Sun Times, Pacific Steel Host Energy Business Forum in Great Falls, Montana

Sun Times Publisher Darryl L. Flowers chats with Ed Walker of Loenbro Pipeline Solutions.

Full House Present For “A Night In The Oil Patch;” Funds Raised For Lyndsey Tikalsky

From Staff Reports

“We’re all in this together.”
-Paul Bellamy, Halliburton.

On Thursday, March 22, 2012, the brainchild of Pacific Steel and Recycling’s Tina Nolevanko and Sun Times owner and publisher Darryl Flowers, A Night in the Oil Patch, drew more than 100 business owners, geologists, drilling consultants, manufacturers, and landowners out to discuss oil activity on the Eastern slope of the Rockies.

Meetings have been taking place in Eastern Montana’s Richland County regularly over the last year as oil business picks up and local officials seek solutions on how best to handle the increased need for teachers, law enforcement, and infrastructure.

Choteau and Great Falls have entertained numerous round tables and listening sessions within the last few months in an effort to get a head start on the predicted boom in the area, educating the public about the lease and drilling processes.

Last Thursday, employees , associates, and spokesmen from companies as diverse as Primary Petroleum, Halliburton, and Anschutz joined representatives from local companies like Cascade Machine in Great Falls and Lewistown’s Wickens Construction at the Hilton Garden Inn to speak about better-business relations at the onset of a new economic boom.

The meeting opened with a statement from Jeff Millhollin, President and CEO of Pacific Steel. Asked after the meeting for his thoughts on how the evening went, Millhollin said, “Pacific Steel & Recycling was very pleased to have this opportunity to work with Darryl Flowers of the Fairfield Sun Times and co-host this event. It was a great opportunity for us to find yet another way to provide better service for our customers by recognizing opportunities coming their direction. We hope they will be able to utilize the information presented to support their businesses in the near future.”

“I see friends and I see competitors, and that’s how it should be,” said Texas geologist for Lonesome Dove Resources, Jim Bass. “Competition’s great.”  Bass explained that once the leasing process is complete, competitors “drop knives and come together” to accomplish a shared goal; to recover as much oil as possible.

Darryl Flowers grew up in the newspaper business in the 60’s and 70’s, and explained that, “they [newspapers] used to serve communities.”  Flowers expressed that he maintains the obligation, as a paper owner, to publish a wide variety of news stories and community events.  Darryl described the Sun Times’ Weekly Oil Report as one of the most popular articles as of late, now printed in the Great Falls Tribune as well.

“If you think things are picking up on the Front now, you ain’t seen nothing yet,” said Flowers.

When asked how big this is going to be, Bass answered, “The upside… a lot of acreage.   We can probably see drilling here for 10 years, though many will complete most of their production within the first 5 to 6 years, and then activity will taper off.  Then we’re looking at production for the next 20 years.”

Bass, who refers to himself as an environmentalist, tipped his hat to the technological progress the oil and gas industry have made. Bass, a third generation geologist, says that drilling nowadays is simply unrecognizable compared to the methods used by his grandfather.

“The best thing [about horizontal drilling] is we don’t have to drill in the backyard, in the middle of a pivot, a barn, or your farmland.”  The process, instead, allows petroleum engineers to pinpoint a location from several hundred yards away, now capable of creating a bend in the pipe to reach highly pressurized zones without drilling directly above the site.

“We’re not here to run over ranchers.  We don’t want to break any rules or regulations,” said Bass.  “People have a right to negotiate everything.”

Many echoed the same sentiment throughout the night.  Halliburton Field Sales and Service Representative Paul Bellamy, a native of Conrad, said “this is not a new frontier, this is a new technology.” Bellamy, a self-proclaimed drilling man for thirty years has worked in oil fields in Alaska, and assured listeners that the technology used nowadays is significantly cleaner than drilling methods of yesteryear.

“These oil companies are in here and they’re going to do it right,” said Bellamy.

Jim Bass provided a long list of items needed to accommodate the influx in oil exploration and activity in and around Teton County, siting homes to rent, hotels, office space, places to eat, and other job creating opportunities.

“We need GIS analysts, folks that understand the permitting process and the rules and regulations,” responded Bass when asked what kind of educated people companies would be looking to hire. Additionally, he mentioned land men, attorneys, petroleum engineers, well-site geologists, truck drivers, and other positions.

“What we’re dealing with is huge; young people are going to get hired.  Your colleges, your technical schools, they need to gear up.  Why give jobs away when we have young people here looking for employment,” said Bass.

Harold Yeager, of Montana Overthrust Management, believes it’s still early in the process, saying that Primary Petroleum has leased the land they want to examine, and will now begin the exploration process. He said he has been approached by vendors eager to start construction; one hotel, for example, but says his priority is to keep focus on the work at hand…the oil work, that is.

Yeager also acknowledged Flowers’ work in keeping the public educated on the whereabouts and progress of the many oil leases along the Rocky Mountain Front.

The Public Relations representative, Brent Temmer, of Anschutz Exploration stated, “We’re still in exploration mode,” but ensured vendors and job seekers at the event that Anschutz, a 75-year-old Colorado based company, will likely seek the services of numerous Montana businesses in the near future.

Jim Bass and other speakers addressed the need for oil companies, vendors, and the community to work together.

“We’re all in this together,” said Paul Bellamy of Halliburton.

As Bass put it, “the community must take the responsibility to have a social conscious.”  He said area residents ought to help in the effort to build infrastructure that can keep up with the predicted development, but also that service stations, manufacturers, and other businesses should seek to become allies of oil companies and survey crews.

Shawn Boylan from Wickens Construction in Lewistown, “the kind of person that makes vendors like us [Pacific Steel] do our jobs better,” according to Tina Nolevanko, shared ideas on how to build healthy business relationships.

“The oil is coming,” said Boylan, “and I’ve seen the effects of businesses that didn’t want to ramp up.  When I’m dealing with vendors, there’s not a sense of urgency a lot of times.”

Boylan described a “lackadaisical attitude” as a crutch to efficiency, and emphasized the importance of good service, saying that often vendors don’t know their customers, which makes it difficult to provide quality service.

A spokesman for L&H Industrial shared the company’s value system with the crowd, saying that it has been the key to the success of the family owned business.  On a large screen at the front of the room read, We Value: Integrity, Fairness, Honesty, Loyalty, & Respect.  Safety, Productivity, Innovation, & Accountability. Our employees and their families.  Going the extra mile and giving people more than they expect.

The Wyoming-based company provides welding, machining, hard chrome plating, and a myriad of other drilling and mining related manufacturing services.  From less than 20 employees, L&H has grown into a worldwide operation with facilities in Australia, South America, and India.

L&H has not been issued a single OSHA (Occupational Safety & Health Administration) citation in the last 14 years.

Tina Novelanko encouraged utilizing other businesses for additional resources, even across state lines in the case of L&H Industrial.

“We don’t have the equipment to do what we need to do.  They do,” said Tina.

Aside from the obstacle of needing supplies and/or resources that may be hard to come by, especially water which Jim Bass says can run oil companies as much as $800,000.00 per well, the Eastern Slope of the Rockies provides other challenges for surveyors, geologists, and crew members.

“We’re dealing with some pretty challenging circumstances.  We’ve learned that Porta potties do fly,” said Brent Temmer, “thanks to 80 mile an hour winds.”

In the spirit of social consciousness, attendees concluded the night with an auction to raise money for Lyndsey Tikalsky of Fairfield, who underwent brain surgery last December.  Tikalsky and her young family are without health insurance, and the means to cover Lyndsey’s recent medical expenses.

Fairfield artist and business owner Diane Hausmann donated an oil painting depicting a drilling rig on Halverson Road in Teton County.

Waterjet Extreme Technologies also donated artwork for the auction; a bronze replica of an “old time” oil well and derrick. The oil rig, complete with a Bloodwood base to represent the blood, sweat, and tears of the workers, was cut with highly pressurized water mixed with powdered garnet.  An American flag, reminiscent of tradition, completed the piece.

Lonesome Dove Resources Continues To Pick Up Leases In Area

Jim Bass, with Lonesome Dove Resources, speaks to landowners Friday night in Conrad. Sun Times photo by Darryl L. Flowers
By Darryl L. Flowers
Jim Bass and his Lonesome Dove crew were in the Treasure State once again last week, this time meeting with landowners in Pondera County.

The meetings were held at Norley Hall in Conrad. On Friday night, a crowd of about 75 people listened as Consulting Geologist Jim Bass used Southern charm, a video presentation and years of experience in the oil fields to explain the process of leasing mineral rights to an oil company.

During the presentation, Bass said that he had learned a lot from his first round of meetings in Teton County. He described how forums with landowners in Fairfield had given him new insight into the challenge of meeting the water needs of the drilling rigs in this region of Montana. “We’ve done this before,” said Bass. “There’s not much water in West Texas either, but we still drill there.”

During the question and answer period after Bass’ presentation, someone asked about a “Pugh Clause”.  Bass answered that after a lease negotiation with a landowner in Teton County, a Pugh Clause had been added to the leases.

The Pugh Clause provides that, at the end of the primary term the lease will terminate in regards to any acreage outside of a “production unit.” This will allow the landowner to sign a new lease for the property not included in the production unit at the end of the primary term. Any cash bonus paid for signing a new lease provides compensation to the landowner only for the property that is not included in the production unit.

After the meeting Bass was asked how Lonesome Dove was progressing in the acquisition of leases in the region.  The Texas Wildcatter reported that the company, as of this Monday, would have approximately 185,000 acres under lease. While the majority of the leases were in Teton County, followed by Pondera County, the company has secured holdings in Glacier and Toole Counties. Bass added that Lonesome Dove had leased small acreages in Cascade and Lewis and Clark Counties. “Lewis and Clark and Cascade Counties are very small leases,” said Bass. “We consider those areas to still be high risk until we do some exploratory drilling in the area. But, if a ‘play’ develops in that area, we do not want to be caught off guard.”

Land Grab on the Eastern Slope of the Rockies

The Front Line

by Jim Anderson
In recent weeks the Rocky Mountain Front is making news because of a possible oil boom.  This has caused quite a stir.  People for and against oil are holding meetings either promoting the benefits of an oil economy or are attempting to convince the public that the drinking water will catch on fire if drilling occurs.  Meanwhile, quietly behind the scenes over 18,000 acres of public lands are about to become the private playground for David Letterman.

West of Choteau, located between the Teton and Sun Rivers is the Deep Creek Ranch owned by the late night talk show host.  Senator Max Baucus, a Democrat, is presenting legislation in Congress this week which if passed will create thousands of new wilderness acres along the Front.  Part of this acreage is called the Deep Creek addition.  Nowhere along the Front does this proposed new wilderness come down and touch private land except where the Deep Creek addition borders up to the Deep Creek Ranch.  A map showing the Deep Creek addition can be found on the Senators web site.

At one time sportsmen and recreationists had access to this area via County Road 380.  Unfortunately, a local rancher illegally shut the road off in 1988.  The legislature had passed a law requiring ranchers to allow hunting on leased state land if it bordered a public access such as a county road.  The rancher instead of allowing the public the right of entry to several sections of state land connecting to BLM, National Forrest, and the Bob Marshall Wilderness, blocked the road.  Eventually, the rancher sold part of his ranch to Letterman and then gave him an easement to our county road.  Today, at the end of county road 380 is a horse barn built by the Deep Creek ranch which is so large it can easily be seen on Google Earth.

The Teton County commissioners have failed the people by not declaring the road open.  In 1988 they should have immediately taken action.  Instead, because the rancher allowed access to several local people it didn’t become an issue until Letterman purchased his Deep Creek Ranch.  It really came to a head when the Heritage Act, written in large part by the Wilderness Association and the Wildlife Federation, revealed their plan.  They encouraged hunters and sportsmen to support their proposed legislation saying they were saving the land for future generations, taking care of weeds, and creating more wilderness for everyone to enjoy.

With the arrival of several new out of state owners along the Front also wanting further road closures, angry outdoorsmen have organized and are insisting for access on these roads.  One landowner removed a bridge on the Boadle road and has refused the courts instructions to put it back and open the road.  The Public Land and Water Access group has filed suit regarding this road.  It looks like a lawsuit will take place over County Road 380 also.

It would only make sense that the Heritage Act folks would want County Road 380 to remain open so the public could enjoy those new acres of proposed wilderness.  However, the main architects of the Heritage Act want that road kept closed.  This has aroused suspicion with many along the Front.  Who benefits if sportsmen and recreationists are not allowed to access this area?  Obviously, only David Letterman and his private guests.  When pressed about the dollar amount Letterman has contributed to the Heritage Act project, no one seems to know or is willing to admit.  Once the Deep Creek addition borders the Deep Creek ranch, in my opinion, it will quadruple the value of the ranch property.  For anyone other than a private guest of Letterman access to the Deep Creek addition, will require a horseback ride or hike in from the Teton or Sun Rivers.  Either access will be more than ten miles through rough mountain terrain.

Senator Baucus was asked about these concerns.  He responded that he is always in favor of helping sportsmen gain access.  He either doesn’t understand about an obvious land grab or he is providing a large donor with their own private wilderness.  These types of policies have been prevalent throughout the current administration in Washington.  Political analysts are predicting that conservatives could pick up as many as ten more seats in the Senate this fall.  I would think the Senator would be more in tune with sportsmen and recreationists who also vote.

Jim Anderson, is a Montana Native, Choteau businessman, and resident of the Rocky Mountain Front

HICKS: ‘Frack Nation’ Digs Up The Not-So-Scary Truth

By Marybeth Hicks

ANALYSIS/OPINION:

When it comes to 21st-century environmental and energy debates, a little knowledge is a dangerous thing. Especially when what little knowledge you may have is incorrect. And most especially when it could be a lie.

That’s the conclusion of documentary filmmakers Ann McElhinney and Phelim McAleer, who are on a quest to shed some light – and truth – on the subject of hydraulic fracturing, or fracking. They are producing a feature-length film called “Frack Nation” that looks at the process of fracking in an effort to combat the “scaremongering” surrounding this safe and useful method of energy production.

If all you have is a little knowledge about fracking, you may believe this method of extracting natural gas from the ground causes environmental and health risks, and therefore should be banned. In fact, you would be unlikely to come to any other conclusion since 2010 when the movie “Gasland” was released, in which producer Josh Fox portrayed fracking as an evil and dangerous practice.

But like much of the environmentalist propaganda that passes for hard science, it turns out Fox’s conclusions about the dangers and impact of fracking are misleading. McElhinney says “Gasland” was misrepresentative, and plans to investigate the health claims surrounding the process to reveal the startling lack of scientific evidence to substantiate them.

“Frack Nation” also will tell the human story of hope and opportunity for people in hard-hit regions of the nation whose lives can be transformed by the ability to use fracking to produce natural gas. Areas such as upstate New York, western Pennsylvania and North Dakota could be promising sources of natural gas if landowners can use fracking to tap reserves deep under the ground.

“It is incredibly important that we tell this story and we tell this story right,” Ms. McElhinney said. “It is disheartening to meet people in upstate New York – farmers who are not able to hang on to the family farm – because of elites who want to take away an extraordinary opportunity for people living in counties where the average salary is less than $20,000 per year. How dare they?”

Because of “Gasland” and the hype about the supposed dangers of fracking, Ms. McElhinney said, state and local environmental policies are hindering landowners’ abilities to tap the energy resources under their properties, eliminating the economic benefits for individuals and families and impeding domestic energy growth.

The filmmakers of “Frack Nation” say the issue isn’t about just energy or the environment, but about personal freedom.

“America is the only nation on the face of the planet where if you own land, you own the mineral rights underneath your land,” she said. “No other country allows this. This is important, and we have to be willing to fight for it.”

To finance the film and involve everyday citizens in the fight to promote the right to engage in fracking, Ms. McElhinney and Mr. McAleer launched a “crowdfunding” effort at FrackNation.com to collect contributions of as little as $1 from individuals who will be named as executive producers of the film. After nine days, they raised more than $50,000 of their $150,000 goal, with more than 600 donors.

“When they learn about the injustice of the environmental propaganda that’s out there, people think there’s nothing they can do,” Ms. McElhinney said. “The enviros are going to frame the debate and declare that the science is settled. But it’s not settled and there is something you can do. You can help us to tell the truth.

“Some people say, ‘There’s all kinds of truth.’ That’s wrong. There’s all kinds of opinion. There isn’t all kinds of truth. There’s just the truth.”

Marybeth Hicks is the author of “Don’t Let the Kids Drink the Kool-Aid: Confronting the Left’s Assault on Our Families, Faith and Freedom.” Find her on the Web at http://marybethhicks.com. This article originally appeared in The Washington Times, http://www.washingtontimes.com/news/2012/feb/14/hicks-frack-nation-digs-up-the-not-so-scary-truth/.  ©The Washington Times. Reprinted with permission.

“Oil” Painting To Be Auctioned At Private Event

Fairfield artist Diane Hausmann, owner of Hausmann Studio, is at work on an oil painting  depicting the drilling of the Spring Hill 14-34-27-6 oil well on Halverson Road, near Bynum. For inspiration, Diane is using a photo taken on December 3 of a drilling rig from Patterson Drilling Services that was at work on the well.  Diane is donating the work, which will be auctioned at an upcoming private event.  The proceeds from the auction will be donated to an account set up for Lyndsey Tikalsky.

Sun Times photo by Darryl L. Flowers

Where The Work Means Lots Of “Pressure”

The finished piece.
By Darryl L. Flowers
Published: Tuesday, March 20, 2012 3:30 PM CDT
The crew at Waterjet Extreme Technologies, or WET for short, are used to working under pressure. Lots of pressure.

The company, located in Black Eagle, specializes in cutting metals. Nothing new there, lots of people can cut metal.

But WET does it with water.

WET uses a pair of machines manufactured by OMAX Corporation based in Kent, Washington. The OMAX machines use water, at pressures from 12,000 to 55,000 pounds per square inch mixed with garnet powder to slice through metal up to 12” thick.

When WET was cutting a piece of bronze recently, the just-cut metal was cool to the touch. The water jet left a smooth edge as it cut through the metal.

The machines are computer driven and can cut at close tolerances, which means less waste. About 50% of WET’s work is for the aerospace industry, and the company’s handiwork can be seen at Great Falls Airport. WET cut the metal panels that decorate the terminal. 40% of their work involves other industrial clients, such as Pasta Montana and Montana Refining. The remaining 10% of their business comes from artists.

Asked how much they hoped the piece they were working on, “A Night In The Oil Patch”, will fetch at an auction that is to be held at an upcoming private industrial forum being organized by The Sun Times and Pacific Steel, John Kramarich said, “We just want to get Lyndsey Tikalski as much money as we can to help with her medical bills!”

Blackfeet Sign Letter of Intent For Treatment Of “Frack” Water

A well in Glacier County undergoes hydraulic fracturing. Sun Times photo by Darryl L. Flowers
Ecosphere Technologies, Inc. a diversified water engineering, technology licensing and environmental services company, today announced that the Company, its majority-owned subsidiary, Ecosphere Energy Services LLC, and its sub-licensee, Hydrozonix LLC (collectively, the “Ecosphere Partners”) have signed a Letter of Commitment with the Blackfeet Nation to provide Ecosphere’s Ozonix water treatment services to oil and gas companies conducting hydraulic fracturing (“fracking” or “fracing”) operations on the 3,000 square mile Blackfeet reservation in Montana. Ecosphere Partners will be the exclusive provider of water treatment services on the Blackfeet reservation.

The Ecosphere-Blackfeet commitment will make available to operators a non-chemical approach for treating and reusing 100% of their flowback and produced waters on the reservation. Use of Ecosphere’s Ozonix technology will not only help preserve the Blackfeet Nation’s water resources, but also eliminate the need to truck wastewater to disposal sites off reservation, thereby improving the economics of shale oil and gas exploration on the reservation. This exclusive services agreement is part of a broad effort by the Blackfeet Nation to sustainably develop their heritage lands, bring jobs to tribal members and improve the economic well-being of the tribe.

“We chose to partner with Ecosphere and Hydrozonix after spending significant time and effort evaluating all available water treatment technologies in the market,” said Grinnell Day Chief, Oil and Gas Manager for the Blackfeet Tribe. “We have visited the frac sites where Ecosphere is replacing traditional chemicals with Ozonix for its customers and recycling 100% of their waters. By providing the oil and gas companies operating on our land with access to this environmentally sound and cost-effective technology, we are reinforcing our commitment to improving the quality of life for our people through economic development of our energy resources while also preserving our vital natural water resources for future generations.”

“Partnering with the Blackfeet Nation to assist the tribe in their commitment to sustainably develop their lands is totally in keeping with the Ecosphere mission to provide environmental wastewater treatment solutions across industries, nations and ecosystems. The Ozonix technology has been used by Ecosphere and our licensee, Hydrozonix LLC, to treat more than one billion gallons of water on approximately 500 oil and natural gas wells since 2008,” said Charles Vinick, Chairman and CEO of Ecosphere Technologies. “This is an important opportunity to work with the Tribe to provide jobs for their members and to help the tribe realize their development goals for profitable and environmentally responsible hydraulic fracturing operations.”

The Blackfeet reservation is located along the eastern slopes of the Rocky Mountains, bordered by Canada and Glacier National Park, between the mountains and the prairie. It is part of a sensitive and important ecosystem in northwestern Montana and is larger than the state of Delaware. The reservation stretches over 150 miles north to south and 100 miles east to west and is home to grizzly bears, black bears, mountain goats, bighorn sheep, lynx, elk, deer, bull trout, eight major lakes and approximately 175 miles of fishing streams.

The Blackfeet reservation sits on top of the prolific Bakken shale, a formation that has experienced a recent boom of activity in the Williston Basin (located in North Dakota and Eastern Montana). Several major oil and gas companies including Newfield Exploration, Rosetta Resources and Anschutz Exploration have all secured mineral rights from the Blackfeet Tribe and are actively drilling vertical and horizontal wells on the reservation to pursue the Southern Alberta Basin, which includes the Bakken, Three Forks, Nisku and Lodgepole formations. The Devonian-Mississippian Bakken Shale on the Blackfeet reservation is a widespread, organic-rich marine source rock that has been a known producer in the Williston Basin.

Robbie Cathey, CEO of Ecosphere Energy Services, stated, “We are excited and grateful to have the opportunity to work with the Blackfeet Nation and the oil and gas companies operating on tribal land. Ecosphere’s Ozonix process will allow operators to reuse their wastewaters and treat water in an environmentally friendly manner. It demonstrates everyone’s commitment to utilizing our natural resources and producing energy in a responsible way.”