New Bakken Crude Oil Gathering System

April 27, 2015 Elizabeth Alford

Enable Midstream's Gathering and Processing Assets

Enable Midstream Partners announced last week that it has completed its first crude oil and produced water gathering system in North Dakota.

The project began in August of 2013 to service XTO Energy Inc, a major Bakken producer. The Bear Den Crude & Produced Water Gathering System system is located in Dunn Co, N.D. and now that it is fully operational, will a maximum throughput of 19,500 barrels of oil per day.

“Lynn Bourdon, president and CEO of Enable Midstream said, “It’s a great demonstration of our ability to effectively and efficiently deploy expansion capital to meet our customers’ needs for delivering energy to key markets.”

In the oil and gas industry, a gathering system includes both the flowline networks and the process facilities. It is through this system that oil and/or gas is transported and controlled from the well site to a main storage facility, processing plant, or shipping point.

Fracking Companies Likely to Close

April 23, 2015 Elizabeth Alford

Will 50% of the fracking companies be gone by the end of the year?

This is precisely the opinion of Rob Fulks, pressure pumping marketing director at Weatherford International Plc, who spoke with Bloomberg at the annual IHS CERAWeek in Houston last week. Fulk predicts that of the 41 current companies that provide fracking services, only 2o will still be viable at year’s end.

At the start of 2014, there were 61 fracking service providers in the U.S. and those numbers have decreased as the demand for fracking has dropped off dramatically. Many firms are forced to leave wells unfinished because they are no longer economically viable. Another reason for the decline is the big mergers over the last few months, including Halliburton;s plan to buy Baker Hughes.

Weatherford has had their own share of troubles, announcing plans this week to plans to cut 18% of its staff by the end of the second quarter. These actions are part of a spending cut designed to save the company $640 million this year.

“According to Bloomberg, Fulks wouldn’t say whether Weatherford is want to acquire other fracking companies or their unused equipment. “We go by and we see yards are locked up and the doors are closed,” he said. “It’s not good for equipment to park anything, whether it’s an airplane, a frack pump or a car.”

Pipeline Safety Strengthened in North Dakota

April 22, 2015 Elizabeth Alford

On Monday, Governor Jack Dalrymple took steps to strengthen the state's regulatory oversight on crude pipelines by signing House Bill 1358.

This legislation provides $1.5 million for a study of pipeline technology and gives the state greater authority to regulate construction.

After a series for accidents involving leaks and accidents, Gov, Dalrymple sought help from the federal Pipeline and Hazardous Materials Safety Administration in order to help fund university research in pipeline safety.

“Gov. Dalrymple offered a statement, saying that “This legislation builds on our ongoing work to enhance pipeline safety in North Dakota. With this bill’s passage, North Dakota will require significantly more from pipeline builders and operators. At the same time, the state has significantly expanded its pipeline reclamation fund so that we can also resolve land and water restoration needs that are more than 30 years old.”

The issue of pipeline safety and environmental concerns have increased as more oil has been produced in the United States and producers must find ways to move the product. TransCanada Corporaiton has been working since 2008 to get approval to extend the Keystone, allowing another 800,000 barrels of petroleum to flow from the Bakken region to the Gulf Coast.

Halliburton Lays off 10% of Workforce

April 21, 2015 Elizabeth Alford

This week, Halliburton announced first quarter losses of $643 million and acknowledged that they have cut 9,000 jobs over the past two quarters.

The Houston-based oil giant has been forced to scale back operations in light of plummeting energy prices. They confirmed on Monday that the number of layoffs represent approximately 10% of their workforce.

“Acting CFO Christian Garcia said “We are continuing to take a hard look at our operations and additional actions will likely be required in the second quarter. We believe that the long-term prospects of the industry remain sound. We are excited about the pending Baker Hughes transaction, which will significantly enhance the growth potential of our organization.”

In light of the $35 billion takeover of Baker Hughes, Halliburton is selling several business to secure the necessary regulatory clearance. Once the merger is approved by antitrust regulators, the new entity will surpass Texas-based Schlumberger as the world’s largest oil drilling company.

DOT Tells Oil Tankers to Slow Down

April 20, 2015 Elizabeth Alford

The DOT's Federal Railroad Administration issued an emergency order on Friday that establishes a maximum speed of 40 miles an hour for certain trains going through high threat urban areas.

Citing “gaps in the existing regulatory scheme”, the agency beefed up the 2014 voluntary agreement by making this speed limit a requirement for trains hauling crude oil and other flammable liquids. The emergency order defines affected trains as:

20 or more loaded tank cars in a continuous block or 35 loaded tank cars of class 3 flammable liquid
AND at least one DOT-111 tank car loaded with class 3 flammable liquid

“The emergency order states that “Speed is a factor that may contribute to the severity of a derailment or the derailment itself. Speed can affect the probability of an accident. A lower speed may allow for a brake application to stop a train before a collision, or allow a locomotive engineer to identify a safety problem and stop the train before an accident or derailment occurs.”

The requirements go into effect immediately and carry potential penalties of $105,000 dollars for companies that don’t comply.

This order is one of many attempts by the DOT to address this huge issue of rail safety including two previous emergency orders in the last two years. The department has also proposed a more comprehensive series of regulations that are under review by the White House that includes a stronger tank car design and better train braking systems.