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Oilman Magazine — Your Voice In Energy JANUARY / FEBRUARY 2014
OILMANMAGAZINE.COM
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Oilman Magazine — Your Voice In Energy JANUARY / FEBRUARY 2014
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MAGAZINE
JANUARY — FEBRUARY 2014
PUBLISHED BY
Oilman Magazine, LLC
116 W Main ST
Norman, OK 73069
(800) 562-2340
OilmanMagazine.com
PUBLISHER
Luke McDonald
publisher@OilmanMagazine.com
(800) 562-2340 Ex. 5
View the publisher’s introduction at
OilmanMagazine.com/subscribe
LOUISIANA OILMAN
ASSOCIATE PUBLISHER
D. L. George
dlgeorge@OilmanMagazine.com
(800) 562-2340 Ex. 2
CONTRIBUTING
WRITERS
Don Briggs
Story Sloane III—
The Sloane Gallery— Houston, Texas
SUBSCRIPTIONS
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© Copyright 2013 by Oilman Magazine, LLC. All
rights reserved. Reproduction without permission
is prohibited. All information in this publication is
gathered from sources considered to be reliable, but
the accuracy of the information cannot be guaranteed.
Image credits, 123rf.com.
DownHole Data
Departments
Company Spotlights
Features
Dupre’ Logistics—
Page 18
AMPOL—
Page 22
OMI Environmental Solutions—
Page 26
Sources: BakerHughes.com — U.S. Energy Information Administration (EIA)
OIL RIG COUNTS
TX: December, 2013— 843
LA: December, 2013— 111
TX: November, 2013— 829
LA: November, 2013— 108
TX: October, 2013— 820
LA: October, 2013— 108
TX: September, 2013— 837
LA: September, 2013— 111
OIL PRICES
(BARREL)
October, 2013— $96.24
September, 2013— $102.45
August, 2013— $103.13
July, 2013— $101.61
June, 2013— $94.05
May, 2013— $95.00
April, 2013— $94.72
March, 2013— $95.85
CRUDE OIL PRODUCTION
(BARRELS)
TX: Oct, 2013— 85,320,000
LA: Oct, 2013— 5,924,000
TX: Sep, 2013— 81,067,000
LA: Sep, 2013— 5,959,000
TX: Aug, 2013— 82,958,000
LA: Aug, 2013— 6,233,000
TX: July, 2013— 81,362,000
LA: July, 2013— 6,517,000
NATURAL GAS
MARKETED PRODUCTION
(Volumes in Million Cubic Feet)
TX: September, 2013— 610,911
LA: September, 2013— 180,868
TX: August, 2013— 633,277
LA: August, 2013— 197,390
TX: July, 2013— 636,469
LA: July, 2013— 207,000
TX: June, 2013— 605,288
LA: June, 2013— 197,446
// In This Issue
OILMAN PRIDE
Honoring Our Proud History
Page 6-8
Killing the Golden Goose—
Don Briggs, LOGA
Page 10
Downhold Data
|
Oil Briefs Page 28
Feature
Numbers Fly Off the Charts—
Page 12
Feature
Rushing to the Gulf of Mexico—
Page 14
ENGINEERING & MANUFACTURING
Oil and Gas Careers—
Page 16
Transportation & Logistics
Natural Gas-Powered Vehicles
Page 20
Environmental & Safety
OSHA Forms Alliance—
Page 24
OILMANMAGAZINE.COM
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PHOTO BY STORY SLOANE III
Modern Day Gulf Station in Houston, Texas.
Do you remember when there was actually
customer service? — 1930’s
Photos by Story Sloane III — The Sloane Gallery, Houston, Texas. These images and more are for sale and can be
found by visiting www.sloanegallery.com or calling 281-496-2212.
// Pride
1 of 2
See this photo and
the entire collection at
OilmanMagazine.com
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Oilman Magazine — Your Voice In Energy JANUARY / FEBRUARY 2014
88
// Pride
www.lwcc.com
At LWCC, we’re committed to making Louisiana
a safer place to work. With our Mobile Safety
Training Center we deliver convenient, cost-
effective training directly to our policyholders.
Our team of loss prevention consultants brings
online training and classroom-style instruction
right to the policyholder’s doorstep. Now that’s
going the extra mile.
With 11 workstations, LWCC’s climate-controlled
mobile center provides policyholders’ employees with
on-site access to free, dynamic web-based training.
GOING THE
EXTRA MILE
FOR YOUR
SAFETY.
PHOTO BY STORY SLOANE III
Early morning Sabine Lake
coffee, extra strong — 1950’s
2 of 2
Photos by Story Sloane III — The Sloane Gallery, Houston, Texas. These images and more are for sale and can be
found by visiting www.sloanegallery.com or calling 281-496-2212.
OILMANMAGAZINE.COM
99
www.lwcc.com
At LWCC, we’re committed to making Louisiana
a safer place to work. With our Mobile Safety
Training Center we deliver convenient, cost-
effective training directly to our policyholders.
Our team of loss prevention consultants brings
online training and classroom-style instruction
right to the policyholder’s doorstep. Now that’s
going the extra mile.
With 11 workstations, LWCC’s climate-controlled
mobile center provides policyholders’ employees with
on-site access to free, dynamic web-based training.
GOING THE
EXTRA MILE
FOR YOUR
SAFETY.
Oilman Magazine — Your Voice In Energy JANUARY / FEBRUARY 2014
10
Killing the Golden Goose
By Don Briggs — President Louisiana Oil and Gas Association
// Column
A common saying in the South is “Don’t kill the goose that
laid the golden egg”. In Louisiana’s business environment, this
golden goose is Louisiana’s oil and gas industry. The industry
contributes in severance taxes, royalties and bonuses between
15-17% of the states general fund revenue and contributes 19
billion dollars in annual impact to the state’s economy. These
dollar amounts do not even account for the tens of thousands
of direct and indirect jobs that come from the oil and gas
industry.
This week, the South Louisiana drilling rig activity reached an
all-time historic low with a mere 13 rigs running on land. Why
is this rig count so low? With over $100 per barrel oil and a
booming oil and gas industry around the rest of the United
States, why? The president of a medium size independent
company answered these questions by simply stating, “My
investors don’t want to cross the Sabine River because of
Louisiana’s legal climate”. His answer sounds very simple, but
the situation is actually extremely complex. However complex
the situation may be, a caustic legal climate is currently a reality
in Louisiana.
Proponents of the lawsuits are often quoted as saying, “The
oil companies will not leave Louisiana. As long as there is oil
and gas in the ground, these companies will be here.” These
statements are partially true in the fact that the companies will
not leave completely, however, they will NOT REINVEST in
our state. Eventually oil and gas production will deplete, as will
the billions in revenues and thousands of jobs for our state
economy.
The year 2003 was the beginning of the “legacy lawsuits”
feeding frenzy by a small group of trial lawyers. Fast-
forwarding to today, more than 350 such lawsuits exist with
around 2,000 defendants. Legacy lawsuits are lawsuits that
can be led or authorized by landowners, school boards, the
Louisiana Attorney General, parish governments and levee
boards to name but a few. These suits are against oil and gas
companies for alleged land contamination during drilling
activities that were performed decades ago. As a reminder,
these drilling activities were legal according to the existing
technology and regulations of that time period. In other
words, these suits convey a message to the companies that
states, “Drill here today and we will sue you 20 years from
now for an alleged issue that requires little to no proof.
According to the U.S. Chamber of Commerce, Louisiana is
the 2nd most litigious state in the United States. So, when
a company is contemplating where to invest in a drilling
program or where they will get the best bang for their buck,
the current legal climate in Louisiana is deterring future
investments. You simply cannot sue thousands of companies
and individuals with such frivolous lawsuits and NOT expect
to have a drastic impact on the business climate.
Here are the facts: drilling activity in South Louisiana is facing
an unprecedented decline and will continue to be in a decline
until the state of Louisiana recognizes its severe need for legal
reform. Without such positive reform, the Golden Goose will
be killed.
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(318) 628-3523
10264 U.S. 84 | Winnfield, Louisiana 71483
Louisiana's superior rock resource.
Winn Rock's local quarry
produces crushed stone for
all of your needs.
Our applied cost saves you
both time and money with
no compaction necessary.
Oilfield and natural gas sites
Logging and forestry roads
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Mining operations
Secondary public, private and
industrial haul roads
w w w . w i n n r o c k . c o m
(318) 628-3523
10264 U.S. 84 | Winnfield, Louisiana 71483
Louisiana's superior rock resource.
Winn Rock's local quarry
produces crushed stone for
all of your needs.
Our applied cost saves you
both time and money with
no compaction necessary.
Oilfield and natural gas sites
Logging and forestry roads
Parking and storage areas
Mining operations
Secondary public, private and
industrial haul roads
Oilman Magazine — Your Voice In Energy JANUARY / FEBRUARY 2014
12
Texas Oil and Gas Numbers Fly
Off the Charts
SOURCE: Forbes— The growing scale of the oil and natural
gas boom in Texas continues to stun most observers. We
have discussed this phenomenon periodically, but the
newest developments are so off the charts that an update is
warranted. We’ve pointed out a couple of times that Texas’s
oil production represents roughly 30% of the total US output,
an amazing statistic, especially considering that the percentage
was below 15% just a few years ago. In May, that statistic
became even more amazing, as Texas accounted for 34.5%
of total US oil production, thanks to continued production
growth in the Eagle Ford Shale and in several shale plays in
the Permian Basin region of West Texas. As Dr. Mark J. Perry
points out in his Carpe Diem blog, Texas’ daily oil output has
doubled in just a little more than two years, averaging 2.525
million barrels per day in May, the highest daily output the
state has experienced since April 1982. In February of this
year, Texas – were it a nation in and of itself – would have
ranked as the 14th largest oil producing nation on earth. In
April – the most recent month global data is available – Texas
would have ranked 12th among all nations, in this category,
just ahead of Venezuela, and slightly behind Kuwait and
Mexico. By the end of the year, when Texas’s daily production
is likely to exceed 3 million barrels per day, Texas would
likely rank 9th on this list. Extraordinary. Where natural gas
is concerned, Texas accounted for just over 27% of all US
production in May, and would still rank 3rd among all nations
in natural gas production, behind Russia and the other 49 US
states.
Facilitating all of this production growth is the fact that the
latest rig count indicates Texas remains home to 832 drilling
rigs, about 47% of all land rigs in the United States, and fully
25% of all the rigs working anywhere in the world. Again,
extraordinary. So now that we’ve got the numbers accounted
for, let’s talk about the real-world impact of what this amazing
growth means for Texans. One terric example came to
light late last week, when Texas State Comptroller Susan
Combs was able to make the happy announcement that state
receipts from oil and gas severance taxes had exceeded her
projections for the rst nine months of Fiscal Year 2013 by
a whopping $900 million. The Comptroller’s announcement
came shortly after Texas Governor Rick Perry had called the
Texas Legislature back for a 3rd straight special session, with
the House and Senate deadlocked on how to produce more
funding for maintenance and expansion of state highways.
Each house had produced competing bills designed to
dedicate excess funds from the state’s Rainy Day Fund in
order to accomplish that task. The good news for Texas is that
the Rainy Day Fund is almost entirely funded by oil and gas
severance tax collections, and the Comptroller’s announcement
that the Fund would be much more ush with money than
previously thought provided the impetus necessary to break
the impasse. So on Monday, the Legislature was able to reach
agreement on a mechanism directing an additional $1.2
billion from the Rainy Day Fund to highway construction and
maintenance, and nally, at long last, adjourn the session so
that members could return to their homes, families and jobs.
That’s great news in and of itself, but it’s not where this story
ends. During the regular session, the Legislature also passed a
series of bills that will also tap surplus funds in the Rainy Day
Fund to fund the State Water Plan, as well as other road, port
and rail infrastructure projects desperately needed in the state’s
rapidly growing economy. The legislation would create two
funds: 1) The State Water Implementation Fund (SWIFT) that
will contain $2.5 billion to fund projects in the State Water
Plan; and 2) The State Water Implementation Revenue Fund
of Texas (SWIRFT) that will contain $3.5 billion for road,
port and rail infrastructure projects. All told, the legislature
was able to tap the almost exponential growth in the Rainy
Day Fund for more than $7 billion to pay for a great variety of
much-needed infrastructure projects.
As an aside, The State Water Plan was conceptually approved
by the Legislature in 1997, but not funded. For the last 16
years, proponents have tried in vain to devise a source of
funding for the plan that does not involve an increase in taxes.
As recently as two years ago, no one had the slightest idea how
the Water Plan or any of these myriad other infrastructure
needs could be paid for. Today, thanks to the amazing growth
in Texas oil and natural gas production since 2011, and the
resulting windfall of tax revenues that has produced, the
legislature was able to fund all of that, without any sort of tax
increase, and still maintain a very healthy balance in the Rainy
Day Fund. The result is a great story that opponents of the
oil and natural gas industry hate to hear, but it’s a story that is
well worth telling. Good news of this magnitude – like rain,
it seems – doesn’t just fall out of the Texas sky on a regular
basis. God Bless Texas.
// Feature
Also on OilmanMagazine.com — Texas Sees Growth in Natural Gas-Powered Vehicles... Developments in Hot Tapping Technology... A Roadmap For IP Protection Strategies....
Texas’ daily oil output has doubled in just a
little more than two years... thanks to continued
production growth in the Eagle Ford Shale and in
several shale plays in the Permian Basin region of
West Texas...
OILMANMAGAZINE.COM
13
Also on OilmanMagazine.com — Texas Sees Growth in Natural Gas-Powered Vehicles... Developments in Hot Tapping Technology... A Roadmap For IP Protection Strategies....
Oilman Magazine — Your Voice In Energy JANUARY / FEBRUARY 2014
14
Oil Drillers Rush Back to
the Gulf of Mexico
SOURCE: businessweek.com
// Feature
The Gulf of Mexico has been left for dead more than once
over the past half-century. It’s now roaring back to life with
at least 10 recent mega-discoveries that have renewed oil
explorers’ enthusiasm for the region. Billions of dollars are
being poured into new wells in the ultra-deep waters off
Texas and Louisiana, fueling a resurrection that could set a
production record this decade and complete a recovery from
the worst offshore oil spill in U.S. history.
In 2014, output from the deepest parts of the Gulf, where
the water is more than 1,300 feet deep, will be equivalent to
about 1.5 million barrels of oil a day, 15 percent more than
this year, according to estimates by energy consultants Wood
Mackenzie. By 2020, the rm says, the deepwater Gulf, which
accounts for about half the Gulf s 252,000 square miles of
federal waters, is expected to produce an average of more
than 1.9 million barrels a day, a new high. “Investors should
not sleep on the Gulf of Mexico,” says Brian Youngberg,
an analyst with Edward Jones in St. Louis. “Onshore shale is
obviously the main driver in the growth in U.S. production,
but going forward, the Gulf of Mexico should start
contributing to that.
dec-2013_IHS_data_BW47_energy_gulfchart_315U.S.
crude production has surged in recent years, largely because
companies used hydraulic fracturing and advanced drilling
technology to open onshore shale formations. Now producers
including Chevron (CVX), Royal Dutch Shell (RDS/A), and
Anadarko Petroleum (APC) are preparing to surpass the
Gulf s 2009 peak; production collapsed after BP’s (BP) 2010
spill. That disaster, and the ve-month drilling moratorium
that followed, led to an exodus of rigs and drilling equipment
as regulators bolstered safety requirements. As large oil
companies have begun drilling again, so has BP, which remains
a major operator in the deep Gulf. It was the biggest producer
there in 2012 and has ownership stakes in more than 650
leases.
In the late 1970s energy companies began referring to
the Gulf as “the Dead Sea.” Shallow-water wells drilled
decades earlier were tapering off, and the industry lacked
the technology to nd oil in the deeper waters. New seismic
equipment has since let explorers see through once-opaque
layers of rock. Engineering innovations enable companies to
lower their drills through 10,000 feet of water to the seabed.
There the drills penetrate 5 miles into the earth’s crust, where
temperatures are hot enough to boil water and high pressures
approach the weight of four cars resting on one square inch.
That seismic and drilling technology has improved even since
the 2010 oil spill, allowing ventures into deeper and deeper
waters.
Chevron, with a company-record ve rigs drilling, is among
the most bullish. The company expects its $7.5 billion Jack/
St. Malo platform to begin producing oil and gas in 2014, with
a long-range target of 177,000 barrels per day. Other deep-
water projects that may begin producing in the Gulf next year
include Anadarko’s Lucius, Hess’s (HES) Tubular Bells, and
Murphy Oil’s (MUR) Dalmatian. Gulf projects can cost $15
billion for infrastructure, wells, and facilities, and take more
than a decade to bring into production.
The U.S. Department of the Interior estimates the Gulf has
48 billion barrels of oil yet to be discovered. “What catches
our attention,” says Robert Ryan, vice president for global
exploration at Chevron, “is the potential—billions of barrels
right in our own backyard.”
Also on OilmanMagazine.com — Texas Oil And Gas Numbers Fly Off The Charts... House Approves Bill To Speed Up Oil And Gas Drilling... Higher U.S. Oil Drilling Has An Unexpected Effect
OILMANMAGAZINE.COM
15
Oil Drillers Rush Back to
the Gulf of Mexico
SOURCE: businessweek.com
Oilman Magazine — Your Voice In Energy JANUARY / FEBRUARY 2014
16
// Column
The time is now for oil and gas
engineering, design careers
SOURCE: chron.com
// Engineering & Manufacturing
With the oil and gas industry currently in an upward cycle, driven by
the natural gas shale-play discoveries in the United States, companies
continue to scramble for quality talent to ll an array of positions,
predominantly in engineering and design roles. “It’s a glory time for
engineering and design,” said Tim Turner, the recruiting manager of
Foster Wheeler USA, a global engineering and construction company.
“From my perspective, I’m seeing a lot of new projects and anticipate
a very positive outlook for the near future.”
The demand for experienced talent is
tremendous. Bill Bradshaw, president
of Afnity, a specialized stafng and
recruiting services company, said
career opportunities are hot for oil
and gas engineers. “It’s all disciplines –
structural, process, designers – it’s not
just one group blowing up, they are all
blowing up,” he said. “We are doing our
best to keep up with domestic demand.
We have so many opportunities to
help companies in the United States
we aren’t even looking overseas.” Ryan
Hanemann, president of Audubon
Engineering, agreed. “It’s all about
talent acquisition now,” he said. “Every
discipline of engineer and draftsman is
in demand and it’s difcult to nd the
best people in every discipline. It’s a
resource-constrained market.” Turner
said the majority of job opportunities are in the downstream sector
of rening and petrochemicals, but that the offshore industry in the
upstream sector is on the rise. He said all disciplines are sought, but
tops his list with mechanical and process engineers. “The biggest
emphasis is on the planning and scheduling disciplines,” he said.
With the competition for experienced talent described as “cut-throat”
by Hanemann, companies need to be creative in nding and retaining
employees. “At Audubon we are doing controlled growth by only
hiring people referred to us by employees,” he said. “Our employees
help us in the ‘quest for the best’ by building their own teams and
turning the company into a club that people want to get into.
Audubon moved to this strategy from a broader, shnet approach
to recruiting to ensure applicant quality, Hanemann said. Turner said
there is no lack of applicants, but the issue is nding people with
industry and project experience. “We are all trying to nd the exact
same person and competing with offers from several companies
at one time,” he said. “We’re very pleased that Foster Wheeler has
one of the strongest college graduate-recruiting programs with a
large number of new hires from colleges, but at same time, we have
to keep a focus on more experienced engineers and designers who
can launch immediately and without supervision.” Turner said that
proven tenure with projects and companies is crucial for many of
their positions.
Foster Wheeler has expanded the geography of its talent search
beyond the Houston area to other parts of the United States and
Canada, while maintaining stringent standards for applicants. “We
never sacrice on those requirements,” he said. “It does take more
patience and more creative recruiting methods, but our clients are
counting on us to provide same top quality and we cant do that if
we hire someone unqualied for the position.” Rather than escalate
salaries, companies are looking for ways to improve benets and
workplaces to attract and retain talent. Turner said he hears from
recruits that key determiners can include
paid time off, retirement contributions
and wait time for benets eligibility.
College graduates represent a huge
prospect pool to all the companies,
with more students showing an interest
recently in oil and gas careers. Hanemann
attributed this primarily to attractive
salaries and numerous job opportunities,
but also to a more philosophical pursuit.
“It’s exciting to feel like you are doing
something important, because this is
what civilization needs,” he said. “It’s a
noble quest as well as a protable one.”
Bradshaw agreed that potential income
is a big draw for students, and sees an
idealistic interest in the challenges of
how to produce cleaner and safer energy.
Though fresh graduates have great
potential, the real job training comes down to the employers teaching
and mentoring to bring along new hires quickly, he said.
Many oil and gas companies are responding to this need by putting
programs in place internally to mature young talent. For example,
Foster Wheeler has a strong mentoring program, Turner said. And,
Audubon Engineering has Audubon University for its new graduate
hires. “It’s really about developing young people,” Hanemann said.
Bradshaw said recruiting efforts need to start even earlier than college
level. “The engineering companies and operators have to get out to
the junior high and high schools,” he said. “They have to point out
the whole industry as a viable choice for a career. And we need to
change the perception that the only people who can be engineers are
those extremely good at math. Yes, you have to be smart and have
some technical ability, but it is so much more than that. It’s project
management, it’s self-management, it’s people skills.
All three experts agree that it is a great time to have a technical
degree. “I believe that even with importing talent, we still aren’t going
to be able to keep up with the demand,” Bradshaw said. “It’s a great
profession to be in with tons of opportunity. You can do almost
anything. Companies are looking for great people.
Also on OilmanMagazine.com — Texas Oil And Gas Numbers Fly Off The Charts...Midland, TX Is Now The Richest Metropolitan Area In The U.S... Sabine Pass seeks to export....
Also on OilmanMagazine.com — Texas Oil And Gas Numbers Fly Off The Charts...Midland, TX Is Now The Richest Metropolitan Area In The U.S... Sabine Pass seeks to export....
Oilman Magazine — Your Voice In Energy JANUARY / FEBRUARY 2014
18
A Year in Review: Dupré Logistics
In 2013, Dupré Logistics continued to conrm the company’s
reputation of safe service, environmental responsibility and active
involvement while growing their company to reach into new niche
markets and areas. Established in 1980 with only two trucks,
Dupré has grown to operate more than 500 trucks, employs over
1,200 professional drivers in its dedicated eets and has established
a network of 2,000 preferred carriers through a stringent carrier
approval process. Dupré has an ability to enable manufacturers
and distributors to eliminate the invisible costs that occur in
their distribution and supply chain. Dupré clients gain increased
productivity, permanently decrease their cost structures and become
more competitive and protable through the Dupré approach- a
results-based supply chain process. Throughout 2013, Dupré has
reached a number of milestones in its pursuit of excellence for our
clients including:
Safety Record:
Using its employee safety programs as a catalyst for growth and not
just an afterthought instituted to meet regulatory requirements, the
company has created a progressive, award-winning environment
that has kept it growing and vibrant. Dupré has had a longstanding
tradition of recognition in safety. In 2013, Both the Texas
Motor Transport Association (TMTA) and the Louisiana Motor
Transport Association (LMTA) recognized Dupré for their safety
performance. The American Trucking Association (ATA) presented
Dupré Logistics with three awards at their annual Safety & Human
Resources Conference. The National Tank Truck Carriers (NTTC)
Association awarded Dupré Logistics with the Grand Award in the
31.5 – 40 million mile class in Personnel Safety.
Employee Training and Monitoring:
Dupré’s Safety program is continuously looking forward to evolve as
the industry changes, in 2013, that evolution occurred as well. With
ongoing training for all of its employees, from the top down, Dupré’s
corporate culture is one of safety. Each Dupré driver is given courses
on safe driving and evaluated on a regular basis. The Dupré safety
initiative includes the direct monitoring and observation of drivers
in the eld. Combining fatigue management with measuring and
analyzing driver data has gotten the company recognition nationwide
as an innovator.
Environmental Responsibility:
Dupré strives to be a leader in freight supply chain environmental
performance and energy efciency. Dupré Logistics demonstrated
top environmental performance by effectively hauling all freight with
environmentally and energy efcient SmartWay carriers.
Industry Change:
In early July new Hours of Service regulations were put into effect
by the US Department of Transportation. Those in the Oil and
Gas industry, working on tight deadlines and a fast pace, must
be prepared for these changes, pay attention to the regulations
and prepare to mitigate the impact of the change. The two major
changes focus on when truckers can “restart their clocks,” and
when and how they must take rest breaks. It is often said that with
every challenge lies an opportunity. The HOS regulations certainly
present a challenge that when properly managed provide you the
opportunity to exploit operational excellence and drive improved
performance against your competitors. Dupré Logistics continues it
works with the Alliance for Driver Safety and Security (The Trucking
Alliance), a small group of trucking companies that formed to lobby
Dupré’s corporate culture is one of safety. Each
Dupré driver is given courses on safe driving and
evaluated on a regular basis. The Dupré safety
initiative includes the direct monitoring and
observation of drivers in the eld.
// Transportation & Logistics
OILMANMAGAZINE.COM
19
for a dened set of safety initiatives that affect the industry. The
Trucking Alliance membership is evidence of Dupré’s commitment
to passing effective and important legislation. Currently, the alliance
is focusing on mandatory speed limiters and improvements to drug
and alcohol testing amongst other safety initiatives. Dupré is playing
an important role in lobbying for the initiative surrounding their
innovative fatigue management program.
Community Involvement:
Dupré Logistics, a trucking and logistics provider operating
throughout the United States, is partnering with local re emergency
responders to prevent rollovers of water transporting re trucks,
known in the industry as a water tanker. With a DVD produced
through National Tank Truck Carriers (NTTC) association, Dupré’s
local Field Safety Representatives are sharing training and expertise
in preventing deadly commercial vehicle rollovers. Fire water tankers
often transport hundreds of gallons of water in time-sensitive
emergency situations. The NTTC reports that water tanker drivers
have been killed or injured as a result of these rollovers due in part to
lack of training for many reghters many of which are volunteers.
Dupré’s employees are distributing the NTTC’s Cargo Tank Rollover
Prevention video and sharing safety principles that commercial tank
truck drivers use every day to haul both dangerous and nontoxic
liquids.
Changing the Game with Shale:
As more shale formations are being discovered and developed
throughout the United States, logistics providers are playing a more
important role in addressing the needs of energy producers. Dupré
has been a mainstay in the gulf coast energy sector throughout
its history, growing into a full-service provider throughout the
country. As directional drilling and shale fracturing techniques have
allowed oil to be accessed and gathered for rening in ways never
done before, Dupré’s role as an innovator and safety specialist is
regularly tapped in the harsh shale play landscape. Even as efforts
continue to bring more capacity and exibility to the nations
pipeline infrastructure through the Keystone XL and other smaller
projects, Dupré is focused on the growth of the short haul for
bulk crude and gas loads as pipeline capacity makes that method of
delivery more economically viable. That shorter haul also eliminates
one of the biggest dangers in trucking, the physical demands of
marathon-length runs across the nations interior on both drivers
and equipment. Dupré Logistics works with major oil producers to
provide truck takeaway capacity for crude oil in the Eagle Ford shale
play, a growing energy sector in southwest Texas.
Drivers:
In August, Reggie Dupré, CEO of Dupré Logistics, spoke about
the company’s innovative safety program at the annual Commercial
Vehicle Outlook Conference in a panel titled: How Regulations
& Customer Demand are Driving Safety Technology Forward.
Dupré provided the unique perspective as an operator who relies
on recruiting, retaining, training and knowing their drivers who
implement the company safety program with the assistance of
technology.
Dupré’s safety program utilizes equipment, technology and research
as part of their safety program. However, the company recognizes
that their team members hold the key to success. That is the main
reason for the overall Dupré Logistics personnel strategy called “The
Ideal Place to Work.” The company wants to have the best people
in the industry so Dupré can give the best service. In order to do
this, Dupré needs to have the best jobs to have the best people.
For professional drivers, Dupré pays hourly and overtime after 40
hours. The company also has an advanced understanding of fatigue
and what is does to the body. They apply this knowledge of the
body’s physiology to create and manage driver schedules that are
both benecial for the client and allow the driver to have optimum
performance. Additionally, Dupré utilizes technology to monitor
performance indicators of each driver. The company places a
great importance on communicating the results to those behind
the wheel. The safety monitoring mechanisms open the door for
communication so that drivers are always seeking continuous safe
service and improvement.
Driver Performance Management:
GreenRoad™, owner of driver performance management
technology, announced the recipients of the rst annual Fleet Elite™
awards. As the leading driver performance management service
for eets, GreenRoad™ uses cloud and mobile technology to help
drivers self-improve. The technology-based driver performance
management service provides drivers with real-time, in-vehicle
feedback every trip, every mile. A series of green, yellow and red
lights in the vehicle notify the driver and the company of 5 risky
events (speed, cornering, lane handling, braking, acceleration) that
are tabulated to reveal a safety score. Driver behavior is measured
using a sophisticated combination of a sensitive accelerometer, GPS
data and advanced algorithms. Dupré has used GreenRoad to realize
signicant savings because better drivers use less fuel, crash less
frequently and reduce vehicle emissions. Proven across 70,000 drivers
worldwide, in all vehicle types and industries, GreenRoad dramatically
reduces fuel consumption and crashes so customers realize positive
ROI within 60-90 days. Six hundred Dupré drivers were recognized
with the Fleet Elite distinction as the best eet drivers on the road.
Fleet Elite status is awarded to GreenRoad drivers who maintain a
GreenRoad Safety Score of 5 or less for the previous fullcalendar
year, and log over 500 GreenRoad driving hours. In 2012, less than
5% of the global GreenRoad driver base attained Fleet Elite status.
About Dupré Logistics:
Dupré Logistics, LLC is a team of professionals who design and
deliver safe, diversied solutions and services for quality-focused
clients committed to increasing
their competitive advantage.
Dupré has more than 1,300 team
members and is headquartered
in Lafayette, La. For more
information, visit www.
duprelogistics.com. For forward
thinking about logistics, visit
blog.duprelogistics.com.
Oilman Magazine — Your Voice In Energy JANUARY / FEBRUARY 2014
20
Texas Sees Growth in Natural
Gas-Powered Vehicles
Folks driving natural gas vehicles around San Antonio will
soon have less to fear about running out of fuel. This month,
at a Pilot Flying J truckstop off Interstate 10, a Clean Energy
fueling station is expected to ip the switch on the city’s rst
natural gas pumps. The liqueed natural gas station will plug
a gap in what Texas calls its “Clean Transportation Triangle,
a growing network of natural gas fueling stations along
highways that link San Antonio, Austin, Dallas, Fort Worth
and Houston. The bustling region is home to 10 percent of
the nations trafc.
Natural gas enthusiasts say the station is one of many signals
that the fuel, which burns cleaner than unleaded or diesel gas,
is gaining more than a toehold in Texas’ transportation sector,
as a mix of factors combine to erode long-standing barriers to
expansion, including a lack of fueling infrastructure across the
U.S. and the high upfront costs of natural gas vehicles. “The
tipping point has already started,” said John Esparza, president
of the Texas Trucking Association. “We’re seeing an across-
the-board increase.
Oil, of course, still has a stronghold in the auto industry,
and costs continue to limit the number of natural gas-
powered personal vehicles from hitting roads. But truckers,
large companies and even public agencies across Texas are
increasingly purchasing natural gas vehicles in hopes of saving
on long-run costs and boosting their green credentials. Those
Also on OilmanMagazine.com — Texas Oil And Gas Numbers Fly Off The Charts... Utilizing In-truck Printers to Comply with DOT and Client needs... DOT’s new driver hours is hurting productivity
// Transportation & Logistics
Natural gas enthusiasts say the station is one of many signals that the fuel, which burns cleaner
than unleaded or diesel gas, is gaining more then a toehold in Texas’ transportation sector, as a
mix of factors combine to erode long-standing barriers to expansion....
OILMANMAGAZINE.COM
21
Also on OilmanMagazine.com — Texas Oil And Gas Numbers Fly Off The Charts... Utilizing In-truck Printers to Comply with DOT and Client needs... DOT’s new driver hours is hurting productivity
include public transit systems in Dallas, Houston and San
Antonio. The River City also operates the state’s largest eet
of refuse trucks.
The trend is unfolding across the country. For instance,
some 60 percent of new waste trucks purchased in 2013
were powered by compressed natural gas. That was up
from 3 percent in 2008, according to Americas Commercial
Transportation Research. Texas is home to 69 active natural
gas fueling stations (both liquied and compressed gas) in at
least 40 cities, and more than $75 million in private investment
has been put toward 62 stations, according to tracking by
Pioneer Resources, a large oil and gas company that has been
gradually converting its eets to natural gas power.
It’s hard to tell how that number, which includes private
stations, compares with tallies in other states, because that
data is not publicly available. Of all 654 public stations across
the country, however, 42 are in Texas, according to the U.S.
Department of Energy. The vehicle’s growth in Texas is
thanks in part to the millions of dollars in grants the state
has doled out in recent years. That includes $3.9 million spent
on fueling stations in the “Triangle,” following passage of
legislation in 2011, and nearly $1.8 million for storage and
compression infrastructure in counties that struggle to meet
air regulations, made possible by legislation in 2013. “Texas is
certainly leading the way,” said Patric Rayburn, a spokesman
for Clean Energy Fuels, which owns more than 400 fueling
stations across the country. Those policies and others are a
“vote of condence,” he said.
But Rayburn and other observers say the trend’s far bigger
drivers amount to simple economics. The nations surge in
natural gas production has made the fuel far cheaper — as
much as $1.50 less per gallon, in some cases — than gasoline
and diesel, while natural gas engine technology is rapidly
improving, boosting mileage between ll ups and driving
down the vehicles’ upfront costs.
“That helps,” Rayburn said of the incentives, “but it is
happening regardless.
The trend is unfolding across the country.
For instance, some 60 percent of new waste
trucks purchased in 2013 were powered by
compressed natural gas. That was up from 3
percent in 2008... Texas is home to 69 active
natural gas fueling stations... in at least 40
cities, and more than $75 million in private
investment has been put toward 62 stations.
Oilman Magazine — Your Voice In Energy JANUARY / FEBRUARY 2014
22
AMPOL Strives to Keep
Industry Safe
AMPOL is on the move offering industrial and environmental
services to a global market. AMPOL rst made its name providing
spill response services and has grown over the years into a diversied,
full-service industrial and environmental services provider covering
the Gulf coast region with additional South American operations in
Peru and Colombia.
For decades, the energy sector has put its resources front and center
to develop cleaner and more efcient methods of operational
remediation. Current directives have forged collaborative efforts on
the part of the oil and gas industry with external public and private
agencies to remedy critical environmental concerns.
American Pollution Control Corp., better known as AMPOL, had
its beginnings in the early ‘90’s managing oil spill clean up and
remediation to the Gulf of Mexico. “In 1993, American Oileld
Divers hired me to start a new division called American Pollution
Control,” said Kirk Headley, President and CEO of AMPOL, “and,
in 1994 I had an opportunity to purchase the company.”
Although, the rst image that comes to mind when thinking of an
oil pollution problem is a spill, AMPOL’s services cover a far wider
range of capability. The company routinely manages hazardous
and biological waste materials through the cleanup, packaging and
manifesting to the nal disposition of waste materials. AMPOL
additionally offers industrial tank and vessel cleaning, hydro-blasting,
vacuum services, scaffolding, insulation, coatings, abatement,
N.O.R.M. cleaning facility and remediation. “We’ve grown in assets,
and the Deepwater Horizon incident has helped us to do that,
Headley said. “It was a great project for us. We’ve always been a
sound company, but it improved our ability to grow like we wanted to
grow, getting a lot of great people, assets and new technology. We’ve
been able to really plan ahead and set our company apart from any of
our competition.
Toward that end, AMPOL has continued since 1994 to invested
its prots in its people and equipment. Aside from building up a
full-time staff of 250 employees, the company has added the latest
technology in industrial and emergency response equipment.
“Let’s go back in history a little bit, to 1988,” Headley said. “Prior
to OPA 90, it was common practice to use employees with minimal
or no training on spills.” Headley says his goal is to change the old
school model attached to that perception. “One thing that AMPOL
has done is try to bring a sense of professionalism to our industry,”
Headley explained. “All AMPOL employees are full-time employees
with benets and 401Ks.
“We’ve grown in assets, and the Deepwater
Horizon incident has helped us to do that... It was
a great project for us.”
// Environmental & Safety
OILMANMAGAZINE.COM
23
They are given proper physicals with DOT drug testing. AMPOLs
goal is to upgrade the industry standard.” The company has also
positioned itself to stand up an internationally recognized “spill
response school” in conjunction with UL-Lafayette and its Marine
Survival Training Center and The Response Group (TRG), which
provides emergency response preparedness consulting. The purpose
of the school is to highlight oil spill response strategies and methods
as part of training courses offered through UL Lafayette’s Continuing
Education Program. The four-day training courses will begin in
mid December, said Jim Gunter, Director of UL Lafayette’s Marine
Survival Training Center. “This is something that’s greatly needed in
this region,” said Gunter, citing the potential for spills given the area’s
heavy oil and gas production.
Representatives of oil companies, spill response teams, governmental
agencies and anyone interested in spill response can attend the
school. Instructors for the training courses will be provided by
AMPOL and TRG, using the two companies’ wealth of institutional
knowledge to make the industry more responsive to environmental
incidents. One example of the talent and experience AMPOL has
been able to recruit is personied in the company’s new Director of
Response, Jeff Dalessandro. Like Headley, Dalessandro comes from
a diving background, a graduate of the U.S. Navy’s Deep Sea Dive
School. During his 25 years in emergency response, Dalessandro has
worked many incidents of national signicance. Dalessandro also
brings years of experience as a Coast Guard case ofcer to AMPOLs
repertoire. He coordinated federal responses to environmental
emergencies, including working as a senior technical expert on many
recent nationally signicant spills. “We have assembled a tremendous
staff with synergy skill sets across our service line offerings, said Al
Baker, AMPOL’s General Manager. “We believe our personnel are
some of the best-trained groups of employees in the Gulf South.
They know what to do, both safely and efciently,” Baker said of his
staff. “They are among the best in the industry. For the rst month
they are with the company, AMPOL’s workers are in training for 160
hours. After that, they remain on a mentoring program for their rst
year.”
“We work as a team, focused on safe practices and quality service,
Baker continued. “We expect excellence and quality performance
throughout all phases of a project. AMPOL maintains one of the
largest privately owned inventory of emergency response equipment
in the south.
In addition to the service side of the house, AMPOL also owns
OilStop, a global manufacturer of oil spill response and pollution
control products, from containment boom and skimmers to ood
control barriers and decontamination pools. This is not the only
advantage AMPOLs wide-ranging equipment inventory offers. “We
are one of a few response companies that own its own offshore
vessel assets,” Headley explained. “That combination of talent and
equipment allows AMPOL to offer a turnkey, one-stop solution for
just about any type of industrial, environmental or regulatory issues
its clients may have. The company is focused on all service offerings;
industrial cleaning, tank and vessel cleaning, vacuum truck services,
hydro-blasting, scaffolding, insulation, coatings, abatement and our
N.O.R.M. cleaning facility and remediation capabilities, both offshore
and on-shore.
“For me, this is my dream job,” Headley said. “It’s not your typical
9 to 5. In the energy industry, it’s 24-7. A lot of people who want to
get into this don’t understand that, but when AMPOL gets the call,
we respond.
“One thing that AMPOL has done is try to bring
a sense of professionalism to our industry... All
AMPOL employees are full-time employees with
benets and 401K’s.”
This is not the only advantage AMPOLs wide-
ranging equipment inventory offers. “We are one of
the few response companies that own its own offshore
vessel assets.”
Oilman Magazine — Your Voice In Energy JANUARY / FEBRUARY 2014
24
OSHA Forms Alliance to Protect Oil and
Gas Workers
SOURCE: safety.blr.com
// Environmental & Safety
In Dallas, OSHA has formed a region-wide alliance with the
Association of Energy Service Companies (AESC) aimed
at protecting workers in the oil and gas well industry. The
goal, according to OSHA, is to promote understanding of
workplace safety and health and the rights and responsibilities
of workers and employers by increasing access to material
and knowledge. The AESC’s members include professionals
in the oil and gas industry including eld crews, engineers,
manufacturers, and oil and gas producers and operators.
Under the current initiative, the AESC plans to work closely
with its member companies and OSHA to develop workplace
health and safety goals for the oil and gas industry and provide
training and outreach materials aimed at helping employers
meet these goals. Eric Harbin, OSHAs deputy regional
administrator in Dallas, commented, “OSHAs relationship
with AESC will power new ideas and best practices to help
make this industry as safe and healthful as possible.
The oil and gas industries involve many serious hazards, and
workers in these elds experience a higher rate of work-
related injuries and illnesses than the national average. In the
most recent results from Bureau of Labor Statistics (BLS),
despite a drop in the overall rate of workplace fatalities in the
United States, fatalities in the oil and gas industry rose by 23%
from 2011 to 2012. In addition to the Dallas-area alliance,
OSHA has planned a voluntary oil and gas industry safety
stand-down. If you’re responsible for the safety of oil and gas
workers, the following are some key hazards to be aware of:
Vehicle collisions. Although transportation incidents are the
overall top cause of work-related fatalities in the United States,
oil and gas workers are particularly vulnerable because oil
and gas wells are often located in remote locations and long-
distance travel is often necessary to reach the sites. Highway
vehicle crashes are the leading cause of oil and gas extraction
worker fatalities, accounting for nearly 4 in 10 fatalities in the
industry.
Struck-by, caught-in, and caught-between incidents.
Moving vehicles and equipment, falling equipment, and
high-pressure lines can put workers at risk of being struck by,
caught in, or caught between pieces of machinery or other
elements of the worksite. In fact, 3 out of every 5 on-site
fatalities in the oil and gas industry are due to these incidents.
Under the current initiative, the
AESC plans to work closely with its
member companies and OSHA to
develop workplace health and safety
goals for the oil and gas industry and
provide training and outreach materials
aimed at helping employees meet these
goals.
Also on OilmanMagazine.com Developments in Hot Tapping Technology..... Texas Oil And Gas Numbers Fly Off The Charts..... Midland, TX Is Now The Richest Metropolitan Area In The U.S......
OILMANMAGAZINE.COM
25
To protect against these hazards, make sure employees are
wearing appropriate personal protective equipment (PPE),
follow lockout/tagout procedures, use machine guards where
appropriate, and use signage throughout the worksite to keep
employees out of danger zones where these injuries are likely.
Explosions and res. Flammable vapors and gases can ignite
and cause re or explosion. To prevent this, make sure all
ammable liquids and gases are stored and handled properly
and keep any potential ignition sources (such as static,
electrical energy, open ames, cigarettes, cutting and welding
tools, and hot surfaces) away from ammable vapors and
combustible materials. Make sure re extinguishing equipment
is immediately available and that one or more employees are
trained on its use.
Falls. If workers must work on surfaces elevated more than 4
feet above the ground, make sure appropriate fall protection
measures are taken. This includes guardrails, hole covers,
personal fall arrest systems, and safety nets, as appropriate to
the specic conditions. Other fall hazards can include uneven
surfaces, open pits, stairs, oor holes, and equipment or
materials on the ground.
Conned spaces. If workers are required to enter storage
tanks, mud pits, excavated areas, or other similar areas, make
sure OSHAs conned space procedures are followed. This
includes training for employees authorized to enter permit-
required conned spaces; testing of atmospheric conditions
inside conned spaces; use of fall protection, rescue, air
monitoring, lighting, ventilation, and communication
equipment as necessary; and contact with a trained outside
attendant during entry operations.
If workers are required to enter storage
tanks, mud pits, excavated areas, or
other similar areas, make sure OSHAs
conned space procedures are followed.
This includes training for employees
authorized to enter permit-required
conned spaces.
Also on OilmanMagazine.com Developments in Hot Tapping Technology..... Texas Oil And Gas Numbers Fly Off The Charts..... Midland, TX Is Now The Richest Metropolitan Area In The U.S......
Oilman Magazine — Your Voice In Energy JANUARY / FEBRUARY 2014
26
// Environmental & Safety
OMI Environmental Solutions (OMIES) is growing to
meet the needs of its customers. In September, Joe Christiana,
Vice President; Shaw Thompson, CEO and President; and
Kyle Prest, CFO, broke ground in Belle Chasse, Louisiana for
their new corporate headquarters. Additionally, this summer
OMIES opened three new ofces in Louisiana in Shreveport,
Gonzales and Galliano.
According to Mr. Thompson, “OMI Environmental Solutions
is pleased to be expanding our reach to service the northern
Louisiana area as well as the industrial/ chemical corridor
near Baton Rouge and Port Fourchon area. From these
three ofces, OMIES will be offering its full complement
of environmental services and products to all types of
business including oil and gas, chemical, pipeline, railroads,
manufacturing and reneries to name just a few.
In Shreveport, Mr. Christiana named Robby Tarver as the
Business Development representative that is spearheading the
opening of the new facility. Mr. Tarver has over 25 years of
experience and has signicant knowledge in the railroad and
transportation industries as well as disaster recovery. Mr.
Christiana reports, “Additional staff is now being hired
including drivers to support the new diversied eet of
trucks and equipment being brought in to support this area.”
OMIES’ truck and equipment operators are highly trained
professionals. They undergo extensive training in DOT
regulations, USCG regulations, and they are all fully licensed to
transport hazardous materials.
In Gonzales, Daryl Rice has expanded his responsibilities
as Port Allen Facility Manager to also include the Gonzales
facility. Mr. Rice has decades of experience in the
environmental service business including remediation, oil
spill and haz-mat. This new location positions OMIES for
better access to chemical and industrial plants, tanker truck
terminals and railroads in the area.
In Galliano, Ronald Johnson, Houma Facility Manager, has
expanded his responsibilities to include the new Galliano
facility. This ofce gives OMIES better access to Port
Fourchon and was opened to meet increased customer
demand in that area.
OMI Environmental Solutions currently has ofces in cities
across Louisiana and Texas, but can respond with teams
anywhere to provide solutions regardless of where or when
the next challenge arises.
OMI Environmental Solutions (formerly Oil Mop, LLC) has
a world-renowned reputation and is one of the oldest oil spill
response companies with over 40 years in business. OMIES
has assisted with the cleanup of some of the largest oil spills
and disasters in our nations history. OMIES can respond with
solutions for any type of spill or hazmat response situation,
industrial service, standby rescue, waste management and
disposal service, transportation service, safety, compliance,
training service, and offers environmental, industrial and safety
products both nationally and internationally.
LAO 11/13
For more than 40 years, OMI Environmental
Solutions (OMIES) has been a leading
manufacturer of oil recovery equipment.
OMIES’ skimmers have become a large
part of many industries – from the oil field
to food processing – and can be found in
diverse industries worldwide.
We’ve EXPANDED our focus to meet our
customers’ needs and OMIES now has
one of the largest distribution warehouses
(50,000 square feet) in the Gulf Coast area
with products YOU need!
OMIES Enviro-Industrial & Safety Products
currently represents hundreds of
manufacturers and sells a wide variety of
items such as:
OUR COMMITMENT IS TO ENSURE OUR CUSTOMERS’ NEEDS ARE MET WITH QUALITY PRODUCTS AND
OUTSTANDING SERVICE AT AN AFFORDABLE PRICE. CUSTOMER SERVICE IS OUR MAIN FOCUS.
WE STRIVE TO HAVE EFFICIENT SOLUTIONS FOR PRODUCTS OUR CUSTOMERS NEED, WHEN THEY NEED THEM.
Industrial
Safety
Environmental
WWW.OMIESP.COM 1-800-645-6671 ORDERS@OMIES.COM
AbrAsives
Absorbents/spill Kits
ContAinment boom
Custom mAnufACturing
Cutting tools
Drums
fire extinguishers
first AiD proDuCts
lighting/eleCtriCAl
mro/plAnt mAintenAnCe proDuCts
oil reCovery equipment/sKimmers
personAl proteCtion proDuCts (ppe)
sAfety proDuCts
seConDAry ContAinment equipment
signs/tAgs
storAge equipment
tools AnD hArDwAre
welDing proDuCts
OILMANMAGAZINE.COM
27
level paid by manufacturers in New Jersey, one-third
of the cost faced by European manufacturers and a
fourth of what Asian factories pay. That’s steering
more manufacturing to Texas. Four international
steel rms have announced $3.3 billion in new plants
— two outside Corpus Christi, one in Bay City and
one in Bryan.
LAO 11/13
For more than 40 years, OMI Environmental
Solutions (OMIES) has been a leading
manufacturer of oil recovery equipment.
OMIES’ skimmers have become a large
part of many industries – from the oil field
to food processing – and can be found in
diverse industries worldwide.
We’ve EXPANDED our focus to meet our
customers’ needs and OMIES now has
one of the largest distribution warehouses
(50,000 square feet) in the Gulf Coast area
with products YOU need!
OMIES Enviro-Industrial & Safety Products
currently represents hundreds of
manufacturers and sells a wide variety of
items such as:
OUR COMMITMENT IS TO ENSURE OUR CUSTOMERS’ NEEDS ARE MET WITH QUALITY PRODUCTS AND
OUTSTANDING SERVICE AT AN AFFORDABLE PRICE. CUSTOMER SERVICE IS OUR MAIN FOCUS.
WE STRIVE TO HAVE EFFICIENT SOLUTIONS FOR PRODUCTS OUR CUSTOMERS NEED, WHEN THEY NEED THEM.
Industrial
Safety
Environmental
WWW.OMIESP.COM 1-800-645-6671 ORDERS@OMIES.COM
AbrAsives
Absorbents/spill Kits
ContAinment boom
Custom mAnufACturing
Cutting tools
Drums
fire extinguishers
first AiD proDuCts
lighting/eleCtriCAl
mro/plAnt mAintenAnCe proDuCts
oil reCovery equipment/sKimmers
personAl proteCtion proDuCts (ppe)
sAfety proDuCts
seConDAry ContAinment equipment
signs/tAgs
storAge equipment
tools AnD hArDwAre
welDing proDuCts
Oilman Magazine — Your Voice In Energy JANUARY / FEBRUARY 2014
28
// Oil Briefs
Drilling rig in Gulf of Mexico
no longer on re; no oil
spotted in water
From the Associated Press - A drilling rig that
caught re after a natural gas blowout in the
Gulf of Mexico appears stable now that the re
is out, and there was no sign of any oil sheen
on a y-over Thursday morning, a rig company
executive said. “The well essentially snuffed
itself out,” said Jim Noe, a vice president
with the rig owner Hercules Offshore Inc.,
speaking in a telephone interview. Earlier
Thursday, federal authorities overseeing the
rig re had said it was nearly out. The well had
blown wild Tuesday, forcing the evacuation of
44 workers. The rig caught re Tuesday night
and part of it collapsed. The federal Bureau
of Safety and Environmental Enforcement
announced Thursday morning that the well
had clogged with sand and sediment, a
process called “bridging over” that Noe said
can commonly happen with shallow water
wells. Now, ofcials are focusing efforts on
permanently plugging the well and nding
out why it blew wild. There were no injuries
when the blowout occurred about 55 miles
off the Louisiana coast at a well operated by
Walter Oil & Gas. When the re was raging,
ofcials said they were preparing to drill a
relief well nearby to divert the gas and end
the blowout and re. Such a step is probably
not necessary now that the re is out and the
well has bridged over, said Adam Bourgoyne,
an industry consultant and a former dean
of Louisiana State University’s petroleum
engineering department. He said nding
some way to seal or cap the well permanently
will be much easier now. Well control experts
should now be able to get close to the rig
and examine it. “You never know anything
for certain but usually if it bridges it doesn’t
re-start,” Bourgoyne said. The rig is in 154
feet of water, relatively shallow in terms of
offshore drilling. The Hercules 265 was built
in 1982. It was certied by the American
Bureau of Shipping until September 2017
and by the Coast Guard through July 4, 2017,
according to federal records. It also had a
blowout preventer control system approved
in November of 2010. In May, Hercules told
its investors that Walter Oil & Gas was paying
between $101,000 and $103,000 a day to
rent the Hercules 265 for a 60-day period
that was supposed to end July 25. After that
Arena Energy was supposed to rent the rig
for 90 days, paying $102,000 to $104,000
a day. Why the blowout prevention system
did not prevent the blowout is part of the
investigation. Neither Noe nor anyone else
connected with the investigation would
say anything about the probe so far. “Our
efforts will now turn to, rst, conrming
the conditions at the well site, and then to
assisting in Walter’s effort to permanently
secure and seal the well. We will then focus
on a precise analysis of the facts that led to
this incident,” Noe said. The rig is called a
“jackup rig” because it has four legs extending
to the ocean oor to hold it up. Parts of the rig
had collapsed as it burned Wednesday, but
the structure remained intact. Experts had
said the environmental effect of the blowout
was expected to be limited, even before the
well was blocked and all 44 workers were
safely evacuated. Because the well involved
is a natural gas well, not an oil well, experts
said the pollution threats were far less than
those posed by some previous accidents.
Federal inspectors said a light sheen was
spotted around the rig Wednesday evening.
But like one spotted shortly after the blowout
began Tuesday, the sheen quickly dissipated.
Ofcials and scientists agree the latest
accident should not be nearly as damaging
as the BP oil spill, also in the Gulf of Mexico,
that sent crude oil oozing ashore in 2010.
Tuesday’s blowout occurred at a drilling rig
next to a natural gas platform that wasn’t
producing gas at the time. The rig was
completing a “sidetrack well,” which drills into
the same well hole under the platform. Such
wells are used to access a different part of
the gas reserve.
Oil Traders Misread Tweet,
Spike In Oil Prices Follow
From CarConnection.com - Look before you
leap, our grandmothers used to say. That
calm, orderly, sage advice could’ve come
in handy yesterday, when traders panicked
about the price of oil after misreading a tweet.
Yes, a tweet. The tweet in question came from
the Israeli Defense Forces:
Oct. 10 #YomKippur73: Israel Air Force
bombards airports in Syria to prevent Soviet
weapons reaching the Syrian Army http://t.
co/tKnMzYjgFF
— IDF (@IDFSpokesperson) October 10, 2013
At rst glance, that might seem alarming.
After all, Syria has been engaged in a bloody
civil war for two and a half years, which has
escalated tensions with Israel. And Russia
has been a key supporter of Syria’s Al-
Assad regime. Bottom line: the possibility of
a Syrian/Israeli war looms large. That said,
knee-jerk traders should’ve been tipped off
by at least two things: 1. Yom Kippur was
weeks ago. 2. The Soviet Union is ancient
history. Combine those two, and it becomes
pretty clear that the IDF’s tweet is intended
to commemorate something that happened
in the past. In this case, that something is the
Yom Kippur war, which took place in 1973.
(Thus, the hashtag.) Unfortunately, in the fast-
paced world of investing, cooler heads didn’t
prevail. Investors saw the tweet and rumors
quickly began to spread that the Syrian/
Israeli conict had nally bubbled over.
Traders assumed that oil production would be
compromised, which pushed the price of oil
higher. Within an hour, it had jumped more
than $1, from $110.40 to $111.50.
What’s interesting is that, even after investors
realized their mistake, oil prices remained
high. According to Reuters, Although
traders quickly realized the historical nature
of the Tweet, oil prices maintained their
gains, supported in large part by hopes of
a breakthrough in U.S. debt discussions
and earlier anxiety over political stability in
Libya.” Looks like traders got tweet-drunk
and wanted any excuse to keep the party
going. Within three hours of the IDF’s tweet,
oil prices hit $111.74 per barrel -- the highest
price seen in a month. Yesterday wasn’t the
rst time something like this has happened.
And you can bet a sizable chunk of change
that it’s going to happen again. This is why we
can’t have nice things.
Electric Car Rentals Stalled
In U.S. by Range Anxiety
From Reed Landberg, Bloomberg - Rental
car drivers just aren’t plugging into electric
vehicles, largely because of fears the batteries
will die. In fact, people who drive off in electric
vehicles from Enterprise Holdings Inc., the
biggest U.S. auto renter, often bring them
back to trade for a car that runs on gasoline.
“People are very keen to try it, but they will
switch out of the contract part way through,”
Lee Broughton, head of sustainability at
Enterprise, said in an interview. “Range
anxiety makes them think they can’t get to a
charging station.”
Limited range is holding up demand for
electric vehicles nationwide, both in rentals
and sales. About 140,000 plug-in EVs are
on U.S. roads, short of President Barack
Obama’s goal for 1 million of the cars by 2015,
data from the Electric Drive Transportation
Association shows.
That may slow efforts to cut pollution from
transport, which is responsible for a third of
U.S. carbon-dioxide emissions. At Enterprise,
customers rent the electric cars for about
1.6 days on average, compared to six days
to seven days for conventional vehicles. Slow
demand is the main reason the St. Louis-
based company has 300 electric cars in
its eet, 40 percent below a target it set in
2010 when it ordered 500 of Nissan Motor
Co.’s plug-in electric Leafs, Broughton said.
Hertz Global Holdings Inc. (HTZ) said in 2010
OILMANMAGAZINE.COM
29
blend over 10%. When the ethanol requirements
continued to rise while demand for end product
fell, the reners were reduced to buying and
selling RINs or Renewable Identication
Numbers, which are, in effect, credits that allow
reners to meet the terms of the 2005 Clean Air
Act without producing fuel that is unsuitable for
most cars. So as demand for gas falls, reners
need to buy more RINs. From just pennies-per-
gallon in January, RINs had soared over $1.40
by last summer. Lutz says as much as 75% of
the additional cost was passed along to the
consumer. Therefore, in an attempt to force
cleaner burning fuels into the marketplace, the
EPA created a policy that ended up articially
inating the cost of rening gas when demand
fell. So the reners and consumers got gouged
for not burning enough fossil fuels. Only the
government could make renery companies look
sympathetic. Here’s the good part: Lutz sees
the price of RINs falling, a sign that the EPA is
nally getting around to modifying their absurd
policy. Once RINs are out of the equation, Lutz
says the price per gallon is going to fall lower.
“I’m not going to be stunned if we see gas prices
going below $3 by the end of the year,” Lutz says.
“That’s going to be a heck of a tailwind going into
the holiday shopping season.”
Gulf Coast Gasoline Rises
to 6-Week High on Seasonal
Work
From Bloomberg, Christine Harvey - Spot
gasoline on the U.S. Gulf Coast strengthened to
a six-week high as reners carried out seasonal
maintenance, lowering production in the region.
Conventional, 87-octane gasoline climbed 2.5
cents to 8.25 cents a gallon below futures on
the New York Mercantile Exchange at 3:45
p.m., the strongest since Sept. 3, according
to data compiled by Bloomberg. Conventional
CBOB gasoline gained 2.25 cents to 9 cents
below futures. Differentials narrowed as reners
including Marathon Petroleum Corp. (MPC)’s
Garyville, Louisiana, site and Delek US Holdings
Inc. (DK)’s Tyler, Texas, plant planned to shut
units for work this month. Valero Energy Corp.
(VLO)’s Port Arthur renery, also in Texas, is
operating at reduced rates during repairs at
a wet-gas compressor, a person familiar with
operations said. Reneries in the area, known
as PADD 3, processed almost 8 million barrels
a day of crude oil and other feedstocks in the
week ended Oct. 4, the lowest level since April
26, according to U.S.
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