What is “Combustion Efficiency?”
By: Casey Beeler, Vice President, IES, LLC.

In terms of oil field combustion equipment, combustion efficiency can mean a variety of things. In the world of natural draft combustors, the term usually refers to how “efficiently” the combustion device removes a target compound in a waste gas feed. Those target compounds, typically hydrocarbons, can range from low BTU (BTU/ft3), predominantly methane mixtures, to high, 3500 BTU or greater gas containing rich mixes of methane through C6+’s (Hexanes and larger hydrocarbons). The seemingly simple and often overlooked waste gas combustor is a workhorse in the field, required to meet the most complex and strictest regulated specifications.

“Remove” is really a misnomer. In 100% efficient combustion reaction (typically known as: Ideal, Theoretic, or Stoichiometric Combustion), the combustor should convert all of target contaminant hydrocarbon, say, methane (CH4) into Carbon Dioxide (CO2), Water (H2O) and Nitrogen gas (N2) plus heat – nothing else, nothing more.

This works very well in the theoretic world, but as any experienced hand will tell you, things are usually far from the ideal in the oil patch. Long chain hydrocarbons that should be liquid; but somehow stayed in a vapor state, exotic cyclic and double- or triple-bonded hydrocarbons, sulfur containing compounds, higher than expected oxygen levels, and entrained liquids are all (just to name a very few) situations that can influence how efficiently your combustor is combusting. These types of situations only take into consideration the feed gas stream; external factors can also turn a combustion device from an extremely efficient piece of equipment, into a soot-laden, smoke-belching, fine-inducing nightmare faster than you can say “what inspector?”

Most oil field combustors, also known as enclosed ground flares – are natural draft stacks. This means that the air required for an efficient combustion reaction is drawn into or “induced” into the stack through air intake ports at the bottom of the combustor. A pressure differential is created in the stack by the temperature difference between the base of the stack and the top of the stack creating this air flow. Clogged flame cells, air pressure inversions at the top of the stack due to high winds and flame cooling can cause a lack of induced air, which will lead to a rich combustion, a condition that can lead to smoke or significant noise from detonation.

Obviously, a maintenance program is extremely important to ensure that your combustors remain efficient. Choosing a combustion manufacturer who stands behind their equipment, providing warranty, service and even maintenance agreements is a good step in the right direction. Probably more importantly, choosing the right vendor involves assessing whether a manufacturer has performed and passed mandated state and federal testing guidelines.

Each state air quality agency require combustors meet specific destruction efficiencies and regulate the amount of emissions opacity or smoke a combustor can have in a given period of time. These rules are designed to be difficult in an attempt to guarantee that a combustor will operate efficiently under field conditions. Federally mandated EPA standards are separate, but very stringent guidelines that a combustor manufacturer must prove its products can pass. If a combustor is placed in the field and it hasn’t met EPA NSPS (Standards of Performance for New Stationary Sources), 40 CFR 60 Subpart OOOO, known as Quad O, the purchaser is responsible for a monitoring and testing schedule as described in the regulation, which can be an undue and costly burden.

Quad O can be a very expensive and difficult test to pass and often takes multiple days of testing to complete. It is a much more detailed testing protocol that a straight forward DRE test that shows a snapshot of a combustors operating efficiency. Manufacturers may try to bypass this requirement; however, the regulation is enforced nationwide by the EPA and, depending on the location, may be a state mandated requirement for permitting a wellsite. Either way, it is not a regulation that can be ignored by the manufacturer or producer. A combustor manufacturer that has performed and successfully passed Quad O testing is one that has demonstrated that its equipment meets or exceeds the strictest emissions standards required by law.

So, what are the takeaways? Combustion efficiency seems like a simple concept, but in reality, combustion of waste gas on a wellsite can entail very complex reactions, which are extremely sensitive to inputs. A regular maintenance program and a manufacturing partner willing to stand behind its products and have an established warranty and service agreements. Producers require combustion equipment that is engineered to the strictest specifications and can meet complex and ever changing inlet gas compositions, which have also been proven to meet stringent state and federal testing requirements. This is the most important requirement, and is why I left it as a parting thought: combustion equipment must be safe and follow best practices. Equipment that takes into consideration the human aspect and keeps operators safe and provides for easy field maintenance through good design should be at the top of any purchasing decision.

 

Bismarck, N.D. – The failure of the repeal of the Bureau of Land Management’s (BLM) final rules regarding methane emissions on federal and tribal lands is an affront to North Dakota and state primacy, says North Dakota Petroleum Council President Ron Ness.

“The industry supports the goals of capturing greater quantities of associated gas and reducing waste but this duplicative and unnecessary rule comes at an enormous cost to the state’s economy, tax revenues and private mineral owners.

“We are extremely disappointed in Senator Heitkamp’s decision today to vote against the repeal of this rule. Hundreds of energy employees and numerous businesses, chambers of commerce and trade associations wrote to express concern for the rule. Despite this, Senator Heitkamp has chosen to stand with the environmental activists and the Democratic party in Washington rather than the oil and gas workers and people of North Dakota.

“This rule will provide no environmental benefits, will only increase costs for state and federal governments and the industry, and will further burden already overtaxed federal employees and dilute their ability to perform essential duties. Instead, Senator Heitkamp could have been the deciding vote that would have allowed the BLM and other federal agencies to make a larger, more immediate impact on reducing flaring and venting by focusing on fixing permitting, infrastructure and pipeline delays.

“Just yesterday, Senator Heitkamp applauded the U.S. Environmental Protection Agency’s decision to grant the state primacy and regulatory authority over CO2 injection wells and the certainty it would bring for North Dakota energy. Her decision today is a complete reversal of that stance. North Dakota already has some of the most comprehensive regulations addressing flaring and waste in the nation. Over the past two years, North Dakota has adopted a series of strict gas capture targets. At the same time, the industry has voluntarily made huge strides in natural gas capture by investing more than $13 billion in natural gas infrastructure since 2006. As a result, flaring has declined by more than 54 percent in just three years even as natural gas production has increased. This progress will only be threatened by the continued uncertainty and bureaucratic red tape brought on by the BLM rule, discouraging innovation and complicating the process for approving infrastructure that will ultimately ensure the capture of more of our valuable natural gas resources.

“We are grateful for Senator Hoeven and Congressman Cramer’s hard work and support for North Dakota Energy and energy workers. We look forward to working with them to pursue other avenues of rescinding this detrimental rule.”

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About the North Dakota Petroleum Council
Since 1952, the Petroleum Council has been the primary voice of the oil and gas industry in North Dakota. The Petroleum Council represents more than 500 companies involved in all aspects of the oil and gas industry, including oil and gas production, refining, pipeline, mineral leasing, consulting, legal work, and oil field service activities in North Dakota, South Dakota, and the Rocky Mountain Region. For more information, go to www.ndoil.org.

Media Contact:
TESSA SANDSTROM
Director of Communications, NDPC
T. 701.223.6380
EnergyOfNorthDakota.com | NDOil.org

Read more about DAPL: Reflecting on the Dakota Access Pipeline and the Next Chapter for the Bakken, April/May 2017 Issue.

By: Bob van der Valk

The Dakota Access Pipeline (DAPL) route begins in the Bakken shale oil fields in northwest North Dakota and travels in a more or less straight line southeast, through South Dakota and Iowa, terminating at the oil tank farm near Patoka, Illinois. The pipeline is currently under construction by Dakota Access, a Houston, Texas based company and subsidiary of Energy Transfer Partners.

The 1,172 mile pipeline has a permanent easement of 50 feet and a construction right-of-way of up to 150 feet. The 30-inch diameter pipeline is at least 48 inches underground from the top of the pipe or 2 feet below any drain tiles. The map below shows the route and where it intersects with the Standing Rock Indian Reservation in orange.

 

The pipeline is planned to carry 470,000 barrels per day of crude oil “based on contractual commitments to date”. The capacity may be increased up to 570,000 barrels per day.

The company estimated the pipeline would cost $3.78 billion, of which $1.4 billion would be invested in the North Dakota portion, $820 million in the South Dakota portion, $1.04 billion in the Iowa portion, and $516 million in the Illinois portion. Of this, $189 million would be paid to landowners.

Energy Transfer Partners estimates that the pipeline would create up to 40 permanent jobs and 8,200 to 12,000 temporary jobs.

In March 2016, the United States Fish and Wildlife Service issued a sovereign lands construction permit for the DAPL. In late May, 2016, the permit was temporarily revoked in three counties of Iowa, where the pipeline would cross the Big Sioux River and the Big Sioux Wildlife Management Area; historic and cultural sites of the Upper Sioux Tribe, including graves in Lyon County. Also in May, 2016, Iowa farmers filed lawsuits to prevent the state from using eminent domain to take their land.

Citing potential effects on and lack of consultation with the Native American Tribes, most notably the Standing Rock Sioux, in March and April, 2016, the Environmental Protection Agency, the Department of Interior, and the Advisory Council on Historic Preservation asked the USACE to conduct a formal Environmental Impact Assessment and issue an Environmental Impact Statement. However, in July and August, 2016, USACE approved the water crossing permits and issued permissions for all but one necessary for the pipeline construction.

In June, 2016, the IUB voted 2 to 1 (Libby Jacobs and Nick Wagner in favor and Chairwoman Geri Huser against) to allow construction on non-sovereign lands to continue. The Sierra Club said this action was illegal before the US Corps of Engineers authorized the project. In late June, 2016, construction was allowed to resume in Lyon County after plans were changed to route the pipeline 85 feet below the site using directional boring, instead of trenching and disturbing the soil on the surface. In December, 2016, the approval was disputed in the Polk County District Court.

On July 27, 2016, the Standing Rock Sioux Tribe sued the USACE in the United States District Court for the District of Columbia. On September 9, 2016, U.S. District Judge James Boasberg denied the motion for preliminary injunction. On September 10, 2016, the Standing Rock Sioux Tribe filed an appeal which was denied on October 9, 2016.

In September the U.S Department of Justice received more than 33,000 petitions to review all permits and order a full review of the project’s environmental effects. On September 9, 2016, a joint statement was issued by the US Departments of Justice, Army, and Interior temporarily halting the project on federal land bordering or under the Lake Oahe reservoir. The US federal government asked the company for a “voluntary pause” on construction near that area until further study was done on the region extending 20 miles around Lake Oahe. Energy Transfer Partners rejected the request to voluntarily halt construction on all surrounding private land and resumed construction. On September 13, 2016, chairman and CEO of Energy Transfer Partners, Kelcy Warren, responded to the federal government’s request, saying concerns about the pipeline’s impact on the water supply were “unfounded”. Warren said that “multiple archaeological studies conducted with state historic preservation offices found no sacred items along the route”. Warren said that the company will meet with officials in Washington “to understand their position and reiterate our commitment to bring the Dakota Access Pipeline into operation.”

On November 1, 2016, President Obama announced that his administration “is monitoring the situation and has been in contact with the USACE to examine the possibility of rerouting the pipeline to avoid lands that Native Americans hold sacred”.

On November 14, 2016, the USACE announced that “the Army has determined that additional discussion and analysis are warranted in light of the history of the Great Sioux Nation’s dispossessions of lands, the importance of Lake Oahe to the Tribe, our government-to-government relationship, and the statute governing easements through government property.”

Energy Transfer Partners responded by criticizing the Obama administration for “political interference” and said that “further delay in the consideration of this case would add millions of dollars more each month in costs which cannot be recovered.”

North Dakota Governor Jack Dalrymple criticized the decision saying the pipeline would be safe and that the decision was “long overdue”.

Craig Stevens, spokesman for the Midwest Alliance for Infrastructure Now (MAIN) Coalition, called the Corps’s announcement “yet another attempt at death by delay” and said the Obama administration “has chosen to further fan the flames of protest by more inaction.”

North Dakota Senator John Hoeven said in a statement that the delay “will only prolong the disruption in the region caused by protests and make life difficult for everyone who lives and works in the area.”

Speaking to CBS News in November, Kelcy Warren said that it would be “100 percent sure that the easement gets granted and the pipeline gets built” when newly elected President elect Donald Trump came into office in January.

On December 4, 2016, the USACE announced that it would not grant an easement for the pipeline to be drilled under Lake Oahe and was undertaking an environmental impact statement to look at possible alternative routes.

Jo-Ellen Darcy said that “the best way to complete that work responsibly and expeditiously is to explore alternate routes for the pipeline crossing”. Energy Transfer Partners and Sunoco Logistics Partners issued a same-day response saying that the White House’s directive “is just the latest in a series of overt and transparent political actions by an administration which has abandoned the rule of law in favor of currying favor with a narrow and extreme political constituency.” They said that the companies “fully expect to complete construction of the pipeline without any additional rerouting in and around Lake Oahe. Nothing this Administration has done today changes that in any way.”

On January 18, 2017, the USACE filed its formal Notice of Intent to conduct the Environmental Impact Statement process. The notice opened a thirty-day comment on the scope of the EIS, which concerns the crossing of Lake Oahe. The proposed EIS would consider “Alternative locations for the pipeline crossing the Missouri River”, direct and indirect risks, and impacts of an oil spill on the lake, the Standing Rock Sioux’s water supply, and their “water, treaty fishing, and hunting rights”; as well as their treaty rights to the lake. The same day U.S. District Judge James Boasberg denied ETP’s request to delay the EIS process.

President Donald Trump signing the Executive Order to advance the construction of the Keystone XL and Dakota Access pipelines. January 24th, 2017

On January 24, 2017, President Donald Trump signed an executive order to advance the construction of the pipeline under “terms and conditions to be negotiated”. The order would expedite the environmental review that Trump described as “an incredibly cumbersome, long, horrible permitting process”.

On February 7, 2017, the USACE sent to the United States Congress a notice of intent to grant an easement under Lake Oahe no earlier than 24 hours following notification of the delivery of the notification. On February 9, 2017, the Cheyenne River Sioux sued the easement decision, citing an 1851 treaty and interference with the religious practices of the tribe.

On February 22, 2017, the protest site was cleared, as that was the deadline for the camp to be cleared by protesters. Although many left voluntarily, ten people were arrested in conflict of this event. They were given the option to leave voluntarily and even with the arrests, there was no major conflict.

The “fill” of the DAPL with Bakken crude oil is expected to start no later the second quarter of this year.

XTO accepting applications for Give Back to the Bakken grant program

XTO Energy is dedicated to supporting the communities where we operate – where our employees live, work and volunteer. The communities located in the Bakken formation area – eastern Montana and western North Dakota – have welcomed XTO Energy. To show our appreciation, we want to Give Back to the Bakken.

A few days remain for nonprofit organizations in Montana and North Dakota to apply for two $25,000 grants from XTO Energy.

The grants, says XTO Energy, is a show of appreciation for the communities in eastern Montana and western North Dakota who have welcomed the company and its employees into their communities.

The two grants will be awarded to organizations that are meeting a demonstrated need for communities in the Bakken. Grant requests are due on October 31.

Click here for application guidelines and more information.

ndxto_awards_62k_grants_home_on_the_range_article_componet_1880x1058

jessica-senaBy: Jessica Sena

If you haven’t heard of the Dakota Access pipeline protest across the North Dakota border, now’s the time to pay attention.

The project, a 30-inch-diameter pipeline owned by Energy Transfer Partners that would move up to 570,000 barrels per day from the Bakken oil fields to Patoka, Illinois, was scheduled to be operational by the end of the year. The pipeline operator purchased voluntary easement agreements on 100% of the properties along the route in North Dakota and 99% of the properties across the entire four-state route. All permits, including approval by the U.S. Army Corps of Engineers in July, have also been obtained by the company; however, protests have stopped construction in its tracks.

Yesterday, two decisions marked a precedent setting action by the federal government, with respect to land use and lawful development. Judge James Boasberg of the U.S. District Court denied the South Dakota Standing Rock Sioux Tribe’s lawsuit to block pipeline construction, siting a lack of evidence that building the pipeline would harm the Tribe.

The Departments of Justice, the Interior and the Army then immediately announced an indefinite suspension of pipeline construction to reassess cultural impacts to what the Tribe calls “sacred ground”. The pipeline route does not cross the Standing Rock reservation, however, the Tribe fears harm to Lake Oahe on the Missouri River in North and South Dakota.

Consultation with GeoEngineers, a subcontractor to Dakota Access, provided information which indicates the boring process would not be of a magnitude to impact natural features, cultural resource features or above ground structures. The crossing at Lake Oahe will be placed approximately 140-210 feet below the ground surface and approximately 92 feet below the bottom of Lake Oahe. The pipeline would utilize the best available safety and monitoring technology.

The Dakota Access team held 154 meetings with local elected officials and community organizations in North Dakota since the project was announced last summer. Over the course of the year-long approval process with the North Dakota Public Service Commission, the Tribe did not once appear to voice concerns over the impacts of the pipeline’s route.

Protests arose after the project was approved and easements secured, and have since become violent and unlawful. Construction workers (100% of which are union per the project agreement) have needed protection by security guards and law enforcement. National Guardsmen have also been alerted by the North Dakota Governor to standby for support.

Allies of the Tribe in its protest have been extreme environmental groups, the Black Lives Matters movement, a handful of celebrities, and Green Party candidate for President, Jill Stein. Stein was among many seen vandalizing construction equipment last week, for which a warrant was issued for her arrest. Multiple arrests of protesters have been made along the pipeline route for trespassing and criminal mischief.

The suit filed by Earthjustice on behalf of the tribe states that, “the tribe relies on the waters of Lake Oahe for drinking water, irrigation, fishing and recreation and to carry out cultural and religious practices. The public water supply for the tribe, which provides drinking water for thousands of people, is located a few miles downstream of the proposed pipeline crossing route.” It goes on to say, “the cultural and religious significance of these waters cannot be overstated. Construction of the pipeline … and building and burying the pipeline would destroy burial grounds, sacred sites, and historically significant areas on either side of Lake Oahe.”

In the federal agencies’ announcement to halt construction on federal land and beneath Lake Oahe, it was said the conflict highlights the need to consider “nationwide reform with respect to considering tribes’ views on these types of infrastructure projects.” “Reform” is the word that should have everyone concerned.

In a 1988 case, Lyng v. Northwest Indian Cemetery Protective Association, wherein The U.S. Forest Service attempted to complete a logging road through the Six Rivers National Forest in northwestern California, despite the religious use of the area by three Indian tribes, the Supreme Court ruled against the Tribes.

By ruling in favor of development, the Court avoided a situation in which tribes could guarantee the nonuse of significant portions of government land. The Court, reportedly, realized that the veto power requested by the tribes “could easily require de facto beneficial ownership of some rather spacious tracts of public property,” and it accordingly acted to prevent such an occurrence.

Following the decision, the Supreme Court stated, “however much we might wish that it were otherwise, government simply could not operate if it were required to satisfy every citizen’s religious needs and desires.”

And here we are, now faced with the very question of satisfying desires of some people over the laws which govern all people. The federal government has gone against its own agencies and judges’ lawful determinations to allow the heavily regulated construction of a $3.7 billion dollar pipeline which would create between 8,000-12,000 construction jobs and millions in beneficial tax revenue to the states in which it operates.

It’s worth noting that there are more than 2 million miles of pipeline traversing the country. Seventy percent of domestic crude is transported by pipeline, the safest means of moving oil and natural gas according to the federal government’s own Pipeline and Hazardous Materials Safety Administration.

Those resources, moved by pipeline, provide the necessary living essentials to all people, regardless of their beliefs or support. Every one of the protestors along the Dakota Access pipeline is a consumer of petroleum products, and benefits from the monies which result from pipeline infrastructure.

This decision, perhaps a Keystone XL sequel, will set the stage for what appears to be a frightening and uncertain future. If unlawful protests can reverse lawful permits, then the rule of law itself as it pertains to pipelines, permits, people and public lands as a whole, is imperiled.

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MPA-MARK-MATHIS

The 2016 annual meeting of the Montana Petroleum Association (MPA) will take place in Billings August 30th and 31st at the DoubleTree Hotel, formerly the Crowne Plaza.

Event highlights include special guest, Congressman Ryan Zinke to speak Tuesday night at Pryor Creek Golf Course during the MPA barbeque. Recent past speakers include former Lt. Governor Angela McLean and Attorney General Tim Fox.

On Wednesday, the morning will commence at the DoubleTree with breakfast speaker Paul Babb of Butte, Community Relations Manager for NorthWestern Energy. Babb is a current member of the REAL Montana Program, a public-private partnership through the MSU Extension office, engaged in educating leaders of Montana on agriculture and natural resource development industries and issues. His presentation will be focused on the importance of “Telling the Story of Our Employees”.

The general meeting of MPA will follow, ahead of three panels which will address subjects including landowner relations, community engagement, methane rules, federal proposals, and collaboration with local government.

mpa_alan-olson“This year, we wanted to tailor our meeting to address Montana-specific issues that appeal to both industry and the general public,” said Alan Olson, Executive Director of MPA. “We’re hosting a good mix of industry experts and the regulators we work with on each of our panels.” (Olson, pictured right with MPA President, Greg Brown, CHS Refinery).

Panelists include Jack King of Billings, longtime landman and former commissioner with the Board of Oil and Gas Conservation; Steve Durrett, current BOGC member and President of August Energy Partners; recent past president of the Montana Association of Professional Landmen, Nicole Bement of Sidney, now with XTO. Each panelist will address how industry can balance public concerns with oil and gas operations by improving communication.

On the Community Engagement panel, speakers will discuss how oil and gas businesses are preparing the next generation of industry leaders, and making lasting investments in the community. Panelists will be Dan Carter, Public and Government Affairs Manager at ExxonMobil; Danette Welsh, Government Affairs Manager at ONEOK, representing the midstream; and Shawna Bonini, Montana Tech grad and past president with the Society of Petroleum Engineers, and former Drilling Engineer for Chevron, and SM Energy in Billings.

A final panel on industry topics will address issues facing the oil and gas sector at the state and federal level, including hotly contested methane rules. Speakers include Tony Lucero, Lead of Regulatory Programs at Enerplus Resources; Karl Christians, Conservation District Specialist, DNRC; and Brian Fakharzadeh, VP of Development and Operations at Western Energy Alliance.

Keynote speaker of this year’s Petroleum Industry Appreciation Day luncheon will be author and filmmaker, Mark Mathis. Mathis has spent most of his career challenging widely accepted ideas that are he describes as “simply untrue”. Mathis’s resume includes a decade as a TV news anchor and reporter, talk radio host, media trainer, founder of Citizens’ Alliance for Responsible Energy, speaker and documentary film producer/director.

In his film, spOILed, Mathis highlighted the public’s ignorance of the central role oil plays in our lives. Mark’s new film, Fractured, exposes how language is used to dangerously deceive us about the most essential component to the function of the modern world—energy.

Registration is available online at montanapetroleum.org, and the public is invited to attend. Press requests and additional questions can be directed to Jessica Sena, 590-8675.

Daines Official Senate PortraitMade-in-Montana energy means good Montana jobs that on average pay two to three times more than the state average. Montana’s ability to create more good-paying energy jobs is immense – in fact, our state leads the nation in coal deposits. We are the nation’s fifth-largest producer of hydropower, with 23 hydroelectric dams across our state, and fifth in wind energy potential.

Montana is at the center stage of the national energy debate and provides the nation a template of a true all-of-the-above energy portfolio – we have coal, natural gas and oil, as well as renewables such as hydro, wind, biomass and solar opportunities. What makes our state most valuable are the people who make our energy systems work, towns like Colstrip that build communities around livelihoods reliant on good paying energy jobs: That is the good news.

The bad news: Montana energy jobs are under assault.

The past two weeks, I’ve heard from thousands of Montanans about the future and importance of made-in-Montana energy and made-in-Montana good-paying jobs.

During my week long tour across our state I saw once again, our vast natural resources and our true energy potential – from touring a wind farm near Baker – to seeing the hydropower facility at Helena’s Hauser Dam –to hosting a town hall in Colstrip – hearing directly from the community about the devastating effects President Obama’s anti-coal regulations will have on hardworking Montanans.

My statewide energy tour culminated this week at Montana Energy 2016, where over 600 people gathered in Billings for a Montana family conversation about our state’s energy future.

During the two and half day summit we heard a consistent and powerful message about the need to maximize our opportunity for growth and expand made-in-Montana energy and the good-paying jobs it supports.

Montanans are leading American energy innovation – Montanans’ like Chrystal Cuniff, a Montana Tech engineer from Choteau who’s helped drill the deepest well in the Gulf of Mexico or Ryan Lance, a Montana native, who’s leading one of the largest oil and gas companies in the world. Ashley Dennehey from Colstrip highlighted how the boilermakers, operators and other hardworking labor groups in her community are working hard to keep the lights on in the face of adversity.

We must continue investing in our two year colleges that provide training in trades like welding and heavy machine operations, so we can keep our kids here with good-paying energy jobs. And, we can’t forget that Montana coal provides tax revenues of $145 million year, which support our teachers and schools.

Montana should lead the world in developing clean coal technology.  We must continue to develop renewable technologies that will store the power created by wind. We should not allow Washington, D.C. and the Obama administration to dictate and regulate coal and gas out of existence.

We need more made-in-Montana energy, not more made in the Middle-East energy.

Make no mistake, President Obama’s Environmental Protection Agency regulations are killing Montana energy. Our country’s future is bright if we can unleash the power of innovation and rein in the overregulation of Washington, D.C.

I couldn’t agree more with what Chairman of the Crow Nation Darrin Old Coyote said in his keynote address at Montana Energy 2016, “All of Montana citizens need to work together for a better tomorrow: renewable energy, fossil energy, conventional energy, Indian or non-Indian. Regardless of political affiliation, whether we are Democrats, Republicans or Independents.”

Montanans can find better solutions than Washington, D.C. bureaucrats.

Recently, the U.S. Supreme Court issued a nationwide stay on the Environmental Protection Agency’s (EPAs) new regulations on coal-fired power plants. This decision provides states like Montana – and over half of the states in our nation – relief from these overreaching and misguided regulations while they are being challenged in court.

These latest EPA regulations are part of the Obama administration’s relentless attacks on affordable energy and good-paying Montana jobs. The federal government’s misguided plan would lead our country in the wrong direction – away from being an energy leader—and would destroy thousands of good-paying Montana jobs.

As a member of the Senate Energy and Natural Resources Committee, I’m working to move forward commonsense policies that help secure an all-of-the-above energy solution and push back on job-killing regulations that threaten Montana’s energy future.

By promoting innovation and responsibly developing Montana’s vast resources, we can secure abundant energy that is clean, affordable and reliable.

The 2015 Economic Outlook recently published by the University of Montana Bureau of Business and Economic Research showed how technology and innovation have already revolutionized the American energy industry to make made-in-America energy resources more accessible than ever.

Montana is ranked at the top in U.S. coal deposits, has rich oil and gas deposits including portions of the Bakken and Three Forks formations, has immense hydropower, solar and biomass potential, and is first in wind potential. Montana is truly an example of what an all-of-the-above energy plan can look like and is well-equipped for continued growth.

But despite this encouraging news – and even with the U.S. Supreme Court’s recent ruling to halt the Obama administration’s new regulations— Montana still faces challenges in reaching its full energy potential. We need to work toward comprehensive solutions that encourage innovation, grow our economy and revolutionize how we produce and distribute energy.

That’s why I’m hosting Montana Energy 2016 in Billings from March 29 to 31. Back for its third year, this comprehensive conference will focus on made-in-Montana energy and the good paying jobs it creates.

Montana holds a vital role in securing our nation’s all-of-the-above energy strategy and this conference comes at a vital time when our nation needs leadership. Montana Energy 2016 will bring together energy leaders to help increase innovation and move Montana’s energy opportunities to the next level.

Registration is open, with discounted rates for service members and students. Please visit www.MontanaEnergy.net to learn more and to register. Join me for Montana Energy 2016 so that we can work together to ensure that Montana remains an energy leader for years to come.

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Will falling shale oil production lead to a reduction in crude-oil prices

By: MyraP. Saefong, Markets/commodities reporter

U.S. Energy Information Administration

Key U.S. tight oil and shale gas regions.

Oil production from the Bakken and Eagle Ford shale plays in the U.S. has been falling since March, but traders shouldn’t be quick to assume that will translate into lower supplies and higher prices.

Total oil output from seven major U.S. shale regions is expected to fall by 118,000 barrels a day to about 4.95 million barrels a day in December, according to the Energy Information Administration’s monthly Drilling Productivity Report released Monday. The data show that production from the Bakken and Eagle Ford shale regions are both likely to show declines next month, which would mark 10 months in a row.

Read: Discontent with OPEC spills into the open

“Bakken oil producers are still going after the low hanging fruit and leaving the high ones until prices go back up,” said Bob van der Valk, senior editor of the Bakken Oil Business Journal

Indeed, analysts have been quick to attribute the declines to low oil prices, with West Texas Intermediate crude futures CLZ5, -2.58%  down more than 17% year to date—and some have said that once a trend of production declines forms, higher oil prices will follow.

“There is no evidence at current prices that rig drilling activity will recover any time this year, so we can expect ever lower production every month well into 2016,” said James Williams, energy economist at WTRG Ecomomics.

He expects December production in the shale plays to be down 550,000 barrels a day from the peak seen in April.

But a closer look shows that production from the Permian Basin, which is located in West Texas and southeastern New Mexico, is forecast to climb by 11,000 barrels a day to roughly 2.02 million barrels a day next month. Output from that shale play has been climbing all year.

U.S. Energy Information Administration

“Right now, the Permian looks like the most profitable play,” said Michael Lynch, president of Strategic Energy & Economic Research (SEER).

That is due in part to location, he said. The Eagle Ford shale play is in South Texas, but Bakken Shale is located in eastern Montana and Western North Dakota as well as parts of Canada.

“You have to bring workers from outside North Dakota and so salaries for everything, even hamburger flippers, is elevated,” Lynch said. “Much less so in Texas.”

‘Quite possibly, the redeployment of money, rigs and personnel to the Southwest will mean that even low drilling activity allows shale-oil production to expand.’ ~ Michael Lynch, SEER

So, “quite possibly, the redeployment of money, rigs and personnel to the Southwest will mean that even low drilling activity allows shale-oil production to expand,” he said.

Williams, however, pointed out that the EIA report shows that the number of new oil barrels we can expect per rig showed no improvement in the Eagle Ford and Bakken, and the increase in the Permian was “minimal.”

“Previously, the barrels per rig often showed substantial gains as drillers became more efficient and focused drilling to the sweet spots,” said Williams. “We cannot expect efficiency gains at the same level that we experienced over the last year.”

Still, Lynch noted three key reasons why oil prices won’t climb soon: higher shale output, the return of Iran’s oil to the global market as sanctions are lifted following its nuclear agreement with western powers, and production increases elsewhere in the world.

The combination of those factors will mean there is “no room for prices to rise,” he said.

Retrieved 11-11-15 from MarketWatch.

The Northern Plains Resource Council (NPRC) has asked the Board of Oil and Gas Conservation to commence rule making to impose quarter mile (1,320 ft) setbacks of drilling rigs from occupied dwellings. This is a greater distance than the proposal struck down before the legislative Senate Natural Resources committee just months ago, after ample testimony on both sides.

NPRC claims that because other states have imposed setbacks, Montana should follow suit for the benefit of landowners. However, existing statute and administrative rules, along with the structure and function of the BOGC, are a made in Montana solution that works. Using a checklist of out of state rules and regulations to shape policy in Montana is not a good idea. Doing so neglects to take into account those attributes which are unique to Montana.

This Wednesday, at a public meeting before the Board of Oil and Gas Conservation (BOGC), the Montana Petroleum Association (MPA) will be providing comments on how implementation of the proposed rule would negatively impact oil and gas opportunities in Montana, siting that:

  • Montana’s drilling and permitting activity pales in comparison to other states who’ve elected to impose setbacks, especially with consideration to densely populated areas
  • Other states do not have the same protest ability that Montana landowners do with regard to oil and gas drilling
  • The public, including land/surface owners, have considerable access to the BOGC
  • Montana’s BOGC is set up to mitigate concerns on a case by case basis; ensuring responsible and efficient development of mineral resources
  • If imposed, drilling opportunities in Montana would be severely impacted, with many small and exploratory oil and gas operators essentially placed out of business without the ability to drill into small target formations
  • Many claim horizontal wells have greater flexibility in surface placement, however, operators seek to evenly space wells within a DSU (drilling spacing unit)
  • Setbacks would reduce the number of wells there could be in a given DSU (within the same lease), shorten laterals, thereby increasing wasted oil and gas reserves, and lessening both production revenue (including that to the state and counties) and royalty payments to mineral owners, which include universities, hospitals, and charitable organizations
  • Setbacks neglect to recognize that minerals are the dominate estate (under common law) in split estate scenarios.
  • Setbacks act as a taking of mineral owners rights without compensation
  • Correlative rights of mineral owners are compromised by setback rules administered as a “one-size-fits-all” rule
  • Potential legal conflicts exist with regard to treatment of existing leases under setback rules
  • Surface use agreements are currently negotiated between landowner and operator, prior to drilling
  • The BOGC sites less than a handful of cases wherein a surface owner came before the Board with a concern over the placement of a well
  • The BOGC currently has the ability to exercise authority over well placement to mitigate surface owner concerns when necessary, based on potential harms
  • Montana has a longstanding history of environmentally responsible development of oil and gas, without negative impacts on air, soil, or water

The rule would have widespread effects on Montana’s economy and on mineral rights. Mineral owners, royalty recipients, and oil and gas operators with an interest in preserving future drilling opportunities in the Treasure State ought to weigh in at the June 24th meeting at the Board of Oil and Gas Conservation office in Billings, 2535 St. Johns Avenue, at 1:00 pm.

Public hearings will follow at a date TBD, should the Board commence rule making.

Interested parties may contact the Montana Petroleum Association at mpa@montanapetroleum.org to stay updated on the issue, and to be notified of future opportunities for public comment.

Contact: Jessica Sena, 590-8675

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