Tag Archives: Eagle Ford Shale of South Texas

The difference between oil “conditioning” and oil “stabilization”

Repost from The Daily Yonder, Speak Your Piece
[Editor: Ok, I knew North Dakota regulators were working on regulations to get rid of volatile gases in the crude they ship by train, but I didn’t pay attention: I missed understanding the difference between oil “conditioning” and oil “stabilization.”  If Ron Schalow is right, North Dakota officials are far from fixing the problem of volatile crude oil “bomb trains.”  This is an important distinction – read on….  – RS]

North Dakota’s Other Oil Boom

North Dakota regulators could lessen the danger of crude-oil explosions that have killed bystanders and damaged property. Instead, the state’s Industrial Commission is likely to allow oil producers to continue shipping dangerous crude across North America when a commonly used fix is possible.
By Ron Schalow, 11/24/2014
A train carrying crude oil killed 47 people when it derained and exploded in Lac-Mégantic, Quebec, in July 2013. | Photo by Paul Chiasson/The Canadian Press

The safety of millions of Americans who live, work or play within a mile of tracks where Bakken oil trains run are in the hands of three mortal men.

Unfortunately, these men make up the North Dakota Industrial Commission.

“It’s a little like the Wild West up in the Bakken, where everybody gets to do what they want to do,” says Myron Goforth, president of Dew Point Control LLC, in Sugarland, Texas. “In the Eagle Ford (Texas shale play), you’ve got to play by the rules, which forces the oil companies to treat it (crude) differently.”

Not in North Dakota, where oil regulators are finally feeling pressure to require the Bakken oil producers to render the trains non-explosive. The push comes six years after the first massive Bakken oil train explosion outside of Luther, Oklahoma, and seven months since the last, in downtown Lynchburg, Virginia, where a quirk of physics turned the exploding tanker cars towards the river, sparing many people and buildings.

Making the trains safer has been possible all along. It seems that politicians in some states don’t want their citizens or towns incinerated, nor do they wish to watch property values drop in the meantime.

Will the North Dakota Industrial Commission act?

Spoiler alert: No.

The Bakken crude needs to be “stabilized,” to remove all explosive “natural gas liquids” such as ethane, propane and butane. That requires billions of dollars in additional equipment and infrastructure, and the oil companies don’t want to pay for it.

Stabilization is a standard practice in many other parts of the United States. And it’s a required part of preparing crude for shipment via pipelines. The explosion risk North Dakota’s lack of regulation imposes on railroad communities all over North America is completely unnecessary. And requiring stabilization would a further boost to the state’s economy. But that’s not enough for the commission.

Instead, the commission is going to sell a different process called “conditioning,” which the oil companies have been doing all along. And conditioning doesn’t do the job, unless you think that job should include towering fireballs, mushroom clouds, charred buildings and graves.

Railway Age explains the difference well:

This conditioning lowers the ignition temperature of crude oil—but not by much. It leaves in solution most of the culprit gases, including butane and propane. Even the industry itself says conditioning would not make Bakken crude meaningfully safer for transportation, though it would make the state’s crude more consistent from one well to another.

The only solution for safety is stabilization, which evaporates and re-liquefies nearly all of the petroleum gases for separate delivery to refiners. Stabilization is voluntarily and uniformly practiced in the Eagle Ford formation in Texas.

And, right on cue, on November 13 North Dakota Department of Mineral Resources Director Lynn Helms presented the North Dakota Industrial Commission with proposed new standards (there never were any old standards) to “condition” the Bakken crude, supposedly for the purpose of making the Bakken oil trains non-explosive. Or somewhat less explosive, kinda not explosive, or to get the height of the fireballs down into double digits… I don’t know.

A crude-oil train derailed and exploded in Lynchburg, Virginia, in the spring of 2014. Photo by Elyssa Ezmirly

But, if the goal is to render the Bakken oil trains NON-explosive, the proposal to “condition” the crude isn’t going to cut it.

I repeat, the producers have always “conditioned” the crude, but, evidently, now they’re going to be “forced” by the North Dakota Industrial Commission to turn the knob a few notches to the right, and everything will be peachy.

If it was that simple, perhaps they should have done that before dozens of people got killed – maybe sometime shortly after the first Bakken oil train derailed and blew sky high in 2008.

Commission Chair and North Dakota Governor Jack Dalrymple has so much faith in “conditioning” that his own emergency exercise of a Bakken oil train derailment and explosion estimated 60 casualties in Bismarck or Fargo, both medium-sized cities in North Dakota. One can only guess the number of deaths, if a Bakken train were to jump the rails in Minneapolis or Chicago.

Furthermore, taxpayers are footing the bill for billions to outfit, equip and train firefighters and emergency personnel to deal with a Bakken oil derailment and explosion. Quebec is on the hook for the $2.7 billion disaster in Lac-Megantic, a village of 6,000. That explosion required responses from “more than 1,000 firefighters from 80 different municipalities in Quebec and from six counties in the state of Maine,” according to a report by the Transportation Safety Board of Canada.

How much will it cost your community if tragedy strikes? Will North Dakota pay?

But, there is a bright side. When the next, or the next, or the next Bakken oil train disaster kills more people and decimates a section of Albany or Sacramento or Missoula or Perham, North Dakota can quit worrying about how to spend all of the money piling up in the Bank of North Dakota from oil production revenues. It will be gone to the survivors and a long list of stakeholders.

The loss will be due to willful negligence, disinterest or incompetence on the part of three men.

Ron Schalow lives in Fargo, North Dakota, and is part of the Coalition for Bakken Crude Oil Stabilization.

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    Shale Oil Drillers Deliberately Wasted Nearly $1 Billion in Gas, Harming Climate

    Repost from Desmogblog

    Shale Oil Drillers Deliberately Wasted Nearly $1 Billion in Gas, Harming Climate

    2014-09-04, by Sharon Kelly

    In Texas and North Dakota, where an oil rush triggered by the development of new fracking methods has taken many towns by storm, drillers have run into a major problem.

    While their shale wells extract valuable oil, natural gas also rises from the wells alongside that oil. That gas could be sold for use for electrical power plants or to heat homes, but it is harder to transport from the well to customers than oil. Oil can be shipped via truck, rail or pipe, but the only practical way to ship gas is by pipeline, and new pipelines are expensive, often costing more to construct than the gas itself can be sold for.

    So, instead of losing money on pipeline construction, many shale oil drillers have decided to simply burn the gas from their wells off, a process known in the industry as “flaring.”

    It’s a process so wasteful that it’s sparked class action lawsuits from landowners, who say they’ve lost millions of dollars worth of gas due to flaring. Some of the air emissions from flared wells can also be toxic or carcinogenic. It’s also destructive for the climate – natural gas is made primarily of methane, a potent greenhouse gas, and when methane burns, it produces more than half as much CO2 as burning coal.

    Much of the research into the climate change impact the nation’s fracking rush – now over a decade long – has focused on methane leaks from shale gas wells, where drillers are deliberately aiming to produce natural gas. The climate change impacts of shale oil drilling have drawn less attention from researchers and regulators alike.

    A new report from Earthworks finds that drillers in North Dakota alone have burned off over $854 million worth of gas at shale oil wells since 2010, generating 1.4 billion pounds of CO2 in 2013 alone. The 1.4 billion pounds of CO2 produced by flaring equal the emissions from 1.1 million cars or light trucks – roughly an extra 10 cars’ worth of emissions per year for every man, woman and child living in the state’s largest city, Fargo (population 113,000).

    Flaring at shale oil wells is now so common that satellite images of the largely rural state at night are dotted with what appear at first to be major metropolises but are instead the flares burning round-the-clock in the Bakken shale drilling patch.

    But while the highly visible flaring in North Dakota has drawn the most media attention, the practice is on the rise in Texas, particularly in the state’s Eagle Ford shale.

    “The Eagle Ford produces considerably more natural gas than the Bakken,” Earthworks noted. “In June 2014, the Eagle Ford Shale produced seven billion cubic feet per day, while the Bakken produced 1.3 billion cubic feet per day.”

    In 2013, nearly a third of the gas in North Dakota’s Bakken was flared – but the numbers coming from Texas seem a bit more murky, in part because unlike North Dakota, Texas does not tax flared gas and – according to a new four-part investigative report by the region’s newspaper – the state has failed to track or control flaring adequately.

    The year-long investigation by the San Antionio Express-News recently uncovered striking problems with the regulation of flaring in Texas, including:

    • Texas law forbids drillers to flare past 10 days without a permit – but out of the twenty wells that had flared the most gas in the state, the paper discovered that 7 had never obtained required permits. State law calls for fines of up to $10,000 a day for flaring violations, but regulators have issued a total of less than $132,000 in fines in the Eagle Ford since the boom began, despite over 150 “possible flaring or venting violations” found by state inspectors in the region between 2010 and 2012.
    • Statewide, 33 billion cubic feet of natural gas were flared or vented in 2012 – a 400 percent rise from 2009, when the shale oil rush arrived. The Eagle Ford was responsible for two thirds of the state’s wasted gas in 2012, totaling 21 billion feet for the year. Eagle Ford drillers burned off gas at ten times the combined rate of drillers in the state’s other oil fields.
    • That much gas produces enormous amounts of airborne pollution. “In the early days of the boom, flaring released 427 tons of air pollution each year. By 2012, pollution levels shot up to 15,453 tons, a 3,500 percent increase that exceeds the total emissions of all six oil refineries in Corpus Christi,” the paper wrote. “Moreover, flaring and other oil industry activity in the Eagle Ford released more ozone-creating pollution in the summer of 2012 than two dozen Texas oil refineries.”
    • Despite concerns over how these emissions can affect human health, the state operates just seven air monitoring stations in the region. It can take regulators up to 10 days to arrive to take samples when citizens complain about potentially hazardous fumes.
    • Texas’s environmental agency, the Railroad Commission, is run by a 3-member panel of elected officials. “The three Railroad Commissioners have raised $11 million from campaign donors since 2010,” the paper found. “At least half that money came from employees, lobbyists and lawyers connected to the oil and gas industry, according to campaign finance records.”

    Flaring has angered environmentalists, landowners and even many in the oil and gas industry itself.

    The Railroad Commission is statutorily required ‘to prevent waste of Texas’s natural resources’,” said Earthworks Texas organizer Sharon Wilson. “I don’t see how the Railroad Commission isn’t breaking the law by allowing drillers to waste natural gas by flaring it off rather than capturing it.”

    “Nobody hates flaring more than the oil operator and the royalty owners,” Ron Ness of the North Dakota Petroleum Council, an industry trade group, told Reuters last year. “We all understand that the flaring is an economic waste.”

    But the problem is projected to get worse not better. An environmental report from the Alamo Area Council of Governments predicted that by 2018, emissions of volatile organic compounds – which the EPA warns can have “short- and long-term adverse health effects” – could quadruple in the Eagle Ford.

    Nonetheless, the EPA has decided to consider air emissions from each shale well, pipeline compressor or other piece of equipment individually when deciding whether there’s enough pollution for federal regulators to get involved – meaning that even though the Eagle Ford’s wells collectively pollute more than multiple oil refineries, the flaring escapes federal oversight.

    New federal regulations, aimed at cutting down on the release of climate-changing carbon dioxide and methane from the wells and scheduled to go into effect in 2015, will require many drillers to use a process called a “green completion,” rather than flaring the gas or venting it to the atmosphere as raw unburned methane. Green completions can help reduce leaks by up to 99 percent, according to a study by the Environmental Defense Fund that has was heavily touted by the drilling industry and its advocates.

    But those requirements only apply to wells whose purpose is to produce natural gas, not oil. This means the regulations will have little impact on shale wells in Texas’s Eagle Ford, the Express-News pointed out.

    More than 1 million Texans live near the Eagle Ford, some of whom say they have suffered a litany of health effects that they suspect are tied to flaring.

    We went from nice, easy country living to living in a Petri dish,” Mike Cerny, who lives within a mile of 17 oil wells, told the Center for Public Integrity.  “This crap is killing me and my family.”

    There’s a simple way to spot a poorly-performing flare. “If you see a smoking flare that’s not complete combustion,” Neil Carman, a former state scientist who now works with the Sierra Club, told the Express-News. “If it’s not completed, you get a smorgasbord of chemicals.”

    At times, the gas is simply released unburned directly to the atmosphere – a practice labeled “venting” by the industry.

    Texas state regulators fail to distinguish between flaring and venting in their public production database, the newspaper pointed out, making it impossible to know precisely how bad the impacts of the pollution might be.

    Photo Credit: Flaring Natural Gas in North Dakota, via Shutterstock

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      North Dakota perspective on Bakken: ‘Getting it right’

      From The Bismarck Tribune, Bakken Breakout
      [An interesting analysis of the future of Bakken crude extraction from the perspective of an apparent oil industry advocate.  They’re listening!  – RS]

      Getting it right

      By Brian Kroshus, Publisher, September 17, 2014

      Domestic oil production levels in the United States continue to rise – largely the result of the boom in shale oil drilling across the country. Notable plays like the Bakken shale in North Dakota and Permian and Eagle Ford shale in Texas, have been leading the way with more promising formations in different geographies, targeted for exploration and drilling in the years ahead.

      Plays like the Bakken, Permian and Eagle Ford were actually in decline until only recently, having peaked decades ago when conventional, vertical wells were the only economically viable means of extracting crude. Now, those same plays are part of a drilling renaissance in key parts of the country. Geologists have known for years that more oil was present, trapped in source stone within the formations, but developing technology to profitably extract shale oil hasn’t come easy.

      Today, oil production in the United States is surging thanks to advances in horizontal drilling and hydraulic fracturing techniques. Drillers are not only better understanding the geology of shale formations, but technology necessary to economically drill and produce oil. Increasingly, they’re becoming more efficient. Still, only a small percentage resource is making its way to the surface presently. Undoubtedly, more will continue to be learned in the years ahead, ultimately leading to higher extraction percentage and proven reserves.

      From an energy independence standpoint, the outlook for the United States is certainly promising. In October 2013, for the first time in nearly two decades, the United States produced more oil than it imported. Predictably, while there are those including the current administration attempting to take partial credit, rising output has been the result of drilling on state and private lands. On federal lands, production has actually declined during Pres. Barack Obama’s time in office according to the American Petroleum Institute.

      Despite declines on federal ground, experts still predict that the United States could be fully energy independent by the end of this decade. According the EIA, U.S. oil production will rise to 11.6 million barrels per day in 2020, from 9.2 million in 2012, overtaking Saudi Arabia and Russia and becoming the world’s largest oil producer. Over the same period, Saudi Arabia production levels are expected to decline from 11.7 million barrels to 10.6 million. Russia will also product less oil, falling from 10.7 million to 10.4 million barrels per day.

      With a shale revolution and energy renaissance underway in the United States, there’s reason to be optimistic. Achieving energy independence appears to be within our grasp. Still, despite the prospect of becoming an energy independent nation, potential roadblocks loom.

      In May, at the 2014 Williston Basin Petroleum Conference, Harold Hamm, CEO of Continental Resources told convention attendees that “we can’t have any more issues.” He also said “It has to be done in an absolute, safe manner. It’s going to take all of us.” He was referring to recent problems related to Bakken crude including pipeline ruptures and the fiery train derailment near Casselton, North Dakota this past December.

      There’s a lot at stake. Companies like Continental Resources and others, are expected to invest billions in the years ahead to fully develop plays like the Bakken. Drillers are keenly aware that it’s their game to lose. Hamm stressed, “If we have anything, they’re going to shut us down. So many people want to stop fossil fuel use and production.”

      Despite the positive macroeconomic effects rising domestic oil production and decreased imports have on the U.S. economy, job creation and economic growth alone won’t guarantee that shale oil production will continue, unless it is deemed safe and not a threat to public safety during transportation of Bakken crude in particular.

      Volatility levels of Bakken crude and implication on public safety, continues to be heavily debated. The Lac-Megantic, Quebec, rail tragedy, where 47 people lost their lives when a runaway train carrying tanker cars filled with Bakken formation crude, derailed and exploded in the heart of town has been at the center of that debate. The explosions were so intense, that approximately one-half of the downtown area was destroyed.

      Understandably, safely transporting Bakken crude by rail throughout North America, knowing freight rail routes frequently pass through residential areas on their way to final destinations, is a top industry priority. Much of the focus has been and remains on the DOT-111 tank car. On July 23 the U.S. Department of Transportation announced comprehensive proposed rulemaking for the safe transportation of crude oil and flammable materials, with Bakken crude being mentioned – in the form of a Notice of Proposed Rulemaking (NPRM) and a companion Advanced Notice of Proposed Rulemaking (ANPRM).

      The NPRM language includes “enhanced tank car standards, a classification and testing program for mined gases and liquids and new operational requirements for high-hazard flammable trains that includes braking controls and speed restrictions.” Within two years, it proposes to “phase out of the older DOT-111 tank cars for the shipment of flammable liquids including Bakken crude oil, unless the tank cars are retrofitted to comply with new tank car design standards.” It also seeks “Better classification and characterization of mined gases and liquids.”

      The North Dakota Public Service Commission has set a special hearing for September 23rd, as a part of the discussion on the volatility of Bakken crude and potential oil conditioning requirements necessary to safely transport oil from the Williston Basin. Reducing the light hydrocarbons present in Bakken crude would not only provide greater safety, but the standardization of Bakken crude into a class of oil much like West Texas Intermediate, possibly creating premium pricing opportunities.

      NDPSC involvement and recommendations in addition to oil conditioning include heightened rail inspection efforts at the state level in addition to the Federal Pipeline and Hazardous Materials Administration, and emergency response training. Working closely with federal officials and a heightened inspection process, will require additional resources moving forward.

      Expanding pipeline capacity and reducing reliance on rail to transport Bakken crude will continue to be a growing need, playing a role in addressing public safety concerns. The North Dakota pipeline authority anticipates two new pipelines coming online before the end of 2016, with capacity for 545,000 barrels a day. Another third proposed pipeline, capable of handling an additional 200,000 barrels, could potentially be in operation by late 2016 or early 2017.

      With daily production expected to reach 1.5 million barrels in 2017, and 1.7 million barrels in early 2020, diversifying how Bakken crude is moved to market will be necessary not only from a public safety standpoint, but in order to address logistically challenges that continue to surface as production levels increase.

      Extracting domestic oil and gas, moving it to market and properly disposing of or using byproducts created during the production process in a safe and efficient manner will be necessary in order for plays like the Bakken to be fully capitalized on. Those opposed to fossil fuel production will continue to watch and patiently wait for any opportunity to pressure elected officials and sway public opinion.

      Ensuring both public and environmental safety to ensure the future of domestic oil production – will require a cooperative effort on the part of both industry and the state. As Harold Hamm alludes to, it truly is industries game to lose.

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