Bakken Train Derailment

July 21, 2015 Elizabeth Alford

Another Bakken train derailment leaves a mess in rural northeastern Montana

Last Friday, 22 train cars from a Burlington Northern Santa Fe Railway (BNSF) train derailed causing an evacuation of residents in nearby homes and in a Bakken man camp. Officials said the train was headed to Anacortes, Washington and derailed about 5 miles east of the small town of Culbertson, near the North Dakota border.

35,000 gallons of crude oil leaked from four of the derailed cars, but officials there was no immediate evidence that any crude reached a waterway.

The Department of Transportation issued an emergency order in May that requires certain crude by rail trains to slow down in high threat areas. But speed doesn’t seem to be a factor in the latest crash. After investigating Thursday’s crash, the U.S. Federal Railroad Administration revealed that the train was only traveling at 44 mph.

This was the sixth such train accident in the Bakken since the beginning of he year. Other crashes include:

2/17/15: WV derailment carries Bakken crude

2/14/15 Train carrying crude oil derails in Canada

3/6/15: Oil train carrying Bakken crude explodes in Illinois

3/7/15 Train carrying crude oil derails in Canada

3/8/15: Train carrying crude oil derails in northern Ontario

5/6/15: Train carrying Bakken crude derails near Heimdal, North Dakota

Savage Services Cuts Jobs in Bakken

July 14, 2015 Elizabeth Alford

Savage Services Corp, a North Dakota railcar and logistics facility, laid off 10% of its full time employees this week. Savage is one of the largest facilities of its kind in the region and employed 118 people before this layoff.

Company sources blame the layoffs on decreased demand for railcars to transport Bakken crude oil, saying that as pipeline construction has increased, the demand for railcars is the lowest it has been in three years. This is contrary to other data about the prevalence of transporting crude oil by rail. In May, the Energy Information Administration (EIA) released its latest data for crude by rail across the country that shows a 1700% increase over the last five years.

Related: Crude by Rail Up 1700%

It has been almost two years since Savage announced the expansion of the Bakken Petroleum Services Hub in Trenton, ND as a result of its acquisition of Ft. Worth Pipe. The new terminal added oil country tubular goods (OCTG) storage, transloading, trucking, threading, inspection and clean and drift services for oil and gas producers in the Williston Basin.

Since crude prices plunged last year, oil company executives are working to cut costs wherever they can, but tightening the belt doesn’t necessarily mean more layoffs. Over the next two years, the majority of the oil and gas executives (76%) expect to see their organizations’ ranks to increase or stay the same over the next two years. Read more here.

North Dakota Fights Fracking Rule

July 8, 2015 Elizabeth Alford

North Dakota Developments, LLC — North Dakota Fracking

Two days after North Dakota filed an injunction to delay new federal fracking rules, a district court grants a temporary reprieve.

U.S. District Court Judge Scott W. Skavdahl delayed the new ruling, which was to go into effect this week, saying that permitting of oil and gas wells on federal land will proceed under current regulations until July 22nd.

The case before Judge Skavdahl combined a challenge from North Dakoa, Wyoming and Colorado with one from industry groups who believed the Bureau of Land Management (BLM) did not follow federal rule-making law and exceeded their authority.

“Jessica Kershaw, a BLM spokeswoman said “While the matter is being resolved, the BLM will follow the court’s order and will continue to process applications for permit to drill and inspect well sites under its pre-existing regulations.”

In March, the BLM passed the new regulations after a four-year investigaiton that included over 1.5 million public comments. The new ruling requires:

A validation of well integrity in order to protect groundwater supplies
Companies to publicly disclose chemicals used in hydraulic fracturing through the website FracFocus, within 30 days of completing fracturing operations
Higher standards for interim storage of recovered waste fluids from hydraulic fracturing to mitigate risks to air, water and wildlife
Companies to submit more detailed information before fracking to reduce the risk of cross-well contamination

In the following video, North Dakota Attorney General, says that the state will go through the lengthy process of a filing a permanent injunction if necessary.

WPX Plans to Increase Bakken Activity

July 1, 2015 Elizabeth Alford

WPX Energy announced this week they plan to increase activity in their Williston operations during the second half of the year.

Related: Shale Oil: Sky's the Limit

WPX currently has an inventory of 14 Williston wells awaiting completion and the company will resume completions in August, starting with a four-well pad.

Since the fourth quarter of 2014, many companies pulled back oil rigs as crude prices declined. WPX will be the first to approve more rigs in the play since prices have stabilized. The company credits significant process improvements, structural changes to lower costs and successful discussions with key vendors as key to this decision to move forward.

“The combination of cost reductions and higher EURs gives us the opportunity to generate returns in excess of 30 percent in today’s commodity price environment,” says Rick Muncrief, president and chief executive officer.”

WPX Highlights:

Drilling and completion costs in the basin approaching $8 million per well (decrease of more than 30%)
A blended type curve of approximately 750 Mboe for wells in the Middle Bakken and Three Forks formations, up 25%
Completion modifications include moving toward a higher intensity slick-water design targeting the potential to increase initial production rates and EURs even further.
Total planned capital investments for full-year 2015 remain in line with the company’s previous guidance of staying within its projected operating cash flow

Montana Considers Drilling Buffer

June 29, 2015 Elizabeth Alford

Montana’s Board of Oil and Gas Conservation is considering a proposal that will require buffers zones around homes to protect them from oil and gas drilling.

The board heard almost two hours of testimony last week from farmers, environmentalists and oil companies who all wanted a say in whether setbacks are necessary. Many raised concerns about wastewater dangers, noise and trash that from active wells pads.

“Dale Nelson told local news agency that “The toxic smoke that comes out with a fire, there’s nothing you can do with it,” Nelson said. “Do you want your grandkids around something like that?”

The Northern Plains Resource Council is asking for a quarter-mile setback between well pads and inhabited buildings. This is much greater than the 500 feet required by neighboring states of North Dakota, Wyoming and Colorado.

Montana joins other local and state agencies faced with figuring out how to regulate drilling activities in light of health and environmental concerns. Recently the EPA released a controversial study saying that hydraulic fracking has very little impact on drinking water resources.

EPA Finds Little Risk to Drinking Water from Fracking