TX Oilman Magazine Sept/Oct 2013 : simplebooklet.com

Column Machine Tech Services and Wellhead Recovery Systems We can turnaround your production tool problems Quick Machine Tech is an independent manufacturer and fabricator with decades of experience on oilfield production tools and equipment Machine Tech has extensive knowledge of wellhead equipment with a wide range of Loc Screw assemblies on hand A Study About A Study By Dan Briggs The U S Department of Energy DOE has a history like any federal bureaucratic agency to produce many studies Some of these studies are productive and some of them like a more recent study about hydraulic fracturing are a bit more repetitive DOE s latest study regarding the impacts of hydraulic fracturing and its potential effects on the water table seems to be a study to ensure former studies were accurate In January of 2011 DOE set up a committee to examine the effects of fracturing and possible contamination of water Outcome No contamination found These findings were not satisfactory for the opposition and the environmental groups So in 2012 the Obama administration committed 45 million to the study of hydraulic fracturing and you guessed it its effects on the water table For the better part of a year now DOE s National Energy Technology Laboratory NETL has been studying a particular fracturing site in Pennsylvania near Pittsburg The operator of the site allowed the NETL to place tracers in the fracturing fluid to observe if and how the fluids spread As a reminder the drilling at this site was taking place at a depth of more than 8 000 feet 5 280 feet mile The chemical laced fluids mixed with sand and water mysteriously did not flow against gravity over a mile back up to the water table Nor did these hotly debated fluids leak from layer after layer of casing and cement as the fluids were being injected down into the well The final outcome of the 2013 federally funded DOE study on hydraulic fracturing and its potential effect on the 6 water table Zero contamination was found in the water table and aquifers nearby the study However environmental groups are calling for additional studies as they claim this study was not accurate in its findings As a brief refresher on hydraulic fracturing it is not a new technology The technologies surrounding the process are simply advancing with each year The first commercial fracturing job was completed in 1949 By 1989 over one million wells had been completed in the United States using the hydraulic fracturing technology Today over 90 of U S wells are drilled with the use of hydraulic fracturing Concerning the history of regulation of hydraulic fracturing the Environmental Protection Agency EPA does not regulate the process However in 1997 the Safe Drinking Water Act was put into place regulating underground injections By 2004 the EPA reported that the risk was minimal of hydraulic fracturing contaminating drinking water In 2005 to address further regulatory concerns the Energy Policy Act of 2005 was established and thus revised the Safe Drinking Water Act to exclude the injection of fluids and propping agents except for diesel used for hydraulic fracturing Therefore the EPA continues to lack any authority in the regulation of fracturing Currently all regulations for hydraulic fracturing are monitored and policed by the individual states The industry will continue to work hard to ensure that this state regulation as opposed to federal regulation does not change Machine Tech can design and manufacture specialty tool items to your specifications At Machine Tech Services we treat all jobs alike large or small Our customers are our top priority www machinetechservices com www wellheadrecovery com 337 837 2314 API SPEC 7 1 7 1 0485 TEXAS Oilman Magazine september october 2013 Wellhead Recovery Systems is the home of the Mud Bug an efficient and safe mud bucket featuring 100 aluminum construction and push button operation to safely unlatch on demand API SPEC Q1 Q1 1966 ISO 9001 2008 2076 ISO TS 29001 TS 1848

Page 7

Page 8

Page 9

Page 10

Column 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 firms have announced 3 3 billion in new plants two outside Corpus Christi one in Bay City and one in Bryan But of course cities like Corpus Christi Bay City and Bryan are places whose leaders clearly recognize that one of the best ways to benefit from an amazing industrial boom is to actually participate in it and contribute something other than print space to it Go figure Oil Tanker entering the Houston Ship channel Shale Oil Natural Gas Reap Major Rewards For Localities The other piece of great economic news created by the US shale boom is that exports of tangible goods led by huge volumes of refined petroleum products have shrunk the 2nd quarter 2013 trade deficit to 2 7 of GDP down from a 2005 peak of almost 6 of GDP From January through June of this year the US has averaged exporting 97 8 million barrels of crude and refined products to international markets a dramatic increase from less than 50 million barrels per month as recently as 2007 thanks the discovery and ability to produce the massive new volumes of oil and condensate in shale plays around the country Without that final piece of good news and the subsequent discovery of other massive new oil and gas shale plays around the country October 2008 may well have turned out to have become the kickoff month of a second Great Depression Because the numbers clearly show that the oil and natural gas industry thanks to the much vilified Fracking technique that has enabled the unlocking of this vast new resource has been the main positive driver of the US economy for half a decade now The happy result of this rapid increase in the export of petroleum products and other tangible goods was that the Commerce Department was able to raise its 2nd quarter 2013 GDP growth estimate to 2 5 up from the prior estimate of 1 7 While still not a healthy enough rate of growth five full years after the advent of the Great Recession in 2008 these facts inevitably lead to an understanding of just what a blessing the Shale Revolution has been for this nation s economy States like New York and Vermont and cities like Dallas and other localities around the country have fallen for the misinformation filled siren song of the anti fracking movement and made conscious decisions not to be active participants in the greatest economic story of our time That s their decision and their economic loss It s up to the rest of the country to carry the load and reap the rewards in their absence SOURCE David Blackmon Forbes Contributor Forbes com sites davidblackmon The big news this week comes in the form of a new study conducted by IHS IHS 0 7 documenting the huge positive impact that shale oil and natural gas and Fracking which makes the recovery of the resource possible have had on the US economy and will continue to have into the future Here are the major findings of the study as reported in USA Today Newly found sources of domestic oil and natural gas are having an even bigger impact on the economy than first projected adding more than 1 200 last year to the discretionary income of the average U S family a new study says The explosion in domestic energy production now supports 1 2 million jobs directly or indirectly says consulting firm IHS in a study released Wednesday That number will grow to 3 3 million by 2020 and new energy s contribution to U S families disposable incomes will hit 2 000 per household per year by 2015 said IHS 10 Ironically the results of the study were picked up by the Dallas Morning News which just last week had praised the Dallas City Council for adopting a drilling ordinance that effectively prevents drilling for oil and natural gas inside its city limits Thus the city of Dallas which receives about half of its electricity from power generated by gas fired power plants will enjoy the fruits of this boom while contributing nothing to it In latching onto that free ride Dallas joins places like New York and Vermont as provinces where leaders apparently think that electricity is created when you flip a switch and gasoline stations just happen to be located over underground pockets of naturally occurring reservoirs containing various octanes and blends of gasolines The Morning News story goes on to detail some of the extended benefits that the Shale oil and gas boom is bringing to parts of Texas outside the Dallas city limits IHS three volume study has found the clearest economic gains in Texas with 576 000 jobs added because of the oil and gas boom by the end of last year Industrial natural gas costs in Texas are half the level TEXAS Oilman Magazine september october 2013 texasoilmanmagazine com 11

Page 11

Page 12

Column Oil prices boost Texas Petro Index SOURCE BY VICKI VAUGHAN San Antonio Express News The state s oil and gas boom roared ahead in July boosting an industry index to record levels The Texas Petro Index rose to 287 7 for the month beating the previous all time high of 287 6 in September and October 2008 according to economist Karr Ingham who created the index for the Texas Alliance of Energy Producers Ingham began the index in January 1995 with a base number of 100 The index measures growth in key aspects of the energy industry including crude oil and natural gas prices rig counts drilling permits oil and gas production rates and employment The monthly crude oil price rose by more than 9 per barrel in July to average more than 100 per barrel for the first time since March 2012 Ingham said The number of original drilling permits issued rose by more than 18 percent in July compared with the same month a year earlier while oil and gas industry employment rose by more than 6 percent he said Ingham attributed the higher oil prices in part to political instability and social unrest in the Middle East But he said that as U S producers continue to ramp up domestic oil production and reserves dependence on foreign oil is being dramatically reduced SOME KEY NUMBERS CRUNCHED IN THE INDEX Crude oil production in Texas totaled an estimated 67 7 million barrels a 14 1 percent increase over July 2012 Oil wellhead prices averaged 101 27 a barrel about 20 percent more than the year earlier month The state s estimated natural gas output was almost 634 4 billion cubic feet a 6 3 percent year over year monthly decline but prices averaged 3 63 per thousand cubic feet almost 34 percent higher than in July 2012 The Baker Hughes count of active drilling rigs in Texas averaged 841 down from the 910 operating in July 2012 Texans on oil and gas payrolls reached a record 280 500 according to statistical methods using Texas Workforce Commission data Ingham said the index rose from 2002 to 2008 buoyed by rising oil and gas prices rig count and employment Prices peaked in 2008 and then went almost straight down and bottomed out all the way through 2009 It was a sharp contraction in Texas then we were off again What has been the most fascinating aspect for me he said is that at the start of the recovery even though crude oil prices were high it was a natural gas expansion Eighty percent or more of the rigs in Texas were drilling for natural gas Now he said it s an oil driven expansion Nobody thought in 2008 that we would actually begin to increase crude oil production in Texas or nationally 12 TEXAS Oilman Magazine september october 2013 texasoilmanmagazine com 13

Page 13

Page 14

Feature Gulf activity growing through transition Future is bright for Louisiana Texas drillers even as the industry adapts to new technologies Back in July of 2010 the immediate future looked anywhere from bleak to uncertain for Gulf Coast drilling The post Macondo moratorium was solidly in place with no clear end date in site Industry leaders rallied pulling out all the stops to fix the gushing and some industry voices are claiming our current energy stability has occurred in spite of governmental policy not because of it However it is undeniable despite a formidable new regulatory obstacle course continuing attacks from environmentalists and ongoing political challenges the Gulf Coast oil and gas industry is still leading the way toward energy independence for the United States A deep water semi submersible rig operating in the Thunder Horse field 150 miles southeast of New Orleans La Photo by Andy Cooper flow of subsea crude to get the offshore drilling industry back into operation and to push the federal government to begin permitting new offshore exploration Three years later the portents of doom and gloom are lost in a flood of glowing reports for the oil and gas industry s future In fact new drilling technologies have pushed the total of known reserves to its second largest annual jump in exploration history There are still challenges though Despite the number of new wells and opportunities created there still exists an underlying frustration 14 Mexico federal offshore Texas led by a considerable margin with discoveries of 1 7 billion barrels mostly in the Eagle Ford area while North Dakota added 695 million barrels marking that state s third consecutive year as a major source of total discoveries Total oil discoveries in the Gulf of Mexico Federal Offshore added 441 million barrels in 2011 an increase of 90 percent over the 232 million A NEW ENERGY BOOM In its annual report on known oil and gas reserves the U S Energy Information Administration shows the known reserves of crude oil and lease condensate rose 15 percent during the year ending on Dec 31 2011 the last year for available data This raises the known crude reserve from 25 2 billion barrels to 29 million This annual jump is the second record increase in a row for the crude reserve leaving the nation with its largest reserve since 1985 Texas and Pennsylvania represent 73 percent of the new oil reserves But this is also only half of the picture On the natural gas side known reserves during the same period rose almost 10 percent from 317 6 trillion cubic feet to 348 8 trillion cubic feet Despite the misconception that all growth in the energy sector is coming from tight oil and shale play the report shows that only 38 percent of the known gas reserves are in shale plays The common denominator behind the growth both in oil and gas is technology Adam Sieminski administrator for the EIA said Horizontal drilling and hydraulic fracturing in shale and other tight rock formations continued to increase oil and natural gas reserves According to the EIA report total oil discoveries in 2011 were sourced primarily from Texas North Dakota and the Gulf of TEXAS Oilman Magazine september october 2013 compressed natural gas vehicles into the mass consumer marketplace This could mark a paradigm change for the auto and petroleum industries if those vehicles reach mass acceptance Of course prices also affect the reserve which is likely to change as companies queue up to export liquefied natural gas primarily to the Far East Cheniere Energy received the regulatory go ahead to export last month as it moves to complete its first pair of liquefaction trains at its Sabine Pass facility in Lake Charles La Still some industry advocates are frustrated with the pace of the export permit approval process The Lake Charles permit is a welcome signal that Energy Secretary Ernest Moniz recognizes the importance of LNG exports to economic growth but there are still thousands of jobs and billions in investments waiting on the sidelines for federal approval said Eric Milito the American Petroleum Institute s director of upstream and industry operations America is experiencing an energy revolution thanks to our abundant natural gas resources and LNG exports are critical to unlocking the benefits for U S workers and reducing the trade deficit During 2012 the 12 month first day of the month average spot natural gas price fell nearly 34 percent from the 2011 average to 2 75 per MMBtu Increases in domestic production largely from shale plays drove that drop along with a corresponding rise in inventories According to the EIA in the first half of 2012 the daily Henry Hub The law presumes that all exports are in the public interest and the DOE has every reason to expedite approvals LNG exports will grow the economy and help bring back millions of U S jobs in engineering manufacturing construction and facility operations A hydraulic fracturing rig working in Texas Barnett Shale play Photo by David R Tribble barrels of discoveries in 2010 The resumption and quickening pace of exploration and appraisal activities in the deepwater Gulf of Mexico following the lifting of the drilling moratorium was the main contributing factor to the increase in discoveries in that area NATURAL GAS GOES PRIME TIME The growth of the nation s natural gas reserve has not only driven down prices but it has also made the fuel a strong competitor for use in vehicles So far government motor pools and commercially operated vehicles have been the early adopters of compressed natural gas for fleet use but auto manufacturers are planning to push spot price dipped below 2 00 per MMBtu averaging just 1 95 per MMBtu in April A judicious expansion of the export marketplace could stabilize that price while large reserves keep it affordable enough for growth as a domestic fuel source at the consumer level Milito went on to say The frustration over the pace of permitting in general under the current administration is so slow that even politicians used to the daily gridlock in Washington are calling for a renewed drive to let the industry move forward I am still despite the work that the Interior Department is doing hearing complaints from the industry that they need green lights to drill said U S Sen Mary Landrieu D La during a recent Congressional hearing They can do it and they can do it safely They just need permits FOCUS ON THE ECONOMY texasoilmanmagazine com 15

Page 15

Page 16

Feature For Jack Gerard president and CEO of API the slowdown in permitting and the increase in federal regulation that continues in the wake of the BP spill is detrimental not only to the oil industry but by association the economy as a whole He is a strong proponent of the Empower States Act proposed by U S Sen John Hoeven R N D and cosponsored by Sen Mary Landrieu D LA Sen David Vitter R La Sen Heidi Heitkamp D N D and Sen Rob Portman R Ohio This act though specifically addresses the state s rights to develop and enforce fracking regulations highlights the frustration that the administration s slow response to permitting and regulatory issues within the oil and gas industry as a whole The bill also allows the states to regulate oil and gas development on Bureau of Land Management lands if the state has laws and regulations in place that protect health and the environment New shale discoveries or about 1 percent from the start of 2007 through the end of 2012 Over the same period the oil and natural gas industry number grew by more than 162 000 jobs a 40 percent increase Game changing innovations in hydraulic fracturing and horizontal drilling are creating hundreds of thousands of new jobs every year Gerard said For the first time in generations America s path to true energy security seems clear if we get our energy policy right today The EIA report and the Labor Department numbers also touch on the fact that most oilfield jobs whether directly tied to drilling and exploration or in the support industry have a secondary positive effect on the nation s economy Because employee expenditures are closely tied to their incomes higher paying jobs such as those in the oil and gas sector tend to have larger indirect effects on output and employment than lower paying ones the report said Gerard agrees and sees a direct tie between the administration s need to streamline its regulatory processes and the need to push the economy forward We need Congress and the administration to unlock additional opportunities by expanding access to domestic energy resources speeding up permitting and ending the broken ethanol mandate Gerard said By doing so we will create even more American jobs grow our economy protect consumers and take full advantage of our nation s vast energy resources A BRIGHTLY LIT FUTURE Shortly before it released its annual report on the nation s oil and gas reserves the EIA put out its annual look forward at global energy use for the next 27 years And although nuclear and renewable energy sources continue to grow by about 2 and a half percent a year petroleum products are what keeps the world s economy rolling A pumpjack churns away in West Texas Photo by D J Maschek and advanced technologies have fueled an energy revolution that is revitalizing job creation and promoting economic growth across the country Gerard said For over 60 years state agencies have established a track record of successful oversight over hydraulic fracturing promoting safe and responsible development of America s oil and natural gas resources The Empower States Act preserves the leading role of state regulators who have the experience and geological knowledge to accomplish their mission Although this can seem like an industry specific issue the huge impact of energy policy on the domestic economy as a whole makes it an important concern A recent PwC study shows that the petroleum industry added more than 600 000 to the nation s economic engine between 2009 and 2011 Another report released in August from the EIA puts that growth in context According to Bureau of Labor statistics numbers total U S private sector employment increased by more than one million jobs 16 According to the EIA that demand is not expected to decline The projection is that fossil fuels will still provide 80 percent of the world s energy needs in 2040 Natural gas is the fastest growing fossil fuel as global supplies of tight gas shale gas and coalbed methane increase The report stated The industrial sector continues to account for the largest share of delivered energy consumption and is projected to consume more than half of global delivered energy in 2040 So despite the cries of turmoil and gnashing of teeth over policy oil and gas are not going away anytime soon In fact a more cogent and efficient process for managing the nation s growing energy reserves would increase not only the value or our domestic energy production but will insure future generations the opportunity for economic growth The sooner our domestic policy ducks are all lined up in a row the better off our energy future will be TEXAS Oilman Magazine september october 2013 texasoilmanmagazine com 17

Page 17

Page 18

Profile AMPOL is on the move offering industrial and environmental services to a global market AMPOL first made its name providing spill response services and has grown over the years into a diversified full service industrial and environmental services provider covering the Gulf coast region with additional South American operations in Peru and Colombia OilStop a wholly owned subsidiary manufacturing containment systems sells its spill containment products globally industry Headley explained All our men are full time employees with benefits and 401Ks They are given proper physicals with DOT drug testing Some of our competitors have not left the old ways but AMPOL s goal is to upgrade the industry standard Dalessandro also brings years of experience as a Coast Guard case officer to AMPOL s repertoire He coordinated federal responses to environmental emergencies including working as a senior technical expert on the Deepwater Horizon spill 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 efficiently Baker said of his staff They are head and shoulders above any of our competition For the first 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 first year 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 Oilfield Divers hired me to start a new division called American Pollution Control said Kirk Headley president and CEO of AMPOL and in 1997 I had an opportunity to purchase the company Although the first 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 final 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 big project for us We ve always been a sound company but it enabled us 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 invested its profits 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 For decades the energy sector has put its resources front and center to develop cleaner and more efficient 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 18 Let s go back in history a little bit to 1988 Headley said Before the Exxon Valdez if you and I were a cleanup company and an oil company said We have an oil spill and we need 50 people you d empty out three bars three Popeye s and three Burger Kings and get out there and to clean it up 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 TEXAS Oilman Magazine september october 2013 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 significance 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 The company has also positioned itself to stand up a nationally 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 October 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 personified in the company s new director of 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 flood control barriers and decontamination pools This is not the only advantage AMPOL s wide ranging equipment inventory offers We are one of a few response companies that own its own deep water 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 you get the call you have to respond texasoilmanmagazine com 19

Page 19

Page 20

Profile New Hours of Service Regulations Don t Only Affect Trucking Companies THE NEW HOURS OF SERVICE REGULATIONS 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 While this has earned lots of attention from trucking companies many shippers are at best only slightly aware of these changes As these seemingly small changes impact the industry carriers and those that employ them must be prepared for these changes What impact would a call have telling you that the truck won t be there to pick up your load today because the driver came in hour later than expected two days ago Join us next week as we share some best practices for managing the new HOS regulations Rest Breaks While drivers can still work 14 hours in a day they may not work more than 8 consecutive hours without taking a 30 minute rest break This means that drivers must be properly trained and monitored to ensure they are following regulations and routes and schedules must be adapted to accommodate these breaks WORKING WITH NEW HOURS OF SERVICE REGULATIONS The bottom line is that in a system that is already taxed with processes that already operate with minimal fail safe protocols the margin for error is virtually disappearing The important question for shippers is What must we do to properly manage these changes and mitigate any negative impacts The answer falls into three key categories 2 Driver Management It s easy to forget that multi million dollar supply chains rely on the work of drivers that operate outside the observation of anyone and whose average income is 45 50 000 An industry that is already suffering from a significant shortage in drivers now must adjust to tighter regulations increasing the need for good drivers Dupr Logistics addresses these changes through driver management always an important portion of your supply chain is now absolutely critical Drivers must understand increasingly complex regulations must be more attentive to compliance while also serving their critical function of keeping your supply chain humming Finally attention should be paid to recruiting practices as the need to attract top drivers becomes increasingly important as well as training and management practices 3 Partnership Collaboration has always been an important part of delivering a supply chain that creates an operational advantage and gives you greater control of your costs Today it is essential Ensure that you re trucking company provides the technology transparency and IMPACT OF NEW HOURS OF SERVICE REGULATIONS In an industry that is already under stress resulting from growing volume demands decreased capacity of drivers and aging infrastructure and equipment the net result of the HOS will be to further reduce capacity and increase potential fault lines The two major changes focus on when truckers can restart their clocks and when and how they must take rest breaks While these issues are significant in their own right the real risk comes with how the new regulations impact each other Here s an example The two key prongs of the new Hours of Service HOS regulations include Limitations on minimum 34hour restarts The meaningful change here is that where previously any 34 hour break would allow you a restart of the clock today that 34 hour period must include 2 1 00am 5 00am periods If proper attention isn t paid this 34 hour window could turn into a 50 hour window 20 Let s say a driver is running through the day into the night and he stops at 10 00 PM because he s out of time for the day as a result of the 14 hour day and he wants to begin 34 hour restart In this example there is no negative impact from the regulations Now let s say the driver doesn t stop until 1 30 AM before his time finishes up His first night does not count towards his 34 hour restart This results in 52 hour restart For companies that ship around the clock and are not managing their time carefully or working closely with their motor carriers they are apt to suffer anticipated delays in their supply chain greater disruption and higher cost plus some really upset customers TEXAS Oilman Magazine september october 2013 1 Scheduling Workflow Management Probably the biggest direct impact of the new regulations is that it will lengthen delivery times Left unchecked this can increase costs disrupt complex supply chains and introduce cascading consequences across your platform Dupr Logistics has worked with customers who were able to gain greater capacity and efficiency by simply adjusting their warehousing processes Scheduling will also be stressed A common practice among trucking companies is to schedule driver hours for early morning to allow more drive time and to put trucks out with less traffic The new rules will require this approach to be managed even more closely and small mistakes from scheduling or unexpected events will have greater consequences Ensure that your providers are fully engaged throughout your system and are prepared to handle contingencies reporting that enables you to continually improve the efficiency of your business Just as importantly provide them the data to allow for greater gains in productivity and management 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 you operational excellence and drive improved performance against your competitors Dupr Logistics LLC is a team of professionals who design and deliver safe diversified solutions and services for quality focused clients committed to increasing their competitive advantage Dupr has more than 1 200 team members and is headquartered in Lafayette La For more information visit www duprelogistics com For forward thinking about logistics visit blog duprelogistics com texasoilmanmagazine com 21

Page 21

Page 22

Page 23

Page 24

Page 25

Page 26

Page 27

Page 28

Oil Briefs SUPPORT VESSEL COLLIDES INTO OFFSHORE PLATFORM IN GOM M V Celeste Ann an offshore support vessel sank Friday morning in the U S Gulf of Mexico The vessel which had 4 crew members and 19 people on board collided with an offshore oil production platform the Coast Guard reported The 112 foot supply vessel struck a platform located about 15 miles west of Southwest Pass at around 9 a m All people on board were rescued and transferred to another ship before the vessel sank There were no injures Everyone was rescued Coast Guard spokesman Carlos Vega said in a released statement A Coast Guard aircraft that flew over the scene reported that a halfmile by 150 foot sheen of oil was spotted on the ocean surface The Coast Guard deployed a boom to contain the spill and reported that the platform was not damaged B J Martin owned Celeste Ann and plans to hire a company to recover its vessel Vega said All passengers aboard the vessel were offshore workers company spokesman Jimmie Martin said as reported by The Associated Press Martin declined to identify the operator of the platform If the boat isn t recovered and remains at the bottom of the Gulf it would have to be reported as a waterway hazard because of the fuel it contains Vega said WHITE HOUSE CANNOT SUPPORT GULF TRANSBOUNDARY BILL The Obama administration cannot support a bill that would move forward establishing a framework for oil and gas exploration and production in the transboundary zone in the Gulf of Mexico the Office of Management and Budget OMB reported Tuesday The White House does support the goal set out in H R 1613 to provide Congressional approval of the agreement and allow the Secretary of the Interior to implement the agreement However the administration strongly objects to exempting actions taken by public companies in accordance with transboundary agreements from requirements under Section 1504 of the Dodd Frank Act and the Securities and Exchange Commission s Natural Resource Extraction Disclosure Rule As a practical matter this provision would waive the requirement for the disclosure 28 of any payments made by resource extraction companies to the United States or foreign governments in accordance with a transboundary hydrocarbon agreement OMB said in a statement The provision directly and negatively impacts U S efforts to increase transparency and accountability particularly in the oil gas and minerals sectors OMB noted that the Obama administration looks forward to working with Congress to enact legislation that would focus the U S Mexico Transboundary Agreement without the inclusion of extraneous and unnecessary provisions H R 1613 also known as the Outer Continental Shelf Transboundary Hydrocarbon Agreement Authorization Act was proposed earlier this year by U S House of Representative members Jeff Duncan R S C House Natural Resources Committee Chairman Doc Hastings R Wash and House Foreign Affairs Subcommittee on Western Hemisphere Chairman Matt Salmon R Ariz The lawmakers see the bill as a means of helping the United States achieve energy independence and better energy cooperation with Mexico as well as while lowering energy costs and creating jobs The bill would amend the Outer Continental Shelf Lands Act and implement the U S Mexico boundary agreement which was signed in February 2012 by then Secretary of State Hillary Clinton and Mexico s Minister of Foreign Affairs Patricia Espinosa Castellano at the G 20 Summit in Los Cabos Mexico The Department of the Interior estimates the area subject to the Western Gap Treaty moratorium holds as much as 172 million barrels of oil and 304 billion cubic feet of gas estimated to include 172 million barrels of oil and 304 billion cubic feet of natural gas Production in the area is currently subject to a moratorium under a treaty The legislation makes it available for leasing The bill passed by a vote of 256 to 171 with a majority of Democrats voting against the measure Democrats as well as President Barack Obama oppose the bill because it includes a provision that exempts U S companies from having to disclose royalty and other payments they make to the Mexican government as part of their production activities Payment disclosures are required under the DoddFrank law aimed at preventing corruption and secrecy among the governments of resource rich countries The White House said the provision in the Republican led bill negatively impacts U S efforts to increase transparency and accountability The White House didn t threaten to veto the legislation but said it wanted to work with lawmakers to amend the bill The Senate is considering a similar version of the bill The Senate measure doesn t include the same provision which means there is a major difference between the two chambers that will have to be sorted out U S energy companies have long opposed the disclosure requirement The companies contend it puts them at a competitive disadvantage to foreign companies The nuts and bolts of the transboundary agreement were originally brokered between the Obama administration and Mexico in February 2012 HOUSE VOTES TO RATIFY ENERGY AGREEMENT BETWEEN US MEXICO The temporary bridge plug that Energy Resource Technology LLC ERT and subsidiary of Talos Energy used to stop a natural gas and condensate leak on their Well 2 late last week is holding and the well has been sealed the Bureau of Safety and Environmental Enforcement BSEE said Monday A bridge plug which can be either permanent or retrievable is a tool that is used in downhole applications to isolate the lower part of the wellbore allowing it to be temporarily or permanently sealed from production We are pleased to report that the well control event has been successfully resolved without injury and with a very limited The U S House voted to ratify an energy agreement between the U S and Mexico that governs how oil and natural gas is developed along a shared border in the Gulf of Mexico The agreement establishes a framework by which U S energy companies and Mexico s state owned oil company Petroleos Mexicanos known as Pemex can jointly develop the resources along this area The agreement covers about 1 5 million acres of the U S Outer Continental Shelf an area BSEE CONFIRMS ERT STOPPED LEAK IN NATURAL GAS WELL OFF LOUISIANA COAST TEXAS Oilman Magazine september october 2013 release of hydrocarbons which we believe to be a small amount of natural gas and less than 10 barrels of light condensate over the course of the event Talos Energy President and CEO Tim Duncan said Additional work by ERT remains before the well is permanently plugged BSEE said and that work will be reviewed and approved by the BSEE Houma District engineers BSEE will also investigate the reason for the loss of well control and make recommendations to improve the response to well control events The U S Coast Guard will also work closely with ERT to plug the well permanently with cement Initially ERT used drilling fluids on the leak after a loss of well control was observed early last week at Well 2 Ship Shoal Block 225 Platform B which is located about 74 miles southwest of Port Fourchon Louisiana The leak initially allowed condensate consisting of a light oil and water mixture to cover the surface of the water However no sheen was detected last Friday after ERT stopped the leak July 11 The condensate evaporated overnight Thursday and a July 13 flight over the site confirmed that no sheen was visible BP Launches Deepwater Horizon Fraud Hotline BP announced in a statement late Monday that it has launched a Gulf Claims Fraud Hotline in order to help protect the integrity of the claims processes relating to the Deepwater Horizon oil spill The move comes a week after BP launched a new action in the 5th U S Circuit Court of Appeals arguing that the terms of the mechanism used to make payouts connected to the 2010 Deepwater Horizon oil spill are being misinterpreted and that payouts are being made to companies unaffected by the disaster BP said the fraud hotline will be a reliable resource for people who want to report fraud or corruption connected to Deepwater Horizon compensation payouts Reports should be made of any fraudulent or corrupt activity no matter where in the claims process it occurs whether in the solicitation of the claim by attorneys accountants or other claims preparation services the preparation of the financial records and claim application or the processing of the claim and no matter whether the claim was filed with BP the Gulf Coast Claims Facility GCCF or the Court Supervised Settlement Program CSSP the firm said in a statement USING COMPRESSED NATURAL GAS TO ITS FULL POTENTIAL The United States is now the hub for natural gas exploration A shale play touches nearly every corner of our country More prominent shale plays are in the news with frequency such as the Marcellus of the northeast and the Haynesville Shale of northwestern Louisiana The Haynesville Shale from 2008 10 brought about an economic impact of 40 billion to Louisiana alone Over the same time period the Haynesville brought nearly 100 000 direct and indirect jobs The oil and natural gas industry has contributed more than 1 3 billion in local and state tax revenue During fiscal year 2011 12 mineral income severance taxes bonuses and royalty payments accounted for 14 percent of income deposited in the state general fund But how can Louisiana and the United States benefit from this mass amount of natural gas beyond new jobs How can we put this fuel to good use In addition to a manufacturing renaissance resulting across our state and country due to this abundant and cheap natural gas the automotive industry is now being greatly impacted and transformed Transforming this dry natural gas that is found in the Haynesville Shale into a compressed natural gas is the wave of the future for the automotive industry Compressed natural gas is clean cheap abundant and most importantly U S produced CNG is more than half the price by the gallon than standard gasoline If a vehicle takes 20 gallons of gasoline at 3 25 the total cost will be 65 to the consumer For the same amount of CNG the cost would be around 29 or 1 45 for a gas gallon equivalent of CNG The finances simply make sense Currently more than 500 CNG stations are in the United States Louisiana has more than a dozen stations at the moment with several more in the works You will soon be able to travel from Shreveport to New Orleans up to Monroe and back to Shreveport with CNG infrastructure all along the way Auto manufacturers such as Chevy Dodge Ford and Honda are constantly releasing CNG compatible vehicles Also these aforementioned brands as well as larger commercial grade brands are releasing numerous types of CNG trucks heavy equipment and even CNG engines to power drilling rigs Across the nation incentives on the state and federal level exist to help with cost of CNG conversion for vehicles that are not manufactured to be originally CNGpowered Who is using CNG now Brand names such as Frito Lay and Pepsi municipalities such as Baton Rouge and Lafayette and individuals across the world are now converting to CNG powered vehicles The United States is actually not even in the top five in the world for the number of vehicles powered by CNG Does CNG make sense for you and your company The economics are completely sensible The availability is beyond a 100 year supply just in the United States And lastly using U S produced CNG will discourage our country s dependence on foreign resources this alone can strengthen our country s national security If there is a true downside to CNG use for vehicles it has not been made known SUNDROP SELECTS CONTRACTOR FOR CENTRAL LA PLANT Sundrop Fuels has selected an IHI Corp subsidiary as the contractor for Sundrop s natural gas to gasoline plant in Alexandria IHI E C International Corp in Houston is performing the front end engineering design for the combined commercial and demonstration plant that will have the capacity to produce about 60 million gallons of finished gasoline from natural gas Sundrop Fuels is working to prove its proprietary gasification technology for making renewable green gasoline from woody biomass Its success could lead to a series of renewable gasoline megaplants each producing more than 200 million gallons of cellulosic biofuel annually Once initial phases of its contract are completed IHI E C will do the detailed engineering procurement construction and completions for the commercial plant SEND INFORMATION FOR OIL BRIEFS TO EDITOR OILMANMAGAZINE COM texasoilmanmagazine com 29

Page 29

TX Oilman Magazine Sept/Oct 2013

Page 1

Page 2

Page 3

Page 4

Page 5

Page 6