A case in point is Manti Te’O's Twitter hoax!He convinced the world that he had a girlfriend, unfortunately this bad press about Manti Te’O is true and he will have a lot to overcome and it won’t be easy. Once it’s on the net, it’s on there for good.

But unlike Manti Te’O there is bad press on Facebook for brands that is not true and uncalled for, some from misguided souls, enemies and bullies. Some bullies never grow up.

Bullies are mean and don’t think twice of ruining the reputation of a brand online. They don’t think and don’t care about consequences, they let their anger and hatred fuel them and drive them.

But what does this mean for the Brand? It means you need to stay on top of all information put on the web about you. You need to share so much positive information, truth about your brand on the web. When you respond to the negativity, never attack, always respond positively. Don’t get in a pissing match on the web with your bully or hater. It will only hurt you in the end.

To find out what is being said about your brand on the web, signup for Google Alerts! This will enable you to stay on top of things.

If someone comments or posts negativity about your brand, remember to only come back with positive comments.

Look around. A new era is dawning in Montana. If we let it. If we embrace it.

Besides energy, manufacturing in Montana could explode into a rich and vibrant economic base, as well as a source of many new high-paying and challenging jobs.

The 3000 manufacturers in the state, throughout the recession, have held their own, although, it’s been a struggle. In listening to the comments of people attending the Compete Smart Conference, in Missoula, produced by the Montana Manufacturing Extension Center, there were upbeat reports, and some down beat reports. But, overall , the big picture for manufacturing in Montana has the potential of reshaping the economic dynamics of the state.

There are many market situations that are aligning to Montana’s advantage, and given the very obvious depth of savvy, talent and knowledge on display at the conference, there’s no doubt the people of this state are fully capable of seizing the opportunities that will emerge. The only question is whether government policies, regulations and taxes will give them the maneuvering room they need to do it.

Rumors flew at the conference about some rather big names in Montana’s manufacturing sector who are having trouble and are laying off, cutting back and even perhaps facing reorganization. But, at the same time, there were remarkable and exciting stories about those who are doing extremely well, and are expanding and making significant capital investments. Including, those who have made the news recently about building new facilities such as Black Hawk, Simms, and West Paw Designs.

There has been a strengthening in emerging food and beverage manufacturers in Montana. An especially robust niche is the increase in the number of breweries, wineries and distillers – due in large part to a backing-off of state regulations that has allowed them to find a toe-hold.

The reasons the struggling companies are struggling, are varied. Some are facing stiff price competition from China. Others have lost their export markets because of the worldwide bad economy. Some have lost their niche and need to quickly innovate. China’s propensity for knock-offs (stealing designs and ideas) forces US companies to constantly be re-innovating and finding other advantages.

And, other Montana manufacturers, because of more stringent regulations, have had to drop certain products, or are having to “re-invent” them.

But, for all the woes, there seemed to be an air of confidence that even these companies will re-emerge as strong as ever. Companies which are listening to their customers, which are being problem-solvers for their customers, and which acquire better tools for production, they are the ones which will thrive, said one observer.

And, there’s other good news that bodes well for manufacturing in Montana.

The explosion of production in all kinds of energy categories creates a great opportunity for manufacturing to meet the escalating needs of all aspects of that industry. That means opportunity for existing manufacturers to find new markets, as well as, to attract manufacturers to move here, and for new ones to start up here. And, there are sure to be lots of new manufacturers as technology advances and new products come into demand.

At the same time, there comes reports that across the border in Alberta, their manufacturing sector is reaching capacity, which prompts companies to look hard at Montana. As these companies do the math and make their choices, we should be concerned about what it is they see and how Montana compares, because they do have other options, although Montana should be the best, given its geographical location.

We should also be concerned about making sure we have the transportation infrastructure to serve Canadian markets, just as one Billings manufacturer has urged.

A theme of conversation at the Compete Smart Conference was that of “re-shoring” — manufacturers returning to the US. That is happening because conditions are changing overseas, as well as, in the US. Reports are that manufacturers of all kinds — machinery, electrical products, transport equipment, furniture, etc. – are coming back to the US.

Some fifty new plants involved in the petrochemical industry are planning $50 billion worth of investments in the US (many in Texas, undoubtedly, due to more rational regulatory environment, as well as being in close proximity to petroleum supplies). Among the reasons for “re-shoring” is that the benefits which drew companies out of the country are changing. Labor costs are increasing, as other countries build their own economies and their laborers becomes better trained and experienced, with many more options. Wages in China have increased 16 percent.

But, also, cheap natural gas is making it possible for manufacturers to compete better when based in the US. In other words, these companies are demonstrating the truth of the fact that cheap and abundant energy is an important foundation for building an economy and creating jobs. Bear in mind, as Jay Timmons, National Association of Manufacturers, pointed out, manufacturing consumes one-third of the energy use in this country.

And, it is more than that, when it comes to energy. Manufacturers are returning home because they can see the day approaching when the US will become, perhaps by the end of the decade, energy independent, because of the shale developments.

The “Telegraph” in the UK reports that because of the shale developments in the US, the country has “acquired a massive and lasting advantage in energy costs over global rivals.”

The report states, “The revival of the chemical industry is a spin-off from the greater drama of America’s energy rebound, though a very big one. . . the US energy department said last week that the country will produce 11.4 million barrels a day of oil, biofuels, and liquid hydrocarbons next year, almost as much as Saudi Arabia.”

The Telegraph went on to say:

“Shale has made the US self-sufficient in gas almost overnight. The new twist of course is shale oil. Output has jumped to 2 million b/d from almost nothing eight years ago. The Bakken field in North Dakota is twice as big as the conventional Prudhoe Bay field in Alaska.

“America produced 81pc (percent) of its total energy needs in the first six months of this year, the highest since 1991. Citigroup thinks US output of crude and equivalents will top 15.6 million b/d by 2020, adding up to 3.6 million jobs through multiplier effects. North America as a whole will reach 27 million b/d – with Canada’s oil sands and Mexico’s deepwater fields – making the region a ‘new Middle East’.”

“The implications are momentous. America will no longer need a single drop of oil from the Islamic world.”

The implications are also “momentous” for Montana, located as it is in the center of energy production of all kinds. It is momentous, not only in terms of energy production, but also in manufacturing. The question is whether the state is going to make the changes in attitude, in regulations and policies to embrace this new era.

Oil drilling in the Bakken and Elm Coulee is a long ways from many Montana cities, but its impact has reverberated statewide, and certainly in Butte at Montana Tech.

While our experience is just one of the ripple effects of the increased Bakken activity, it has proven to be a good one for a growing number of young Montana men and women.

It was about 2002 that Montana Tech began to see a spike in interest in its petroleum engineering program. Drilling activity in the Elm Coulee was a spark for it. In 2002, the department had an enrollment of 130 students. By 2011, Montana Tech had grown to be eighth in size out of 19 U.S. undergraduate petroleum engineering schools. This fall, we’re at an all-time high enrollment of 350 students.

That increased awareness of opportunities in the oil and gas industry is something we can attribute to the heightened oil and gas activity, especially in the Bakken and Williston Basin.

Even with the growth Montana Tech has seen, today it still has close to a 100 percent job placement rate for petroleum engineering graduates. We get about 40 companies from the oil and gas industry that come each year to recruit. We hear from them that they see many of our grads as the kind of people who like field operations.

It says something about the young people we are fortunate to attract. They’ve grown up outdoors. They have a background of doing hard work outside, an appreciation of the land and they are comfortable around machinery. And they know if they do the work, they can find a good job somewhere.

Right now, the average annual starting salary for our graduates is close to $85,000, and most of the larger companies pay cash bonuses of from $10,000 to $25,000 to help students get relocated. That’s pretty good for someone in their early 20s and just out of college.

Many jobs are based at national and regional company offices that tend to be in cities like Denver and Houston. So while we may not add a lot of people to the work force here, we have been able to create great opportunities for a lot of young people born and raised here.

The challenge will be to sustain and grow the Montana opportunity. There are three cycles for an oil field: primary, secondary and tertiary. Primary is when the oil flows from natural pressures. We know that even the best fields yield only 20-25 percent of their oil in that cycle.

The secondary is when you inject water to sweep the oil off the rock. That costs more, so the price of oil needs to be high enough for it to be economical. You might get another 25 percent with that effort.

The tertiary cycle is when you inject something else to get the oil flowing: steam or carbon dioxide or a surfactant. The tertiary cycle is very expensive, but I think that is what the future opportunity looks like in Montana. The state has areas not only over towards the Williston Basin but in central and north-central Montana, where there are fields that were depleted in the primary and secondary phases, and there never has been enough economic incentive to do more. The potential is there, though, with today’s higher oil prices, for companies to go back and rejuvenate these older fields.

That’s where we hope to help. With funding through the Montana Board of Oil and Gas, and support from the major operators, we are engaged in a three-year study over at Elm Coulee to determine that tertiary opportunity. We’re looking not just at the engineering but also whether it’s economically feasible. If it is, we would expect it to last much longer than the primary cycle.

Ideally, we hope it is a catalyst for another spike in activity – for more jobs, more production, more revenues and taxes for the state of Montana.

Leo A. Heath has almost 40 years of experience in the oil and gas industry. He currently heads the Department of Petroleum Engineering at Montana Tech at the University of Montana in Butte.

President of Bay Limited’s parent company, Berry Y & V, Ken Luhan, was in Billings last week to observe “what is almost a test case,” to demonstrate the feasibility of manufacturing in Montana for the oil sand producers in northern Alberta. A lot of prospective clients are watching, said Luhan, about a project which has taken almost three years to implement.

After considerable coordination with the Montana Department of Transportation (MDOT), Bay Limited has received permits from the state to move nine large loads, and expect to get permitted for 20 more. Three loads were well on their way to Canada, at the time of the Big Sky Business Journal’s interview with Luhan. The loads are modularized pre-assembled components for a refinery for a secondary upgrader project in Ft. McMurray, Alberta.

It will take two to three days for each load to reach the Sweetgrass-Coutts Canadian border crossing, with each successive load improving in the efficiency of modifying barriers along the route. Each load can reach maximum sizes of 24 feet by 120 feet, and weighing a maximum of 280,000 pounds. Some, not all, will require the lifting of aerial power lines along the route. Once they get to Canada, it will be much easier transporting, as they hit a corridor which has been cleared of all barriers for large loads.

Bay Limited hopes to see a similar corridor developed in Montana. Luhan said that doing so holds great economic prospects for the state. “What we are doing is shifting manufacturing jobs from Canada to Montana.”

Bay Limited in Billings is poised to take advantage of what they expect to be growing demand for pre-built components, as manufacturing capacity in Alberta, Canada is forecast to reach a saturation point in 2013 or 2014.

Bay Limited has been working with state officials, and hope to see the 2013 State Legislature assist, in developing a clear corridor in Montana. Many of the improvements and changes in the route have already been made and paid for by Bay Limited.

“It is quite a burden because we have to pay the utility companies to permanently move the lines,” said Luhan. Bay Limited has paid to clear about a third of the corridor. The company has spent “several millions to date and forecast for many more millions,” said Luhan. Utility companies are not allowed to incorporate the cost of modifying the route for such a purpose in their utility rates.

It is hoped that some kind of process can be established in which the burden of that cost can be shared by other companies using the route in the future, and as they apply for permits to do so.

Moving large loads is not all that unusual, in the state, said Luhan. Some 1500 permits are issued by MDOT, every year. Other companies move materials like wind turbine components, boilers or houses. A system that spreads the cost of establishing a clear corridor would be a cost savings for all of them, as well as encouraging the development of a whole new manufacturing sector in Montana.

“We have not received any kind of assistance,” said Luhan, “We are working with all the economic development agencies, and we have been in contact with the federal representatives and senators and government officials looking for some assistance because we have to spend a lot of money on clearing a route in the interest of public safety and convenience, and in order to bring jobs from Canada, into Montana, Yellowstone County and Billings.”

The clear corridor through Montana is necessary to remain competitive with Canadian manufacturers. Luhan explained that to be competitive they must be able to build components of the same size as those built in Canada. Smaller units entail more costs for Canadian oil producers. In an area where labor is scarce and the work environment is very harsh, they “try to minimize the man hours on site and maximize man hours of work in shops and yards.”

“We are getting a lot of cooperation from counties along the routes, sheriffs, mayors and MDOT, as we are trying to enable this job creation to occur and to do it in a safe manner that does not disrupt the public,” said Luhan.

This inaugural project for Bay Limited is a very small contract, compared to the future contracts that Bay Limited plans to acquire, according to Luhan. But even at that, the company is currently employing 259 people in Billings, most of which are welding jobs.

Following the completion of the project, there may be a layoff, while the company lines up more contracts. But, given the prospects for growth in the oil industry in Canada and in the region, “bigger opportunities will follow, and we will be hiring back in great numbers,” predicted Luhan, “We are actively talking to other clients about similar work.”

“We had such an aggressive schedule on this project,” said Luhan, “we hired every local qualified person we could find, and still had to bring workers from out of state. That costs more and is not in our best interests. The more longevity we can build and to build up a local workforce of qualified, skilled workers, the better for us.”

Bay Limited is a subsidiary of Berry Y & V headquartered in Corpus Christi, Texas.

People who look for adventure often go hang gliding, parachuting, deep sea fishing, deep sea diving or they ride bucking horses; which are a lot of dull pursuits compared to darting up Oil Patch Lane, better known as Highway 85, north of Belfield these days.

Stupidity reigns on that fast track and I know because I’ve seen every form of automotive stupidity that exists, having negotiated southern California freeways during a 20-year hiatus in the City of Angels and beyond.

Back there they drive 85 mph an inch from your bumper and think nothing of it, scurrying from one lane to the next and back, overworking to gain an additional second of time as if it was worth more than a hill of beans, a lost crescent wrench or a wife who dates the postman.

I was rear-ended twice, passed by a truck tire, spun out across six lanes, slammed into a retainer wall, had two cars spin out in front of me and, as if it was the grand prize, had a plane land on the freeway in front of me.

It is deadly, deranged, dramatic, depressing and a daily ordeal that drags you down, digs deep, robs time and gives birth to varying levels of a dementia known as road rage, a disease now afflicting even Oil Patch Lane, the nation’s latest fast track, surpassed in danger only by Talladega, Daytona Beach, Martinsville and a few other NASCAR venues.

On Oil Patch Lane, young dudes in giant pickup trucks, raised up as high as a forest ranger’s lookout tower, drive so close that they are nearly hooked to your bumper, hoisting an occasional beer or energy drink and gliding over the centerline to see if they might have an inch or two to pass, especially uphill, putting pedal to the metal, shooting dark dungy diesel in thunderous clouds out of their tailpipe.

Or it is a company truck from Texas, Louisiana, Colorado or Oklahoma, full of tools and fools, dipping in and out from one lane to the next, playing a glorious game of chicken while putting everyone at risk for a two-second gain that results in a lot pain and a small-town newspaper headline worth of fame.

It’s a rush, a high, a desire to fly, or something crazy that motivates these few who’ll ultimately find that their time is due.

I saw it this past weekend as part of a pack of 10 vehicles in a row with two white ones in back. They were fighting for position, a pickup and truck, until one passed the other and the other passed back, on the right, on the shoulder, half in the ditch.

Crazy it is, insane if not worse, a game played on asphalt that makes no sense and reminds me of a quote I once heard that said, “It takes 8,460 bolts to assemble an automobile, and one nut to scatter it all over the road.”

That’s twice in two trips that I’ve seen some moron pass on the right, too much in a hurry with too much at stake. What’s the rush and the hurry you want to say, take your time and live another day.

Meanwhile the U.S. Transportation Department announced that, in the rest of the country, highway deaths fell to 32,885, the lowest level since 1949, even though American’s increased their driving by 1.6 percent.

Of that number, 5,474 were “distraction-related” fatalities caused by texting or talking on a cellphone and 10,228 deaths were caused by drunk drivers.

Still, it is especially alarming to note that drug-related deaths now outnumber traffic fatalities in the U.S. by almost 5,000 people per year and these deaths are due largely to the growing popularity of powerful prescription pain and anxiety drugs, which are often highly addictive and dangerous when combined with other drugs or alcohol.

Which reminds me of another quote that went something like this: “To all my friends I bid adieu, a more sudden death you never knew. As I was leading the old mare to drink, she kicked and killed me quicker’ n a wink.”

So look out for the old mare. She comes in many forms these days.

Holten is a freelance columnist and cartoonist from Dickinson. To Follow The Dickinson Press click here.

By Kevin G. Hall

McClatchy Newspapers

SIDNEY, Mont — Politicians are quick to extol the virtues of domestic oil drilling while ignoring the trade-offs. Here in this fast-developing Western oil patch, the gritty side of America’s new oil boom is on display with rising crime, a slain schoolteacher, rents that have tripled and public resources stretched thin. Some area high schools are at historic low attendance levels, as students drop out to work the oilfields, and most everyone worries that the boom is transforming small-town values into something new and unpredictable.

“It’s just happened so fast, and many small communities just didn’t have time to plan,” said Mike Coryell, executive director of the Area Economic Development Council of Miles City, located just south of the oil boom but feeling its effects. “The impacts hit but you don’t have the resources to attack it.”

The Bakken Shale, some 200,000 square miles of it, stretches across North Dakota, Montana, Native American reservations and parts of Canada’s Saskatchewan province. The area saw a short-lived boom in the 1980s, but technology back then allowed only vertical drilling. Breakthroughs in horizontal drilling, and hydraulic fracturing, or “fracking,” have unleashed a drilling boom that many expect to last for decades.

Signs of the times abound. Natural gas is flared in the middle of sugar-beet farms and on prairie ranches that look like the set of old TV Westerns. Just across the North Dakota line, oil rigs dot a landscape where President Theodore Roosevelt lived out his final years, and where explorers Lewis and Clark famously rendezvoused at the confluence of the Yellowstone and Missouri rivers.

“We’re glad we have an area that’s booming . . . but it has totally ruined the quality of life around here,” said Kerry Finsaas, 60, walking her land, which abuts an expanded rail terminal near Trenton, N.D. “I’d say life as we knew it here is gone.”

After 34 years on her land, Finsaas and her husband, Darrell, look out the kitchen window at a natural gas flare a few hundred feet away. Crude oil is pumped into rail tank cars that stretch in front of their house almost as far as the eye can see. Nearby irrigation ditches adjacent to a new open-air disposal pond reek of sewage.

“We don’t need a night light,” Finsaas said sarcastically.

From Miles City, where Coryell struggles to keep pace with growth, it’s almost 50 miles to Sidney, Montana’s oil hub, and roughly 120 miles to Williston, N.D., the heart of the region’s oil boom. Rents have risen so high in both places that workers now commute there from Miles City.

Coryell’s office is helping to secure funding for a new jail. That’s not the traditional work of economic development officials, but Miles City, like other area small towns, is burdened by rising crime. Parts of its current jail date to 1904.

“We need them to find oil in Custer County, that’s what we need,” said Coryell, referring to the revenues such a strike would bring to towns in the region. “I don’t think people understand the impacts on a rural area, the small towns that are used to having a quiet lifestyle.”

These impacts include sugar-beet farmers on tractors competing for space on tight two-lane highways with rumbling rigs that rush sand, water and heavy machinery to drill sites. Drunken driving arrests are way up, and police report seizures of uncommon illicit drugs.

“Heroin is starting to come back. The drug activity has really changed in this region,” said Doug Colombik, the Miles City police chief.

Crime increases

Cops on the beat feel a difference, too.

“The level of aggression that we’re met with when we’re responding (to a call) has really increased,” Mark Kraft, 33, a night officer for the Sidney Police Department, said during a ride-along with a McClatchy reporter. “It makes our job a little more dangerous than it was a couple of years ago.”

The big wakeup call came in early January, when schoolteacher Sherry Arnold went for a morning jog in Sidney and never returned.

Her remains were found months later across the state line near Williston. Police said the 43-year-old cancer survivor was kidnapped and killed. Two Colorado men who came to the area in search of work in the oilfields are charged in her gruesome death.

Arnold’s slaying brought soul searching over the costs of a transformative oil boom. Almost to a person, everyone interviewed in the region complained they no longer recognize people in the grocery store, and that they now must lock their doors. A large town here is home to fewer than 6,000 people, and leaving doors unlocked and keys in the car is the very definition of small-town life.

“I think whenever you don’t know people, you become suspicious of them. You just have to remember that not all strangers are bad,” said Maj. Robert Burnison, Sidney’s assistant police chief. “I tell people that, and to be aware of their surroundings . . . just be cautious. You don’t have to be afraid.”

Burnison recently counted 17 out-of-state license plates in the local grocer’s parking lot. This flood of new American workers, dubbed “patch rats” by locals, is also clogging up the criminal justice system in eastern Montana, he and others said.

“We average about a DUI a day now,” said Judge Gregory P. Mohr, a city judge in Sidney, whose office is strained by mounting demands and no comparable increase in revenues. “All of the oil money goes west (to the state capital), but we need it here.”

Montana has a “three strikes” policy, meaning a fourth drunken driving arrest is treated as a felony charge and conviction results in a 13-month prison sentence. Many of the arrested have strikes in other states, and Montana’s policy counts them.

“We’re up in felonies all over the place here. What we’re seeing is a lot of out-of-state (resident) felonies. These are extraordinarily taxing to our system,” said Sheila M. Newman, the deputy public defender in Miles City, who now spends much of her time researching the laws of other states. “I’d like to have another full-time employee, but the legislature says the public defender system is maxed out.”

It all explains concern that eastern Montana will inevitably resemble Williston, which earlier this year was named by the Census Bureau as the fastest-growing micro area of the nation between April 2010 and July 2011. Roadside businesses tied to the industry dot both sides of the highway for seven miles out of town.

Oil workers are young men paid handsome sums. There’s little to do in small rural towns with those sums but frivol it away on alcohol and electronic casinos. Some workers dispose of their earnings at Whispers, one of Williston’s two seedy strip bars.

There, young men slug down liquor, drop loud F-bombs and jostle over billiards. Some disappear with dancers into rooms guarded by burly, tattooed, pierced men who work in the club.

For many workers coming to the Bakken region, they quickly find they can’t afford to live here.

“The city is being terribly saturated with individuals looking for work,” said Cal Westerhof, a missionary from Dallas whose Fellowship Baptist Church in Sidney offers free showers, food donations and low-cost rentals for displaced workers.

Skyrocketing rents

Rents have more than doubled all over the oil region. People rent out basements, rooms and even their front yards for trailers. Makeshift RV parks have cropped up everywhere and charge $400 a week or more. That’s about what an apartment rented for monthly before the boom began.

“Even with a good-paying job, how do you afford to pay the rent? Groceries have gone horribly high . . . living on a daily basis here is high,” said Candy Markwald, who helps run the Richland County Food Bank in Sidney.

For Brant Powell, 23, rent isn’t an option. He came up from Bozeman earlier this year and landed a job driving a truck that hauls sand used in the oil drilling process. He’s forced to live in his truck, unable to afford the high rent.

In between attempts to woo a barmaid at the Cattle-Ac, known to Sidney police for its oil-worker brawls, Powell scarfed down dinner and admitted that he’s had about enough of the oil patch.

“It’s just rough. You don’t know anybody here, you don’t feel at home,” he said. “It’s dirty. But people do a lot for money.”

Building boom

Apartments and condos are under rush construction on the outskirts of Sidney, but they’ll rent for $2,000 a month and upward, a price tag for supervisors and managers. It means workers like Powell coming to the oil patch are likely to keep improvising.

“Holy smokes, if you want it bad enough, you’ll find a ranch, a basement, a backyard,” said Wally Jungels, a roofer from Miles City whose company paid for three workers to share a small trailer next to Sidney’s Pizza Hut. “If you’re not making $15 an hour, you can’t live here.”

It’s so bad that an area manager for a major national fast-food chain confides he’s forced to bring in foreigners on student visas just to man the cash registers.

“I advertised at $10 an hour and got no response,” said the manager, who demanded anonymity because his well-known chain doesn’t want to broadcast that it brings in college kids on student visas for three-month stints.

September marks the start of his staffing problems. Summer has ended north of equator, and the Russian, Ukrainian and Macedonian students have returned to their universities. It won’t be until December that summer vacation begins south of the equator. At that point, the manager can bring in students from Brazil, Peru and elsewhere.

With so few rental options, the fast-food chain bought three trailers to house its visiting guest workers.

Kim Trangmoe, executive director of the Glendive Chamber of Commerce, points to a 10-acre parcel of land that just a few years ago sold for $10,000. It’s up for sale again, listed at over $300,000.

“It really hurts our essential workers — firefighters, teachers and the like. Their paychecks are not going up with the rent,” said Trangmoe, noting that the local sheriff had to purchase a home for use as temporary living quarters for patrol officers. “I think our biggest struggle is housing for renters.”

The town’s mayor agrees.

“We’re seeing landlords increasing rent to the point that a lot of local people who’ve lived here all their lives are feeling the pinch,” said Jerry Jimison, adding that new construction hasn’t kept pace. “We’ve never had homeless people in Glendive . . . there are some of them living in tents, sleeping in parks. It’s not hundreds and hundreds, but there are more stragglers showing up with no place to live.”

The people involved and the discussions pursued at Energy Day at MontanaFair were indicative of the broad range of businesses and organizations that are engaged, as they unveil a new source of economic opportunity, stemming from energy development. Sometimes it was surprising to discover just who is involved and how they connect, but then comes the realization that for all the discussions of economics and technology, it is just life, and those involved need all the same services, commodities and support as any other community – so, opportunity abounds.

To find Sanjel, ExxonMobil or Schlumberger tucked in along the rows of vendors of the classic Heritage Building at Metra Park in Billings, Montana was not surprising, but to also find the Yellowstone Boys and Girls Ranch, COSTCO, and the Montana Farmers Union was somewhat of a surprise, until they explained.

The Montana Farmers Union is concerned about keeping their members informed, many of whom are the landowners who are leasing mineral rights to oil companies. “We want to be able to help them protect their mineral rights and their property rights,” said Aeric Reilly, membership developer, who was manning the booth on Thursday ,”We had members calling in about leases, so we held meetings to try to help inform them.” When 250 members turned out for a meeting at Lewistown, they knew they had struck a chord. Having a booth at MontanaFair’s Energy Day is a continued part of that out-reach.

Interest in the oil patch by Montana Farmers Union, which has been representing agriculture producers since 1915, shouldn’t be surprising since there is emerging an understanding that while there are issues of contention between the two industries there are also corresponding interests. For example, it was recently reported in North Dakota that a railroad grain terminal facing the stark prospect of having to lay off employees, due to a decline in business, found it could augment business by also operating the loading terminal for oil. They in fact hired more employees. So while oil development is having a significant impact on their way of life, agriculture is embracing energy development, more than willing to work out their differences for the shared opportunities.

Interest of the Yellowstone Boys and Girls Ranch (YBGR) is two-fold. The communities in the midst of the tempest are being impacted by a significant jump in school enrollment, often with students who have had turmoil in their lives because of economic stresses and displacement brought on by the recession and their parents’ job searches.

The small schools lack the mental health services and expertise that are offered by YBGR. Gary Flohr of YBGR said that YBGR wants to inform the companies, whose employees are the families that will be in need of their services, about their therapies and behavior specialists – that they offer residential treatment and preventive care. Extending their services to outlying communities is not new for YBGR; they already provide services in a number of smaller communities.

Also, YBGR has “kids who are growing out of the system,” in need of jobs and careers. Connecting with oil field companies with job opportunities is important for those students, Flohr said, noting that there are as many as 15,000 jobs in Montana and North Dakota that employers are having trouble filling.

Huntington Learning Center in Billings had very much the same idea for providing teaching services to help students keep up in the classroom. Jennifer Quinn said that theirs is the only franchise in the state, and they are already extending services from Plentywood, Montana, to Cody and Sheridan Wyoming.

COSTCO played a very active role at Energy Day, as they made the effort to find out what is needed in the oil fields and to let the companies know they can deliver – by the truckload if necessary – which has often been the case as most of the supplies needed by everyone in eastern Montana and western North Dakota are coming to Billings to supply. Saturday morning, visitors at Energy Day, were greeted by a table full of Costco pies, which were served up later in the day by COSCTO representatives, who talked about the challenge that is probably being encountered by all retailers. Building stores in the Williston Basin and staffing them in competition with all the other building and staffing needs is, almost, an impossiblity, so how else can they meet the needs of prospective customers? The company is exploring for those answers.

Searching for ways to reach markets in the Bakken was also the purpose of the involvement of Beetle’s Auto Body, Inc., in Billings. Hearing that it takes at least a two-month wait for people to get body work and mechanical repairs for their vehicles, in the Bakken, owner, “Beetle” Bailey, is offering transport services from Williston to Billings. To be able to haul several vehicles at once would make the service more affordable, he said, but the service provides faster turn-around and saves people the time of having to come to Billings, themselves.

Of course, while oil and gas seemed to steal the limelight, Energy Day is about all kinds of energy development. Representing Cloud Peak Energy was Senior Manager, Government Affairs, Todd O’Hair who talked about what his company is doing and about the future of coal. He said he was pleased to see that Billings is so supportive of energy development.

Big Sky Linen, a Billings commercial laundry, also had a presence at Energy Day, because they are more than a laundry. The company sells and cleans flame resistant work clothes. “It’s the biggest thing coming down the pike, for oil and gas as well as other industries,” said the owner Rob Cline. The federal government is mandating that workers wear the special clothing in all kinds of venues. His business has already felt the impact of the oil fields, and they are searching for more ways to tap into it.

Airgas Intermountain, too, sells flame retardant clothng, as well as all kinds of other safety equipment. Airgas is the largest US distributor of industrial, medical, and specialty gases and hard goods, such as welding equipment and supplies. Billings has emerged as such an important market that they built a new store at 6785 Trade Center Avenue in Billings. It is the first store the company has that provides both the retail outlet and the service aspects of their business. Lacey Williams, safety trainer, and Jacob Anderson, safety supervisor, are two of the six employees who now work for Airgas in Billings. They provide everything in the realm of personal protection equipment, including the training needed to “keep industry safe”.

Of course, big names in the oil business were present at Energy Day. ExxonMobil, which one might think needs no introduction, was there to make sure people know the role of the refinery in the future. Spokeswoman, Pam Malek, said that they answered a lot of questions about what kinds of occupations are available and how to apply for jobs. Contractors, too, were interested in pipeline projects.

Schlumberger is an equally big name, but it may be new to many people, locally. It’s a name recognized around the world, as the world’s largest oil and gas field service company; delivery technical solutions – high pressure pumps, generators, hydraulic and pneumatic systems, electrical systems, engines, transmission and fuel systems – to their customers.

Schlumberger recently built a huge new facility in Williston, North Dakota; significantly increasing their capacity. The company has had a presence in the area for years, but over the past three years they have tripled the number of crews operating in the area, according to Tom Papiernik, technical sales support engineer. Besides wanting to provide information to the public about what they do, Schlumberger was in serious recruiting mode for employees as they greeted visitors to their booth.

Schlumberger and others brought equipment to Energy Day so the public could see, up close, the technology that is making shale oil production possible. Papiernik and others spoke to audiences during Energy Day about what they do and how the technology works, countering much misinformation and attempting to alleviate concerns about risks, and the industry’s commitment to mitigating risks.

For example, hysteria about fracking contaminating underground water sources, is usually brought into check as soon as people understand that all the action is happening two miles below underground water reservoirs.

While anti-industry activists are well programmed and fully focused on agitating against hydrocarbon production, defending themselves is not the focus of the industry, nor are engineers usually as adept at public relations, but they are recognizing the need to inform the public so as to promote more common sense regulations. Energy Day is an opportunity to get the message out to the audience that will likely be greatly impacted by any policies which are imposed. It’s all about communications.

For all of these businesses – for all the businesses in the oil fields – other than housing and transportation the next biggest issue is one of communications. Businessess need to connect with other businesses in a growing and vital economy. Many of the avenues and resources commonly used to do that haven’t been available in the Bakken area, so companies are pursuing every idea that presents itself, and devising more new and creative ways of reaching each other and to recruit for prospective employees – hence their presence at Energy Days.

Such is also the reason for the creation of synergystation.com by Laura and Kendall McRae, who helped to pull Energy Day together. Theirs, too, is a business that has emerged solely because of the oil boom, and solely in an attempt to provide a new means to facilitate connections within the industry.

It is because of the need to communicate that Energy Day is so dynamic and is poised to be even more successful in the future, according to Laura McRae. She pointed out that the oil companies and support businesses viewed Energy Day as so important that they pulled vital people and equipment from the fields, at considerable cost, to spend the three days at Montana Fair.

Interestingly, during one of the seminars, one of the audience members asked, “Is it true that the US has the capability of being 90 percent energy independent?” There was a pause, as the numerous industry representatives in the room waited to see who would answer, and then all answered at once, giving a resounding, “yes!”

No one was more enthused about the potential for natural resource development in Montana than was Ed Walker, who was on hand to represent his employer, Loenbro, a pipeline company, which installs pipelines and provides services to companies using pipelines. The company will lay some 500 miles of pipeline this year in the Williston Basin, North Dakota, Montana and Wyoming.

Loenbro provides a unique technology, devised by the welder-trained brothers, to test welds on site. Called NDT (non-destructive testing), it uses an ultrasound process which is safer and more accurate and faster than previous x-ray technology. The process can follow right behind a pipeline layer or it can be taken to any site. It reduces turn-around time for a refinery by one-third to one-half and can pin point to the micrometer a defect. “That is real dollars,” said Walker.

“Montana is poised to be the energy epicenter of the US, if we get our energy policies right,” Walker said, “There is opportunity and prosperity on the horizon.” No state has the carbon resources that Montana has, said Walker. “No one state has it all the way we do, but we are at a decision point in our economy.”

Walker, who is also a state legislator, was just as enthused about the story of Loenbro, a company founded by two brothers from Sun River, Montana, three years ago, who today employ 250 people. Walker is, in general, enthused about the entrepreneurship that is bursting forth because of the energy boom. There were several exhibitors who had similar entrepreneurship success stories.

For example, Rig Mats of America which has devised portable high-strength, lightweight rig mats, to put over the ground to preserve it from heavy equipment traffic or to create a platform when the soil is unstable. Another emerging entrepreneurial effort comes from Sivert and Richard Mysse, under the business name, Hot Fracking Water, Inc. Recognizing an industry need to be able to heat water during winter’s freezing temperatures they designed and manufactured a semi-trailer that is more energy efficient and five times larger than the traditional 45-year-old hot oiler truck that is commonly used. One of their colorful trucks was on display at the show.

Sanjel – a name that is probably more readily recognized for their expansion into Billings with a regional maintenance and training center—is a Canadian-based company that does business worldwide providing systems and services that maximize production at the well. “We want to educate and inform the public about what we do,” said Alan Olson, Senior Field Sales Representative. “Billings has been good to us. Montana has been good to us,” said Olson, because of that Sanjel felt it was obligated “to be involved” in Energy Day. Olsen said that Sanjel is a “small, quiet company, family-owned and family oriented.” Thirty people work in Billings for Sanjel, which also has a location in Miles City. Throughout the state they employ some 250 people, and 300 in Williston.

Other representatives of the oil industry included Shale Exploration, which was founded in 2011 in Ft. Worth, Texas, and is opening an office in Crowne Plaza. The company, also has offices in Shelby and another in Scobey. Shale Exploration does exactly what its name implies, they explore for shale oil for themselves or for other operators – and said company spokesman, “there is lots of exploring to do in Montana.”

“After over 12 months of leasing and multiple large acquisitions, from numerous companies, Shale is positioned to begin development of the Bakken-Three Forks Jayhawk Prospect.” Shale Exploration and JV Partners hold more fee Leaseholds and State of Montana Leaseholds in Daniels County than any other company. The company employs about 70 people company-wide, of which 20 are located in Montana.

Nabors Well Services, the world’s largest onshore drilling contractor, has had an office in Billings since 1948, prior to the 80s it was known as Pool Company. Forty percent of the rigs in operation in the Bakken belong to Nabors. They joined Energy Day because they are in search of employees. Russ Burch, District Human Resources Manager for Nabors said they are looking for rig supervisors, crew chiefs, derrick workers, crew workers mechanics and CDL Class A Drivers. The company has yards in Baker, Glendive, Plentywood, and Sidney and in North Dakota, Belfield, Fairfield, and Williston, also in Rock Springs, Wyoming and Roosevelt, Utah.

MacTech based in Red Wing, Minnesota was also part of the show, seeking to connect with prospective customers for its wide range of on-site machining and heat treating services and equipment. Employing some 75 people, the company rents and sells, and has design engineers to solve problems, explained company representative Quentin Luff. Their clients are typically refineries, power plants and manufacturers. “We are a small company that values good service,” said Luff, who sees his role as establishing trust and confidence with the businesses involved in the rapidly growing energy industry in Montana. If they can gain the business necessary, to open an office in Billings is a very real possibility.

Prudential Floberg Real Estate wanted to interact with the companies who are moving here and bringing in new people. “We have specialist who understand the whole relocation process,” said Patty Connelley. They have already represented some workers who are relocating to Billings. The impact of people in search of energy-related jobs and companies doing business in the oil fields is already being felt in the Billings real estate market, said Connelly, announcing that as of last March the demand for housing in Billings switched from being a buyer’s market to a seller’s market.

Clay Schreder, owner C’s Exterior Design, a construction business of some 18 years, has an idea for a mobile cabin to replace “man camps.” He has launched a new business Signature Cabins, LLC, and had a prototype on display for visitors, feeling out the prospects for production. The first thing everyone says when they see it is “Wow!” said Schreder. There are more applications for the comfy-looking living units than just to relieve the housing pressure in the Bakken. Schreder suggests recreational cabins or mother-in-law suites. They are built to last as a home-away from home.

The American Fuel and Petrochemical Manufacturers Association, a trade association based in Washington DC, wanted people to know what the four refinery members of the association do. Spokesperson Steve Higley pointed out that their members employ two million people in the US in the process of producing refined petroleum products.

The American Energy Alliance played a major role in Energy Day, likewise, wanting to provide information to the public about the need for the AUS to become more energy self-reliant. The organization is in the process of traveling from state to state in a bus, on which they ask people sign their names in support of domestic energy production. Upon hearing about Energy Day, they turned the bus around and headed back for Billings, to take advantage of the public exposure and gather more signatures to petition the White House, by parking the bus outside at the end of their tour. Spokespeople pointed out that the US uses 20 million of petroleum based products a day, of which just under half is imported. Producing our own or importing it from friendly countries like Canada can “keep us edging towards zero imports.”

Understanding that there will be many business start ups, as well as expansion of existing business because of the energy boom, SCORE was on hand to let entrepreneurs know that they are available to provide business advice and counseling from retired business people. SCORE (Service Core of Retired Executives) is a volunteer program under the US Small Business Administration dedicated to assisting small business owners to succeed and grow.

On the private front there was also a consultant whose business does much the same thing. Dr. Joe Michels, founder of Solomon Bruce Consulting, said he as “invited to participate to be able to help clients and prospective clients improve their business operations. Formerly of Billings, Michels now has his company located in Ft. Worth, Texas. He pointed out that being located in Ft. Worth is little different than being located in Missoula, as far as proximity to potential clients. It’s only a five hour trip, he said, and “we have much greater collaborative power than was available in the Rocky Mountain region.

And, then there are the basics of services that every business needs, but many of those involved in the Bakken have little time or opportunity to pursue. Kinetic Marketing and Creative wanted companies to know that they are fully prepared to fill the gap. They stepped up to help promote Energy Day giving it a professional flare and helping to market it. Also, offering services, especially in the realm of social media marketing was BLaST creative, a full-service marketing studio providing custom print and Web design.

Part of marketing involves promotion through the use of specialty items emblazoned with logos and company names. Marilyn Roen with her company, MGR Marketing Tools, was introducing prospective clients to the broad range of promotional products, printing services and E-commerce solutions she has to offer.

People are making money in the energy boon and often need help in handling it and planning for the future. Denise Bouscher was one of several representatives of Primerica offering their expertise in planning for the future and for the unexpected. ‘My mission is to make sure that they set themselves up so there will be something there for them in the future.” Bouscher serves clients throughout Montana, North Dakota, Minnesota and New Mexico. “I go where people are looking for me,” she said.

AFLAC offers benefits to employees, explained Susan Kahn. Working through the employers or with individuals, AFLAC has products that pay cash when people are most in need of it.

And, the time could hardly be better for the Petroleum Club, to seek new members. Kayla Piatkowski, banquet manager for the restaurant located on the 22^nd floor of Crowne Plaza, said they wanted to let people know that they are available to serve entertainment needs for members and non-members.

And, just to show that there is no limit to the prospects for local entrepreneurs, Body by Vi, a business owned by Karen Gosz, was introducing people to good nutrition. For people on the go in an area where food services are often not very convenient, they offer products that are nutritious, filling and affordable.

‘If you don’t pay attention to the provisions of the lease, you may end up with pennies instead of Benjamins.’

Source:  “Tappin the Bakken”, Spring 2012, Sidney Herald, Steve Hamel

Mineral rights are valuable commodities for landowners in the MonDak region, but a thorough understanding of the leasing process is the key to maximizing the value of those mineral rights, said Timothy Fitzgerald, assistant professor of agricultural economics at Montana State University. “If you don’t pay attention to the provisions of the lease, you may end up with pennies instead of Benajmins,” Fitzgerald said during an April webinar on the subject.

The leasing process begins when a mineral owner begins negotiations with a landman. Landmen, who may work for developers or as independent contractors, are paid to obtain signed mineral leases from mineral owners. They are usually very familiar with the details of mineral leases and recent trends. “You want to try to understand your options beforehand and minimize any informational advantage the landman may have over you in the process,” Fitzgerald said.

Before beginning negotiations, Fitzgerald said it is important for mineral owners to consider both their short-term and long-term priorities since mineral leases may last 40 or more years. There is no standard lease form and everything in an oil and gas lease is negotiable, so consulting with an attorney may be advisable, Fitzgerald said.  Typically, a lease includes an upfront payment, usually on a per acre basis, and a royalty clause, which specifies the percentage of the production value entitled to the mineral owner. A lease may also include a rental agreement in which an annual payment is received by the mineral owner between signing and production if the lessee waits to develop the minerals.

The main provisions of a lease mineral owners should be aware of are the granting clause, duration, royalty, surface damage and assignment clause, Fitzgerald said. When negotiating the granting clause, which specifies what is being leased, the mineral owner needs to be specific about what rights the lessee does and does not have. For example, a landman may want a landowner to include water rights in the lease, which would allow the developer to use the mineral owner’s water for hydraulic fracturing. Fitzgerald advised against including water rights in a mineral lease. “Hydraulic fracturing takes a lot of water, so if you want to lease water, you might want to lease it separately,” he said.  The duration clause specifies the primary and secondary terms of the lease. The primary term is the amount of time the lease is set in stone, while the secondary term may include an option for additional years.

One provision Fitzgerald recommends mineral owners include in the duration clause is a “shut-in” payment, which the developer would pay the mineral owner in the absence of royalties if the developer choses not to market the oil produced by the well.  “You want to make sure you have a shut-in payment, so you receive a little income for having those minerals, even if the producer chooses not to market it,” Fitzgerald said.  When negotiating the royalty clause, Fitzgerald said the most important thing is to know the amount of the royalty interest. “You should not be shy about asking for more if that’s what you want,” he said. Fitzgerald said developers may try to reduce royalties to cover their post-production costs, but this can be avoided if the landowner includes an overriding royalty in the lease, which keeps the landowner from being held responsible for post-production costs incurred by the developer.

“The landman is trying to get you to sign, so you can try to ask for stuff (to be included in the lease),” Fitzgerald said.  When negotiating the surface damage terms of the lease, the mineral owner has the ability to specify the terms of suface use, which could include weed control, fences, roads and water development among other things, and the terms for compensation should the developer violate the terms of surface use.  The final provision mineral owners should pay attention to is the assignment clause, which requires the lessee to give the mineral owner written notification if the lease is transferred to someone else.  “You want to know who is holding the lease at any given time”, Fitzgerald said.

Source: “Tappin the Bakken” – Spring 2012 Sidney Herald:  Louisa Barber

Take a drive through the Williston Basin anytime, and one will see thousands of wellheads flaring to be rid of the tremendous amount of natural gas locked deep within the shale oil formations of the Bakken and Three Forks.  There’s an opportunity there, to capture the liquids in those gases, to clean the air and generate revenue for producers and royalty owners. G2G Solutions, an oil and gas service company based in Billings and operating near Sidney, will install and operate mobile flare gas treatment technology for oil well sites. “The main reason we have flaring is that gas pipelines cannot be constructed quickly enough to keep up with the current drilling and completion pace in the Basin,” co-founder Brian Cebull said. So G2G Solutions has set a goal: to get to the well site as soon as the completion has finished.  The equipment is hooked up to the gas flare line and treated utilizing G2G’s mobile equipment. The captured natural gas liquids, like propane and butane, are stored in a tank on location and are turned over to the operator for marketing.  G2G’s innovative technology is scalable so systems can be combined to treat higher flow rates and taken away as the production rates decline. The mobile systems are self-contained and can be moved and set up within one day. Recovery systems are powered by treated gas residue allowing G2G to operate at the most remote sites.

Because of the rapid pace of oil drilling and production, pipelines and meter runs can’t be constructed quickly enough to collect all natural gas associated with oil production. G2G’s operation reduces flare carbon emissions, NO2 emissions and flared gas volumes. The company even recycles some of the gas for itself to power its own generators.  “We’re really a standalone service. We are self-contained, we can generate our own power,” Cebull said. G2G, a relatively new company, currently has nine people on staff but has established an aggressive growth pattern, he said.  “We see the Bakken as a great opportunity. There are many other active shale oil plays in the nation, but the Bakken was among the most active and is located right in our backyard.  We see growth potential in other areas around the Rocky Mountains and the rest of the U.S. Flaring gas is a problem in search of a solution – and we are part of the solution.” In April, G2G conducted its first major commercial deployment, the first in what the owners hope will be a long list of commercial opportunities.  “This is a big problem in need of a solution, but we are confident that our business, knowledge and technology will work well,” Cebull said.  For more information, contact Brian Cebull by calling 406-867-6700 or emailing bcebull@ g2g-solutions.com. Also, visit the G2G Solutions website at www.g2g-solutions.com.

Focusing some attention, at Montana Fair, on what is fast becoming a significant base of the local economy, seemed like an idea whose time had come to Montana Fair planners. Forming a collaboration with Metra Park, the Billings Chamber of Commerce, Big Sky EDA, Montana Energy, and synergystation.com, Energy Day mushroomed so quickly that planners realized that more than timely, it is something that is long past due, and could prove to be one of the Fair’s most popular features.

While Energy Day at the Fair is August 16, once open, it will remain open for the duration of the Fair through August 18. While it will be an unprecedented kind of exhibit, it will be more than just an exhibit; each day will be full of educational and fun events, and many opportunities for business people to connect with each other, and for job seekers to connect with potential employers and training.

The venue for Energy Day is the Heritage Building, which initially seemed more than adequate, but demand for space quickly filled it and spilled out into the front of the building and the Rodeo Arena. Some 45 exhibits will be housed inside while outside will be a number of amazing static equipment displays. Oil field companies are putting together the displays which will allow visitors to see things like: a work over rig, frack truck, wire line truck, etc.

Each day will have an agenda of events which can be tracked through a special website that is being developed – www.montanaenergyday.com. On that agenda will be information about a job fair, workforce development and training opportunities, and “speed dating” for businesses. There will be numerous opportunities for businesses to network and compare notes, including an apple/cherry pie social. Special attention will also be given to Veterans, with one sponsor having committed to providing rodeo tickets for Veterans.

Sponsoring businesses (those acquiring booths) will be interviewed and featured on synergystation.com and a business showcase. Montana Energy Forum will host a special event that will further add opportunity to meet and mingle for business people.

Attention will also be focused on what community impacts might be from all the energy development that is happening in the region. What might some solutions be? How to fund them?

For information on Energy Day contact Event Coordinator Melody Dobson, 405 256-2400 or 800 366-8538. Or synergy station. com at 696-5433 or laura@ synergystation. com

]]> http://synergystation.com/news-feed-for-bakken-information/energy-days-at-montana-fair/feed/ 0 http://synergystation.com/news-feed-for-bakken-information/getting-advice-once-in-a-lifetime-opportunity/ http://synergystation.com/news-feed-for-bakken-information/getting-advice-once-in-a-lifetime-opportunity/#comments Tue, 24 Jul 2012 01:09:44 +0000 Big Sky Business Journal http://synergystation.com/?p=6840 “Think big and bold. If not, you are selling yourself short.”

Such is the advice for would-be entrepreneurs in the Bakken, from Steve Slocum of First National Bank and Trust of Williston, ND. Slocum was one of several business people comprising a panel discussion about how Billings area businesses can get a foothold in the fast-paced, booming oil business of the Sidney, Montana and Williston, North Dakota areas. The panel was moderated by Steve Arveschoug, Billings, Director of Big Sky Economic Development, the agency which recently hosted two tours of the area.

The movement of western Montana businesses and laborers eastward is the beginning of a new era in the state. It’s a watershed moment in the history of both Montana and North Dakota – nothing will ever be quite the same.

It’s a “once in a lifetime opportunity,” claim most observers, one that is already reaching deep into the economic foundation of Billings. “It is critical that Billings take advantage of it. It will have a large impact on Billings,” said Kevin Heaney, another member of the panel. To find a way to “take advantage of it,” is just what many members of the tour group were interested in doing.

Having a presence to develop personal relationships, and being able to overcome the housing hurdle were two reoccurring themes in the conversation among panelists, which also included Kevin Heaney, a partner in the Commercial Department of Crowley Fleck, PLLP, Billings; Garth Sjue, Williston, also with Crowley Fleck; and Rick Leuthold, Director of Business Development for Sanderson Stewart, Billings.

To introduce prospective business developers to the phenomenon that is the Bakken oil fields and to see firsthand the economic impacts on surrounding communities was the primary purpose of the tours. Billings is a primary support center for the oil field activities and for the infrastructure building that is going on in Williston, Sidney and other eastern Montana communities. Billings is “strategic to energy” of all kinds, pointed out Arveschoug, in introducing the panel.

Besides being a store-house of all fossil fuels, Montana is considered second in its potential for wind energy, said Arveschoug. Billings is central to the development of those energy resources, as well as the infrastructure to serve them.

In fact, looming in its potential, for that infrastructure and to create more jobs and business opportunities, is the building of the Keystone XL Pipeline, which Arveschoug said he has been assured by Keystone representatives, will happen. President Barak Obama currently has a regulatory hold on federal permitting of the project, which would help get Bakken oil to market.

In his advice to the group, Heaney said, “You want to assimilate how to take advantage of what is happening.” Figuring out how to capture that business is much of what Heaney does for his law firm, which has had offices in the region since 1995. “We are uniquely situated to take advantage of all this,” he said. The firm today has offices in Williston and Bismarck, North Dakota, and Casper and Sheridan, Wyoming, as well as in six Montana cities. “We are strategically situated to be one of the players in the energy development boom. We have a very large market share of the region.”

“It is difficult to recruit into these areas, because it is expensive to live here,” said Heaney. It is also expensive for his company to add a new lawyer to the firm – “It takes a lot of training to bring a new lawyer on line.”

“In Billings, we are working with lenders in making some unique loans,” said Heaney. For example, they are working with the Highland Projects, a Sundre, Alberta-based company, which is building storage tanks in Billings. “They are looking to make a substantial investment,” in either buying or building a manufacturing center.” His firm has also been “talking to a company in Canada that provides equipment to deal with the flaring – “something that requires a lot of heavy equipment.”

“The residential real estate market in Billings is making somewhat of a recovery,” said Heaney, “and I think that is being impacted by the activity in this region.”

There is a lot of commercial real estate and industrial properties that are being “gobbled up,” as well.

Health care providers are also being impacted in Billings, and there is opportunity for them to expand into the Williston Basin area.

Because of all the spin-off businesses that oil development is spurring, “there is a tremendous amount of wealth being generated,” said Heaney, which creates a need for legal services regarding taxes and tax planning, which Heaney’s firm is poised to address for clients.

What about the historical nature of the oil industry, of the “boom and bust,” cycle?

“It is important to come to grips with the issue,” said Heaney, “All of us wanting to invest were worried that oil prices may drop.” But Heaney came to the conclusion that “this is a once in a life time opportunity to invest in what is probably the epicenter in the world.”

“If you look at it in its totality, this has some legs – no guarantees, in life but this is a good place to invest – a good bet,” said Heaney.

In doing business in the Bakken, “relationships and partnerships are important,” Heaney continued, “If you know businesses already here, tap into some of those resources for information and networking. You need to be here. You need a presence – it doesn’t have to be large, but it’s important for people to get to know one another.”

“You can do the work elsewhere, where things are slower paced. With email and other communications, there aren’t many things that can’t get done.”

Heaney’s cohort with Crowley Fleck, Garth Sjue, told the attendees, “A rising tide lifts all boats” and those boats include Billings, Minot, Bismarck and Dickenson – all are communities benefiting from the activity in the oil patch. Crowley Fleck represents “most of the oil companies doing business here,” said Sjue.

“We hear from companies that there is going to be two or three phases in development,” said Sjue, “Right now it is almost like a gold rush because people are trying to buy up the leases” – paying $1000 to $1500 per mineral acre. “It’s a big investment.”

There are layoffs in the landman segment of the industry, “that tells us that the companies have all the lease positions they want,” said Sjue, “They are now going like bats out of hell trying to develop the leases.” That will take another two to three years.

What this activity impacts the most is the service industry, “then the bean counters will come and there will be a contraction of rig count,” said Sjue.

Among the businesses providing the support services, “there are obscene amounts of money being made, right now,” said Sjue, “which will continue until the oil companies get back in control” – perhaps in three to five years.

Fracking companies are being drawn from all over the country.

Sjue said that Harold Hamm, CEO of Continental Resources, believes the number of service providers has stabilized. But it is still a vendors markets. “It is what it is,” said Sjue, “The oil companies do not ask ‘How much?’ but ‘How soon can you be here?’”

“I have bankers who are always asking for referrals,” said Sjue, “If you want to be part of the community it helps to have a presence. If you are working with local leaders, you need to have relationships because they want to work with people they know and trust.”

Sjue said that Williston is “missing a lower middle class” from whence service workers usually come – “they run off and go to work in the oil fields.” That leaves many needs for services unmet.

Since most of the workers are young, with young families, besides housing, the next greatest needs are for day care and education. Sjue said that there are 2400 kids in Williston that need daycare.

Steve Slocum, with First National Bank & Trust in Williston, said that Williston banks are stressed. People are always bringing in checks thinking that a mistake has been made – they have too many zeroes.

“You are all here to make money and this is a good place,” he said.

Slocum explained how the Willliston Basin is a different kind of oil play. It is a stratigraphic column with layer upon layer. At the middle of the basin, the layers are deeper and thicker, and as it nears the edge of the basin, they taper closer to the surface and become thinner. Sort of like a bowl. The Bakken is just one of 19 known oil and gas zones in the Williston Basin.

“Hydraulic fracking is not the problem here like it is in the Marcellus (shale gas formation) in Pennsylvania,” said Slocum.

The major oil companies have the best engineers in the world. They figured out how to drill 600 feet (horizontally in a geological layer) and make it pay, explain Slocum. “Now they are opening up 10,000 feet of pay zone. It is a total game changer.”

When it comes to wondering if the industry will figure out how to get more of the resource extracted – “to think they won’t figure out a way – you are crazy,” said Slocum.

It’s been recommended that there will need to be $1 billion spent on infrastructure needs in western North Dakota, for each of the next five years. “That is huge,” exclaimed Slocum.

He went on to say, “The top ten oil companies are here. They have made huge investments.”

“There would be 400 rigs drilling if they had the full infrastructure needed.”

“Warren Buffet, Haliburton, Schlumberger, Baker Hughes — all think this is a good investment, “I’m going with that, said Slocum.

Slocum said that he would like to get the oil companies in charge of building the needed infrastructure – “these guys get it done. When it takes the highway department two years to get it done, these guys have it done by lunch tomorrow.”

Rick Leuthold, Billings, lamented that more people, nationally, don’t know what is happening in the Bakken – “People don’t know it exists.” But, he went on, oil development of the Bakken began 42 years ago and “it will be going on when I’m dead and cold in the ground. My grandkids will be benefitting from this.”

“There will be a population shift,” predicted Leuthold, about the future of the Bakken. Leuthold’s firm, Sanderson Stewart, eased into the oil fields with the beginning of the recession in 2008, when they began looking for new opportunities. His experience in the Bakken has led to the conclusion that “It is not business as usual. If you are set in your way it is not going to perform very well.”

As a consequence of the activity in the oil industry, “things are ramping up in Billings,” said Leuthold, “The last six month I have seen our Billings business ramp up. We could put another 6 to 12 people to work and keep them busy in the Bakken, and another 6-12 people in Billings.”

“You would think hiring in this economy would be an easy thing,” said Leuthold, “but it is not. It is hard to find the right people. You could go to Arizona or Los Angles to hire but you are in a constant revolving door.” The issue is other than money – it’s a matter of “the first zero degree day they head south again.”

Again, Leuthold underscored that relationships are important working in the Bakken. “That’s why I’m here, two to three days a week. Face to face relationships are needed. North Dakota is old school, when it comes to doing business.”

The benefit of the relationships is that “development agreements get put together next week. You don’t have all that overhead process. If they have confidence in you, you are golden.”

“That is great. They are not jaded.”

Sjue said that there is “a world of difference” in the business environment in North Dakota.

“Send your best people over or do it yourself,” advised Leuthold.

Finding people to work in the Bakken is hard. “It is a tough environment for housing and to get people to live in the heat, humidity, cold, and mosquitos,” said Leuthold, but “there are the beautiful sunrises.” Their best luck has been in finding people who have family members who moved away and want to come back.

Leuthold said that his company has bedrooms, and a couple of mobile homes to provide to people who “come and go,” — people who come to perform inspections, etc.

When it comes to providing services, “there are a tremendous amount of needs – “think bold and out of the box,” he said. “Things that wouldn’t be a service in other areas are needed here. They have unique needs.”

Large national firms don’t understand what is happening in the Bakken, either. Part of Leuthold’s efforts on the part of clients has been to help educate lenders – lenders whose “eyes glaze over when you tell them how quickly a motel can pay back.”

When it comes to accommodations – “we are behind the curve by 6000 units over the next 8 to 10 years. It is hard to communicate that to lenders.”

“Bottom line is, this is the real deal,” said Leuthold.

Montana has more potential for diverse energy development – both existing and untapped – than any other state in the nation. Oil, as one of these resources, provides the state with tremendous economic opportunity, creates good jobs here at home, and increases energy security for the nation.

Eastern Montana is seeing the beginnings of one of the nation’s largest energy plays – the Bakken. In Richland County, the Elm Coulee field has already been one of the most productive onshore oil fields in the lower 48 states, and could end up being the largest in history. Some 20 percent of the field is found in Montana, while the rest underlies western North Dakota and southern Saskatchewan.

Knowledgeable folks in the industry tell me that, above all, drilling takes place where the shale formation is most accessible. The formation is thicker, and is also under more natural pressure in North Dakota. So the lion’s share of wells are being drilled across the border, but as those wells drop in production, more and more activity will be moving west. Based upon the aggressive leasing now going on in Montana, we are starting to see that shift, with some 20 drilling rigs already present in eastern Montana.

“Landmen” have been storming courthouses and buying up leases. Why? Because setting aside the geology, Montana is a great place to do business. The industry is poised to take advantage of our competitive tax rate. According to the conservative Tax Foundation’s state rankings, Montana has the eighth best tax climate in the nation, and much lower than that of our neighbors.

Making Montana even more attractive, we have a lower tax burden. On paper, our taxes are about 20 percent lower than North Dakota’s – 9.75 percent to 11.5 percent. But when Montana’s 18-month tax holiday on wells is applied over the life of a productive oil well, our taxes are a full 40 percent lower than North Dakota’s. It didn’t surprise me to hear Continental Resources CEO and Chairman Harold Hamm tell folks in Billings that the reason his company started drilling in Montana was because of our business-friendly regulatory and tax environment.

State regulators do a professional job in a short timeframe to keep rigs operating in the field. One permit application in Montana takes about 60 days,  which is under the 75 days allowed by law, while a permit in North Dakota takes, on average, the legal limit of 365 days.

In more good news, the Keystone XL pipeline proposed to run across eastern Montana will include a $100 million onramp for Bakken oil producers near Baker. I insisted on this addition in order to provide relief from the shipping bottleneck that has restricted market access in both Montana and North Dakota; producers will no longer be forced to accept steeply discounted prices for their oil. The state of Nebraska has been a bit of a roadblock to the Keystone XL, but I am confident that once Nebraska reworks its pipeline route, federal approval will follow.

All of Montana is benefitting from the recent reforms to our Workers’ Compensation Insurance system. Businesses now save an average of 20 percent on this expense. In addition, I signed legislation that yet again reduced the business equipment tax. Both actions should have a positive effect on job growth and business development in the state.

Rapid development often changes a community. Growing pains can strain local governments’ capacity to meet new demands. Last month I met with oil patch leaders to again offer continued assistance in the region. I have instructed several state agencies to double down on efforts to lend a hand with the impacts of oil development.

From the Department of Transportation to the Department of Commerce, these agencies can help with roads, water treatment plants and other essential services.

We’re lucky. Our beautiful state lies within the most important energy corridor in the world. Our resources include wind, natural gas, coal, biofuels, solar, geothermal, hydroelectric, and, of course, oil. The future is shaping up to be a very productive one for oil and gas in Montana, and I will continue to encourage good public policy so we get it right.

If you have ideas about how we can get it right with oil production, energy development, or anything else in Montana, please do not hesitate to contact me. You can reach me at governor@mt.gov or by phone at 406-444-3111.

Democratic Governor Brian Schweitzer is siding with the oil and gas industry in its fight against drilling regulations that some would say could devastate Montana’s economy.  The Bureau of Land Management, a bureaucratic subsidiary of the U S Department of the Interior, is eying new regulations for hydraulic fracturing on all federal lands.

Fracturing is the process of pushing a chemical mixture thousands of feet below the earth’s surface to release oil and gas.  Most of the chemical compound returns to the surface, along with the fossil fuels.  The Department of the Interior claims national uniform standards are necessary for safety’s sake, but Schweitzer contends that the states should monitor the activity, saying the federal rules are redundant, onerous, and burdensome.

Dave Galt, executive director of the Montana Petroleum Association, Inc., a trade non profit that represents oil and natural gas producers, said the new rules are designed to regulate oil and gas companies out of business.

Carl Graham, president of the Bozeman based Montana Policy Institute, a free market think tank, said the anti fracking push is simply an effort by environmental radicals to cut off access to cheap energy.  “More than 99 percent of the fluid used is water and sand,” Graham said of the fracking fluid.  Graham is also concerned with the economic slowdown the state would experience, if federal regulations scare off drilling companies.

Environmental groups supporting the federal proposal include Sierra Club, Northern Plains Resource Council, and Montana Environmental Information Center.

McRae was one of a number of participants in a roundtable discussion focused on the phenomenon of the rapid development of oil and gas in eastern Montana. It was something of a listening session for US Senator Jon Tester, sponsored by the Billings Area Chamber of Commerce.

McRae has launched a business called Synergy Station with the purpose of providing a means of communication through a website. Synergystation.com “is geared to be a bridge between needs and solutions…a platform to get information, which is otherwise, often, very hard to get amid “the chaos.”  The oil and gas development “…isn’t stopping at the border. It is coming this way,” McRae told a room packed with many people wondering just exactly what the impact will be on Billings.

Sen. Tester opened the discussion (in January 2012) saying that he was “looking for opportunities” to cut spending in Washington DC and to create jobs. But also, in regard to what’s happening in the development of oil and gas in the state, he wants to “provide proper protections and to make sure it’s done safely.”

Tester said that “the issue of fracing” and protecting water sources “is going to be critically important.”

While energy development was seen as a huge economic boon, providing a wealth of opportunity for many of the business representatives in the roundtable discussion, comments from others were somewhat negative.

Stefani Hicswa, Miles Community College, complained about the ease of getting jobs, which lures potential students away. It’s so easy to get good-paying jobs, that many young people prefer to get a job rather than get training or education, she said. “The average job seeker has no idea of the training opportunities,” she said. “It’s imperative that we facilitate a partnership with businesses so we have a well qualified community of workers,” she stressed. She suggested the development of better connections between higher education, and the companies doing the hiring – “to get to know each other” – so ‘higher education can get involved.”

Dr. Marsha Riles, MSU College of Technologies, echoed Hicswa’s concerns. Because of the job climate, “Our students can be stolen away and not complete their education.” She urged support in developing and training the workforce.

Nancy Weaver of Lewistown, expressed concerns to Tester, about protecting a fresh water spring in the area “if the drilling should occur.” She noted, also, that Lewistown has an aging population and the availability of jobs will keep younger people there. “Young people need to get an education and come back there,” she said.

Mike Sanderson of Sanderson Stewart Engineers, Billings, said that his company has “made a strong move into the Williston area.” His company provides engineering services needed for community development. “It’s a challenging place to do business,” he said. Of the things you hear, he said, “they are all true.”

They do most of the work in Billings for the projects they have in The Bakken, he explained, making transportation to and from the area their biggest challenge. He urged that the Senator help in efforts to increase the number of available flights between Billings and Williston.

Sanderson said that by having most of their engineers located in Billings they have avoided the kind of turnover others experience in the Bakken where there’s a bidding war for good engineers. While transportation expenses are higher, they have a more affordable workforce, he said.

“There are plenty of qualified engineers and they are glad to come to Bozeman and Billings,” he said, “but locating in Williston is a harder sell.”

Chamber of Commerce President John Brewer said that his organization is trying to establish Billings as “a hub for energy development.” “What do we need to be prepared for to prevent the chaos?” is the question that needs to be posed, he said.

The development has had an impact on tourism in Billings, Brewer said. New employers and new employees are passing through Billings, and every one of them spends about $200 a day — or a quarter billion dollars a year in Billings.

Brewer said that hotel rooms were at a premium this summer. There are three new motels in Sidney and three new ones in Miles City because of the growth. There has been a 5.1 percent increase in occupancy rates in Montana, and in Billings occupancy has increased 10.3 percent. Hoteliers say that occupancy rates are currently at 90 percent compared to 60 and 70 percent two years ago; and the reason is because of oil “in one way or another,” said Brewer.

As an example of what is happening, Brewer said that one corporation flies in 20 workers every two week to be trained in Billings, and then moves them to Williston.

Steve Arveschoug, Director of Big Sky Economic Development, said “we want to make sure we are planning far enough ahead to get ahead of some of the challenges. One of the current challenges, he said, is to have the infrastructure in place for companies who want to move quickly. That infrastructure would include the development of an industrial park such as that in Bismarck, he said.

Arveschoug said also that businesses located in Billings need unobstructed routes into The Bakken and Canada. He pointed to Bay Limited which has invested $8 million in Billings and needs to be able to permit loads to their customers. There needs to be a process developed that will not put the cost of developing that infrastructure on one company, he explained.

“We also need a comprehensive workforce development program,” he said.

Steve Zabawa of Rimrock Auto in Billings said that the impact of energy development “has been amazing.” He said 15 percent of their business is coming from the oil field activities. “International companies are buying all their trucks, here.” The growth in his business has created 75 new jobs, he said.

He also noted that Sanjel has rented a facility from his company where they will be training their drivers.

Zabawa underscored the need for improved infrastructure in The Bakken. The roads are “hard on trucks,” he said. He also said it would be helpful to the industry if Montana repealed it medical marijuana law. The state is getting “a bad rap from it,” he said, going on to explain that in eliminating it, “we clean up employment issues.”

Kendal Hartman of Montana Job Service reported that his agency is supplying a lot of the Bakken with workers. The oil companies come to Billings on a monthly basis and hire away ten to 24 workers – “and they are not unemployed; they are taking them from local companies.”

“We are the hub for manufacturing for the Williston Basin and Canada,” he said, and that is driving a need for welders. With a potential of 122 positions open, said Hartman, Bay Limited [one Billings' manufacturer] will have to go out of state to hire. Hartman said that only one out of every ten applicants his office sends to Bay Limited can pass their welding exam. The company hires and trains many of the applicants.

For all the demand for truck drivers, Hartman noted that there is only one entity in Billings training drivers to get their CDL licenses.

Hartman said that it is hard to find a business in Billings that hasn’t been impacted by the development of the Bakken.

He went on to say that bringing employees from out-of-state is “quite an adjustment” for them, “it is easier to transition our own.”

Bruce Parker, President of First Interstate Bank, said that there is a lot of work to do to get prepared for the challenge that’s happening. “Too many people are still wondering if anything is going on.”

The recession would have been worse for Billings “if it were not for what is going on around us. Everyone has been impacted and has generated revenue. We do a lot of indirect automobile financing – 20 to 25 percent of what we are financing is directly due to income from oil companies…from Rapid City to Kalispell.”

Parker said, “The business is coming because of better paying jobs and higher standard of living.” For the community, said Parker, this is “a huge opportunity but we have to do it right.”

“Because of the impact, local housing is 95 percent occupied and rental rates are increasing some,” said Parker.

“We have room to grow and get ready for what is coming our way,” he added.

David McCullough of Dowl HKM said, “this presents an opportunity for small communities in Northeastern Montana.” He pointed out that many of these communities need water and waste water systems. They already have a pent-up demand for housing.

Permitting and review processes faced by the communities as they attempt to meet their needs often takes a year, he pointed out.

He specifically identified the Ft. Peck Dry Prairie Water System as a project in need of more funding. He said it needs $36 million in funding, which is supposed to come from the federal government.

To tap in to the Big Sky Business Journal visit their website or quick link to their Synergy Station Business Directory Listing.

The Bakken is booming, and so are Billings businesses.  How much opportunity is there in the Bakken for businesses in Billings or other areas of the state?  That was the question for a group of people who went on tour of the Bakken recently, sponsored by the Big Sky Economic Development Authority (BSEDA).  They came away stunned.

Even if one thinks they have an idea of what is going on in eastern Montana and western North Dakota, it’s hard to fully grasp the dynamics of some 350 oil companies drilling in the largest reserve in the US, for the world’s highest quality oil, in some of the smallest and most remote communities in the country.

The business leaders came away knowing that they had just seen the most economically vital hot spot in the nation.  They came away realizing that one of the most “unique” events in the history of this country is unfolding on the eastern Montana border.  They came away concluding that most people in the state do not realize what is happening in their back yard.  They came away believing that that lack of understanding means many opportunities are probably being missed.  They came away believing that there needs to be more awareness among legislators and government, in both states, about the desperate need of these counties to be able to retain their tax revenues in order to build desperately needed infrastructure.

“Capacity is the limiting factor of The Bakken,” said Doug McCreedy of XTO Energy, Some companies have backed away from investing in The Bakken because of it.

“What do you need?” was a reoccurring question posed to the speakers and leaders in Sidney, Montana and Williston, North Dakota.  “We need pretty much everything,” said Tom Rolfstad, Executive Director of the Economic Development Agency in Williston.

Williston Mayor Ward Koeger said that while they get inquiries from all over the nation, they are “elated” welcoming people from within the region, “because we know they understand our community better.”

One thing’s, for sure, if you are going to visit The Bakken, make sure you call ahead to make a hotel reservation, he advised, making reference to one of the biggest problems that confronts The Bakken – housing.

It’s actually hard to determine what is their biggest problem, housing or roads?

“It’s a crisis situation,” said the Mayor of Sidney, Bret Smelser.

With between 2000 and 3000 job openings on any given day, most paying handsome wages, housing stands as the primary barrier to attracting workers – and hence poses the biggest problem for businesses wanting to come to The Bakken.

But, demanding every bit as much attention is the need for improving roads and building new ones. It turns out that developing oil is all about transporting water, sand and gravel. The roar of trucks and pickups on every street corner, and the vision of truck caravans lumbering over hill and dale, on highways for as far as the eye can see, is evidence that “This industry has to run on roads,” said Tom Rolfstad.

“I think every gravel truck in the world is here,” said Doug Hill of Stockman Bank, Sidney.  It takes 600 semi loads of water to drill one oil well. It takes 3000 gallons of uniquely-sized sand, which comes from Minnesota by rail and is trucked to the well site.

But besides the issue of how a construction company can house the workers which they need to build homes or motels, or to build roads, there is the question of how confident investors should be in the longevity of this “play.” The fact is these communities have been here, and done this before. Many of them lost fortunes, just a few years ago, when a hiccup in oil prices put the brakes on development in The Bakken. And, beleaguered taxpayers who had to pay off public debts which were incurred when the promise of huge tax revenues seemed certain, are saying “not again.”

However, most of the speakers, heard by the tour group, in Sidney and Williston, said that this time is different. “This boom is not a boom, it is an industry,” said Mayor Smelser.

Oil wells in The Bakken reach break-even at $55 a barrel, said Greg Heller of Stallion Oilfield Services, Williston. “If oil doesn’t drop below $70 to $80, there will be a lot of business for a long time. It is here for awhile,” said Heller.

“You just can’t walk away from 2000 oil wells” commented another, “There will always be a production sector left here in Williston.” 2000 is the number of leases in North Dakota that must be drilled before they expire. It’s been predicted that the basin will host some 65,000 wells, when all is said and done.

It takes more people to drill an oil well, nowadays. Drilling a well takes 55 to 75 people, and once drilled, it takes eight people to maintain it over a 20-30 year period. Do the math — that’s what people who believe that Williston could grow to a city of some 100,000, are doing. Williston has already grown from 12,000 to 18,000 according to the last census, and is probably closer to 20,000, now.

In his publication “The Bakken,” Nick Smith reports that at a recent Canadian oil conference, where all things were “Bakken,” the consensus of opinion is that it’s a play that will be played out. The New Yorker reports that industry experts are saying it will take 20 years to play out.

“Who knows? No one knows,” said one tour speaker. As always, there are risks associated with doing business, anywhere.

But, to whatever extent the “doubting Thomases” are impacting the production in The Bakken, there’s still more demand for materials and services than is available locally, and that poses opportunity to far-flung surrounding communities, especially trade hubs like Billings.

In fact, there are hundreds of Billings businesses already doing business in The Bakken. Some of the sponsors of the bus tour were Billings businesses who already have a foothold in The Bakken, Sanderson Stewart Engineers, the law firm of Crowley Fleck, the accounting firm of Anderson ZurMuehlen, and Allied Industries.

Scott Chester, Billings, has already expanded his company, CMG Construction, to Williston. He was able to keep his employees employed following the construction crash, in the rest of the state of Montana, by adjusting to meet the needs of The Bakken, and establishing a base of operations in Williston.

“We thought we would take it slow, but it doesn’t work that way,” he said. They also built a campground for RVs for their employees. Chester announced that although his company will continue to do business in Billings, he is building a home and moving to Williston. “That tells you how I feel about the Bakken play,” said Chester, “I wouldn’t put money into this play, if I didn’t think it was going to last.”

There is so much work to do in The Bakken and the pace in doing it is so intense that Chester usually has no idea what day of the week it is. “What day is this?” he asked. Weekends, weekdays, holidays all blend together as the paramount focus becomes getting the job done.

Asked if he subcontracts to other construction companies in Billings, or if he would encourage them to go to The Bakken, Chester paused a moment and then said, “I don’t know of a construction company in Billings that isn’t already here.”

Tom Rolfstad said, “Off the top of my head I could name you 50 Billings businesses here, and if I can do that you know the number is several times greater.”

Many of the Billings business owners explained that they have established satellite offices in the area, staffed with core people, who are farming work back to their people in the main office.

In discovering the degree to which Billings businesses are already doing business in The Bakken, there emerges a clear understanding of exactly why Billings is as strong, economically, as it is. Even though it’s located some 280 miles away from The Bakken, Billings is an oil town.

Oil in Eastern Montana is not a new phenomenon. Billings is used to hearing about oil in Fallon, Richland, Blaine and Roosevelt counties. The industry in Montana has had its ups and downs, but things have changed. Improving technology is rapidly ramping up the prospects of one of the biggest oil resources known in the world. Frequently called a “world class resource,” The Bakken is “a twenty-five-thousand-square-mile sea of oil,” which has been estimated by some to have almost 500 billion barrels of oil. If only 10 percent of it is recoverable, that’s a lot of oil by any standards. For comparison Saudi Arabia is a 262 billion barrel resource. (And, there are other oil-bearing formations below The Bakken.)

Estimates as to recoverable oil from the US Geological Survey are conservative and often frustrating for the very optimistic, but even those estimates are escalating. In 2006 the government issued an estimate of 3.65 billion recoverable barrels, that has increased, yearly, to some 11 billion; and now many are saying that they expect to see revised estimates of 24 billion barrels of oil. At today’s prices that’s worth $2.6 trillion.

The increased projections are being driven by improving technology.

Not only is the technology increasing the amount of oil that is recoverable but it is reducing the cost of operations. An oil well that used to cost $10 million to drill, is now coming in closer to $5 million. And such things as “dry wells” are increasingly rare. The oil companies are reporting a 99 percent success rate. They can drill multiple wells from one well head. And, they are getting more oil from each well.

A year ago record wells were 3800 or 4000 barrels a day. Now, its 5300. “If it’s not over 5,000, now, you don’t even hear about it,” said Greg Heller.

Last year North Dakota produced 113 million barrels of crude oil, more than five percent of total US production. Montana produced 25,321,700 barrels of oil in 2010.

Oil has always been good for the Billings economy, but never before have the opportunities been so dynamic. With wages for truck drivers in The Bakken ranging from $45,000 to $75,000, “If you can think and breathe, you are working on an oil rig,” explained Rick Leuthold, of Sanderson Stewart Engineering of Billings. His company is one of those that already has an office in The Bakken, and Leuthold is familiar with the tempo and temperament of business there.

Retail businesses are finding it hard to compete for labor and many are making-do, short-handed, which usually restricts their capacity and sometimes the quality of service. Others have simply closed their doors. That leaves the field open to outlying communities like Billings to fill the growing needs.

The availability of good food is considered by some as being at a crisis level. Eating out isn’t something the locals do any more, and feeding workers is a challenge, since restaurant workers are quickly enticed into the oil fields.

Leuthold said he has heard stories of businesses sending out delivery drivers, only to have them waved down along the road, offered a job, which they take on the spot, and park the delivery vehicle.

He said one Billings businessman visiting Williston had his vehicle break down. He was told that they couldn’t even take time to diagnose the problem for several months, so busy were the repair shops dealing with oil field equipment. The visitor had to load the vehicle onto a flatbed and take it back to Billings. “If your vehicle breaks down here,” said Leuthold , “You buy a new one.”

Another story is that a Billings landscaping company was offered $750 just to go to Williston to give a bid on a project.

Leuthold pointed out that the eastern Montana border is about mid-way between Minot, North Dakota and Billings, so when businesses and residents in the oil impacted communities make a call, or make a trip for shopping or entertainment, they have a choice between the two.

“If we can do it better than Minot, then they will go to Billings,” said Leuthold.

Doing business in The Bakken has a lot to do with relationships, it was said many times. If you know someone already doing business there, that is where to begin, they advised. But even if you don’t know anyone, you will still be given a fair shot, said Leuthold, “How you perform — at the levels these folks are requiring — will determine if you get a second project.”

But don’t go if you don’t have a place to stay.

Throughout the Bakken – on lots that have stood vacant for years, along the edges of hay fields, or on construction sites, one sees the most common solution to the housing problem – RVs. Come winter, the RVs will be wrapped in insulation as the workers endure the long months when temperatures frequently dip to minus 40 degrees. Many of those from Florida and California, didn’t make it through this last winter,” noted one speaker.

How to manage the housing problem is tough. One speaker commended the leaders for dealing with the problem in a realistic manner. They have tried to accommodate the temporary solutions as much as possible. The skid units, the trailer courts, the man camps and the RVs. While it’s not what they hope to see in the long term, they understood that if they attempted to shut them out of the city they would “sprawl out” into the county in every space they could fine.

There are all kinds of reality at play in The Bakken. A lot of the people who are moving into area are often from the ranks of the nation’s unemployed who are struggling to overcome financial problems, and don’t have the ability to acquire more expensive housing. Trailer houses are the most that they can afford.

In order to get and keep workers, several of the oil companies, have purchased property and are building their own housing. Several are utilizing the services of “man camps,” a term which is not well liked by those at Target Logistics. “We prefer to call them lodges,” said Travis Kelley, in giving a tour of one of their camps in Williston.

Back ground checks and drug testing are required of everyone staying in the camps, and those who work in the camps—men and women. Target Logistics has a camp at Tioga, another at Stanley, and two at Williston – housing a total of 750. They are expanding the one at Tioga from 250 to 1300 which will make it the largest temporary facility in the lower 48 states. Another at Williston is being expanded from 250 to 1000.

The accommodations are provided in contracting with the company which employs the people who stay there. The focus of the camps is to cater to the workers’ every whim…and, that they never have to take out their wallets, said Kelly.

“We pride ourselves on setting the bar when it comes to standards – new facilities will provide saunas, tanning beds and masseuses,” said Kelley. The employees for one of their additions will be those building a natural gas plant.

Residents can eat whenever they want and as much as they want, and great effort is made to make sure the food is very good. Maid service is provided weekly, laundry service is available, computers and internet, television rooms and game rooms. The rooms vary from one or two occupancy. Some units actually have their own small kitchens.

The development of the Bakken also demands power – and lots of it. They can improve power lines to get more power, but they will reach a point – very soon— where there is no more power to get.

Rolfstad pointed out that the needs they are trying to address involve an area that is as large as some states. “Today it is power lines; tomorrow it’s power plants,” said Rolfstad.

Projections are that the area around Williston will need two power plants.

The Mountrail Williams Electric Co-op, which was originally built to serve agriculture was using 30 megawatts of power three years ago, and is currently using about 120 megawatts. By 2015 they are projected to need 180 megawatts and by 2025, 1.2 gigawatts. There is little doubt that the company will meet the rising needs of oil production, since today it is 95 percent owned by oil companies.

It takes 10 years to permit a power plant and five years to build it, noted Rolfstad, so planning is being done now.

Refineries too must be on the horizon for the Bakken. The claim was made that the refineries would be needed to produce diesel when Bakken annual production reached 350,000 to 400,000 barrels. Production now stands at 1.2 million barrels.

The growth and impacts of the burgeoning industry are not just isolated to Sidney or Williston. In Montana the communities of Glendive, Wolf Point, Culbertson, Glasgow, Baker, etc. are all caught up in the “boom.” Sixty townships are being impacted in North Dakota, and 20 in Montana.

“We need to help these communities to deal with this kind of growth,” said Leuthold, “This is a state project.”

As one approaches Sidney, long before reaching the town, one begins to see RVs and campers of all sorts parked in the hay fields along the highway. In Sidney every available open spot is similarly filled, and pickups and trucks, if not moving, are parked in any remaining spots. For all the trucks, the community has no truck stop.

Also, evidence of the liberal cash flow that oil is bringing to the communities are new civic and school buildings and other public structures. But, that doesn’t mean there aren’t many needs that still need to be met. A sewer system is of dire concern and important to meeting future housing needs.

When it comes to developing infrastructure in Sidney, “We have a crisis, not a problem,” said Leslie Messer, Richland County’s economic development director.

The new industry is a “mixed blessing,” said Sidney Mayor Smelser. There are families who, after struggling on dry land farms for generations, to make ends meet, are suddenly rich. “Those riches are trickling down into the community, but the money isn’t always going where it’s needed the most,” he said. “Things don’t happen fast enough,” he lamented.

A 3.3 percent unemployment rate in Richland County puts “extra pressure on retail businesses that can’t afford to pay $25 or $35 an hour, said Messer. To compensate they are reducing inventory and reducing their hours.

The City of Sidney has trouble hiring people to pick up garbage because they can make better money diving trucks for oil companies, and the city lacks the budget to increase wages.

Anyone who can pass a drug test and has a CDL license can make $50,000 to $80,000 a year, and in a couple of years over $100,000. There is such a demand for CDL licenses that the drivers’ licensing agent for Richland County can’t keep up. One company, said Messer, takes a load of job applicants to Billings to get them licensed, at considerable time and expense. Messer has requested the governor to send licensing agents from others areas of the state, on a temporary basis, to help out.

But for all the activity in Sidney, it only intensifies as one goes across the border into Williston. Williston is the preferred place to do business,” said Rolfstad. His conclusion is not much different than those in Sidney.

Sidney Mayor Smelser didn’t mince words in saying that all things are not equal in how the oil business gets done between Montana and North Dakota.

Leuthold, too, expressed amazement at the difference in attitude found in just crossing the state line. Working on projects for city governments, Leuthold said, things that take years to get accomplished in Montana, take but a few months in North Dakota. And, he said, they don’t give anything up in terms of doing it right, it’s just a different attitude about the importance of getting it done.

Predictability is important, said Hill from Sidney. “There is a real difference from state to state. In Montana even though it takes a long time, there is still lack of predictability. You can get near the end and still not be assured you are going to have an approved project. It makes it difficult to decide to make the investment.”

Three new motel chains are locating in Sidney; but attracting businesses to Sidney is a challenge. “We are compared to North Dakota,” said Messer, and the comparisons are not often to Montana’s benefit. Montana’s workers compensation and “various tax structures,” said Messer, “make it a challenge to compete.”

“Everything is rolling out of Williston,” said Smelser, referring to a tax that encourages companies to locate in Williston and drive to Montana, because it’s less expensive to “park” the vehicles in North Dakota.

“If you have 10 projects” said Rolfstad, “I would bet nine of them will happen on the North Dakota side. It’s an attitude, thing. We try to be accommodating.” In North Dakota, the question asked is “How can we getter’ done?”

‘You can’t stand in the way,” said the Mayor of Williston, explaining the drive in a market in which a $5 million investment in an oil well is frequently capturing a return in 18 months.

On both sides of the border there were complaints that state governments were quick to expropriate the tax revenues generated by the oil production, but not nearly so quick to respond to requests for help in building the infrastructure that is desperately needed to sustain production.

“In our mind it’s an issue of fairness,” said Smelser, “We would like to have seen some of that money come back here, but that didn’t happen. The state decided not to fix the truck route, he lamented, explaining that its condition is “not conducive for trucks.” “Give us a chance to bring business here,” said Smelser, in reference to an act of the recent state legislature that took a portion of the oil counties’ tax revenues to distribute to other areas of the state.

But North Dakota is getting it right.

The State of North Dakota is assisting the Williston area to build a $200 million water project which will serve five counties and provide frac’ing water. Williston is also spending another $40 million to expand its water and sewer system.

The state has also committed to building a new truck route that will go around the city of Williston. (It was also noted that the oil companies themselves are “stepping up” to help maintain and build some of the roads.)

It’s not all taxes and regulations that make for 163 rigs in North Dakota, while Montana has only ten. Some of it has to do with geology and timing. Montana’s time is coming, said Mayor Smelser. He hopes they will be ready.

Currently, companies are completing leases in North Dakota. They will be moving operations back into Montana, soon, it is predicted. Even though historically, The Bakken saw its beginnings in Montana, but it dissipated as wells in North Dakota began producing more. The new technological advances are expected to bring new life back to Montana fields, and they may produce every bit as much as in North Dakota.

In the end, while taxes and policies might influence where a company headquarters, it’s probably not going to keep them from pursuing potential oil wells. According to Greg Heller of Stallion Oilfield Services, some companies are already starting the move.

Indicative of the problems for producers, that seem to manifest themselves in Montana, was reflected in a discussion of the proposed rules being considered by the Montana Oil and Gas Board, which happened to be in session during the tour’s visit in Sidney. (The board declared that they will not meet again in Sidney until more accommodations are available.)

Rules are being proposed to require companies to publically disclose the chemicals that are used to drill an oil well – an issue that has been raised to national awareness as environmentalists have expressed alarm about potential risks.

Most industry representatives are fine with the rules except for the timing of them. They are being asked in Montana to stipulate far in advance of the actual drilling what they will be using. The proposed rules ask for disclosure at the time it is necessary to get permissions and permits, which is months before the company actually knows what the conditions will require.

“We are all for transparency,” said Lisa Winn of XTO Energy, “but we don’t want the regulations to restrict what we need to do, or to add the necessity of waiting for another permit.” She noted that the industry has created a website (fracfocus.org) where companies are voluntarily posting their additives. Winn said that they would like the Montana Oil and Gas Board to adjust the proposed rules to allow a company to provide initial information based upon generalities, with more precise, well-specific information, included in the notification that they are required by law to provide to the landowner, when they start to drill.

Some companies are concerned about full public disclosure as to what they are using as additives, because they consider it a trade secret, but most have no objections.

Contrary to the prevailing public perception that the additives are highly toxic and pose serious health risks, most of the additives are “common household products” – things like rubbing alcohol, borax (a soap), Guar gum (thickening agent for foods), citric acid, methanol, acetic acid, salt etc.

Even at that, the amounts are miniscule. 99 percent of what is pumped into the wells is fresh water. “It’s like adding drops of bleach to drinking water to kill bacteria,” said Winn.

In addition, considerable measures are taken to protect aquifers which are almost always located within the first 1000 feet of the surface, while the wells are almost two miles below the surface. The risks of contaminating the aquifer in The Bakken, as a result of frac’ing are minute to the point of being nonexistent, according to industry representatives.

In all the years of frac’ing, said McCreedy, there has never been an instance of contamination to an aquifer.

As the tour group listened to the speakers they came to the conclusion that there is a lot of information about the oil industry in Montana that needs to be conveyed to the public and especially to political leaders. Many comments and questions were raised about how to put Montana on more of an equal footing with North Dakota. There is really no reason that Montana shouldn’t be as desirable a place to do business as North Dakota, was a common theme in the conversation on the return trip.

Stated Doug Hill, if all things were equal the blue-collar workers would prefer to live in Montana. “They want to get an elk permit.”

To tap in to the Big Sky Business Journal visit their website or quick link to their Synergy Station Business Directory Listing.

Doing a multi-state environmental study would probably take decades, said Commissioner John Ostlund, and hence delay the development of the state’s natural resources by decades. He said he didn’t know of an instance when the county had been part of another state’s issue.

The commissioners also rejected another request from Northern Plains Resource Council to direct the commissioners’ representative on the Policy Coordinating Committee (PCC) to support NPRC when it makes a similar request of that body. The PCC is comprised of representatives of the county, city council, planning board, and regional director of transportation.

NPRC representatives spoke to commissioners the week previous about the issue, explaining that they were concerned about the impact that more coal trains through Billings would have on traffic.

Last week, Ed Gulick representing Yellowstone Valley Citizens Council (YVCC), a part of Northern Plains Resource Council, said that they would like to see a regional review made for the proposed Cherry Point port expansion in Washington, “which would facilitate massive expansion in the amount of coal exported.”

Upon questioning by the commissioners, Gulick conceded that he was just as much interested in stopping the development of Montana coal as he was concerned about the traffic of coal trains through Billings.

Ostlund said that he thought supporting NPRC would be akin to the Missoula County Commissioners filing a law suit against the companies moving the megaloads on Montana highways, which diminishes the amount of gas tax revenue that comes to the communities to maintain transportation.

Ostlund outlined the impacts of the coal industry on the economy pointing out that they currently pay $86 million in wages, and $118 million in federal, state and local taxes each year. Each train that passes through the state pays $30,000 to public coffers, he said.

The letter approved by the commissioners instead of the NPRC letter was read into the record by Commissioner Jim Reno. Directed to Montana Congressional Delegation, as well as regulatory officials in Washington state, it stated, “Much of Montana coal is exported to Asian markets via west coast ports. As such, we advocate for, and support, the expansion of additional shipping capacity in existing ports and, hopefully, the building of a new port.”

Reno pointed out that there are three crossing at which traffic can cross the railroad tracks when trains are blocking traffic. They do need to be updated, he said.

Commissioner Bill Kennedy pointed out how much the tax revenues which come from coal development and the railroad help to finance other needs in the community. “I think if everyone knew the amount of money that comes back to the community they would be amazed,” he said.

Kennedy also said that Billings is a railroad town – it has built its economy upon it. He pointed out that five years ago a study was done regarding the possibility of moving the railroad and it was concluded that it would cost some $21 million. And, he said, that would only be diverting the problem, putting it “into someone else’s backyard,” who wouldn’t like it any better.

Steve Arveschoug, Director of the Big Sky Economic Development Authority also commented on the issue saying that his agency had met with others on April 2 to “talk about facts of train traffic,” and to work on resolving potential problems. He said that they support the development of natural resources, “which are a huge economic driver – an important underpinning of our economy.”

Chamber of Commerce President John Brewer also commented saying, “We do support natural resource development.” He said that the Chamber has not “written a letter either way” on this issue, but the Chamber is sponsoring a tour of Spring Creek mine to help inform people about the industry.

To tap in to the Big Sky Business Journal visit their website or quick link to their Synergy Station Business Directory Listing.

Outsourcing to Billings has become the solution for the Bakken boom. It’s a solution that has been at least three years in the making, and holds the prospect to become even greater as the boom continues and moves westward, towards Billings.

One of the earliest participants in that trend was guest speaker at the Yellowstone Valley Electric Cooperative’s annual meeting, last week.

Like many businesses in Billings, when the economic recession hit in 2008, Sanderson Stewart Engineers looked around for new opportunities. “We looked to the east,” said Rick Leuthold, an engineer and one of the firm’s principals.

Leuthold’s company found enough business in Williston ND, to establish an office, a year and a half ago, and their business continues to grow, as does one of the largest oil and gas plays in the US – perhaps the largest in the country’s history.

To understand what is happening there – and here — “Go spend a day in Williston,” Leuthold urged his audience.

Leuthold said that he now spends two to three days a week in Williston.

Their problem – like everyone else in the Bakken, is finding a place for staff to live. They have five people in their Williston office. Two live in mobile homes.

“You can’t get a motel room for three months out,” said Leuthold.

With space at a premium – for everything – outsourcing to surrounding cities has become the solution for the Williston Basin.

“Lot’s of people are coming to Billings,” said Leuthold. Not only are they coming to shop and purchase equipment and supplies (much of which can’t get delivered to Williston), but companies are locating their headquarters and maintenance facilities here because it is simply impractical to locate them in the communities of the Bakken. “It’s a great opportunity for us,” said Leuthold.

The outsourcing is for more than just the direct support of oil well development. It includes outsourcing for the building of houses, motels, man-camps, restaurants – and for building power plants.

Leuthold rattled off the several counties in North Dakota whose accumulative immediate need for power is some 1.2 gigawatts, that’s enough demand that each county will have to build their own power plant. All such development adds, of course, to the need to outsource for supplies, equipment, and manpower.

Large subdivisions are being built trying to meet a minimum goal of 500 new homes a year, some 3000 one-bedroom rental units are planned, and motels are going up as rapidly as possible. Five motels were built this past year, and four more are “on line.”

A future opportunity for entrepreneurs, said Leuthold, will be to figure out what to do with empty motels, when they are no longer in demand.

That raises the question of how long can this last? Over and over, one hears projections which conservatively speaking, say it will last 20-30 years. This is a boom unlike any other, because of the resource and the technology.

Leuthold said that the companies he talks to say that production is profitable down to a price of $45 to $55 per barrel.

Elm Cooley on the “Montana side” “is a huge producer,” and production continues to migrate from North Dakota “to the south and west.”

It’s projected that 50,000 wells will be drilled over the next 20 years. They are putting in 2000 wells per year.

Leuthold said that every well is considered on average to have a life span of 20 years. Each well requires at least one person to maintain it. “Do the math,” said Leuthold, “That’s 50,000 guys, long-term.” Each one of those workers will have “a spouse and kids and need all the same services and retail stores as any other community.” That means that long-term the Williston Basin area will likely see its population burgeon to about 100,000 people. “And, that is a conservative estimate,” said Leuthold.

It is estimated that over the next two to three years, Williston with a population of some 24,000 will double in size. It has already doubled since 2008.

Projections for the ultimate production from the Bakken, range from a conservative 3.65 billion barrels, to 11 billion, to an extreme, upward of 500 billion.

A looming question is how to get it to market?

The most technically reasonable and efficient means is by pipeline, said Leuthold. Without pipelines production in the Bakken will reach “take away capacity by 2015,” he said.

Alternatives to pipelines are trucking and rail which will demand a huge increase in the available infrastructure, roads, tracks, transfer facilities, as well as increased production of diesel fuel – all of which means more need to outsource.

Oil was first discovered in the Bakken formation of the Williston Basin in 1951, near Tioga, ND, but it was considered “submarginal.” It has taken the intervening years of innovation and new technologies to develop it into the “significant economic center,” it is today, said Leuthold.

Leuthold described the Bakken as “a big bowl of organics,” covering some 200,000 square miles, extending into Canada and into South Dakota, across much of North Dakota, and to some point in the middle of Montana – no one knows for sure yet how far westward the Bakken will continue to produce. The thickest part of the bowl is at the center, near Williston, where the geographical layer is about 120 to 150 feet thick.

There are actually three layers to the Bakken, the “upper,” a mid-”sandstone” layer, and a lower shale level. And, beneath that is the Three Forks Sanish, a formation that is only just beginning to be tapped, which some believe will be as significant as the Bakken. “Once it [the Bakken] is done,” said Leuthold, “they will come back and develop the Three Forks.”

As an indication of how much activity is actually going on in the Bakken, Leuthold explained that they used to place one well per platform spaced about every two miles. They are now placing as many as eight and the “hit rate” is almost 100 percent. “The hit rate has become so high, it’s just a matter of systematically gridding,” he said. It takes 35-40 days to develop a well, and costs between $8 million and $10 million.

This kind of certainty and success rate is why the play is unlike any other in history and bears no comparison.

The numbers change quickly, as knowledge and technology advances, noted Leuthold, saying that probably some of his information is already “outdated.”

Developing a well takes a million gallons of potable water and a million pounds of sand. The well can extend downward by as much as two miles. And, the technology and operators have such accuracy in running the line where they want to go, that even at that distance, two miles below the surface of the earth, they could hit the center of a basketball hoop, said Leuthold.

He recognized the controversy brewing regarding “fracing”—the process of setting off explosives that fracture the surrounding rock and then forces sand into the fissures to prop them open enough to allow the oil to drain from the surrounding rock. There are those who are very concerned about what is in the materials used.

Leuthold explained that 98 to 99 percent of it is potable water. The additives are lubricants which are used to make the water “slick” and thick enough that it will suspend the sand particles and propel them into the fissures. The additives are, for the most part, things “in your kitchen, under your sink,” said Leuthold. He also noted that the furthest down an aquifer extends is about 1500 feet, while the fracing is occurring at depths of 5,000 feet.

Getting all those materials, the sand and water, to the well site takes a thousand truckloads – a thousand going and a thousand coming. Hence the reason for all the truck traffic, the demand for drivers, and the impact on roads and infrastructure.

There are 205 rigs in operation in North Dakota, at present, and 17 in Montana.

In an effort to meet the need for workers in Williston, Leuthold said one sees signs such as that at Taco Bell which offered prospective employees $15 an hour plus a $500 signing bonus. Or another at Applebees, which said they had to temporarily close because their cook took a job as a truck driver.

The biggest problem is finding a place to live. Hundreds of people are indeed living out of their vehicles. One report said a couple hundred people are living in the Walmart parking lot.

The City of Williston is being forced into purchasing an apartment building so that they can hire the employees they need. Garages and basements are being subdivided and rented out at exorbitant rates.

And, the problem of meeting all that demand is a, sort of, “which came first the chicken or the egg” dilemma, said Leuthold.

Click to Follow:  Big Sky Business Journal, Evelyn Pyburn

The Bakken spells “opportunity” unlike anything in recent memory, as far as Montana is concerned. All of us, no matter what kind of business we are involved in, will benefit from the billions and billions of dollars being invested, right now – not ten years from now—but right now in 2012, just a few hundred miles down the road.

This is huge. It is epic. And, the only thing that stands in the way is us.

Billions and billions of dollars (not millions but billions) are being invested, which require no matching funds, no applications, no lobbying, no new taxes, and no complicated public programs. This is private investment on private property creating energy, jobs, wealth and opportunity for future generations, and all we have to do for it to happen is to get out of the way — and stay out of the way.

We have the resource. We have the technology. We have the manpower. We have the capital needed to develop the most efficient and cleanest fuel, economically available for human beings, at this point in time – gas and oil.

And, it is right here, quite literally, in our own back yard, in potential supplies that surpass any other in the world. It is energy independence — some say for as much as 100 years, others say 200 years. What more could we ask for?

It is economic development, national security and, yes, it is environmentally friendly, if we but look at the full picture.

Every other kind of energy costs more. That means it is less efficient. By the very definition of “efficient” that means it generates a greater “carbon footprint.” If one understands that from a utilitarian stand point, the cost of something reflects the amount of total energy required for its production, then one has to understand that all alternative “green” energies, by the very fact that they are more expensive, says that they are less “green” than gas and oil. The green alternatives – every one of them – generate a larger “carbon footprint” to produce and use, than gas and oil. It’s as simple as that.

Maybe someday – undoubtedly, someday – we will have better options, but those options or innovations will not come unless they are built upon a realistic and sound economic base. We cannot short circuit the process or pretend them into reality, with subsidies or political mandates. For those future innovations to be practical and, hence, enduring, they must emerge from a sound market.

So goes the development of the infrastructure needed to advance the Bakken development. Building pipelines is the most cost-effective means – hence the most economically and environmentally sound way of getting this energy to market. It’s absolutely insane to block the development of such tried-and-true technology as pipelines. Without pipelines the transport of this fuel is pushed onto the highways, roadways and railroads, across our lands, over our rivers, and through our communities, at far, far greater risks and costs.

The calculations of abandoning pipelines should include the additional costs, fuel usage and environmental hazards of the alternatives. It takes but the most cursory look, at what happens without pipelines, to know the folly of interfering with this market-driven solution of getting oil and gas to consumers.

And, the spinoff of what’s happening in the Bakken!!!

Not only does it bolster the prospects for our retail and service sector businesses, but it poses the potential of redeveloping and recreating much of the manufacturing base we have lost over the past few decades to foreign shores.

What’s happening in the Bakken demands the production of equipment, materials, parts, gidgets and gadgets of things most people don’t even know about. Some are new things, being invented and produced for the first time, others are things that are simply needed immediately, and to custom specifications, most easily met locally. This means more opportunity. It means more private sector entrepreneurial activity in manufacturing, another basic industry that fuels the growth of secondary businesses, service industries and professions. More basic industries, which also mean more tax revenues for education and government.

It means more billions of dollars of investment with nothing required except for a political environment that doesn’t block it, and allows it to happen.

None of this is pie-in-the-sky visionary thinking. It is happening at this very moment. The investors and entrepreneurs are banging at our doors, right now. Many have already opened shop in Billings and other surrounding communities. The only question is, are we going to open the doors or continue to attempt to bar them shut?

Look around folks, the market is trying to overcome the recession, if we but let it happen. Our future is emerging before our very eyes, if we but open them to see.

Click to follow:  Big Sky Business Journal, Evelyn Pyburn

“You have redefined and defied the trends suggesting strongly the future of energy is oil and gas and not solar and wind,” said Economides. Economides is professor at Cullen College of Engineering in Houston, consultant and author.

The reason places like Montana and Canada stand at the leading edge of the industry is because of conditions that exist in other countries, which are mostly hostile to the US. Many of these countries are “a shambles,” “corrupt,” and unstable. “It is hard to produce oil when people are shooting at you,” said Economides.

“You are making the whole myth of peak oil a shambles.”

People have been talking a supposed end in the availability of oil for years but supplies have always increased and continue to meet a demand that only grows as countries like China and India grow and increase their demand.

The reason is because of increases in price, said Economides. Economides expressed disappointment with the US Geological Survey and the degree to which they fail to take increasing prices into account in making their projections regarding supply. Increased prices increase the amount that producers can afford to invest, which puts into production resources that they previously considered uneconomical to recover.

Economides predicted that $100 a barrel oil is the new norm.

The price will be held because of the unprecedented demand for oil in China. The situation with China is “bizerk,” said Economides, “Never before has there been a country where their demand for oil increased 20 percent per year.”

Also OPEC, Russia and other oil producing countries love $100 barrel oil. “…they will try to keep it up there as long as they can.”

The amount of potential energy possible from such “alternative” sources as wind and solar, are so small that they “do not even register,” said Economides.

Economides pointed out that going back decades in the US, oil, gas and coal – the fossil fuels – have consistently contributed 87 percent of the fuel used in the country. He said that the day will come when his great, great grandchild “will stand here and tell you that 87 percent of the US fuels come from hydrocarbons,” said Economides, “There are no alternatives to oil and gas.”

And, that comes even with the increased demand for fossil fuels. In 1973, “the world energy demand was 60 percent of what it is today,” and in 2030 it will be 50 percent more than what it is today,” but still 87 percent will come from oil, gas and coal. Production from other energies may grow, but they will not be where the 87 percent is going to come from.

Nuclear energy is green and “it will have to play a role,” even though it “has yet to live down the bum rap,” it’s been given.

Energy from biomass is nothing new. One-third of the world’s population get their energy from biomass and it is the only source of fuel available to them.

Other “green energies” according to Economides, “simply can never cut the mustered from a physics point of view.”

He went on to criticize President Obama’s focus on solar and wind calling it a “never, never land.” He called Obama’s rejection of the Keystone XL Pipeline as “despicable.”

“How can you have too much of a good thing?” he asked, pointing out the importance of Canada, as a friendly country, and a dependable source of oil for the US.

Economides questioned every alternative energy option as being an ineffective alternative to fossil fuels.

He called ethanol a scam, because it takes 1.6 gallons of gasoline to produce one gallon of ethanol – not to mention the negative impact on food prices.

He said that not a single country in which wind energy is used has closed a single coal-fired plant and in fact their demand for natural gas has increased.

He said that he is not a climate change expert, but pointed out that “China is going to use every drop of oil they can get.” That means that whether the US uses the fuel or not it will still get used on planet earth.

“The last refuge of the energy scoundrel is CO2 sequestraton,” said Economides. “It isn’t going to happen,” he said, and “a high school chemistry student can figure out why.” He said that one 1000-megawatt power plan will require a space the size of New Jersey in which to store sequestered CO2. “And we have 1000 power plants.”

Natural gas is the energy of the future, predicted Economides. “There is absolutely no doubt that NG will take over” during the next 30 – 40 years.

World demand for natural gas is increasing about 7.6 percent per year.

He pointed out that natural gas is abundant and that Russia “has the natural gas.” Russia will become energy dominant, predicted Economides.

The US will become an exporter of natural gas in the form of LNG – exporting it especially to Europe. In the US the Marcellus shale in Pennsylvania and New York, “could easily be the second largest gas field in the world.

Economides predicted that by 2014 -15 the price of gasoline will get to $8 and stay there, because of world demand, led by China.

“China is like no other county you have ever seen. They don’t have enough oil to meet their needs.” Their demand is being driven by a process of modernization which is driving rural residents into the city. In China’s cities, said Economides, “700 million now live where 200 million used to live.”

They too will be using natural gas. Right now the country gets 70 percent of their energy from coal, but they have decreed that by 2020 they will increase the amount of energy they get from natural gas by ten percent – using about 14 trillion cubic feet – that is half of what the US uses annually.

China is going all over the world buying up every energy resource they can find. They spent $200 billion last year. “China is buying everything, while we are talking about solar and wind.”

Economides, who has traveled the world extensively in his career, said that the two most common questions he gets from the Chinese is “What is the energy policy of the US?” and “Why are you guys letting us do this?”

China will probably lead economically in the future, said Economides, saying that he believes China has more in common with the US, than Europeans do. “They have adopted what we used to do,” he said.

Upon questioning, Economides said that in his presentations he doesn’t have enough time to fully explain his position regarding alternative energies. They all “have a clear place and use,” but he said, “Let’s not pretend that solar, wind or even geothermal are going to replace fossil fuels.”

Indicating that he believes the issue of climate change will eventually go away, coal will be used to a greater extent in the US and it will go “head to head” in competition with natural gas. And, that is good, he said. “There is not a single solution by any means” and “competition is good.”

He said that “peak oil may never happen. Natural gas will contribute a massive share of transportation fuel.

Click to Follow:  Big Sky Business Journal, Evelyn Pyburn

Montana is experiencing “a revolution in energy… in spite of some of the policy decisions being made,” said Whitsett, a Montana native whose company, which is based in Oklahoma, is one of the largest in the nation involved in that revolution. “Even if the Montana Bakken turns out to be a fraction of North Dakota, we are still looking at huge energy potential in eastern Montana.”

“It’s excitement that you can feel in this room— in Montana —in the country. It’s not only justified but permanent – if we do the right things,” said Whitsett.

What he sees as “doing the right things” is a responsibility to educate the public as to what it’s all about, as part of its “social contract” to do business. “If we understand the industry and do things right the sky is the limit. The same is true of other energies, too,” he said.

He pointed out that there are a lot of people in the country who have a lot of concern, but studies have shown that the closer people are to the industry, the more they understand it, the less concerned they are. “”We need to make sure people understand what we do. .. We need to demystify the nature of our businesses,” he said.

Whitsett talked about the concerns about fracing, about additives to water, and emissions. “We need to find a way of letting people see it is not mysterious. And, that even while those things [additives] are benign, they do not get into the water.” He said that the technology is improving so that “we are using less and less water, we are using more non-drinking water for steam processes, and we are recycling, blending and reusing water. Our emissions are low.”

Whitsett talked about the ups and downs and uncertainties of oil development in the past, but this time around he said, “everything is different.” This time it’s not about the resources, “it is about technology.”

Devon Energy Corporation “cracked the technology code” that led the shale revolution by using computer imaging to direct horizontal drilling. The technology takes most of the risk out of exploration. The new technology has “hits” almost 100 percent of the time.

Estimated to have 24 billion barrels in the Bakken play – Whitsett predicted that that estimate will continue to grow. “It will be a lot bigger in the not too distant future,” he said.

Click to follow: Big Sky Business Journal, Evelyn Pyburn

Greg Dover, Vice President of Operations excellence for Denbury Resources, told a crowd of several hundred people at the Montana Energy 2012 conference in Billings that there’s going to be significant increases in the production of oil in Montana as the result of a completely different kind of technology than what is being used in North Dakota.

One of the most intriguing aspects of CO2 EOR is that it allows the resurrection of wells once considered depleted. Denbury Resources, a national leader in CO2 EOR, plans to invest some $3 billion over the next few years to squeeze additional oil from two well-known Montana fields.

In its heyday in the late 60s, Belle Creek in southeastern Montana produced some 48 million barrels of oil, Denbury expects to invest $400 million and pull another 30 million barrels from 475 existing wells.

In addition to Belle Creek, further north is the Cedar Creek Anticline, which Dover called a “monster field.” The company plans to invest $2.5 billion to recover some 200 million barrels of oil. Cedar Creek Anticline is four miles wide and 100 miles long, “and saturated with oil,” said Dover. At its peak, the field will produce 40,000 barrels of oil a day.

But, to get all that oil, Denbury needs a lot of carbon dioxide, which the company plans to bring from a natural gas process facility at Lost Cabin in Wyoming. A 232-mile pipeline is already under construction which is expected to be able to deliver carbon dioxide in time to begin oil production at Belle Creek in 2013. Production will take place in eight phases through 2019.

This phase of oil extraction can last up to six years – and then as production levels begin to decline, it will continue for perhaps another six years. Development could extend beyond that, adding another 30-40 years to the life of the fields. The area could be producing oil for another 100 years, said Dover.

The process of CO2 EOR is to inject the carbon dioxide into the well, under pressure. The CO2 acts as a solvent enabling the oil to flow more easily. After it has been brought to the surface, the CO2 is separated from the oil and then re-injected. No worry about encouraging the capture of CO2 – “It is valuable to us. We don’t want to lose any of it,” said Dover, who explained how they use a closed-loop system to reuse as much of the CO2 as possible.

Denbury Resources has also invested in another property at Riley Ridge in Wyoming as another potential source of carbon dioxide.

Because of CO2 EOR, nationally, there is a potential market for 380 trillion tons of CO2.

It has been estimated that in employing the technology there is 7.5 billion of oil to be recovered nationwide. “And, the industry is just scratching the surface,” said Devon. In Montana, Wyoming and North Dakota, alone, there is 3.2 billion barrels of recoverable oil, said Dover.

US CO2 oil production first started in west Texas in the 1980s – production using the process has steadily increased. Denbury today is producing 280,000 barrels of oil in its fields in New Mexico, Texas and Colorado, using the process.

“It’s a key prize for us,” said Devon.

Denbury is a leading oil company in the US and the largest producer of oil in Montana and Mississippi. The company employs 65 people near Baker.

In 2011 the company paid $53 million in state severance tax and royalties to the State of Montana.

Click to Follow More with: Big Sky Business Journal, Evelyn Pyburn