WATFORD CITY — Driving through Watford City to arrive at the North Dakota Petroleum Council’s annual meeting Wednesday afternoon, one thing stood out for Blu Hulsey, NDPC Chairman and a senior Vice President for Continental Resources.
“It doesn’t look like a slowdown when you go through Watford City,” he said. “We have had a consistent growth rate, even in a slowdown.”
The comment was indicative of a thread woven throughout the NDPC meeting on Wednesday, Sept. 18. The nation’s No. 2 shale play has arrived, and its oil and gas industry leaders are working to make it their steady Eddie.
“More than 60 producing companies are here today,” Conoco Phillips Williston Asset Manager Chris Malkin said. “And the companies here like their positions a lot. We have moved beyond the phase of establishing position, and we are moving into the phase of optimizing and improving our positions.”
Three technology trends are helping companies like Conoco Phillips solidify the future prospects of the Bakken. Among these is an old technology in a new scenario.
The technology is called gas lift. It involves injecting compressed natural gas deep down into the well. That creates bubbles, lowering the density of the fluid, and helping it flow better.
“This is rapidly becoming the lift method of choice in our shale plays,” Malkin said, adding that it reduces downhole maintenance and production losses.
“Gas lift also presents an opportunity for a beneficial use of gas that may have otherwise been flared,” he said.
Automated directional drilling is another technology boosting performance in shale plays, improving both safety and consistency of well performance.
Last, but not least, wells completed with old technology are are being re-stimulated with new technology. That’s proving economic in tests, and could apply to hundreds of wells in the Bakken.
There are a number of areas where industry can begin to collaborate more closely to further strengthen Bakken prospects, Malik said. Namely, safety, water disposal, well interactions and developing workforce.
“We have a lot to learn from each other,” Malik suggested. “We all develop a little differently. There’s no right or wrong way to do it.”
Perry Pendley, with the Bureau of Land Management, talked about how the federal agency is working to speed permitting and create a responsive agency with more boots out in the field.
“We have heard consistently from people like you that you are understaffed and need more resources in the field,” he said.
To accomplish this, employees who had been working in Washington DC are being moved to state and field offices, he said.
“It’s mind boggling to me that the House is worried about where I put these employees, especially if it improves our function,” he said. “But that is Washington.”
Pendley denied allegations this will weaken the BLM and said they want to keep all the employees they can.
“We want their skills and abilities so they can help you help the American people,” he said.
Mark Fox, chairman of the MHA nation, home to a large percentage of oil and gas production in North Dakota, talked about the state’s recent change in tax distribution.
Fort Berthold has constrained capacity and processing for natural gas. This is partly due to lengthy federal permitting processes, but another key element is infrastructure, Fox said.
Fort Berthold needs $2 to $4 billion in infrastructure, including pipelines, Fox estimated. The new tax distribution will put $30 million additional revenue for infrastructure into the tribe’s coffers.
“The more tax we can retain, the more we can develop infrastructure like roads and water,” he said. “You have to have a lot of water to frack.”
Fox is among tribal leaders invited to the White House soon to discuss energy resources that lie in Indian country. His message there will be the same as the last time he was there.
To get buy-in, it is necessary to defer to and allow the tribes to regulate their own lands, he said.
Secondly, the tribes must be the primary beneficiaries of developing their own resources.
Fox exhorted everyone to keep communicating.
“When you draw the line and don’t talk, even if you disagree, even if you don’t understand why one side is saying what they are,” he said. “If you draw the line and don’t talk, you don’t get anywhere. Our nation has done our best to advocate for that and adhere to it.”
North Dakota’s Department of Environmental Quality Director Dave Glatt, meanwhile, said the long-term health of the oil and gas industry is tied to regulatory effectiveness.
His office is working on several fronts to strengthen regulations. There is a new self-audit protocol, for one, and his office is testing a device to more immediately tell when there is an emissions problem at a facility.
He’s also working to improve the transparency of spill reports, after criticism emerged of the state’s handling of data available online.
A new, one-stop shop for companies to report spills is coming, he said. Until that comes online, however, he has directed that all open spills be reviewed and updated to ensure the online information is current.
Glatt said while industry and regulators may feel they have it good right now, the industry cannot rely on that long-term. Regulatory processes must be strengthened for the industry’s long-term health. The state must get away from embarrassing trends, like landowners being the first to notice a pipeline leak.
“It won’t be much longer in the future that the administration changes and that things are different,” he said. “We, meaning the regulatory agencies and the industry, have to be in a position to say we got this. We have it under control. We have control of our emissions. We are making money as an industry, and also taking care of the environment. If we don’t, we will have a hard time pushing back on those who say keep it in the ground.”