Two Big Problems Facing the Oil and Gas Industry Today

Vortex Tools discusses Denver Startup Week, how much sand is used in fracking operations, and how jobs in the oil and gas industry are changing.

Denver Startup Week was this month. We’ve participated before, but this year we attended their “oil and tech” presentation by RockPile Energy Services‘ VP Marketing and Sales, Howard Rough. Rough worked for Schlumberger for 30 years before starting RockPile—they provide services to the oil and gas industry.

Sounds pretty generic, yeah?

Okay, let’s chat specifics: In 2015, RockPile will provide a billion pounds of fracking sand to the Bakken formation in North Dakota. That’s the size of Santa Barbara beach.

Shove it down a well!

It sounds like a lot, but they’re maybe 5-6% of the frack sand market in North Dakota. One well uses about 10 million pounds of sand (along with a lot of water and a bit of gar gum [hydroxyethyl cellulose] to suspend the sand in the liquid). It’s not just any sand either. We’re talking white, clean sand from Minnesota that’s a specific size. You can use other sand, but in the opinion of many, it’s not as good.

And that’s where a current pain point of the oil and gas industry lies: It’s really difficult to logistically transport and store all that sand and water with minimal environmental impact.

Overall, there’s a push for greener fracking approaches. As a company that works with oil and gas operators to increase their energy efficiency (recovering more natural gas liquids and condensates) and to keep their wells in EPA air quality compliance, we know some of the struggles they face. Fracking is perceived as a huge water waste (when it’s less than 1% of Colorado’s water use). While I’m happy to see companies reusing fracking water, agriculture is still the water monster to slay in these drought years (using 69% of the state’s water).

On the sand side of things, they don’t have great logistics, and rail is an entirely separate issue. Finally, the massive silos required to store sand lead to storage issues, too.

Overall, there are many pain points with fracking logistics that Rough would like to see addressed. The second is addressing employee retention in oil and gas. There are two problems here:

• In the oil and gas industry, you have Baby Boomers with 30+ years of experience getting ready to retire. The next rung down is those with 10 years of experience. Most of the oil and gas industry workers have 3-4 years’ worth of experience, so there’s a huge changing of the guard going on.
• With most people having little experience, a huge chunk of the problem is employee retention.

Unless you’re working at the downtown corporate offices, you can get shoved off to some mighty obscure places. Oil and gas fields are often in the middle of nowhere, thus oil and gas jobs can be in the middle of nowhere, too. Plus, right when you get adjusted to your living arrangements, you get transferred to the next less-than-ideal place. After 3-4 years of repeating that cycle, you can get burned out and move on to a different line of work.

But wait, your brain says, don’t oil and gas people make six-figure salaries?

Some do, but it’s long hours and less-than-ideal work conditions. Parts of North Dakota freeze for four months and get 100 mph winds; you can work outside in Alaska when it’s 62 degrees below zero. Then after that, you return to the trailer with a dozen other dudes and sleep in the sweaty bed that the last guy just left. There’s no going home for days or weeks on end; the well site is in the middle of nowhere. One of our engineers worked a similar set up and kept getting his electric razor stolen… by someone else also making six figures.

You can understand why all this might get tiresome. With these issues, there’s not enough experience and huge companies have a big turnover rate (40% annually). That’s a lot of money wasted on training for people who don’t stick around that long.

So there’s also a need for oil and gas companies to connect with qualified, talented individuals. Rough thinks the future may be a LinkedIn for oil and gas professionals—maybe even something that helps give people a virtual tour of an oil and gas field. That way they know what to expect. What Rough has found is that military are often a great fit for the oil and gas industry. As one man put it: “It’s twice the pay and you don’t get shot at.”

If you think you can address the problems covered here, there’s demand, and if you’re military personnel looking for your next gig, come get more pay and less bullets (unless you work in Texas—no guarantee there).

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Colin McKay Miller is the VP of Marketing for the SpiroFlo Holdings group of companies:

–SpiroFlo for residential hot water savings (delivered 35% faster with up to a 5% volume savings on every hot water outlet in the home), industrial water purification (biofilm removal), and reduced water pumping costs.

–Vortex Tools for extending the life of oil and gas wells (recovering up to 10 times more NGLs, reducing flowback startup times, replacing VRUs, eliminating paraffin and freezing in winter, etc.).

–Ecotech for cost-effective non-thermal drying (for biosolids, sugar beets, dairy waste, etc.) and safe movement of materials (including potash and soda ash).

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9/11 Thought

“9/11 A day to remember that extraordinary heroes are often disguised as ordinary people and that spirit and soul are unbreakable.”

-Stacey Alcorn

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Image/quote credit: LifeChange International

Colin McKay Miller is the VP of Marketing for the SpiroFlo Holdings group of companies:

–SpiroFlo for residential hot water savings (delivered 35% faster with up to a 5% volume savings on every hot water outlet in the home), industrial water purification (biofilm removal), and reduced water pumping costs.

–Vortex Tools for extending the life of oil and gas wells (recovering up to 10 times more NGLs, reducing flowback startup times, replacing VRUs, eliminating paraffin and freezing in winter, etc.).

–Ecotech for cost-effective non-thermal drying (for biosolids, sugar beets, dairy waste, etc.) and safe movement of materials (including potash and soda ash).

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Smoggy China Has Tourists Take Pictures Next To Fake Skyline

Vortex Tools shares some insight into the current Chinese market and how air quality is affected, leading to people taking pictures of themselves by a picture of the skyline

Last year, we signed a distribution deal to sell our oil & gas optimization tools into China. As a result of this, we naturally make trips out there to connect with customers and grow the relationships.

If you haven’t got the memo, China is changing:

If someone went to the big cities 10-15 years ago, they’d tell you of bikes everywhere. These days, it’s lots of fancy cars—Mercedes, Audis, BMWS—and like many parts of the world, where there are four lanes, they make six and all honk at each other. They want quality for themselves and they’re selling the junky stuff to tourists (like how if you believe you can get a Gucci purse for $20, there are about 10,000 of them for you to haggle over with the street vendors of New York City).

It’s not uncommon to see a 30-story tall apartment complexes—30 of them together: three rows by 10. One of our Chinese customers joked that the construction crane is now their national animal because you see them everywhere these days.

Probably won’t bite you. Probably…

He also told us that a quarter-million people are moving to Beijing every month.

That’s all of the Denver Metro area (some 3.27 million people) getting crammed into Beijing in a little more than a year.

Naturally, this has had some impact:

• For starters, they can’t stop the westernization of their culture. It’s odd to mosey around town and see modern buildings surrounding an encased artifact from the fifth century. In many ways, they’re losing their traditions—ask to see my happiness ball sometime (no, that’s not inviting a felony)—but given the discrepancy between city life and country life, I can’t blame any of the 250,000 a month making the move for a better life.
• The second thing, however, is this: All those people, all that construction—it comes with an environmental cost—and parts of China are struggling with poor air quality (many believe they’re at the level where the US was in the 1970s).

The best pic of this I’ve seen is actually from Hong Kong (a Special Administrative Region of the People’s Republic of China) where people take pictures in front of a fake skyline… as long as they focus low enough. While this picture is of a particularly smoggy day in a particularly smoggy period, it still gets the point across that there’s a lot of work to be done:

Credit: Alex Hofford / EPA / Landov

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Colin McKay Miller is the VP of Marketing for the SpiroFlo Holdings group of companies:

–SpiroFlo for residential hot water savings (delivered 35% faster with up to a 5% volume savings on every hot water outlet in the home), industrial water purification (biofilm removal), and reduced water pumping costs.

–Vortex Tools for extending the life of oil and gas wells (recovering up to 10 times more NGLs, reducing flowback startup times, replacing VRUs, eliminating paraffin and freezing in winter, etc.).

–Ecotech for cost-effective non-thermal drying (for biosolids, sugar beets, dairy waste, etc.) and safe movement of materials (including potash and soda ash).

Read Full Post »