The Edmond Sun

June 6, 2014

Water worries bring local oil and gas operation under scrutiny

By Joy Hampton
The Norman Transcript

NORMAN — A hydraulic fracturing operation in rural Norman is using non-potable water from a local farm pond and Little River tributary, sources confirmed this week. Fracking started at the well site on Franklin Road recently.

The combination of hydraulic fracturing, horizontal drilling and technological advances have invigorated the Oklahoma and national oil and gas markets. That means less dependence on foreign oil, said Clay O’Neil, operations manager of the Mid-continent Division of Finley Resources, the company that owns the land on Franklin Road and is overseeing the operation.

“Fracking is opening up a lot of plays here in Oklahoma and a lot of people are getting employed,” O’Neil said. “These guys work hard. They’re out here from what they call ‘can’t see to can’t see.’”

Once a well site is working, employees may work through weekends and holidays. Despite the long hours and days away from families, the jobs pay well. The average Oklahoma oil and gas worker makes more than $113,000 a year, according to the Oklahoma Energy Resources Board.

North Dakota and Montana are really booming right now, O’Neil said, but fracking has kept Oklahoma in the oil and gas game.

“The oil business has always been boom or bust — right now it’s boom,” O’Neil said. “You just never know when the next bust is going to happen.”

Finley is a small, independent operator with about 90 full-time employees, and the company operates in several states where its operations create employment through local contractors.

“We serve a purpose. Everybody out here is proud of what we do,” O’Neil said.

One in six jobs in Oklahoma is directly or indirectly supported by the oil and natural gas industry, according to the OERB.

 

Drilling, fracking and production stages: During drilling, Finley purchased water from the city of Norman using a rented water meter. The company pays a deposit and a rental fee on the meter and slightly higher rates than other commercial customers. However, Norman residents were concerned about the industrial-sized use of drinking water.

On May 19, the Floodplain Permit Committee approved a permit to temporarily allow equipment in the floodplain for water extraction from the Little River to two holding ponds for Finley’s drilling operations.

While Finley officials said they still will use the metered water from time to time, non-potable water will be used for the fracking process. One Flow, a water transfer service started by a local entrepreneur, worked with Finley to develop the alternative.

Drilling was the first step in the multi-phase process of oil and gas extraction. The dirt and water mixture or cuttings that remain after drilling are mixed into the soil at a permitted site. The disposal process is regulated by the Oklahoma Corporation Commission, O’Neil said. This is not a deep well disposal process.

Finley owns the 10-acre site on Franklin and also has purchased some of the surrounding mineral rights. Horizontal drilling combined with hydraulic fracturing allows operators to access oil and gas trapped in tight rock — formations that are common in Oklahoma.

Often, horizontal drilling allows for one well versus multiple wells that were once the method for extracting from tight rock. Drilling these days is computer driven with millions invested in a site before there’s any guarantee of payoff.

While technology has improved the processes, every well is still a gamble.

“It’s millions of dollars at risk every time,” said Fred Gosling, Finley production superintendent.

 

Fracking 101: Prior to fracking, a perforating gun is run down the hole. Small perforations are shot along the well bore to allow the fracking fluids to escape into the rock. In the Franklin Road well — officially named the Little River after the tributary that crosses an edge of the 10-acre property — there will be 19 frack stages. Each stage is perforated and fracked separately.

Once a new stage is perforated, hydrochloric acid (HCL) is pumped to clean the perforations. HCL is the same acid that is found naturally in the stomach, Gosling said.

Finley used a 15 percent solution Thursday. Tanker trucks with the chemicals used in fracking are run by a computer and monitored by technicians to carefully control each process.

The acid is inserted slowly at 10 barrels a minute with low pressure. It hits the perforations and cleans up any particles that might disrupt the fracking process.

Next, a sand and gelled water mixture is pumped down the well bore. The gelling agent (Guar) is the same used in the gelatin people eat. The sand and gel mixture is pumped at a high rate and usually at a high pressure.

While pressure is necessary to the fracking process — the sand mixture hits the perforations and bursts into the tight rock, widening the tiny cracks that exist naturally — too much pressure is not good, so everything is closely monitored.

While the technicians watch the numbers and graphs closely on a variety of compute screens, O’Neil oversees the process. He’s on the scene for the entire fracking portion and likely won’t leave until it’s complete.

During a break, he fields a phone call from his 13-year-old daughter in Texas. She wants him to come home so she can go to the local water park. He explains that he’s in the middle of a job in Oklahoma and won’t be home any time soon.

It’s tough, the guys said, being away from their families, but it’s also a rewarding job.

“It’s a fun business, but you work,” O’Neil said. “We earn our money out here.”

Gosling said he once missed nine Christmases in a row before making it home the next year. When he arrived, everyone was in bed. They hadn’t expected to open their presents on time, he said.

 

Safety first: Safety is a key component for Finley. No one wants injured employees or for a job to be shut down. Drilling and fracking and the related disposal is highly regulated.

Every person on the drill site at Little River has to sign in with the safety person. He checks IDs and records entry and exit. Sometimes employees work long hours and everyone must be accounted for.

Hard hats and steel-toed boots are the dress of the day. Under each tanker are containment pads that look like rubber swimming pools. They are there to catch any potential spills. Finley also installed a silt fence, although it’s not required.

There is no trash on the site, except what’s been put into the trash trailer, which will be hauled to the dump.

Gosling said keeping the site clean is important, not just to be good stewards of the land but for safety on the site and to protect the investment. As a runner and triathlete, he said he hates seeing all the trash alongside the roads these days, especially plastic bags. He wonders aloud why they’re not made out of biodegradable materials to be more environmentally friendly.

“We try to keep the location as clean as we can,” O’Neil said. “Everything’s enclosed. Everything’s confined and contained.”

There are safety meetings before each stage of work.

Gosling and O’Neil said the people who work on oil rigs live in neighborhoods and respect the land just like everyone else. They believe they work in one of the most highly regulated industries in the nation.

At the Little River well, Finley employees carry noise meters. City staff said the noise from the site is well within allowed parameters.

The frack “tree” connects to the well head. There are two frack valves, O’Neil said. The redundancy is a safety feature. There is also a “tree saver” inside the line that seals it off to protect the well head when there’s high pressure.

In the frack van, as the pressure rises, O’Neil becomes alert. To the lay observer, there doesn’t seem to be much going on except for some rising numbers and lines on graphs. But to O’Neil and technicians, it’s high pressure time, and they are watching closely to see that the pressure stabilizes at the right level to push the gel and sand into the surrounding rock.

If the pressure mounts too high, that means something has stopped the flow.

“How each stage fracks is a little different,” O’Neil said. “One of the worst things that can happen on a frack job is when you get too high of pressure and it’s hard to put the sand away.”

 

Flowback and production: After fracking, the sand stays put, but the water comes out, bringing hydrocarbons with it. It’s Gosling’s job to analyze the flowback and see if the well is going to be commercially viable. While Finley is expecting oil in this case, the natural gas also will be captured and sold.

“It might never pay out,” Gosling said.

Usually the pressure from the fracturing injection is enough to cause flowback, but it can be pumped if needed. Fracking is expensive. On this particular well, it could cost Finley between $2 million and $2.5 million. It’s not unusual for millions to be spent on drilling before fracking ever starts.

If the well is deemed commercially viable, production begins. The production process separates the oil, gas and water that is produced at the well bore.

There are different types of crude oil. What the “Beverly Hillbillies” character Jed Clampett called “Black gold and Texas tea” can be black, brown, green, yellow, clear or, less commonly, purple.

Like crude oil, operators come in a wide variety. At the large end of the scale is ExxonMobil, Shell and Chevron.

ConocoPhillips is a step down from the mega giants but still larger than Devon and Chesapeake, both of which O’Neil and Gosling described as large to mid-sized independents.

Finley is a small independent.

Gosling said many operators are small “mom and pop” operations. Such an operator may only have five or six wells and may work only in a limited area. According to the National Stripper Well Association, small wells account for about 19 percent of total U.S. production.

Once the hydrocarbons are extracted, they are separated, treated and sold. All volatile organic compounds extracted are heavily regulated, Gosling said. Some wells are in production for several years.

Issues surrounding water are some of the most controversial in the fracking industry. Those concerns range from fears of groundwater or surface water contamination to the amount of water used in the fracking process to how the water used in the fracking process is disposed.

In Oklahoma, disposal is regulated by the Corporation Commission, but a possible link between the deep well disposal required by the state and earthquakes has put the industry under new scrutiny.

Joy Hampton

366-3544

jhampton@

normantranscript.com

 

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