adding that it’s too early to comment on whether a fine will be warranted in this case.

Farris said he didn’t realize until he was contacted by the state that workers had not properly disposed of the used filter socks. He estimates about 40 of the filter socks found were used and the waste had been there for more than one year.

“I didn’t realize there were any dirty filters that needed to be disposed of or I would have done it a long time ago,” Farris said. “Nobody was trying to hide anything here.”

The North Dakota Department of Health also is investigating. Field tests indicate the level of radioactivity of the filter socks is slightly above the background radioactivity level at the site.

“The readings at the site were pretty low, so the public’s not at risk,” said Scott Radig, director of the Division of Waste Management.

Since last June, companies have been required to store used filter socks in covered, leak-proof containers at well sites. This is the first reported incident of improper disposal since that rule took effect, but officials believe the waste had been there prior to the new rule taking effect, Radig said.

Ritter encouraged the public to contact local law enforcement, the Department of Mineral Resources or the health department if they discover filter socks at an improper location.

Green Diamond Environmental Services hauls water for the oil industry, but has not been active in the Bakken for about a month due to the slowdown in activity resulting from low oil prices, Farris said.


Strong turnout at Williston job fair


WILLISTON, N.D. – Employers at a two-day job fair in Williston are finding there is an upside to low oil prices.

Pete Lewis, who was recruiting workers for Mayo Construction, said the number of qualified applicants he met Wednesday was “more than I dreamt.”

More than 700 people attended the first day of the job fair, including many who have been laid off or had their hours cut as low oil prices have prompted drilling to slow down in North Dakota.

But for employers like Mayo Construction, a seasonal construction business that’s gearing up for major road projects, the demand for workers is still strong. He was taking resumes from diesel mechanics, drivers with Class A commercial driver’s licenses and equipment operators.

“It’s really been hard to find people here,” Lewis said.

About 1,000 to 1,200 are expected to attend the job fair over the two days, said Cindy Sanford, who manages the Williston office of Job Service North Dakota. The booths at the first day of the fair, geared mostly for the energy industry, were sold out. Today’s job fair that includes all industries had a waiting list.

“There still isn’t a job that we don’t need here,” Sanford said.

While Job Service has seen some laid off workers looking for new jobs, Sanford said she hasn’t seen any company make mass layoffs in the state. In fact, the number of available oil jobs Williston Job Service listed in January and February was slightly higher than the same time a year ago, she said.

But there has been a shift in what types of oil jobs are in demand, as the number of drilling rigs operating in North Dakota was down to 112 on Wednesday compared with more than 180 in mid-December.

Paye Tarpeh, who was recently laid off as a wireline operator, was among those looking for a new job. He has a Class A commercial driver’s license and was looking for any job that could help him pay his $2,000 a month apartment rent.

“It’s really, really tough. The cost of living here is not easy,” said Tarpeh, who helps support family in Minneapolis and Africa.

Some job-seekers asked that their names not be in the newspaper because they’re still employed but looking for new jobs because their hours were cut. One truck driver said he was busy in December hauling sand for hydraulic fracturing, but recently he’s gone as many as 10 days in a row without working.

Monte Horst, a recruiter for MBI Energy Services, said he’s running into more workers who have been laid off, and he likes to hire them because they already have the experience.

“These guys have already paid their oilfield dues,” Horst said. “They need to keep working.”

At MBI, the company offers employees other positions when times are slow to avoid laying off workers, Horst said. The company recently readjusted a lot of employees and now is looking to hire for remaining openings, especially experienced and qualified truck drivers.

“We have a backlog on fracking and we’re still busy,” Horst said.

Bob Horab, owner of McCody Concrete in Williston, said employers are now able to be more selective with hiring than they were when they didn’t have as many applicants.

McKenna Larson, human resource specialist for Ackerman Estvold, also said she’s busy since oil prices declined. She is recruiting civil engineers, architects and construction specialists, and is getting applications from engineers who were laid off by oil companies.

People from around the country also continue to contact Larson with job inquiries.

“Even though the rest of the U.S. is picking up, North Dakota’ on the map and people are still really interested in what’s going on here,” she said.

The job fair continues Thursday from 2-7 p.m. at the Grand Williston Hotel & Conference Center.


Pipeline company didn’t use remote sensors before leak

Workers take soil borings on Wednesday, Feb. 18, 2015, near Blacktail Creek north of Williston, N.D., to test for contamination after a pipeline rupture spilled nearly 3 million gallons of saltwater in the area. Amy Dalrymple/Forum News Service

Workers take soil borings on Wednesday, Feb. 18, 2015, near Blacktail Creek north of Williston, N.D., to test for contamination after a pipeline rupture spilled nearly 3 million gallons of saltwater in the area. Amy Dalrymple/Forum News Service

WILLISTON, N.D. – The pipeline that ruptured and spilled nearly 3 million gallons of saltwater, contaminating a nearby creek and two rivers near Williston, could have been monitored remotely but the system wasn’t turned on, a regulator said last week.

Meadowlark Midstream, a subsidiary of Summit Midstream, relied on checking meters by hand rather than a more sophisticated system that had been installed, said Lynn Helms, director of the Department of Mineral Resources.

The investigation into the spill is still ongoing, but Helms estimates the pipeline was leaking for more than 12 days before the rupture was discovered Jan. 6.

By being allowed to leak for so long, the spill significantly contaminated groundwater near Blacktail Creek, and a North Dakota Department of Health official says the cleanup will take at least five years.

“I think five years would be very optimistic,” said Dave Glatt, chief of the Environmental Health Section. “Ten years, there still may be talk about this.”

Ron Sylte, who owns the land where the spill happened, said pipelines should require greater monitoring.

“Common business practice is if you put something in on one end and it doesn’t come out the other end, you’ve got a problem. You should be able to monitor it that way,” Sylte said. “Somebody dropped the ball.”

Meadowlark Midstream said in a statement the pipeline that ruptured met all requirements of the North Dakota Industrial Commission, which began regulating about 20,000 miles of gathering pipelines last year.


The pipeline that ruptured north of Williston transported produced water, the briny waste product that comes to the surface along with oil and gas, from 40 well pads to a saltwater disposal well. The company also operates produced water pipelines in two other nearby segments that were shut down after the rupture was discovered.

The pipelines had flow meters and the capability of being monitored by supervisory control and data acquisition, or SCADA, a remote system to gather data from the meters, Helms said.

Why the company wasn’t using the SCADA system is part of the Department of Mineral Resources investigation.

“They had to drive out to the site, read the number on the meter, and then go site to site, read the numbers and sit down with a computer and add them up to try to see if there were differences that indicated a leak,” Helms said.

In addition, the company performed monthly flyover inspections. A flyover Dec. 30 did not detect evidence of a pipeline rupture.

The state Industrial Commission does not require gathering pipelines to have meters or monitoring systems. State legislation being proposed would strengthen requirements for pipeline monitoring.

Before regulators will allow Meadowlark Midstream to resume operating these produced water lines, they are requiring the use of SCADA, Helms said.

“We want real-time pressure readings, meter readings and temperature readings in their control room when they start up again,” Helms said.

In addition to the pipeline that ruptured, regulators are especially focused on making sure a pipeline that crosses Blacktail Creek upstream of Blacktail Dam has a better monitoring system, Helms said.


The Department of Mineral Resources is interviewing landowners, former contractors, employees of oil and gas operators, disposal well operators and pipeline operators in the area to investigate the timeline of the pipeline leak, Helms said.

“When did it happen, when did it start and when could it, should it have been detected?” Helms said.

The investigation will look at lab analysis of the ruptured pipeline, engineering drawings of the pipeline and whether the pipe was installed per the manufacturer’s recommendations.

The composite material used to make the pipeline also is being studied, particularly because the pipeline was six months old when it ruptured. Helms said state regulators know of only three places the material, called FiberSpar LinePipe, is used in North Dakota, however it was only last year that reporting pipeline material and other information became a requirement. The manufacturer says it has thousands of miles of the pipeline material installed, primarily in Texas, Helms said.

Meadowlark Midstream said in a statement that the pipeline was installed with certified FiberSpar experts and monitored by third-party inspectors.

“Extensive testing is being conducted to understand why and how the ruptured occurred,” the company said.

Summit Midstream operates crude oil and natural gas pipelines around the country but only operates produced water pipelines in North Dakota. The company has 850 miles of pipeline in North Dakota and has invested $800 million in the state since 2013.


The pipeline rupture released an estimated 70,000 barrels of produced water, or nearly 3 million gallons, the largest spill of its kind in North Dakota. The brine, which can also contain oil, hydraulic fracturing fluid and other chemical compounds, is more difficult to clean up than oil and can have devastating impacts to the environment.

The levels of chloride and ammonia detected at the rupture site were “acutely toxic” to fish, Glatt of the state health department has said, but a detailed biological assessment won’t be taken until the ice melts. The contamination, which included an estimated 2,520 gallons of oil, reached the Little Muddy River and the Missouri River after contaminating Blacktail Creek.

The levels of chloride detected downstream have reduced significantly as a result of the containment and cleanup operations, Glatt said. The main concern now is groundwater that has been contaminated around the creek.

“We need to cut that off from getting into the creek,” Glatt said.

The company, working with environmental contractor Stantec, has more than 15 interceptor trenches along the creek to capture contaminated groundwater so it can be hauled away for disposal.

Contaminated groundwater is still being removed from a 2006 pipeline spill into Charbonneau Creek, which flows into the Yellowstone River in northwestern North Dakota. That spill involved about 1 million gallons of produced water, or one-third the size of the more recent spill.

“Anytime groundwater is contaminated, you’re looking at a minimum of five years,” Glatt said of the remediation.

Charbonneau Creek rebounded fairly quickly after the spill, Glatt said.

“These creeks typically are used to feast or famine where they have droughts and floods. Their aquatic community is used to that. They have a resiliency where they can rebound fairly quickly,” he said. “We’re hopeful that’ll be the case here, but we really won’t know until that (biological) assessment is done.”

Summit Midstream CEO Steve Newby said in a statement the company is committed to North Dakota and the cleanup of the site.

“We are making significant progress in these efforts, and remain fully engaged in the important work of addressing the impacted land and waterways as quickly as possible,” Newby said.

The state health department, together with the Environmental Protection Agency, plans to take enforcement action against the company, Glatt said. The Department of Mineral Resources also plans to issue its own penalty, Helms said.

Meadowlark Midstream also is proposing a crude oil pipeline in Divide and Burke counties in northwest North Dakota and will go before the Public Service Commission on March 30 for a public hearing.

Chairman Brian Kalk said any company that has had a pipeline spill will face greater scrutiny about what’s being done to prevent another incident.

“Hopefully they have some better details as to why things happened,” Kalk said.


Pipeline inspectors hired

BISMARCK – The Department of Mineral Resources has hired two pipeline inspectors, filling positions that had gone vacant for months.

The inspectors will oversee more than 20,000 miles of crude oil, water and other gathering pipelines that fall under the department’s jurisdiction under new rules that went into effect last year.

The department had been advertising for three pipeline inspectors since last July, but had not received qualified applicants until recently.

Under new legislation being proposed to strengthen pipeline safety, operators would have to hire certified third-party pipeline inspectors to inspect their work. One role of the new state pipeline inspectors will be to “inspect the inspectors” by ensuring that they’re doing their jobs properly, said Lynn Helms, director of the Department of Mineral Resources.