Construction to start on worker training facility

WILLISTON, N.D. – Work will begin this week on a new TrainND workforce training facility here after the oil industry provided nearly $1 million in donations.

TrainND’s Northwest Center at Williston State College proposed a building project to more than double its size and offer more programs. The $7.5 million project had funding from a variety of sources, but needed about $1 million more, said CEO Deanette Piesik.

Last week, Oasis Petroleum presented TrainND with a donation of $165,000 during the Williston Basin Petroleum Conference. That contribution, along with $150,000 from Statoil and $150,000 from Steel Energy Services, allowed the project to move forward this construction season, Piesik said.

Several other energy companies have also made smaller donations or committed dollars to the project.

“We feel we’re very close to the $1 million,” Piesik said.

In 2013, TrainND in Williston provided training to 386 businesses and 11,200 participants, including some who took more than one training course.

Oasis CEO Tommy Nusz said the company wanted to partner with TrainND, where Oasis employees receive training on drilling rig operations, commercial driver’s license training and technical training such as well control.

“What we want to do is make sure that when people go to work every day, they come back in the same condition that they left,” Nusz said.

The new 19,740-square-foot training and educational center will allow TrainND to offer more technical oilfield programs. TrainND also plans to diversify to offer workforce training in construction, health care and other industries that are expanding in northwest North Dakota.

A ceremonial groundbreaking was held recently and construction gets under way this week, Piesik said.

TrainND is still seeking another $500,000 in donations for a parking lot and other features, she said.

Funding sources include $1.75 million from the Department of Trust Lands, $2.5 million from the Bank of North Dakota and $500,000 in matching funds from the North Dakota Board of Higher Education and $750,000 from the city of Williston’s STAR Fund.

Faces of the Boom: Young engineer expects long career in oil business

Kevin Black, pictured Thursday, May 22, 2014, at the Williston Basin Petroleum Conference in Bismarck, is a recent North Dakota State University engineering graduate who works for Baker Hughes in Minot, N.D. Amy Dalrymple/Forum News Service

BISMARCK – When North Dakota State University graduate Kevin Black was looking to start his career in 2011, he feared he’d have to leave his home state.

“I really had every intention of going to Minneapolis because up until that point, if you were an engineering grad, the odds were you were going to have to go to Minneapolis or someplace out of state if you wanted a job in the engineering field,” said Black, who grew up in Grand Forks.

Instead, Black decided to explore opportunities in western North Dakota, where the Bakken oil boom was creating a demand for educated workers.

Black, who spent his last year at NDSU as student body president, started out in the Bakken “in the mud and getting dirty,” collecting samples at oil well sites for testing and analysis.

After nine months in the oil industry, Black began working for Baker Hughes, one of the world’s largest oilfield service companies.

He advanced from working in the field to spending more of his time in the company’s Minot office doing sales and business development. Black, 26, is an account coordinator for the company’s line of production fluids that prevent corrosion and mineral deposits from developing in oil wells.

“If people are willing to come out here and start from the ground up and work hard, the sky’s the limit,” said Black, whose degree is in industrial engineering and management. “I’ve been blessed to be a benefactor of the times, I guess.”

Black is the third generation of his family to work in the oil industry in North Dakota. Oil brought Black’s grandfather, a mud engineer, to Williston in the 1950s during the state’s first oil boom. Black’s father and uncles operated a drilling fluid business in North Dakota in the 1980s.

Unlike the previous generations that experienced busts, Black is expecting to work in the oil industry for the long term.

“I think they all recognize this is very different than the past oil booms,” said Black, who also has several cousins working in the industry in North Dakota.

Black’s wife, Kalli, is also a North Dakota native, and now helps her father run Artz Insurance in Westhope.

During the past few years, Black has recruited some of his friends to work in the oil and gas industry, and he’s seeing a reversal of the trend of college graduates leaving North Dakota.

“More and more I meet people from the state who are moving back either home or moving from the east to the west because they recognize the tremendous opportunity that’s out here to start a career and grow pretty quickly,” Black said. “It’s exciting to see.”

Attorney turns to Industrial Commission in flaring dispute

BISMARCK – An attorney involved in the recently dismissed class-action flaring lawsuits is now asking the North Dakota Industrial Commission to determine if mineral owners are owed royalty payments.

Attorney Derrick Braaten delivered the requests Friday to the North Dakota Industrial Commission after a federal judge ruled that the mineral owners failed to exhaust their administrative remedies through the Industrial Commission.

Mineral owners filed lawsuits against 14 oil and gas companies that operate in western North Dakota, claiming they were owed millions of dollars in royalties for natural gas they allege was illegally flared from oil wells. All but one case were moved to federal court.

U.S. District Court Judge Daniel Hovland ruled last week that the court lacks jurisdiction because the administrative remedies were not exhausted.

Braaten, who represents the mineral owners, said last week that Hovland’s dismissal was not on the merits of the cases.

Hovland’s ruling noted that the Industrial Commission has broad authority to regulate oil and gas activities in the state, including determining whether gas is being flared in violation of state law and ordering the payment of royalties and taxes on improperly flared gas.

In Braaten’s letters submitted to the Industrial Commission, he asks for the commissioners to use their discretion to take up the matter and determine whether the 13 companies flared gas in violation of North Dakota law.

The Industrial Commission, which consists of Gov. Jack Dalrymple, Attorney General Wayne Stenehjem and Agriculture Commissioner Doug Goehring, meets Tuesday.

CEO calls for oil exports to strengthen U.S. economy

BISMARCK – The CEO of Marathon Oil Corp. called for lifting the U.S. ban on crude oil exports Wednesday during his keynote address at the Williston Basin Petroleum Conference.

“Lifting today’s crude oil exports restrictions would help strengthen the U.S. economy, foster job creation and promote the efficient development of the domestic energy sector,” said Lee Tillman.

The current ban threatens U.S. oil production because refineries have a limited capacity to process light, sweet crude such as the oil being produced from the Bakken, said Tillman, who leads one of the major companies operating in North Dakota.

Studies have shown that it would lower the price at the pump for American consumers, Tillman said.

“More production in the Bakken means more exports, less imports, greater energy security and greater economic security,” he said.

Reducing a backlog of federal drilling permit applications is critical for the industry, Tillman said. He complimented North Dakota’s federal delegation and said the right public policy paves the way for investment and new technology.

“As Congress considers the role of federal policies and regulations, we hope they will take cues from North Dakota,” Tillman said. “This state has a history of successful state-led regulations of oil and natural gas production.”

Marathon is working to reduce the amount of water used for oil and gas production. In the Eagle Ford formation in Texas, the company has reduced water use per well by 45 percent during hydraulic fracturing, he said.

In the Bakken, the water that is a byproduct of oil production has such high salinity that it makes recycling more challenging. But this year, Marathon will do field pilot testing of methods to conserve water. One test involves treating the wastewater so it can be used as a drilling fluid rather than injected into a disposal well.

“It’s a challenge, but we’re not giving up on it,” Tillman said.

Tillman outlined some of the benefits oil and gas development have brought to North Dakota, including 75,000 new jobs and more than $2.9 billion in oil and gas taxes recently paid to the state.

Also Wednesday, State Treasurer Kelly Schmidt announced that deposits into North Dakota’s Legacy Fund will exceed $2 billion this month.

At this pace, the fund is on schedule to receive $3 billion by the end of the 2013-15 biennium. Thirty percent of revenue from North Dakota’s oil and gas taxes are deposited into the Legacy Fund, which was created in 2010 by a vote of the people. State lawmakers can’t spend money from the Legacy Fund until July 1, 2017.

Tillman called for oil and gas companies to be mindful of the communities where they operate.

“We must be responsible corporate neighbors and never lose site of the fact that we are a guest in these communities,” he said.

The conference, which concludes Thursday, has attracted a record of more than 4,100 attendees.

Revenue from the conference will support geological exhibits at the North Dakota Heritage Center, support nonprofit organizations in western North Dakota and support scholarships for North Dakota students, Tillman said.

“We should all be very proud of the ways our industry is giving back,” Tillman said.

Study says Bakken crude no greater shipping risk than other oil

BISMARCK – Bakken crude oil is similar to other light, sweet crudes and does not pose a greater risk to transport by rail, a North Dakota Petroleum Council study found.

The study, released Tuesday during the Williston Basin Petroleum Conference, is the third independent study to confirm that Bakken crude does not differ significantly than other crude oils, said Kari Cutting, vice president of the industry group.

The study analyzed 152 samples from 15 well sites and seven rail-loading facilities covering the entire Bakken.

“We’re seeing a more consistent oil across the field than we thought we’d have,” said Jeff Hume, vice chairman of strategic growth initiatives for Continental Resources, who presented the findings.

The study was conducted by Turner, Mason & Co. and SGS Laboratories, with the laboratory collecting the samples from the well tanks to guarantee independent results, Hume said. The study cost about $400,000.

The study showed that Bakken crude meets the current criteria to be shipped in the commonly used DOT 111 rail cars.

“Under today’s rules, we’re moving it in the proper container,” Hume said.

Results are being shared with the Pipeline and Hazardous Materials Safety Administration, with a final report expected in June.

The safe transportation of crude oil was the first session during the conference. Kip Wills, director of PHMSA’s central region office, displayed a timeline of recent train derailments involving Bakken crude, including the Dec. 30 derailment in Casselton.

“Did the Bakken crude oil cause any of these incidents? No. it might have caused them to be more catastrophic, but it did not cause these incidents,” Wills said. “The commodity may contribute to the incident being larger or more noteworthy or causing more damage, but it is not causing the incident.”

PHMSA has collected 88 samples of Bakken crude oil. All but one sample tested in Packing Group I, which indicates high danger, Wills said.

The NDPC study showed that Bakken crude samples met either the Packing Group I or II.

Both Wills and Hume said there’s a need to develop a better standard for testing the initial boiling point, one of the characteristics used to determine the oil’s packing group. The American Petroleum Institute is working on recommendations.

The petroleum council’s study showed that Bakken crude is low in sulfur and hydrogen sulfide, a poisonous and corrosive gas.

The petroleum council recommends establishing a new crude oil benchmark for Bakken crude, or BKN, to ensure that the oil meets certain specifications.

“It does ensure the quality that we’re shipping this oil at is getting all the way to the marketplace,” Hume said.

The study found that there was no “spiking” at rail stations, or incidents of adding butane or propane to crude oil, as some allegations suggested, Hume said.

The study also looked at five railcars loaded in North Dakota and compared them to the oil when it arrived in St. James, La. The results were close to one another, Hume said.

Consultants also looked at data from a rail shipping location from August to March and found that the vapor pressure stayed within a relatively narrow range, despite the varying temperatures.

The Williston Basin Petroleum Conference is expected to attract more than 4,000 attendees with people registered from 48 states, six Canadian provinces and nine countries. The conference, at the Bismarck Civic Center, continues through Thursday.

Gas plant opening marks ‘new era’ for N.D. industry

TIOGA, N.D. – The expansion of the Hess Corp. Tioga Gas Plant will significantly reduce natural gas flaring and could be North Dakota’s gateway to the petrochemical industry.

State and company officials gathered here Monday to celebrate the completion of the plant’s expansion, which more than doubles the plant’s processing capacity.

The expanded gas plant now produces ethane, a new product for North Dakota. The ethane is transported by pipeline to a plastics plant in Alberta, Canada.

The production of ethane is significant for North Dakota, with several companies looking at petrochemical manufacturing opportunities in the state, said Director of Mineral Resources Lynn Helms.

“It really starts a whole new era for North Dakota,” said Helms, one of several state officials who attended the event. “With the growth in gas production in North Dakota, petrochemical manufacturing out of ethane is right on the doorstep.”

North Dakota Commerce Commissioner Alan Anderson said the possibilities are exciting for the state.

“The question becomes, Why not have a plastic plant in North Dakota instead of shipping it all the way to Canada?,” Anderson said.

The Tioga Gas Plant also produces propane, methane, butane and natural gasoline.

When operating at full capacity, the plant will produce enough energy to meet 2½ times the residential fuel needs of North Dakota, said Hess President Greg Hill.

“That really puts it in perspective,” Hill said.

Hess, one of North Dakota’s largest oil and gas producers, recently flared about 25 percent of its natural gas. With the expanded plant, Hess now flares 15 percent to 20 percent of its natural gas, with a goal of reducing that to 10 percent or below by 2017.

Hess invested $1.5 billion between 2012 and 2014 on the plant expansion and a gas-gathering system. Prior to the expansion, the 60-year-old plant processed about 100 million standard cubic feet of gas per day.

It now processes 120 million standard cubic feet per day and has the capacity to process 250 million, with a potential to increase to 300 million.

The plant also will process natural gas produced by other companies.

“It’s not only going to be great for this company, but it’s going to be great for the state,” Hess Corp. CEO John Hess said.

The expansion is expected to reduce the state’s overall flaring percentage from 33 percent in March to the low 20s in April or May, Helms said.

Hess, which drilled North Dakota’s first oil well in 1951, operates 17 drilling rigs in North Dakota and expects to produce an average of 80,000 to 90,000 barrels of oil per day this year.

Gov. Jack Dalrymple and U.S. Sen. John Hoeven, R-N.D., thanked Hess for making the investment in North Dakota.

“This is a huge step forward for us in reducing flaring. This big increase in capacity is going to have an immediate benefit,” Dalrymple said. “But it’s all part of a bigger plan to require companies to have a plan for the use of the gas as they continue to drill and as they continue to develop.”

The expansion was completed over 2½ years with a peak of 1,400 people working at the site at one time. Now that it’s operational, the plant employs 100 full-time workers and 40 contractors.

Faces of the Boom: Rising rent forces woman to move back in with family

Michelle Thomas, pictured Thursday, May 15, 2014, had to move away from Williston, N.D., after her rent increased and now commutes from Montana to work. Amy Dalrymple/Foum News Service

WILLISTON, N.D. – At 31, Michelle Thomas is back living at home, but it’s not by choice.

The Williston woman was forced to move in with her grandmother in Bainville, Mont., after her apartment building was sold and the new owner increased the rent.

Thomas said she learned on Jan. 20 that her rent of $550 a month for a one-bedroom in Williston’s Park Village Apartments would increase to $900 in March.

In addition, the new building owner required tenants to pay a higher security deposit, she said. For Thomas, she would have been required to pay an additional $700 on top of the $200 deposit she paid when she moved in 10 years ago.

The building is more than 30 years old, according to information from the Williams County Assessor’s Office.

Thomas works two part-time jobs in Williston as an administrative assistant and as a custodian for her church. But the two jobs together don’t pay enough for her to afford Williston’s high rent prices on her own.

“A lot of single people are having difficulty,” Thomas said.

Thomas has been living on her own since she was 18. Now she is back living in the home where she grew up and renting a storage unit for some of her belongings.

“It’s hard, especially when you’re used to your own space,” Thomas said.

Thomas now commutes 28 miles one-way to Williston, which can be challenging with busy oilfield traffic and road construction. She allows an hour to get to work on time and often takes Williston’s temporary truck reliever route to avoid the congestion.

She estimates she drives at least an extra 350 miles each week now. Thomas recently had to replace her windshield after a rock came through the glass. During a late spring snowstorm, her Ford Focus went into the ditch during her commute.

“It ended up being a costly day,” Thomas said.

Thomas has started to look at jobs in other communities. But her family lives in the area and she doesn’t want to move.

“I’ve seen a lot of my friends leave because of this,” Thomas said.

When minutes matter: WPX works to improve response to rig accidents

An injured worker taking part in a simulated oil rig emergency is loaded onto Trinity Health’s NorthStar Criticair helicopter and flown from the site during a safety exercise Wednesday, May 14, 2014, near Mandaree, N.D. (Kevin Cederstrom/Forum News Service)

MANDAREE, N.D. – Two years ago, Teresa Van Deusen felt helpless when an oilfield worker lost his arm in a drilling rig accident and had to wait two hours for an ambulance to arrive.

Once the ambulance got to the remote North Dakota oilfield location, the paramedics decided to call for a helicopter, adding another 20 minutes.

“I don’t find that acceptable,” said Van Deusen, safety specialist for WPX Energy.

On Wednesday, the company demonstrated its new emergency response plan, which not only gets injured workers to a trauma center in about an hour, but also will improve emergency response to the local community.

WPX, which operates five drilling rigs on the Fort Berthold Indian Reservation, now stations a paramedic and a quick-responder at a central location to react to incidents at the company’s sites.

The response team also can provide assistance if there’s a vehicle crash or other emergency in the rural Mandaree area, where it can take 1½ hours to get an ambulance.

“This needs to benefit the whole community,” Van Deusen said.

The emergency response plan, which was developed by consultant Troy Easton, president of Health and Safety Solutions, involves training oilfield workers to know what to do before paramedics arrive, as well as how to assist the emergency response team.

The drilling crew also is trained to help guide a helicopter to a safe landing.

The goal is to get the injured worker from a rural Mandaree oilfield site to a trauma center in about an hour. It typically takes 5½ to six hours to get from the site to a trauma center due to the distance, the congested oilfield roads and overworked local ambulance crews, Easton said.

“If he’s got to lay on the ground for two hours, what’s his chance of survival?” Easton said.

In Wednesday’s demonstration, the crew simulated that an oil worker suffered a broken femur on the rig floor. The quick responder and paramedic arrived within minutes and the drilling crew was ready to work with them to lower the victim.

The simulation included a second critical injury when a crew member suffered a heart attack during the response.

The drilling crew worked with the first responders on the ground and helped guide a helicopter from Minot and another from Bismarck to land safely.

The program includes training helicopter crews on the basic components of an oilfield location so they can work safely.

“A lot of the crews have never seen a rig site before,” said Tamera Harvey, a flight nurse with Trinity Health’s NorthStar Criticair in Minot.

A flight crew from Sanford in Bismarck said the coordination on the ground during the simulation got the patient to the hospital at least 15 to 25 minutes faster.

In the simulation, both patients would have arrived at trauma centers in about an hour and likely in less time than it would have taken for a ground ambulance to arrive, Easton said.

The emergency response plan, which includes regular training and emergency drills, is seeing results.

“We’ve saved three guys’ butts big time flying them,” Easton said.

Medical personnel and emergency managers participated in the training session.

“It’s great to see the industry take on some of the responsibility to keep the job site safer,” said Randy Schwan, vice president of Trinity Health in Minot.

Easton’s next step is to expand the pilot project from five rigs to 25 rigs in North Dakota. Ultimately, it could become a national model, he said.

“Right now, this isn’t happening anywhere else in the nation,” Easton said.

Kurt Papenfus, a doctor from Colorado who serves on a National Institute for Occupational Safety and Health committee, observed the simulation and said the program would work in a lot of different areas. He said getting industry to adopt the program will take showing companies that they’re better off in the long run being prepared for an emergency, rather than relying on dialing 911.

“Unfortunately, it usually takes some horrendous thing to slap you into reality,” Papenfus said, adding that the oil and gas industry has a fatality rate seven times higher thanother industries. “There’s a lot of room to do a better job.”

Anglers flock to northwest N.D. to snag a paddlefish

Jeff Boudreaux of Grand Forks, N.D., shows off a paddlefish he caught Friday, May 9, 2014, at Sundheim Park in McKenzie County, N.D. Amy Dalrymple/Forum News Service

CARTWRIGHT, N.D. – Northwest North Dakota has more people and traffic than it did a decade ago when Dennis and Brenda Ahlfs began traveling from Minnesota for paddlefish season.

But the oil boom hasn’t deterred them from visiting the region each year to try to snag the ancient fish.

“The fishing hasn’t changed,” said Dennis Ahlfs of Detroit Lakes.

The annual paddlefish season continues in the Williston area until May 31 or until 1,000 fish are harvested.

Last year, the state sold more than 4,000 paddlefish tags, up from a typical season of 3,000 to 3,500 tags, said Fred Ryckman, supervisor for the North Dakota Game and Fish Department’s Northwest Fisheries District.

“It has become more and more concentrated in terms of the number of snaggers per day,” Ryckman said. “There’s a lot of intense competition for the really good spots.”

About 30 percent of the tags sold last season were for non-North Dakota residents, a figure that has been increasing each year as new residents move to northwest North Dakota, Ryckman said.

People continue to travel from out of the area for paddlefishing, with a typical fisherman traveling 200 miles one way, Ryckman said.

Dennis and Brenda Ahlfs spent two weekends this spring camping at Sundheim Park in McKenzie County until they each snagged a paddlefish.

“It’s addicting,” Brenda Ahlfs said.

Shane Johnson of Grand Forks has missed only two paddlefish seasons since 1993. Johnson said he now encounters more people along the Yellowstone River, but that didn’t stop his group of six guys from enjoying a weekend of camping and fishing.

“It’s just awesome,” Johnson said. “Where else are you going to catch a 100-pound fish in freshwater?”

LaVern Gross of Bismarck said the camaraderie of participating in paddlefish season is what has brought him back to northwest North Dakota every year since 1995.

A few years ago, Gross said there were more people taking up camping spots in the oil region than there were people fishing. But this year he and his sons had no difficulty finding a place to camp for the weekend.

Marty Shaide, whose family runs a food stand during paddlefish season, said the influx of new residents has made some spots more crowded, but locals are still able to enjoy the season.

“If you’re from around here, you can always find a quiet space by the river,” Shaide said.

This paddlefish season has been successful for snaggers, with a higher number of female fish harvested that weigh 70 pounds or more, Ryckman said.

North Star Caviar, a nonprofit company that cleans the fish free of charge in exchange for the paddlefish eggs, reported cleaning a fish this season that weighed 123 pounds.

How late this season goes will depend on how many snaggers show up, Ryckman said. He estimates that 650 to 700 paddlefish have been harvested this season in North Dakota.

Williston will consult attorney general on options for high rent prices

WILLISTON, N.D. – Citizens here pleaded with the Williston City Commission on Tuesday to address steep increases in rental prices, with some comparing the displacement of residents to a natural disaster.

City commissioners plan to ask the North Dakota Attorney General’s Office whether there’s anything the city can do to provide relief. Residents of two trailer parks and several apartment buildings in Williston recently learned of rent increases that in some cases more than doubled the cost.

The trailer parks are tied to the same owner, Renu Properties of Scottsdale, Ariz., and the apartment buildings were purchased by New York companies, said Barbara Vondell, a Williston resident who is working on affordable housing issues.

“It sounds kind of funny that they’re buying up all the properties and raising all the lot rent,” Vondell said.

Commissioner Tate Cymbaluk made the motion to ask the city’s attorney to seek an attorney general’s opinion about what the city can do legally to help residents.

“It’s causing undue hardship to the community,” Cymbaluk said.

Several residents said they may be forced to leave the area due to the rent, which will go from $300 to $850 for some trailer park residents starting June 1.

“It’s very devastating to us all that we’re kind of being forced out,” said Kristy McKechnie, crying as she spoke to commissioners.

Williston resident Lee Steen said he’s not personally affected by the high rent prices, but he’s tired of watching widows get “knocked out” by the increases.

“This is kind of a natural disaster,” Steen told commissioners. “I’m not saying we need FEMA trailers in here right away, but when you go to Bismarck, let them know it’s a natural disaster.”

Commissioner Brad Bekkedahl agreed that residents being forced to leave Williston due to high rents could be compared to being displaced by a flood.

“This is displacing people,” Bekkedahl said. “It’s a different way of displacement.”

In addition to asking the attorney general for assistance, commissioners said they plan to raise awareness of the issue at the state level and talk to federal representatives about adjusting income levels for federal programs.

Bekkedahl added that while it’s not enough, the city of Williston has committed $1.2 million in funding to projects for elderly housing or reduced rental housing and sold property for low-income housing.

“All of those have waiting lists of more than 50 people,” Vondell said.