Repost from The Takeaway
[Editor: This Takeaway report is a good summary of the lengthy investigative report by Reveal / Center For Investigative Reporting, which is also highly recommended.  – RS]

The Human Cost of America’s Energy Boom

By Arwa Gunja and Jillian Weinberger, June 15, 2015

Over the last decade, the United States has undergone an economic transformation in energy production. As President Obama told Congress in his 2014 State of the Union address, “Today America is closer to energy independence than we have been in decades.”

The United States has surpassed even Saudi Arabia in oil and gas production, in part because of fracking technology, which allows energy companies to reach oil and gas deposits they could never access previously.

One of those deposits lies in the Bakken oil fields, which stretches 170 square miles from North Dakota to Montana and into Canada. An estimated 7.4 billion barrels of undiscovered oil are sitting under the U.S. portion of the Bakken, and thanks to fracking, the industry now has the technology extract that oil.

Workers have flocked to the Bakken for jobs with six-figure salaries that don’t require advanced degrees. But a new investigation from Reveal, a public radio program from the Center for Investigative Reporting, finds that those high-paying jobs come with a high price.

In the first comprehensive analysis of its kind, Reveal found that, on average, a worker dies about every six weeks from an accident in the Bakken, with at least 74 deaths in the oil fields since 2006.

Jennifer Gollan, a reporter with Reveal, led the investigation. She says that the top energy firms may be championing speed over safety—something that was seen in September 2011 after a well owned by Oasis Petroleum exploded in North Dakota.

“The supervisor on this well was congratulated for working quickly and setting a new drilling record” months before the explosion, says Gollan. “She went on to call this record-holding well a ‘pace-setter.'”

Oasis offered workers daily bonuses of $150 for drilling quickly—those who drill slower and safer are only offered $40 a day.

“Safety is tantamount at Oasis,” spokesman Brian Kennedy told Gollan. “Bonuses should not have been paid, and we regret that they were.”

The day before the explosion in 2011, Gollan says that a crew of four men were brought on site to get the well to produce more oil.

According to documents from the Occupational Safety and Health Administration (OSHA), a supervisor had pumped heavy salt water into the well to prevent volatile gases from escaping before the crew set to work the next day. But the well wound up erupting into a fireball.

Jebadiah “Jesse” Stanfill bared witness to the events of the day.

“He was working on an oil rig less than a mile away,” says Gollan. “He was near the top of the rig when he heard this boom. He spun around, grabbed a fire extinguisher and first aid kit, and jumped in this truck with two co-workers.”

But Stanfill and his friends were too late—two men had died and two others were injured.

“As Jesse was helping to pick up some of these men to load them into the bed of this pick up truck to bring them to the ambulance, some of the men’s skin came off in his hands,” says Gollan. “That is a feeling that, to this day, he just can’t shake.”

Gollan says that Stanfill has gear to protect himself from that horrific memory—he is usually wearing gloves, even when he’s playing with his children or cooking in the kitchen.

“How can a simple thing like looking at your hands or washing your hands send you completely enveloped back to that day,” Stanfill told Gollan. “The scenery changes. It’s as if I’m there. It rules my life.”

Brendan Wegner was one of the men who died in the well explosion.

“He was just 21. It was his first day on a rig,” says Gollan. “He was scrambling down the derrick ladder when the well exploded. It consumed him in this fiery tornado of oil and petroleum vapors. Rescuers later found his body pinned under this heap of twisted metal. His charred hands were recovered later still gripping the derrick ladder.”

Another man named Ray Hardy died the next day from his injuries. Michael Twinn had his lower legs amputated after the explosion. He committed suicide two years later.

“There was just one lone survivor who was burned over half of his body,” Gollan says of a man named Doug Hysjulien.

It appears that the victims of this explosion are the casualties of a flawed system.

“OSHA regulators will tell you that they often have to rely on a part of the law called the general duty clause,” says Gollan. “Basically, it makes it very difficult for them to hold top energy producers accountable because they typically don’t have direct employees on these well sites. As a result, in many of these cases, the top energy producers are not fined. It’s the subcontractor—typically the company that employs these workers—that get fined.”

Four of America’s largest energy-producing states—Texas, Louisiana, New Mexico and Wyoming—have adopted statutes that prevent or limit oil companies from shifting liability to smaller contractors.

Wyoming set up a task force to address worker safety back in 2008, a move that started the Wyoming Oil and Gas Industry Safety Alliance. Between 2008 and 2012, the state saw a 45 percent decrease in the number of worker deaths in the oil and gas industry.

Click on the audio player above to hear Jack Bedessem, the past president and advisor to the board of the Alliance, explain how Wyoming is working to improve worker safety, especially in the oil and gas industry.

Repost from Reveal, The Center for Investigative Reporting
[Editor: This is an excellent and beautifully personalized report on conditions in the oil fields in North Dakota.  Graphic images are best viewed on the original source page.  This report  is nicely summarized in a Takeaway report.  – RS]

In North Dakota’s Bakken oil boom, there will be blood

By Jennifer Gollan / June 13, 2015

In the early evening of Sept. 14, 2011, Jebadiah Stanfill was working near the top of an oil rig at a bend in the Missouri River in North Dakota. Jolted by a deafening boom in the distance, he swung around from his perch and saw a pillar of black smoke twisting into the sky.

Less than a mile away, another rig had exploded. “There’s men over there!” a worker below him shouted.

Stanfill, a compact and muscular man in his 30s, descended to the ground and hopped into the bed of a red pickup driven by a co-worker. Bruce Jorgenson, a manager overseeing the work of Stanfill and his crew, jumped into the passenger seat, and they raced to the explosion.

A few minutes later, they reached the burning rig and pulled up next to Doug Hysjulien, who was wandering in a valley and clutching the front of his underwear. The rest of his clothes were gone.

“They’re over there,” Hysjulien shouted, pointing toward the fiery rig. “Go help the other boys. They’re worse.”

“They were beyond burned. Nothing but char. The smell of flesh burning. … It smelled of crude oil.” — Jebadiah Stanfill, oil worker

Stanfill sprinted until he spotted Ray Hardy, who had been hurled into a patch of gravel. His skin was charred black and peeling. His nails were bent back, exposing the stark white bones of his fingers.

“How many people were on the rig?” Stanfill asked Hardy.

“He’s over there,” Hardy responded, gazing toward a field near the rig. Stanfill scrambled over a berm and waded through knee-high wheat until he found Michael Twinn, lying on his back naked and seared. His hair was singed and his work boots had curled up in the heat. He cried out in agony.

“The derrick man’s dead! The derrick man’s dead!” Twinn screamed.

“They were beyond burned,” Stanfill recalled. “Nothing but char. The smell of flesh burning. … It smelled of crude oil.”

Brendan Wegner, 21, had been scrambling down a derrick ladder when the well exploded, consuming him in a fiery tornado of oil and petroleum vapors. Rescuers found his body pinned under a heap of twisted steel pipes melted by the inferno. His charred hands were recovered later, still gripping the derrick ladder. It was his first day on the rig.

Hardy died the next day of his burns. Twinn had his lower legs amputated. Dogged by post-traumatic stress disorder, he killed himself in October 2013. Each left behind three children. Hysjulien suffered debilitating third-degree burns over half of his body. He is the lone survivor.

To this day, the explosion – pieced together from interviews, court documents and federal and local reports – remains the worst accident in the expansive Bakken oil fields since the boom began in 2006.

Beyond the human toll from that day, which continues to haunt Stanfill and others, the 2011 explosion offers a striking illustration of how big oil companies have largely written the rules governing their own accountability for accidents.

“The Bakken is the most dangerous oil field to work in the U.S. The energy producers never pay for their mistakes.” — Justin Williams, Wegner attorney

Across the Bakken, deeply entrenched corporate practices and weak federal oversight inoculate energy producers against responsibility when workers are killed or injured, while shifting the blame to others. Oil companies also offer financial incentives to workers for speeding up production – potentially jeopardizing their safety – and shield themselves through a web of companies to avoid paying the full cost of settlements to workers and their families when something goes wrong.

An estimated 7.4 billion barrels of undiscovered oil is sitting in the U.S. portion of the Bakken and Three Forks formations of the Williston Basin, a 170,000-square-mile area that stretches from southern Saskatchewan, Canada, to northern South Dakota. North Dakota now ranks just behind Texas with the second-largest oil reserve in the U.S. Both states now account for half of all the crude oil production in the country.

But the boom also has been a serial killer. On average, someone dies about every six weeks from an accident in the Bakken – at least 74 since 2006, according to an analysis by Reveal, the first comprehensive accounting of such deaths using data obtained from Canadian and U.S. regulators. The number of deaths is likely higher because federal regulators don’t have a systematic way to record oil- and gas-related deaths, and the U.S. Occupational Safety and Health Administration doesn’t include certain fatalities, such as those of independent contractors.

Only one energy operator that leases or owns wells has been cited for worker deaths in North Dakota or Montana over the past five years, Reveal’s analysis has found. Slawson Exploration Co. Inc. paid a $7,000 penalty in 2013 after a contract worker died in an explosion.

OSHA officials say they are concerned that plummeting oil prices in the past year are prompting energy producers to shortchange safety even more. To others, the deaths and injuries would be preventable if not for a combination of greed, inadequate training and lack of government oversight.

“These workers are paying for cheap gas with their lives and their limbs,” said Peg Seminario, director of safety and health for the AFL-CIO.

Oil companies offer financial incentives to workers for speeding up production, potentially jeopardizing their safety. Credit: Adithya Sambamurthy/Reveal

‘All I saw was just a fireball’

On the day of the North Dakota explosion in 2011, the job of Brendan Wegner and the three other workers of Carlson Well Service was to get the well to produce more oil. Carlson was hired by the well’s owner, Oasis Petroleum North America LLC, which is part of Houston-based oil giant Oasis Petroleum Inc.

Michael Twinn, an experienced floorhand on the rig, had told his co-workers soon after they started work that day that he was worried about the well because it was “talking,” meaning it was showing signs of being under pressure. He had warned Loren Baltrusch, an independent contractor hired through Mitchell’s Oil Field Service who was supervising the site for Oasis, that there might have been a buildup of hydrocarbon gas, according to Justin Williams, a lawyer for Doug Hysjulien, the lone survivor, and Wegner’s parents, who spoke with Twinn about his ordeal before he died. Carlson Well Service officials later would testify that Wegner and his crew were not trained to work on wells under pressure.

Oasis declined an interview, but in a written statement, spokesman Brian Kennedy said: “Pressure gauge readings confirmed that the well was in fact static when operations began. Any suggestion that Mr. Baltrusch or Oasis Petroleum might have knowingly put workers in danger is patently false.”

The day before the accident, Baltrusch pumped heavy salt water into the well to prevent volatile gases from escaping before the crew set to work the next day, OSHA documents show. But on the day of the explosion, the well started to overflow with oil as the crew inserted more pipes into the well hole. That’s when the workers saw the oil rocketing 50 feet into the air. Then the inferno. Then their bodies burning.

“It shook my whole shack,” Bruce Jorgenson said in an interview. He was in a trailer less than a mile away working for Oasis, which had hired him through RPM Consulting Inc. to oversee another well site. “I went outside to investigate; that’s when all I saw was just a fireball.”

He called 911. His crew grabbed fire extinguishers and first-aid kits and sped toward the blast.

“We needed to try to help them in any way we could,” Jorgenson said. “Ray (Hardy) just seemed in shock … and Mike (Twinn) was in a lot of pain; he was screaming.”

When he saw Doug Hysjulien, Jorgenson recognized him immediately. They had both lived in Powers Lake, North Dakota, at one point. “His skin was very red. At first, I thought it was strings from his gloves hanging off of his hands, but it was his skin.”

“I said, ‘Doug, what happened?’ He said, ‘It fucking blew up.’ ”

Jebadiah Stanfill helped load Hardy and Twinn into the back of a pickup. When they placed Hardy in the bed of the truck, the coarse lining sheared skin off his scorched back. Stanfill cradled Twinn as they raced across the cratered dirt road to an ambulance on the main road. The flames had turned their skin to wax.

On the way, the men frantically begged Stanfill to call their wives on his cellphone to say goodbye.

“There’s been an accident at the rig, and your husband wants to talk to you,” Stanfill said urgently into the phone to Twinn’s wife before putting her on speaker.

“How bad was it?” she asked her husband.

“It ain’t nothing,” Twinn said. “I love you.”

Stanfill hurriedly dialed Hardy’s wife next and handed him the phone.

“Don’t worry about it, I’m OK,” Hardy told his wife hours before he died. “I love you. I’ll meet you at the hospital. Everything’s fine.”

Stanfill says he can still hear the women’s “painful, wretched screams.”

 

An estimated 7.4 billion barrels of undiscovered oil is sitting in the U.S. portion of the Bakken and Three Forks formations. Credit: Adithya Sambamurthy/Reveal

Investigating the explosion

The rig was still smoldering when federal investigators drove to the scene the next day and began their work. Staff from the small OSHA office that serves the area interviewed witnesses and company officials in an attempt to re-create the blowout.

In 2011, the year of the deadly explosion, the agency’s office in Bismarck, North Dakota, had five field investigators – compared with eight this year – to handle tasks ranging from fielding complaints about butcher shops to triaging construction site hazards, along with far more technical cases involving oil and gas. The office covers roughly 148,000 square miles in North Dakota and South Dakota, including more than 12,000 producing wells in North Dakota alone.

From the start, the agency’s focus mainly fell on Carlson Well Service, the North Dakota-based company that employed Brendan Wegner and his three co-workers. The well itself was owned by Oasis Petroleum North America.

Investigators took dozens of photographs and several videos of the smoking nest of pipes and bent rig. They sifted through Carlson’s internal company documents such as work invoices and researched the company’s equipment. Over the course of six months, investigators interviewed about a dozen people and drafted reports totaling more than 200 pages.

Part of their investigation included researching the equipment they were inspecting – on Wikipedia. OSHA’s safety narrative report on the accident includes diagrams and information credited to the website’s entries for “blowout preventer” and “pumpjack.”

In the end, OSHA inspectors gave Oasis Petroleum cursory attention in their reports. A handwritten note from an OSHA investigator shows that Loren Baltrusch killed the well, or temporarily closed it, the day before the explosion, yet he was deemed an independent contractor. This was key because it is difficult for OSHA to cite energy producers that do not have direct employees on a worksite.

“No Oasis employee on site,” the investigator concluded. The company was not fined or penalized in any way by the government regulator.

Instead, OSHA penalized Carlson for failing to properly install and test the blowout preventer, a mechanism that can help control an oil and gas well, as well as failing to provide flame-resistant clothing and an emergency escape line for Wegner to abandon the rig.

None of these steps would have prevented the accident in the first place, said Williams, adding that Oasis bore ultimate responsibility for making the proper engineering decisions that would have prevented the dangerous pressure buildup.

“It’s a simple engineering calculation,” he said. “They should have people qualified to do so, but they didn’t do that to start with.” Williams added that an expert he consulted said it would have taken no more than three tanker trucks of heavy brine water, costing about $1,500 combined, to properly kill the well.

Oasis’ Brian Kennedy said it was Baltrusch who arranged and oversaw the salt water injections – both the day before and the morning of the explosion – which he maintained rendered the well “static when work began.”

“The release of gas and the subsequent fire was caused by a kick, or sudden and unexpected flow of gas into the wellbore,” Kennedy concluded.

In March 2012, Carlson was fined $84,000, in part for failing to provide required safety equipment. The company’s lawyers hit back, arguing that one of the violations was not “willful,” as OSHA investigators had claimed. After negotiations, federal officials reduced that fine to $63,000. A top Carlson official declined to comment on the accident or OSHA fines. Carlson sold its business last year.

Like Carlson, many smaller contractors in the Bakken often receive fines, rather than the energy producers that own and lease the wells. Even though large companies often exert the most control over safety on their well sites, there is no specific federal workplace safety standard that applies to the oil and gas industry, which allows producers to dodge severe penalties.

In 1983, OSHA proposed workplace safety requirements for the oil and gas industry, but the rules never were imposed, leaving a “bit of a hole,” said Eric Brooks, director of OSHA’s Bismarck Area Office. As a result, OSHA primarily relies on the so-called general duty clause, which requires all employers to provide a safe workplace.

By contrast, the mining and construction industries are subject to stringent federal workplace safety regulations that address specific hazards. In fact, the Mine Safety and Health Administration enforces specific health and safety rules for the nation’s mines to reduce deaths and injuries.

In the absence of comprehensive workplace safety regulations, OSHA frequently invokes standards written by the industry itself, including those from the American Petroleum Institute, to determine whether employees are being exposed to hazards.

For example, companies involved in drilling and well servicing activities such as hydraulic fracturing are exempt from federal workplace safety laws requiring machines and equipment that are undergoing maintenance or repairs to be locked and tagged to prevent injuries. The American Petroleum Institute recommends such practices but does not require them.

For some, this is a direct conflict of interest.

“This premise is counterintuitive to the intent of government oversight. The problem with this scenario is that API is the lobbying arm of the industry,” said Dennis Schmitz, a former oil worker who is the chairman of the MonDaks Safety Network, an organization in North Dakota that promotes safety in the oil fields.

Following the accident, OSHA investigators interviewed Oasis officials and scrutinized Baltrusch’s role to determine how much control Oasis exercised over Carlson’s crew, Brooks said. OSHA didn’t fine the company because “in the absence of federal laws directly covering work on oil and gas sites, we couldn’t support a citation against Oasis,” Brooks said.

Brooks said that given another chance, OSHA likely would reverse itself and penalize Oasis. “If I had to look back on it, do I think things would be done differently? Absolutely,” he said. “I think we might have taken our chances and issued citations on that.”

OSHA’s statute of limitations, which is six months from an accident, would prevent the agency from citing Oasis now, Brooks said.

Insulated from liability

After major accidents like the one that killed Ray Hardy and Brendan Wegner, big oil companies are insulated from financial costs. A spiderweb of corporate relationships allows big energy firms to shield themselves from collateral damage by forcing insurance companies for contractors at the bottom of the pecking order to pay.

Even though the government did not cite Oasis for responsibility for the accident, the company negotiated four separate settlements for undisclosed amounts with Wegner’s parents, Peggy and Kevin; Doug Hysjulien; Michael Twinn; and Hardy’s wife. During this process, disputes arose over who should pay the victims.

So the companies and their insurers took it to federal court. In the first lawsuit, Carlson Well Service argued that it should not have to defend or indemnify Oasis under their contract. The case ultimately was dismissed in June 2013 as part of a confidential settlement agreement.

In a second case, filed in the same court on the same day, Carlson’s insurance company argued that it did not have to pay damages to the injured workers on behalf of Oasis. In the end, Carlson’s insurance company agreed to share part of the settlement costs with Oasis’ insurance company, interviews show. The insurance company for Mitchell’s Oil Field Service, Loren Baltrusch’s employer, also contributed to the settlements.

“We found a way to protect Oasis,” said Kevin Cook, a Texas attorney who represented Carlson’s insurance company in the lawsuit against Oasis and its insurer in North Dakota federal court. “We resolved our differences with Oasis and their insurer by agreeing with them to divide these settlements.”

To Peggy Wegner, the shifting responsibility and finger-pointing means that Oasis “has never been held accountable” for the accident that killed her son. “It’s just another way to cover their ass,” she said. “It’s bizarre to me that a contract like this can even take place.”

“Indemnity provisions are contained in most commercial contracts in nearly every sector of the economy,” Oasis spokesman Brian Kennedy said.

In a more recent case, for example, Continental Resources Inc. won a favorable decision in February following a well blowout that injured three contract workers in July 2011 near Beach, North Dakota. The workers’ employer, Cyclone Drilling Inc., had signed a contract containing an indemnity provision in favor of Continental that was unlimited and without regard to the cause of the accident, according to the agreement.

In addition, Cyclone’s insurance policy included coverage for Continental protecting it from paying the cost of any suits brought by Cyclone’s workers who were injured or families of workers killed on the job. As a result, a federal judge allowed Continental and its contractors to shift up to $6 million for the workers’ injuries to Cyclone’s insurance company, court records show.

Continental officials declined to address questions about this case or the company’s agreements with contractors.

“As to the cause of the incident the public records show who was cited,” Eric Eissenstat, Continental’s senior vice president, general counsel, chief risk officer and secretary, said in an email.

Patrick Hladky, Cyclone’s president, did not respond to requests for comment.

If the top energy producers that control sites with fracked wells – in which oil and gas are extracted from shale with high-pressure mixtures of water, sand or gravel and chemicals – are permitted to offload the responsibility to smaller contractors, then there is little incentive to make worksites safer, said Paul Sanderson, a North Dakota attorney who frequently has encountered these agreements.

This phenomenon seems to be lost on the federal regulators who cover the Bakken. Asked whether these agreements could make energy producers indifferent to worker safety, Eric Brooks, OSHA’s Bismarck office director, said of the practice: “I’m not aware of that at all.”

To Justin Williams, the attorney for Wegner’s parents, as well as industry insiders, the agreements allow top companies to operate with impunity.

“The Bakken is the most dangerous oil field to work in the U.S.,” Williams said. “The energy producers never pay for their mistakes; the insurance company for the contractor pays. It doesn’t give them any incentive to change the procedures that are unsafe.”

Industry lobbyists fend off reforms

While Oasis contends that Carlson Well Service was largely at fault in the 2011 explosion, the contractor’s experience afterward is not uncommon. Smaller contractors have little choice but to agree to the terms in their contracts. Their insurance companies often end up shouldering part or all of the costs of settlements with workers and their families.

“This bill could have saved lives. When everyone is held responsible for their own conduct … it’s going to create a safer work environment.” — Paul Sanderson, North Dakota lawyer

“The big oil companies have you locked in,” said Connie Krinke, business manager for Diamond H Service LLC, an oil and gas service company based in Bowman, North Dakota.

“You really don’t have the ability to refuse to sign these agreements because most of these companies are billion-dollar companies, and we’re just a small pea in the big pod of people that work for them,” she added. “They have really good lawyers.”

When state lawmakers in North Dakota have tried to fix the problem, the oil and gas industry has used its considerable influence to kill any reform.

A bill proposed in the state Legislative Assembly in January 2011 sought to prevent companies from adding provisions to oil and gas production contracts that required smaller contractors to indemnify them when people are injured or die because of the action of the companies or their independent contractors.

“If you break it, you buy it,” said Paul Sanderson, a North Dakota lawyer who crafted the bill in response to growing concern among insurers following several oil field accidents. “When a person is not responsible for their actions, they disregard the consequences.”

The bill passed out of the House Judiciary Committee. But the effort was torpedoed nearly a week later after heavy lobbying from the oil industry, Sanderson said. The bill was unnecessary and interfered with contracting in the oil industry, a lobbyist for the North Dakota Petroleum Council argued at the time. The bill was defeated 63-27 on the House floor, state legislative records show.

Yet the dangerous nature of the oil and gas industry has prompted four of the largest energy-producing states – Texas, Louisiana, New Mexico and Wyoming – to adopt statutes that prevent or limit oil companies from shifting liability, including legal costs, jury awards and settlements for workers’ injuries or wrongful death suits, to smaller contractors.

Today in North Dakota, under some agreements, oil companies and smaller contractors indemnify each other, meaning each will shoulder the cost of claims for damages made by their own employees involved in accidents, regardless of who is at fault. But this works only if large companies dispatch direct employees to work on their well sites, which they often do not.

“This bill could have saved lives,” Sanderson said, adding: “When everyone is held responsible for their own conduct … it’s going to create a safer work environment. You have situations where the oil companies know they are not going to be held responsible.”

Bill or not, safety is the top priority for oil and gas companies in the Bakken, said Kari Cutting, vice president of the North Dakota Petroleum Council, which represents 550 companies. “Any language written in a contract is not going to change where safety is in their priorities. A lot of these companies are very savvy and don’t want to be the headline in any news cycle.”

The role of the company man

Oasis’ company man the day of the 2011 explosion was Loren Baltrusch. Soon after the accident, he gave conflicting accounts to authorities and regulators of his precise role that day.

Just after the accident, Baltrusch told a McKenzie County sheriff’s deputy that he was “kind of supervising” when the rig exploded, a video shows.

Soon after the interview begins, an unidentified man interrupts: “Hey Loren, that’s the guys in Houston; they’re very concerned about you,” he says in an apparent reference to Oasis officials. “You need to get checked out.

“We need to get – I know you’re not in the right frame here,” he continued, referring to Baltrusch’s shaken state of mind following the explosion.

His interview with the sheriff’s deputy ends abruptly.

Baltrusch later told OSHA investigators that he was charged with consulting with Oasis on the engineering aspects and directing servicing activities on the well. But then he said he “really did not know what his authority was since it had never been explained to him,” OSHA records show. Baltrusch declined to comment.

Because Oasis did not have a direct employee on the site, federal regulators could not cite the company for the explosion.

This loophole has allowed Oasis and other energy producers to shift blame and protect their bottom lines from government fines when workers are injured or killed. They hire so-called company men to be their eyes and ears, executing orders and supervising drilling and other tasks.

“If you ask anyone who is in control at these well sites, they’ll tell you the company man,” said Eric Brooks, OSHA’s Bismarck office director. “They are dictating what you’re doing, how you’re doing it. They’re communicating every detail in real time to the companies about what’s happening with the drilling process.”

But because most of these managers are independent contractors, they are not covered under federal workplace safety laws. So company men generally allow energy producers to duck federal fines for accidents.

“Company men became independent contractors to protect the company,” said Tom Dickson, an attorney in Bismarck who has represented dozens of workers in personal injury and wrongful death suits. “They’re not accountable to anybody when something bad happens. It protects the top dog from accountability.”

That’s what happened after an explosion at the Zacher oil well in Mountrail County, North Dakota, in 2007. EOG Resources Inc., formerly known as Enron Oil and Gas Co., was using an open-top tank to reclaim wastewater from a fracking well to save money, according to court records.

When EOG’s company man, Paul Berger, decided to jump-start a defective light tower late one evening, gas vapors wafting from the experimental tank ignited, scorching the crew. Berger said he was under pressure from EOG to get the well flowing, according to a deposition.

“You know, every – all the oil companies are in a hurry to get oil in the tanks to sell,” Berger said. “That’s the cash register.”

After the explosion, EOG prevailed in a lawsuit in federal court in North Dakota, arguing that a provision of its contract required its contractors to indemnify the company, the well’s owner and operator, against other lawsuits that three injured workers had brought against EOG. While EOG ultimately controlled the well site, OSHA did not cite or fine the company.

A spokeswoman for EOG declined to comment.

Few suffered the consequences of that thirst for cash more than Ted Seidler, one of the workers injured at the EOG site, who underwent a series of operations after he was burned on his hands, legs, face and backside.

“It was hell,” Seidler said in a phone interview from his home in North Dakota. “It was a whole year that I never worked because of the burns. My wife quit her job to take care of me.”

Seidler, 66, tried to return to his old job. But the confluence of North Dakota’s extreme temperatures and his tender skin forced him to quit the oil fields. In 2009, Seidler settled with EOG and several of its contractors for an undisclosed amount after filing a lawsuit in state court.

“Everybody was passing the buck,” Seidler said. “They shouldn’t be allowed to do that. EOG should be the one who should be held accountable for the whole deal because they are the owners of the well.”

 

There have been at least 74 deaths in Bakken accidents since 2006, according to a Reveal analysis using data from Canadian and U.S. regulators. Credit: Adithya Sambamurthy/Reveal

Incentives for speed

Oasis provides workers with financial incentives to drill quickly and has lavished them with praise for setting records when they reach target well depths.

Four months before Brendan Wegner died, Joseph Kronberg, a 52-year-old father of three, was electrocuted and died at another North Dakota well owned by Oasis Petroleum North America.

Oasis paid bonuses worth a combined $33,000 to 23 of Kronberg’s co-workers in part for working quickly – even after Kronberg died, internal company records show. At a well on the same site where Kronberg died and another nearby well, Oasis paid workers performance bonuses of $150 per day for drilling quickly, compared with $40 a day for drilling safely, records show.

“Safety is tantamount at Oasis,” spokesman Brian Kennedy said, but when pressed, he acknowledged that in the case of Kronberg’s co-workers, “bonuses should not have been paid, and we regret that they were.”

Internal Oasis documents show that company officials also have actively encouraged company men to set records.

“Nabors 149 just set a new record for Oasis on the Kline with Stoneham 18 following close behind on the Lynn. Congrats guys, keep it up!!” Laura Strong, an Oasis drilling engineer, wrote in a May 27, 2011, email to top company officials and company men.

Strong went on to call the record-holding well, Kline 5300 11-18H, the “Pace setter.”

“If you have a bonus that is simply based on getting it done faster… you’ve got a recipe for disaster.” — Eric Brooks, OSHA’s Bismarck Area Office director

It was the same well that exploded less than four months later, killing Wegner and his co-worker.

In a lawsuit filed in January 2013 in federal court in North Dakota, lawyers for Kronberg’s widow, Margo, asserted that the company fosters a culture of recklessness in which there is one imperative: speed.

In court papers, lawyers for Oasis said Nabors Drilling USA LP, a contractor, would be required to cover the cost of any judgment in the case under its drilling contract. A federal judge concluded that Oasis was not responsible for Joseph Kronberg’s death, concluding that Oasis didn’t exercise a sufficient degree of control over the company man or any of the smaller contractors on site.

In the case, the judge reviewed a string of emails between Oasis and its company men, but ruled that they “merely constitute evidence as to Oasis’ end goal for the Ross well.” In addition, the judge ruled, Oasis did not owe a duty to exercise reasonable care to prevent this kind of accident.

In 2014, Nabors Drilling USA was ordered to pay a $12,000 fine to OSHA for two electrical violations related to Kronberg’s death.

Margo Kronberg was prevented from suing Nabors under North Dakota law, which generally prohibits employees who are injured on the job and their families from suing their employers.

She appealed the decision to a federal appeals court at the end of March and declined to comment. The case is still pending.

“Safety is tantamount at Oasis. Bonuses should not have been paid, and we regret that they were.” — Brian Kennedy, Oasis Petroleum spokesman

Insiders overseeing drilling in the Bakken oil fields say Oasis is not the only company that pays bonuses for increasing production and profit. They say top companies such as EOG, Whiting Petroleum Corp. and many others also dole out incentives.

On EOG sites, for example, some workers earn $1,600 to $3,000 for “beating the curve,” or rapidly drilling their wells, according to two workers who declined to be identified for fear it would jeopardize their jobs.

EOG declined to comment. Whiting did not respond to a request for comment.

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“Over the past five or six years, there’s been a culture that’s been primarily focused on the production side,” said Dennis Schmitz of the MonDaks Safety Network. “There’s been a culture of gettin’ it done.”

Among the most common oil field injuries are amputations, broken bones and burns, which can severely disfigure workers and diminish their career prospects, OSHA’s Eric Brooks said. Despite the dangers, workers are drawn to the Bakken for hefty salaries, some in the six figures.

Drilling and well servicing in the Bakken is high stakes, at an average cost of about $9 million per well, according to the North Dakota Industrial Commission’s Department of Mineral Resources. The faster the oil gushes, the faster it gets to market to turn a profit, which averages $27 million per well.

That was true when oil was $100 a barrel. And now that oil has slipped to about $60 a barrel, that pressure has intensified, Schmitz said. In addition, with slimmer margins, Schmitz said several companies have fired their safety managers.

On their websites, many energy producers promote a “stop work” culture, in which workers are encouraged to speak out and stop the job if they deem something unsafe. But dozens of workers interviewed in the Bakken said that when they’re drilling, time is money.

“You’ve seen that in a lot of the accidents that happen out here, guys saying yes and meaning no,” said Matthew Danks, vice president and partner of Oilfield Support Services, a New Town, North Dakota-based company that builds facilities after wells are drilled to separate oil, gas and water.

Asked about speed bonuses, Brooks said that while he has not seen any specific examples, he would consider asking his investigators to scrutinize the practice.

“If you have a bonus that is simply based on getting it done faster,” Brooks said, “ … you’ve got a recipe for disaster.”

Jebadiah Stanfill, who helped the men in the 2011 explosion, says he will never return to the oil fields.

For his efforts in trying to save his brethren, Stanfill says he was fired from his job at Xtreme Drilling and Coil Services Corp. Stanfill said he was told by managers at Xtreme and Oasis that he’d gone beyond his “scope of employment.” He should have remained on his own rig instead of rushing to the scene.

Oasis spokesman Brian Kennedy said: “As Mr. Stanfill was an employee of Xtreme Drilling and not Oasis Petroleum, we were not party to or responsible for any decisions regarding his employment.”

Benjamin Smith, Xtreme’s vice president of human resources, said Stanfill’s claim is “bogus.” Instead, Smith said Stanfill was fired for turning off a valve that cut power to a drilling rig, which he said endangered other employees – a claim that Stanfill dismissed as “a bald-faced lie.”

“Why would I put my life on the line for those men on the burning rig and then turn off the power on a rig so that my own co-workers will die?” Stanfill said. “That makes no sense. I don’t even know how to turn off a rig.”

Now a handyman living in Alabama, he said he still struggles with PTSD, often wearing black work gloves to prevent the sight of his hands from triggering memories of skin sliding off in his palms.

“I always seem to think I still have those men’s skin on my hands,” he said.

When Bruce Jorgenson returned to the site this past March to start drilling the new well, “the anxiety came back. I relived every minute of it. I’ve been involved in other bad things in the oil field, and this one was the only one that gave me nightmares.”

Even so, Jorgenson said he hasn’t discussed the explosion with his current crew. “I didn’t want them freaked out by it in any way. I wanted their mind on what we were doing.”

On a recent visit, the lone reminder of that day was a modest wooden cross bearing Wegner’s name near the well site. Trucks thundered past.