WSM Ma 12

March/April 2012
CEMENT EVALUATION MORE DETAIL AND HIGHER RESOLUTION

OILFIELD JOB MARKET
W HAT THE STATISTICS TELL US
RAILROAD CROSSINGS H OW TO MAKE SAFE DECISIONS
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Volume 53, Number 2
March/April 2012
features
OFFICIAL PUBLICATION OF
THE ASSOCIATION OF ENERGY
SERVICE COMPANIES
Executive Director: Kenny Jordan

14 Cement Bond Evaluation
kjordan@aesc.net; (713) 781-0758 Cements and cementing techniques have
President/Publisher: Patty Jordan improved much faster than the tools used to
pjordan@aesc.net; (713) 781-0758
evaluate the cement bonds
Editor: Polly Fisk
Production & Design: Polly Productions

24
polly@pollypro.net; (972) 234-5445
Safety Statistics for the
Contributing Writers: Sharyn Alden, Mark Crawford, Well Service Industry
Kevin Drake, Patricia Edwards, Danny Lillard,
Andy Maslowski, Terry Moffatt, Al Pickett,
A slight increase in both LTAR and TRIR
Thakur Sekhon, Lucio Tello, Kristin Van Veen-Hincke,
Brandon Williamson
Well Servicing: www.wellservicingmagazine.com 38 Safe Decisions at Railroad Crossings

AESC: www.aesc.net In 2010, about 2,000 collisions occurred between
Oilfield Theft: www.stopoilfieldtheft.com vehicles and trains at railroad crossings
Unless expressly stated otherwise, all editorial

42 Oilfield Job Market
and advertising material published is the opinion of
the respective authors and/or companies involved
and should not be construed as official action by or At its peak in 1982, more than 800,000 people
approved by Publisher or the Association. No part
were employed in the oil and gas extraction business
of this publication may be reproduced in any form
without the express written consent of the publisher.
If available, extra copies of current issue $4.00
and back issues $8.00. All prices for U.S.A. 2012
all rights reserved. 24
Foreign Subscriptions: Canada and Mexico 14
$100/year, all other non-U.S. addresses $200/year.
CHANGE OF ADDRESS: Please send copy of

mailing label with new address to Well Servicing,
14531 FM 529, Suite 250, Houston, Texas 77095
Official publication of the Association of

Energy Service Companies. Editorial, business
and advertising offices: 14531 FM 529, Suite 250,
Houston, Texas 77095; (713) 781-0758 or
(800) 692-0771; Fax (713) 781-7542
Well Servicing (USPS 537-670) 38 42

(ISSN 0043-2393) is published bimonthly by
Workover/Well Servicing Publications, Inc.,
14531 FM 529, Suite 250, Houston, Texas 77095.
A wholly owned subsidiary of the Association of
Energy Service Companies. Periodicals postage
paid at Houston, Texas 77201.
POSTMASTER: Send address changes to

Well Servicing, 14531 FM 529, Suite 250
Houston, Texas 77095
Well Servicing March/April 2012 3

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Volume 53, Number 2
March/April 2012
contents
departments
_______________________________
6 Presidents Outlook inside this issue
___________________________________
8 Executive Directors Corner
19 Unnatural Gas
10 Well Service Rig Count
31 spOILed Its time to fill up on truth
12 Safety Talk
34 Frac Fluid Chemicals
54 Congressional Spotlight

Steve Palazzo (R-MS) 40 Cable Length How to calculate it
58 The voice of AOGA 42 Oilfield Job Market

Alaska Oil & Gas Association
46 Who is Steven Chu?
61 Market Report
Congress wants a Reasonable 50 Gill Services Inc. 35 Years Strong
Profits Board
Polands shale gas corruption
Obama Administration takes credit
72 Keystone XL Pipeline Rejected
Eastern Ohio drilling boom
Cut back proposed in Western states 77 Natural Gas Electric Plants
U.S. strides toward energy independence
92 Greener Fracking Technology
68 Personality Profile
Daniel Comalander Key Energy Services 112 Association News
96 Election 2012

Election-Mania sweeping the country
About the Cover: Nabors Well
100 Regional Roundup

Services Co. on location in
West Texas.
March/April 2012
CEMENT EVALUATION MORE DETAIL AND HIGHER RESOLUTION

OILFIELD JOB MARKET WHAT THE STATISTICS TELL US
RAILROAD CROSSINGS HOW TO MAKE SAFE DECISIONS
Malaysia Photographer: John Boykin

www.commimage.com
108 Political Focus

Well Servicing Editorial, Business
and Advertising Offices:

Dunes Sagebrush Lizard 14531 FM 529, Suite 250, Houston,
Texas 77095; (713) 781-0758 or
(800) 692-0771; Fax (713) 781-7542
114 Industry Items For questions and comments,

contact President/Publisher
Patty Jordan, pjordan@aesc.net

Presidents Outlook
The Good Old Days

My thoughts, opinions and viewpoints
integrity and plain old common sense resulting in their death, receives more
that people once had? How and when media coverage than the death of any
did we become a nation of blamers and one of our men and women in uniform
complainers? who freely give their lives for our freedom,
We have the current President blaming independence and country. What a shame.
the past presidents for todays issues. We Id like to share with you the words of
have a whole generation of people blaming a song that was written by Mike McClure
their misfortunes on others who more and is performed by (my favorite band) The
Great Divide. These guys got their start
What happened to in Stillwater, Oklahoma back in the early
the days when people 1990s. To me, the words speak volumes
about our nation today and yesterday.
put others first and
Angie Sims-Long kindness was an action Dodgers Were In Brooklyn
2011-2012 AESC President Talked to my Daddy last night about
Busters Well Service
and not just a word that
1952, Id heard about the good old days
Kermit, Texas can be found in the and I was wondering if they were true.
dictionary or Googled? Well it must have been because he smiled
and his eyes looked into mine and I could
I
hope not to offend anyone with this than likely dont even have a dog in the tell he touched a memory as he told me
article but, What is going on in this fight. We have kids having babies and of a time. . . .
country? expecting the grandparents to raise those When the Dodgers were in Brooklyn
Everywhere you turn, you hear, read or offspring. The reality shows on TV dont and the air was clean. Marilyn Monroe
see some of the craziest nonsense. And seem to help the situation either. In my was breakin hearts on the silver screens
youve just got to scratch your head and opinion, shows like Teen Mom, Black Gold, and Daddy finally stole my Mommas
ask yourself, Is this really the world we Bayou Billionaires, Toddlers and Tiaras and heart away from ol James Dean. On the
live in today? Keeping Up With the Kardashians give the other side of memorys fence the grass
A rash of teenage suicides in West viewers a false sense of reality not to is always green.
Texas, An Indian Tribe sues beer makers mention a skewed view of the oil and gas I talked to my Momma last night bout
over alcoholism, the whole Occupy industry, teen pregnancies and all around the way things used to be. She showed
movement, riots during sporting events, bad behavior. Really? Is this the legacy me a picture of her and some guy that
and the list goes on. Whatever happened we want to leave behind? looked like me, spell bound around the TV
to people being accountable for their own And its a sad day for our nation when in the den; I wish that we could go back
actions? What happened to the character, the personal negligence of a music star, to those innocent times again.
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6 Well Servicing March/April 2012

I encourage each of you to view the documentary
But now I know that time has changed
things, then and now is day and night. titled spOILed by Mark Mathis. It is a true and
Memories will always be larger than life sobering depiction of our nation and our world today.
and its all right here in black and white.
It seems that people today have a AESC and extremely proud and honored
What happened to the days when bad case of Not in My Back Yard to be a member. This organization is and
people put others first and kindness was attitude. People want, need and crave has always been diligent in educating
an action and not just a word that can be the products and conveniences that come and informing not only the folks in the
found in the dictionary or Googled? from petro carbons BUT they dont want industry, but also those who are not. The
Is this just the way things used to the harvesting process done in their back Well Servicing magazine is an outstanding
be and well never see those good old yard. Gimme a break! publication filled with information, integrity
days again? It seems that too many We have become a nation of believing and various unbiased viewpoints. I
people are too worried about their rights only what we hear and no longer take encourage each of you as members to
instead of worrying about what is right. the personal responsibility of researching spread the word about the AESC and Well
So many people talk about the effects of and educating ourselves about the world Servicing magazine in an effort to get the
greenhouse gas, carbon footprint and the around us leaving folks to take entirely correct and truthful information out to
endangered species. (Dont get me wrong too much stock in bias-based media that those who seem to have narrow-minded,
I too am an animal lover but at some spreads hysteria. tunnel-vision about our industry.
point we have to realize that the human I encourage each of you to view the I also want to encourage each of you to
race is a species as well.) What about the documentary titled spOILed by Mark perform a random act of kindness just
effect of the lack of morals, scruples, Mathis. It is a true and sobering depiction for good old times sake. And if you see a
decency, good manners, integrity, common of our nation and our world today. It is the vet shake their hand or hug their neck
sense, character, fellowship, kindness and educational information that so many of and tell them thank you.
love? Doesnt that lack scare our nation us need. I thank you for allowing me to share
as well? This rant of mine actually has a purpose. some of my thoughts, opinions and views
Does the phrase Pay it Forward not With all the craziness and nonsense going with you. May God Bless You, God Bless
mean anything anymore? on in the world today, I am thankful for the our Troops and May God Bless America.
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Executive Directors Corner
Why Helium-3 Gas

Impacts the
Oil and Gas Industry
other environmental characteristics requisition program put in place

that are used for neutron logs. by the government, there are more
Without access to He-3, new requests for He-3 than there is
detectors cant be built, which allocation.
in turn means companies cant The Association is currently
expand their service offerings or working with DOE in trying to
Kenny Jordan expand geographically because of justify an increase to the current
AESC Executive Director tool shortages. And to complicate allocation. But then so are the
the problem even further, there other industries that utilize He-3
is no viable alternative
to the He-3 detector at Helium-3 is a non-radioactive
M
any of you have used
this time that meets isotope of helium, two protons
helium for everything
t h e e n v i ro n m e n t a l
requirements, or can and one neutron. It is very rare
from floating balloons to
talking funny. What many people
replace the years of in its natural form on earth and
dont realize is the importance that
information that we
currently have from is a decay product through the
an isotope of helium plays in the oil
and gas industry.
neutron logs using He-3 nuclear weapons program.
Helium-3 is a non-radioactive
detectors.
isotope of helium, two protons
in their businesses or research. As
and one neutron. It is very rare
So why the science lesson? an industry, we must put together a
in its natural form on earth and
The problem is we are in a compelling case for DOE to increase
is a decay product through the
situation where the U.S. Department the allotment and to understand
nuclear weapons program. It is
of Energy is allocating the gas for the importance of the neutron
used in low temperature research,
use in various industries. There is measurement to our companies. In
the medical industry, and the oil
a very limited supply, numerous recent meetings we have discussed
and gas industry specifically
requests by various industries and a the importance of the neutron
in tools that utilize neutron
system of rationing now in place. In measurement in log analysis, the
measurements. It is what almost
the government fiscal year of 2010, need to be less dependent on
every downhole neutron tool uses
oil and gas was allocated a total of foreign oil and gas, and that there
as a gas for the detector. It can
1,000 liters of gas. In this years are over 150 companies in the
withstand the temperatures and
allocation, oil and U.S. that participate in the logging
gas was to have industry, of which many are small
ZERO allocation, businesses.
however, that We are continuing our dialogue
decision was with DOE on behalf of industry. In
changed at the the meantime, help us to educate
last minute. the oil and gas industry on the
The fiscal year importance of this resource.
2011, oil and gas For a more thorough background
was allocated on the issue, the following web
a total of 1,100 location gives the reader access
liters of gas, to the Government Accountability
however, through Office report: http://www.gao.gov/
the current assets/320/318377.pdf

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Well Service Rig Count
Welcome to the Guiberson/AESC Service Rig Count. This
service is being provided by Guiberson, in conjunction with West Coast West Texas/
with Alaska Permian Basin
the AESC. The Guiberson/AESC Service Rig Count is now Mid-Continent Rocky Mnt.
available in each issue of Well Servicing magazine and on the Texas Gulf Coast ArkLaTex
Guiberson web site at www.c-a-m.com/rigcount. South Louisiana Eastern U.S.A.
DECEMBER 2011 12 Months Ago

Area
Active Available Idle Stacked Active % Active %
Rigs Rigs Rigs Rigs of Total Rigs Utilization
texas gulf coast 227 27 31 29 72% 162 61%

arklatex 156 8 33 54 62% 131 56%
eastern u.s. 103 15 20 12 69% 77 59%
south louisiana 22 7 6 37 31% 29 45%
mid-continent 254 55 52 79 58% 348 63%
west texas/permian 684 12 74 211 70% 562 61%
rocky mountain 349 35 39 49 74% 301 68%
west coast/alaska 336 4 64 87 68% 337 68%
total u.s. 2131 163 319 558 67% 1947 63%
canada* 711 187 87 25 70% 714 79%
total u.s. & canada 2842 350 406 583 68% 2661 66%
JANUARY 2012 12 Months Ago

Area
Active Available Idle Stacked Active % Active %
Rigs Rigs Rigs Rigs of Total Rigs Utilization
texas gulf coast 233 27 28 26 74% 158 60%

arklatex 151 13 25 55 62% 129 55%
eastern u.s. 101 12 19 13 70% 94 61%
south louisiana 27 2 6 40 36% 25 38%
mid-continent 245 56 49 101 54% 358 64%
west texas/permian 701 10 65 194 72% 571 62%
rocky mountain 356 33 36 52 75% 305 68%
west coast/alaska 340 4 59 88 69% 343 69%
total u.s. 2154 157 287 569 68% 1983 63%
canada* 718 107 58 22 79% 709 79%
total u.s. & canada 2872 264 345 591 71% 2692 67%
*Canadian rig count provided by Topco Oilsite Products

Active Rig The rig is active if, on average, it is crewed and worked every day during the month.
Available Rig The rig is available if a rig has a crew and is ready to work, but is not working.
Idle Rig The rig is idle if the rig is capable of being put to work in less than 48 hours and does not require
spending in excess of $50,000 to activate it, and does not have a crew currently assigned.
Stacked Rig The rig is stacked if the rig does not have a crew assigned and could not be put to work without
significant investment in repairs and additional equipment in excess of $50,000.

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D392004429-MKT-001 Rev 02
Safety Talk
Safety Talk is an ongoing series that focuses on safety-related issues such as best practices, regulatory, training,
compliance, hazard recognition and prevention, and other vital components of the safety commitment. Information
is reported by Pete Sandel, safety and membership consultant for the AESC.
Lightning Strikes
Spring and summer bring shattered air
not ascend to the top of the tubing in the hole, guy wires
mountain if there were any etc., the charge released by a strike
indications that storms might occur travels over all metal surfaces and
even if there were just clouds if the charged surface is touched
in the area. After the storm hit, by anyone, it then travels to the
the men went into a shallow, open body. Transport truck drivers and
rock structure and were leaning hot oil truck operators are not
against the granite rock when only exposed to higher risks of
the strikes occurred. The strikes lightning strikes in the vicinity of
were not directly on them but tank batteries or disposals but also
elsewhere on the mountain top. from fire-related injuries if there is
The released electricity travelled a fire or explosion caused by the
along the surface of the granite and strike.
struck the men. The least injured
hiker had found a low depression Lightning safety tips to be
Pete Sandel
several feet from the others and observed while on the job:
AESC Safety and Membership
remained there. When thunderstorms threaten,
Thunder and lightning storms dont start anything you cant stop.
occur more frequently from May Know your companys lightning
I
recently read the book through September. Typically safety warning program
Shattered Air, a true story of the southern and Midwestern Assess your lightning risk and
a group of hikers who were states have the highest incidence take precautionary action. During
repeatedly struck by lightning while of lightning-related deaths and thunderstorms, no place outside is
on top of Half Dome, a solid granite injuries due to the greater number safe. If you hear thunder, lightning
8,800-foot mountain in Californias of thunder and lightning storms. is close enough to strike you. Stop
Yosemite National park during a The most deaths and injuries are what you are doing and seek shelter
powerful thunderstorm. Of the in the construction and agriculture in a substantial building. If this is
five men involved, two died, two industries and in outside activities. not possible then get in a metal
required months of hospital care The oil and gas industry is topped vehicle with the windows
with permanent debilitating inherently subjected to the dangers rolled up.
injuries and the fifth recovered associated with lightning strikes Objects and equipment to avoid
fully but had mental and emotional due to the simple facts that our during thunderstorms stay off
trauma resulting from the incident. equipment and workers are outside of and away from anything high,
The compelling part of this story for and in exposed open places. While do not touch materials or surfaces
me was the fact that all the hikers it is true that a rigged up workover that conduct electricity.
totally ignored posted signage to rig is grounded by several devices Think safe, work safe, be safe!

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R A I S I N G P E R F O R M A N C E . T O G E T H E R
TC9883
State of the business on
Cement Bond Evaluation
By LUCIO N. TELLO
_________________________
Weatherford International
A personal perspective
This log illustrates a newer generation ultrasonic tool. The improvement for detecting
channels is obvious in the impedance map track. Blue color represents absence of
cement (channels) while dark color presence of cement. The Amplitude map track
represents the condition of the inside of the casing. Light yellow color means casing
in good condition, dark spots damage, seams, scratches, etc. The casing also can be
viewed in three dimensions and a polar plot, both shown on the left.
T Lewis Brake Lining
he 2010 oil spill in the Gulf cannot see clearly if the reduction
of Mexico has opened our in attenuation rate is due to a lower
eyes to how important it
is for the industry to pay more
compressive strength or to a channel
developed in the cement sheath.
& Brake Bands
attention to the cementing of wells For this reason, in the last couple
and to cement bond evaluation. In of decades a series of new tools
the last 10 years, the industry has emerged. The segmented and sector
improved cements and cementing bond tools addressed the channel
techniques much faster than identification with virtually no limit
they have improved the tools on the weight of the fluid present
that evaluate the cement bonds. inside the well. These tools produce
There is no doubt that we are at a map of typically 6 to 12 sectors
a crossroads between developing scanning the circumference of the
even newer cement types, and casing. This map visually shows
developing cement bond tools that the presence, or absence, of cement
can not only evaluate the cements and indicates where the free pipe,
developed in recent years but also channels, or total cement is located
evaluate the new cements available
today. The public
in both depth and radial directions.
Tough & Durable
is concerned with In the last 10 years, the industry Regular & Oversize
environmental issues
at sea and also on land.
has improved cements and Drilled & Undrilled
In areas where shale cementing techniques much faster
exploitation is in full than they have improved the tools With Wiper Blocks
swing, the protection Inserted in the
of the underground that evaluate the cement bonds. Same Material
aquifers is of concern.
Cement bond evaluation will play Where we are now U.S. Pat. 2,992,701
a very important role in both land We are now at a place where Can. Pat. 62-634-125
Others Pending
and sea environmental issues. A the industry wants to have more
little bit of history will take us on a detail and higher resolution in the
road map to where we were, where detection of small channels that R Woven in one Piece
we are now, and where we need to may allow hydraulic communication
be for the future. between hydrocarbons, and water-
ensuring suPerior Quality
bearing formations (aquifers). R imPervious to HigH Heat,
Where we were This is important for economic, Water, oil & grease
Cement bond logging began in environmental and political reasons.
Venezuela in the late 50s. Logging In the last few years, scientists have R abrasive -Free Fiber
crews noticed the attenuation designed new tools and have made eliminates Flange scoring
suffered by the first bundle of improvements to existing tools.
sound, called compressional The drawbacks of the ultrasonic
arrival, when the sonic tool traveled type tools are (1) the sonic signal OILFIELD
from the open hole to the cased cannot travel too far in heavy BRAKE BANDS
hole section of the well. This drill fluids, and (2) the signal is Full line of high quality
attenuation correlated very well affected by the casing thickness.
bands cut using latest
with the temperature logs that Despite these deficiencies, they
were used at that time to evaluate have excellent resolution down to water jet COLD cutting
the presence or absence of cement a few degrees per radial sample technology which does
during its curing period. Soon after and one inch per depth sample. not weaken the metal.
this discovery, logging engineers Ultrasonic tools produce a clearer
started using the amplitude log of map of the cement job. They also
70Years+
the first arrival as the indication of give an idea of the conditions of Ask Abo
u
the cementing conditions. With the the pipe such as thickness and Band t
further work of several researchers, smoothness. The smoothness of the Exchan
g
the calibrated cement bond log internal wall of the casing is related Programe
(CBL) and the seismogram, called to corrosion. Besides looking at Since 1936
the variable density log (VDL), the bond between the pipe and
became the standards that are still the cement, new tools are now Lewis Friction
used today by many operators. able to look at the bond between
The CBL and VDL are good tools the cement and the formation. Products, LLC
to evaluate the cementing jobs, but These new tools provide a total
888 - 398 - 4719
2026B
these tools lack radial resolution. evaluation of the volume of cement

Without radial resolution, the tool in the annulus. www.LewisMfg.com

Figure 1 Figure 2
Cement bond
evaluation will play
a very important role
in both land and sea
environmental issues.
lowering the casing into the

well. Then they cemented the
wells. The methodology is
described and documented
in the EPA/625/9-89/007
booklet titled Injection Well
Mechanical Integrity.
The EPA invited the industry
to log all different kinds of
tools in existence at the time
and made an evaluation of the
state-of-the-art in cement bond
logging. The commercial tools
were divided into two types.
Figure 1 (left) shows a log from a first generation tool. The amplitude of the CBL
is in the middle track from 0 to 100. The VDL (far right track) shows indication of
The first generation are those
channels where the casing arrivals are present. However there is no picture of how not having radial resolution,
large the channels are. such as the standard CBL-
VDL type of tools. The second
Figure 2 (right) shows a log from a second generation tool. On the right track the
generation are those having
dark color represents presence of cement while the white spots represent channels
identified by the tool. radial resolution, such as the
8-sectors, segmented, and the
early 8-detector ultrasonic
One of the best facilities to there are many man-made channels tools. The results were that none of
evaluate the technology, and the of different sizes from about the tools commercially available at
capabilities of the industry to 6-degrees to 90-degrees. The task the time located any of the 6-degree
evaluate the cementing conditions, was challenging, since nobody knew channels. However, the second
is located near the town of Ada, how to create man-made channels generation tools located all of the
southeast of Oklahoma City. In of various sizes, with predictable 30, 60 and 90-degree channels. Log
the late 80s, the Environmental radial and depth spans. They did examples of the first generation
Protection Agency (EPA) built a it by gluing small, water-filled PVC and second generation are shown
series of test wells as a research tubes around the casings before in Figures 1 and 2.
project to examine the best way
the industry can determine the Besides looking at the bond between the pipe
mechanical integrity of a well,
that is, the cement conditions. and the cement, new tools are now able to look at
One of the wells for example, has the bond between the cement and the formation.
various casing sizes starting with
4.5-inch at the bottom to 95/8-inch These new tools provide a total evaluation of the
at the top. In each casing size, volume of cement in the annulus.

The future
Where we need to be for Today, the
the future, is a place where
we have a full evaluation of industry is I N D U S T R I E S
the mechanical integrity of moving into
all wells. Today, the industry
is moving into tools with tools with
even higher resolution, about even higher
10 times that of the second
generation. Recently, we had resolution,
the opportunity to see for about 10
ourselves how this type of
tool would locate the channels.
times that of
The resulting log shows clearly the second
that by having 3- to 5-degree generation.
resolution, all the channels
in the test wells of the EPA M A N U F A C T U R I N G
can be identified. Not only that, but this type of
tool can measure the casing thickness with good
WORKOVER & DRILLING RIGS
resolution as well. New technology allows (1) the DRAWWORKS PARTS&SERVICE
computation of the casing thickness, (2) an image of HEAVY HAUL TRAILERS
the casing internal diameter, and (3) the cement bond AND NOW INTRODUCING THE
LCIRHINO
evaluation, in a single pass of the tool in the well.
A continuous three-dimensional display is possible
with simple laptop software. With rotation about the
tool axis, an inspection of the inside of the casing MOBILE
is now at our finger tips. An example illustration is
shown on the title page of this article.
sand silos
The faster and economical solution
to a streamlined workflow.
The industry has to develop new
tools that can evaluate the full
Flip action hydraulic trailers
cement sheath in the annulus Shuttle/Sliding conveyors 114 ton Capacity
Dual transport conveyor to blender 210 ton Capacity
between the casing and the Adaptable to existing conveyors 250 ton Capacity
formation, keeping the casing *Patent Pending
COMPLETE SAND MOBILITY!

inspection an integral part of
the log.
For a full evaluation of the mechanical integrity
of all wells, two more things need to happen. First,
the industry has to develop new tools that can
evaluate the full cement sheath in the annulus
between the casing and the formation, keeping the
LOADCRAFT
casing inspection an integral part of the log. Second,
we need a decision from the industry in general to
perform the evaluation, so that we can protect the
economy, environment and safety of all.

About the author: Lucio N. Tello received his B.Sc.
in Electronics from the Universidad Distrital in Colombia,
and his M. Sc. and his D. Sc. from the University of Texas
in Arlington, Texas, both in Applied Physics. Lucio has been
designing sonic and ultrasonic tools for more than 30 years. 3811 N. Bridge Brady, Texas 76825
He is a Sr. Research Physicist for Weatherford International.
(800) 803-0183
Let Your Voice Be Heard ISO 9001:2008

4F-0061
www.Loadcraft.com
Join the AESC Today 7K-0056
Q1-0023
www.aesc.net 713.781.0758 Drill Like You Mean It.

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Maybe we
should call it
"unnatural" gas
Photographer John Boykin
L If low natural gas prices persist through 2012

ets face it: at $2.31 per
Mcf, natural gas has become
the Rodney Daingerfield of and there is a large consensus that calls for this
commodities. there will be unavoidable impacts for the wellsite
That commodity hit an unnatural
10-year low in the first six weeks of services industry.
2012 as the reality surrounding a
possible extended period of sub-$3 What that checklist doesnt Secondly, the initial impact from
gas settled on the industry. reveal, however, is an answer to the an extended period of low natural
How did the industry get to $2.31 greater question of how soft natural gas prices falls on smaller oil and
natural gas in 2012 and in winter gas prices will impact the domestic gas operators who may find they
no less? oil and gas industry in 2012. cannot sell properties on the one
The checklist of reasons begins Those answers are not easily hand or develop them on the
with a warmer-than-normal winter, defined. First, an extended run other creating a paralysis that
too much production as a result of of subnormal natural gas prices results in lower net demand for
joint ventures, the need to capture is a different issue than a 60 to wellsite services.
acreage, hedging, and abundant 90-day price drop. If low natural Privately held operators represent
private investment capital. Further gas prices persist through 2012 30 percent of drilling activity in the
down the checklist is an aggressive and there is a large consensus new world of tight formation oil and
bout of speculative shorting among that calls for this there will be gas, and account for a slightly larger
investors. But the biggest item unavoidable impacts for the wellsite share of natural gas drilling. As a
on that checklist involves the services industry. On the other whole private oil and gas operators
industrys incredible geological, hand, if prices rebound above $3, were hit hard by the downturn
mechanical and engineering the events of January and February in 2009 and did not return to the
expertise at unlocking greater 2012 will merit only an asterisk in market during the general recovery
volumes of tight formation gas the long and ever-changing natural at anywhere near their pre-bust
with fewer rigs. gas narrative. levels of activity when the group

Adding it all up
12 For now, the consensus is
that low natural gas prices will 800
10 influence the 2012 market, but not

necessarily in a net-negative way.
Original forecasts called for activity 700
8
to expand 7 to 10 percent in 2012
on the basis of greater operator
6
spending and an influx of new 600
fit-for-purpose drilling rigs to the
4
industrys revitalizing fleet. The
evolving consensus now calls for 500
2
2012 activity to remain flat, or grow
only incrementally, as increases
0 in oil and liquids-based fieldwork
'95 '97 '99 '01 '03 '05 '07 '09 '11 400
offset declines in dry gas activity.
In fact, industry observers at
Graph shows monthly average natural Tudor Pickering Holt, Global Hunter
gas prices from 1995 to January 2012 300
Securities, Inc. and Raymond James
when the commodity hit a 10-year low. Inc. are projecting a 150-unit drop in
natural gas rig count in the wake of 200
represented 38 to 40 percent of the January 2012 natural gas price Jan 2011 Jan 2012
domestic drilling activity. massacre. Notably, those same
But longer term, even the bigger, observers argue that any drop in Graph breaks U.S. drilling activity into
publicly held companies will gas-directed drilling will be more dry gas, liquids rich targets and oil.
face pressure as revenues drop, than offset by an equivalent rise in While dry gas trended down in 2011,
particularly since so many publicly oil and liquids-based drilling. both oil and liquids rich drilling grew.
held firms have been outspending Specifically were expecting
cash flow in their urgent pursuit of between now and year end (2012) 30 rigs between now and year end,
tight formation oil and gas. to: (A) lose 130 dry gas rigs which would represent a very flat
(40% reduction); 2 percent growth from here but an
(B) lose 20 wet 8 percent average annual growth.
FOR SALE
gas rigs (3% Thats not good news if you
reduction); and (C) are providing wellsite services
gain 180 oil rigs in the Haynesville, the Marcellus
(15% increase), in northeast Pennsylvania, the
30124 WL writes J. Marshall Barnett, the Fayetteville, or the
Adkins, Raymond Woodford. On the other hand, if
WIRELINE CRANE James oil services
analyst. The
your area of interest lies in the
western Anadarko Basin, the
30 TON DUAL WINCH 134 TIP HEIGHT net result is an Bakken, the Permian or the Eagle
increase of roughly Ford, it will still be possible to
2011 MANITEX 30124 WL FREIGHTLINER M2 106D breeze through 2012 with
30 TON CAPACITY
134 TIP HEIGHT
CUMMINS TURBO ENGINE
10 SPEED TRANSMISSION
But longer term, minimal impact from low
DUAL WINCH LOCATED IN TEXAS even the bigger, natural gas prices unless
179,900
your tie to wellsite services
$
TOOL BOX
LOAD BLOCK publicly held involves pressure pumping.
In that case, underutilized
DUAL WINCH
companies will capacity rotating out of
AS LOW AS $
2695
PER MONTH!
face pressure as dry gas markets, plus new
revenues drop, equipment additions, will
impact pricing and margins
particularly since as the industry works
so many publicly through 2012.
But for everyone else with
held firms have ties to oil or liquid basins,
been outspending including the well servicing
contractor, the main issue
cash flow in their in 2012 wont be about
urgent pursuit of natural gas prices; rather,
it will be about finding the
MILWAUKEE
414-764-9200
CHICAGO
708-656-9200
SALT LAKE CITY
800-973-7939 tight formation people to staff high demand
MILWAUKEE CHICAGO SALT LAKE CITY GIUFFRE.COM oil and gas. for services.
well servicing.indd 1 12/28/11 3:59 PM

Through the looking glass
Just how realistic is a 150-unit Before the January 2012
25
drop in dry gas rig count for 2012? price collapse, natural
Essentially it means duplicating
the 19 percent decline witnessed gas was generating
in the final quarter of 2011 and that roughly $6.6 billion
may prove harder than it looks.
In the core Louisiana Haynesville,
monthly, according to
for example, rig count peaked in 20
the U.S. EIA. Sub-$3
mid-2010 at roughly 120 units per gas cuts roughly $1.6
month, and completions peaked
roughly one year later. But core billion per month out of
Haynesville rig count in early 2012 natural gas revenues in
had dropped more than 70 units
from its peak, or 60 percent, to 15
'06 '08 '10
comparison to late 2011.
roughly 45 active.
While Haynesville rig count is
headed lower during the first half Graph illustrates annual average At peak in late 2008, natural
of 2012, there are fewer rigs active natural gas production from 2006 gas represented 60 percent of
in the play now than have already through the first 10 months of 2011. domestic revenue flow. The financial
been let go. Similarly, while rig The time period covers the shale impact from the price-related drop
count will decline in the Marcellus, gas boom during which oil and gas in natural gas revenues should
operators added new production to
the Rockies and other dry gas therefore reduce total monthly oil
the market at an accelerating rate.
basins, the projected drop comes and gas revenue flow back to $25
out to dozens of units rather than billion, a modest decline over late
a hundred and a half. 2011 revenue flows, but a figure that
At a higher level, what ultimately is still higher than revenue flow in
2500
happens in the field reflects overall any month during 2010.
revenue flow from oil and gas
production. Before the January Turn the page
2000
2012 price collapse, natural gas The confusion in projecting a new
was generating roughly $6.6 billion 2012 outlook stems from the mix
monthly, according to the U.S. of good news in the market, which
1500
Energy Information Administration originates in the strong pricing
(EIA). Sub-$3 gas cuts roughly $1.6 environment for oil and NGLs. In
billion per month out of natural late 2011, revenues tied to domestic
gas revenues in comparison to 1000 oil production topped $17.6 billion
late 2011. monthly, the highest total since the
For perspective, the industry was July 2008 peak. Of note, oil revenues
generating $27.7 billion in monthly 500 represented 64 percent of industry
revenue from oil, natural gas liquids dollar flow domestically in late
(NGLs), and natural gas production 2011. Essentially, oil and gas have
in late 2011. While natural gas made Oil-directed drilling separated from swapped market share in terms of
up 24 percent of total domestic the number of rigs seeking gas- revenue generation over the last
revenue flow in late 2011, that directed targets in 2011, illustrating four years.
share should fall to approximately the shift in industry focus from Meanwhile NGLs were generating
20 percent based on January 2012 dry gas to liquids targets. $3.5 billion in late 2011, or
natural gas prices. approximately 12 to 13 percent of

For everyone else with ties to oil or
50 50
liquid basins, including the well servicing
40 40
contractor, the main issue in 2012 wont
be about natural gas prices; rather, it
30 30
will be about finding the people to staff
high demand for services.
20 20
may shift domestic level rises on firms who have been
m o m e n t u m outspending their cash flow on the
10 10 decisively in favor shale gas treadmill.
of the majors who
have aggressively Must rely on logic
0 0 Ultimately the cure for lower
added natural gas
acreage, primarily prices is, in fact, lower prices as
Graph compares monthly footage totals from U.S. in Appalachia, to the laws of economics work their
market with monthly oil, NGL and natural gas their internationally invisible-hand logic.
revenues. Generally footage tracks revenue flow heavy portfolios. Operators are taking steps to get
with a 90-day lag. The natural gas component will Larger organizations there. Chesapeake Energy Corp.
reduce industry revenue flow by roughly 10 percent with deep pockets has announced plans to shut in
compared to late 2011. Unless offset by additional can not only survive up to 1 Bcf/d in 2012, EnCana is
revenue flows from oil and NGLs, that would an extended low on record with plans to shut in
produce a modest decline in 2012 activity levels. price event but 500 MMcfed in production, and
can also deploy ConocoPhillips has discussed a
capital strategically production shut in of 100 MMcfe/d.
monthly industry revenue flow as to acquire cash-constrained But voluntary cut backs have a
they provided a crude-oil based public companies with attractive way of disappearing in practice.
pricing premium to depressed unconventional acreage. Think of it as unilateral nuclear
natural gas production. In other words, an extended disarmament: its a great idea when
Thats an alphabet soup of period of low natural gas prices it involves your competitors.
numerals, to be sure, but the should stimulate mergers and While it is possible to identify
significance lies in the fact that acquisitions as the financial stress up to 2 Bcf/d in potential shut
drilling volume, when measured in production, the industry will
as monthly footage, closely tracks While it is possible to need a net change of 6 Bcf/d in
revenue flow from oil and gas identify up to 2 Bcf/d natural gas production to bring
production with a lag of roughly the market back into balance. That
90 days. So the first impact from in potential shut in is a formidable challenge. It is
lower natural gas prices should production, the industry equivalent to eliminating an entity
be reflected in industry activity the size of Chesapeake Energy
levels early in the second quarter will need a net change Corp., or shutting in all production
of 2012. of 6 Bcf/d in natural gas in either the Barnett or Haynesville
The reality of an extended period shales.
of low prices ultimately will favor production to bring the While theoretically possible, its
the low cost producer and that market back into balance. not likely, at least in 2012.

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2011 Safety Statistics for the
Well Service Industry
By KENNY JORDAN
AESC Executive Director
CHART 1 TRIR & LTAR FREQUENCIES

8.00
TRIR
7.00
LTAR
6.00
5.00
R
A
T 4.00
E
S
3.00
2.00
1.00
0.00
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
YEAR
E
ach year the Association participating companies each year. industry and what the industry is
gathers and analyzes safety These companies do not make up doing to address those issues. If you
statistical information the majority of the membership, look at the various organizations
from participating companies and but it is our estimate that they and associations that are having to
publishes that information in the represent approximately 75-80 address these questions, you see
March/April issue of Well Servicing percent of the well servicing rigs one common thread, each of these
magazine. Results of that reported in the U.S. groups are aware of the issues and
data and some of the conclusions During 2011, I received numerous are doing all they possibly can to
gleaned from those statistics are calls from news agencies around make sure company employees are
illustrated in the following tables the country that have asked for our safe in the workplace.
and charts. These are statistics comment on the posted statistics The statistics for 2011 represents
that are voluntarily submitted by of fatalities and injuries in our an increase in both LTAR and TRIR
Rentals:
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(800) 235-5438

derrickmen combined accounted
TABLE A for 57.1 percent of accidents.
YEARLY COMPARISON OF LTA/TRIR/MANHOURS REPORTED Chart 3 illustrates the type of
incident frequency that occurred.
LTA OSHA TOTAL Charts 4 and 5 show both the
INCIDENCE RECORDABLE (TRIR) type of equipment involved and
YEAR RATES INCIDENCE RATES HOURS the activity involved with the
1994 4.34 7.25 23,953,596 incident rates.
1995 4.89 6.45 28,553,853 Chart 6 represents the part of
the body most affected by the
1996 4.43 6.51 24,173,988 accidents.
1997 4.05 6.16 13,000,000 For the purposes of this analysis,
1998 4.08 6.29 13,705,150 we had a total of 46 companies
1999 3.08 5.64 27,745,046 reporting their safety statistics
and the details involved with their
2000 2.08 6.15 32,723,256 accident investigations. This was a
2001 1.54 4.99 35,528,893 total of over 49.22 million manhours
2002 3.31 4.88 33,393,227 of work performed in our industry
(equivalent to about 24,400 man
2003 2.45 3.79 38,835,386
days of work).
2004 2.70 3.96 43,657,236 If you would like to participate
2005 2.25 3.63 44,275,768 in the Associations Safety Statistics
2006 2.27 3.40 49,553,332 Program, please contact the AESC
national office directly at (713)
2007 0.89 3.04 55,110,850 781-0758 and speak to Nikki James.
2008 0.67 2.57 61,072,689 All company information is strictly
2009 0.61 2.16 42,310,777 confidential. We invite all companies
2010 0.71 2.51 49,353,326 to become involved.
The AESC remains committed
2011 0.73 2.93 49,218,783 to assisting our membership in
developing programs, providing
information and working with
over 2010. The TRIR went from a we find the results below in Table B. both regulatory agencies and
rate of 2.51 up to 2.93 or an increase On the next page, Char t 2 customers to develop a safe
of 16.7 percent. The LTAR went from depicts the job title of the injured workplace. We strongly urge
.71 to .73, an increase of 2.8 percent. personnel. Again, the floorhands are you to continue with your
(Chart 1 and Table A) the most likely to be injured in the commitment in providing a safe
If we look at what occurred course of rig jobs, accounting for working environment and culture
in 2011 and compare it to what 41.3 percent of the accidents that within each of your companies
happened during the last two years, occurred in 2011. Floorhands and and at home.
TABLE B Collected Data 2009 through 2011

2009 2010 2011
Average Age (years): 37.01 35.07 35.6
Avg. Time on a Rig (years): 3.69 4.94 4.98
Avg. Time in Position (years): 3.40 4.01 3.43
Time of Year (month): January May November
Time of Day (am/pm): Midnight to Noon (47%) Midnight to Noon (49%) Midnight to Noon (54.5%)
Noon to Midnight (53%) Noon to Midnight (51%) Noon to Midnight (45.5%)
Day of the Week: Tuesday Tuesday Wednesday
Position: Floorhand (31.1%) Floorhand (32.8%) Floorhand (41.3%)
Type of Incident: Struck By (28.3%) Struck By (32.2%) Struck By (31.8%)
Equipment Involved: Tubulars (12.9%) Tubulars (14.3%) Tubulars (17.5%)
Work Activity: Tripping Pipe (18.0%) Tripping Pipe (30.5%) Tripping Pipe (33.9%)
Location of Accident: Rig Floor (27.7%) Rig Floor (30.0%) Rig Floor (34.3%)
Part of the Body: Fingers/Hands/Wrist (43.1%) Fingers/Hands/Wrist (34.9%) Fingers/Hands/Wrist (39.2%)

CHART 2 JOB TITLE OF INJURED PERSONNEL CHART 3 TYPE OF INCIDENT
____________________________________________________ ____________________________________________________
45% 45%
____________________________________________________ ____________________________________________________
40% 40%
___________________________________________ ___________________________________________
35% 35%
FREQUENCY %
____________________________________________________ ____________________________________________________
FREQUENCY %
30% 30%
____________________________________________________ ____________________________________________________
25% 25%
____________________________________________________ ____________________________________________________
20% 20%
____________________________________________________ ____________________________________________________
15% 15%
____________________________________________________ ____________________________________________________
10% 10%
____________________________________________________ ____________________________________________________
5% 5%
0% 0%
D N R R R T EN L N ER
AN MA IVE ATO HE INS WE FAL TIO OTH
R H IC K DR E R OT / AGA N BET L IP / E XER
OO RR CK OP B Y I S R
FL DE TR
U UCK GHT OVE
STR CAU R A IN /
ST
CHART 4 EQUIPMENT INVOLVED WHEN INJURED

50%
______________________________________________________________________________________
45%
______________________________________________________________________________________
40%
______________________________________________________________________________________
35%
______________________________________________________________________________________
30%
______________________________________________________________________________________
FREQUENCY %
25%
______________________________________________________________________________________
20%
______________________________________________________________________________________
15%
______________________________________________________________________________________
10%
______________________________________________________________________________________
5%
0%
E R RS PS LS ES GS INE
S
OTH ULA / SLI TOO ICL TON S/L
ALL TUB TOR D VEH E
EVA HAN HO S
EL SS/
PRE
CHART 5 ACTIVITY INVOLVED CHART 6 BODY PART AFFECTED

50% 50%
__________________________________________________________ __________________________________________________________
45% 45%
__________________________________________________________ __________________________________________________________
40% 40%
__________________________________________________________ __________________________________________________________
35% 35%
__________________________________________________________ __________________________________________________________
30% 30%
__________________________________________________________ __________________________________________________________
FREQUENCY %
FREQUENCY %
25% 25%
__________________________________________________________ __________________________________________________________
20% 20%
__________________________________________________________ __________________________________________________________
15% 15%
__________________________________________________________ __________________________________________________________
10% 10%
__________________________________________________________ __________________________________________________________
5% 5%
0% 0%
ER E NG EL UT IST /FOOT W ES ACK ER
OTH G PIP N DLI S WIV A KO / WR E / E LBO CE/EY B OTH
N A R E S E RM /FA
PPI TL
H
N P
W P/B
R
A ND / KN A K
TRI MA W EU S/ H LE G ER /
NE C
D O A K GER ULD
UP/ M FIN SHO
RIG

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exceptional warranty coverage to our round-the-clock Parts & Customer Service group, we invest in the
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Ta y l o r I n d u s t r i e s 6 0 1 5 N o r t h X a n t h u s Tu l s a , O K 7 4 1 3 0 s a l e s @ t a y l o r i n d u s t r i e s . n e t
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your smar t phone Q1-0796 APIQR 1016
2011 AESC SAFETYAWARDS
Presented February 24, 2012
at the AESC National Winter Meeting
held in Austin, Texas
GOLD AWARD
Group I TWS Inc. Lovington, NM
Group II Alliance Energy Service Co. LLC Rangely, CO
Jet Well Service Co. Perryton, TX
Royalty Well Service Grandfalls, TX
Group III Great Basin Petroleum Services Inc. Odessa, TX
Group IV Pioneer Well Services LLC San Antonio, TX
Group V Nabors Well Services Co. Houston, TX
SILVER AWARD
Group I Busters Well Service Inc. Kermit, TX
Group II Well-Pro Services LP White Oak, TX
Group III King Well Service Inc. Canadian, TX
Group IV Aztec Well Servicing Co. Inc. Aztec, NM
Group V Key Energy Services Inc. Houston, TX
BRONZE AWARD
Group I Sun Energy Services LLC Charleston, WV
Group II Reliable Well Service of North Texas LLC Wichita Falls, TX
Group III R&S Well Service Inc. Thermopolis, WY
Group IV Monument Well Service Co. Grand Junction, CO
Group V Basic Energy Services LP Midland, TX
Group I 10,000 75,000 manhours

Group II 75,001 150,000 manhours
Group III 150,001 300,000 manhours
Group IV 300,001 2,500,000 manhours
Group V Over 2,500,000 manhours

Association of Energy Service Companies
2011 Safety Award
Non-Well Servicing Sector
GOLD AWARD
Group I Two-State Oilfield Inc. Hobbs, NM
Group II Lucky Rental Tool Hobbs, NM
Group III Gray Wireline Service Inc. Fort Worth, TX
SILVER AWARD
Group I United Energex LP (Truck Division) San Antonio, TX
Group III Northern Plains Trucking Greeley, CO
BRONZE AWARD
Group I Resource Well Services LLC Deerfield, OH
Group III Triple S Trucking Co. Aztec, NM

Special Thanks to AESC Scholarship Fund Contributors
Platinum
Beckman Production Services Inc.
Combined Technical Services Gold Silver
Copeland International Inc. Carter Tool Company Inc. CL Well Service
Dawson Enterprises / Downing Well Service Inc. Callon Petroleum Operating Co.
Cavins Oil Well Tools Global Elastomeric Products Inc. Oil Well Service Co.
Dragon Products Ltd. L-K Wireline Inc. Strawn Transport & Acid Co.
Hawkins Lease Service Inc. Merrimac Manufacturing Inc. Sun Well Service Inc.
Holmes Western Oil Corp. Standard Energy Services Tyler Well Service
Keltons Truck Parts Inc.
RigPro Inc.
Ritchie Bros. Auctioneers Inc.
Michael Stovall
TEC Well Service Inc.

Its Time
t o Fill U p
on Tru t h
This film will change
what you think you know about oil
By MARK CRAWFORD
___________________
Contributing Writer
In his film, Mathis methodically exposes the
misconceptions and deliberate mistruths that have
shaped the publics viewpoint of the oil and gas
M
ark Mathis is right: Were
spoiled. We take our industry, while calling attention to the biggest threat
natural resources for to humanity a world without enough oil to meet
granted, especially energy. Nothing
is more vital to our way of life and demand that plunges into depression and chaos.
global trade than oil.
Because most of us are consumers After many years of study Mathis in 1968. With the cheap, easy oil
far removed from the complexities decided to make a film about all already tapped, Mathis reminds us
and challenges of the hunt, we he had learned. He raised enough that any major new discoveries will
dont appreciate what it takes to money from small independent probably be in deep water, which is
bring oil to our door. Of course, investors and a few small oil more expensive and challenging to
that will become painfully clear companies to get the job done. In his produce. He believes finding enough
when the next global oil catastrophe film, spOILed, Mathis methodically oil to meet growing demand from
hits, most probably a geopolitical exposes the misconceptions and the developing world will be the
event that strangles the flow of deliberate mistruths that have greatest challenge of the twenty-
oil and cripples our economy shaped the publics viewpoint of the first century.
transportation slows, gas hits $10/ oil and gas industry, while calling A global crisis will be especially
gallon, it takes an hour for your attention to the biggest threat to crippling to the U.S., which
turn at the pump, and disruption humanity a world without enough consumes a quarter of the worlds
strikes every part of our lives. This oil to meet demand that plunges into oil. I read recently where the United
of course, is followed by lots of depression and chaos. States may be able to produce seven
finger-pointing and desperation million barrels of oil per day within
moves by desperate politicians and Gotta have it three years, up 1.1 million barrels
corporations with a mad scramble Oil is intrinsic to everything from what the nations oil and gas
to open up domestic oilfields that we do, from transportation to companies are producing today,
wont make a difference for years construction to manufacturing to says Mathis. While this is great
to come. plastics to asphalt. It is the feedstock news, theres another number to
This scenario could happen any for every modern convenience on consider 18.5 million barrels.
time, which is explained in no- which we depend. Yet we continue Thats the daily amount of oil the
nonsense fashion by Mark Mathis to disrespect it by not taking the U.S. uses today while our economy
in his film spOILed: Its Time to Fill supply issue seriously. continues to sputter. When business
up on Truth. We passed peak oil in 2005, says picks up that number will quickly
Mathis isnt a political puppet. the late Matthew Simmons in the return to the pre-recession days of
Like the rest of us, he was blindly film, one of many experts Mathis 20 million barrels a day. The best-
unaware of the ramifications of our interviewed. case scenario then is that the U.S.
dependence on oil until he accepted About three-quarters of the produces 7 million barrels while
a project as a media consultant for worlds oil supply comes from about consuming 20.
a small oil and gas group, where he 700 giant fields, with half of that
learned the alarming truth about coming from the top 50 fields. Most Its not about energy
dwindling oilfields and the very-real of the worlds giant fields were Almost every day I see a new
risks of global economic meltdown discovered decades ago, with the story in the press about America
due to a shortage of oil. height of big discoveries coming magically becoming energ y

headlines that increasingly point
toward a perilous future, why arent
we discussing the most obvious
solution compressed natural gas
(CNG) vehicles? asks Mathis.
The oil and natural gas industry
has discovered ways to tap
enormous amounts of natural gas
from shale formations. In some
places pipeline capacity is so full
and its so difficult and expensive
to build new pipelines that oil
producers are simply flaring this
valuable resource.
Mathis indicates that with
e nco u ra g e m e nt f ro m t he
government, CNG transportation
could rapidly impact the U.S.
economy in many positive ways,
including hundreds of thousands
of new jobs. Building or adapting
Almost every day I see a new story in the press about millions of cars to run on natural
gas would also reduce emissions
America magically becoming energy independent, and improve the atmosphere.
Mathis says. Energy isnt the issue oil is the issue. New technologies are also being
developed that will make the
conversion of natural gas to liquid
independent, Mathis continues. My goal is the same as the biggest fuel an affordable reality in the
We have plenty of energy. We have green energy advocate out there, coming years.
oceans of natural gas for electricity Mathis says. We must transition Simply reducing our dependence
generation, heating and cooking. away from oil as a dominant fuel on oil from 98 percent to even 80
Coal keeps the lights on across the for transportation. The difference percent using natural gas would
country and we could be getting a lot between me and them is that I am have a huge impact on our economy
more electricity from nuclear power. facing the reality that this transition and security, Mathis indicates
And weve got the renewable sector will take many decades or longer to
doing all it can to pull less than one- achieve, and while were on the way Making a difference
percent of the load. Energy isnt the we need a lot more oil to keep the Mark Mathis has taken his
issue oil is the issue. modern world functioning. message on the road, setting up
Fuel for transportation (oil) is by Remarkably, the U.S. still doesnt screenings in places like Kansas City,
far the most important part of the treat energy seriously. Salt Lake City, Denver and Midland,
U.S. energy picture and our supplies The stability of the world and Texas. He gets on talk radio and on
are not secure. World demand for U.S. national security are in TV news shows. After a showing he
energy is growing every year. The jeopardy because of our over- holds Q&A sessions with audience
field of competition is increasing dependence on foreign oil and near- members nearly everyone stays
as developing countries require complete reliance on petroleum for to hear what he has to say.
more oil. China is also buying up transportation the most critical There is a huge political
oil reserves, which will become component of the modern world. disconnect, says Mathis. Most
powerful leverage in the future. Instead of just watching these politicians care first and foremost

about getting elected and staying
elected. Well over 90 percent of
government lands are off limits
to energy production the East
and West coasts, the eastern Gulf,
the Rockies, Alaska. There isnt
much cushion between oil supply
and demand, even in a wrecked
economy. If there is a sudden and
prolonged disruption of even 10 to
15 percent of the worlds oil supply,
the price of a gallon of gas would
likely double or even triple. The
consequences would be extremely
serious and potentially catastrophic.
A fuel shortage will affect every
aspect of our economy and its an
open question as to how the public Mathis stresses that game-changing decisions are
will react. made in Congress, which means there must be a
Mathis stresses that game-
changing decisions are made in powerful catalyst at the grassroots level to increase
Congress, which means there awareness and drive the decision-making process.
must be a powerful catalyst at
the grassroots level to increase of urgency that is needed to create in Washington; then follow up with
awareness and drive the decision- change at such a high level. phone calls, e-mails, or a personal
making process. He hopes his Watch the film. If you agree with visit. Theres still time to communicate
movie is part of that catalyst and its position buy some DVDs and the message and spOILed is a great
will bring about that critical sense send them to your representatives way to start the dialogue.

Frac Fluid Chemicals
at ce n te r of de b ate
ByKevin Drake & Danny Lillard

Champion Technologies
____________________________
Numerous governmental entities at the local, state
S
pecialty chemicals used
in hydraulic fracturing and federal levels have responded to public fears with
have emerged as a major a deluge of regulatory and legislative initiatives.
point of contention in the growing
national debate that ultimately will
determine the role domestic shale industry generally has supported deluge of regulatory and legislative
and other low-permeability geologic increased transparency of hydraulic initiatives.
formations play in supplying U.S. fracturing. Although hydraulic fracturing
energy markets. Industry contends that hydraulic is regulated by the states,
Hailed by advocates as a fracturing is a proven method of legislation has been proposed
cornerstone of national energy completing oil and gas wells, used in the U.S. Congress that would
security for decades to come, even on literally tens of thousands of end its exemption from the Safe
as critics excoriate it as a dire threat wells in the past without harming Drinking Water Act and require
to water resources that outweighs the environment. Many operators public disclosure of the chemicals
any promised benefits, advanced have demonstrated confidence that used in fracking. Meanwhile, both
hydraulic fracturing technology has neither water supplies nor public the Environmental Protection
incited growing public discourse health are at risk by voluntarily Agency (EPA) and the Department
as the pace of fracking has picked posting information about frac-fluid of the Interiors Bureau of Land
up in recent years across the U.S. chemicals used at specific wellsites Management (BLM) have initiated
Increased visibility of the at the website FracFocus.org, co- investigations into fracking
advanced completion technology sponsored by the Interstate Oil technology to determine whether
has stoked alarm among & Gas Compact Commission and additional federal oversight should
environmental activists, as well Groundwater Protection Council. be instituted on fracking.
as individuals and communities At the state level, by one count,
affected by the booming activity. Deluge of new rules more than 100 bills related to
While maintaining that existing Nevertheless, n u m e ro u s hydraulic fracturing have been
laws and regulations are adequate governmental entities at the local, introduced in 19 state legislatures
to protect water supplies and state and federal levels have since October 2010. Proposals
public health, the oil and gas responded to public fears with a variously require: disclosure of

frac-fluid chemicals; protection of contractors. With the outcome of unique systems of compliance have
public water supplies; limits on many legislative and regulatory been devised. For example, one
sources of water used for fracking; initiatives in doubt, to keep working, company fracking wells in multiple
new frac water-quality testing, many producers are augmenting shale plays has compiled a master
tighter regulation of frac-water established operating practices list of chemical substances that
disposal methods; new inspections; with measures designed to comply are regulated or could become
additional financial security with new requirements that might regulated in several states where it
eventually be passed in effect is working. However, it is important
At the state level, by exceeding current requirements. to note that many of the chemicals
Pathways to compliance can used in frac fluids may not contain
one count, more than become rather tortuous for any of the substances listed.
100 bills related to companies trying to comply with Another large operator, fracking
existing and expected rules in wells in more than one state, created
hydraulic fracturing more than one shale play. Many a detailed scoring system that rates
have been introduced
in 19 state legislatures
since October 2010.
requirements; monitoring of air
quality near fracking operations;
and fracking moratoria.
The investigations into fracking at
EPA and BLM are expected to result
in regulatory recommendations
later this year, making 2012 a crucial
period for fracking advocates and
critics alike. At the state level,
the outlook is anything but clear.
Some states notably Wyoming
and Texas have enacted frac-
fluid disclosure rules and put them
into force, providing regulatory
frameworks that recognize the
publics right-to-know which
chemicals operators are injecting
underground and also allows
development to continue. However,
states progress on resolving
fracking regulatory issues has been
unfocused and erratic; if enacted,
proposals in some states would
create data-collection and reporting
requirements that would conflict
with requirements in other states.
Confusing rulemaking
patchwork
Understandably, the myriad
regulatory processes underway
have persuaded operators
participating in the fracking
boom to become obsessive about
the environmental attributes of
frac-fluid chemicals used in well
completions.
But as willing as most producers
are to comply with new regulatory
requirements, the confusing
patchwork of rulemaking for
hydraulic fracturing is creating
new challenges for oil and gas
producers and oilfield service

compounds and glutaraldehyde are
State Legislative Initiatives among the biocides with advanced
Monitoring & Disclosure of Frac-Fluid Chemicals environmental attributes that are
achieving success as frac-fluid
STATE PROPOSAL STATUS PROVISIONS additives. Two such biocides,
Arkansas In Force Disclosure of fracking chemicals required Bactron K-139 and Bactron K-87,
are effective against both aerobic
California A.B. 591 Pending Public disclosure required
and anaerobic forms of bacteria
Colorado In Force Operators required to post frac fluid chemicals and have surface-active properties
for each well at http://fracfocus.org
that enable them to penetrate scale
Illinois S.B. 664 Pending Internet listing of chemicals required deposits and slime. The chemistries
Indiana H.B. 1049 Failed Required fracking contractor to disclose are soluble in fresh water, sea water,
chemicals. Disclosure of proprietary chems and most brines and can be applied
only for medical emergency in batch treatments or through
Maryland H.B. 411/ Died Fracking chems to be reported by Dept. of the continuous injection.
S.B. 422 Environ to Joint Cmte of Admin, Exec & Both biocides are all-purpose
Legislative Review chemistries appropriate for a wide
Massachusetts H.B. 3055 Pending Frac fluids required to be identified and range of applications beyond frac-
described in a report fluid additive. Bactron K-139
Michigan* In Force Requires list of chem additives including
controls bacteria in EOR systems,
volumes, submitted to the Dept of Enviro Quality water floods, water-disposal
systems, and production and
New York S.B. 425 Died Chemical disclosure required
A.B. 6426 Pending Chemical disclosure required
transmission pipelines. It also
S.B. 1234 Pending Chemical disclosure required is useful in pipeline pigging and
scraping operations, hydrotesting,
Texas In Force Operators required to post frac fluid chems for
gas-storage facilities, and as a fluid
each well at http://fracfocus.org
for drilling, packers, completions
Wyoming In Force Full disclousre of fracking chems required and workovers. Treatment
*State agency rulemaking guidelines vary with application and
Source: Champion Technologies
severity of problem. For hydraulic
fracturing, Champion Technologies
normally recommends adding 100
frac-fluid chemicals based upon and low-permeability formations is to 10,000 ppm to water storage
their physical properties such Gyptron T-475, a blend of partially tanks and circulating to mix; the
as reactivity, flammability, toxicity, neutralized specialty phosphonates chemistry also can be added to
and rates of bioaccumulation and that is compatible with cross-linked frac fluid on-the-fly during fracking.
biodegradation and their specific gel system frac fluids used to boost In addition to service as a frac-
formulations such as concentrations carrying capacity in many shale fluid biocide, Bactron K-87 can
of active components and dosage plays. It prevents deposition of be injected down the annulus of
rates. Compliance strategies all common mineral scales by producing wells or water-supply
are as varied as the companies inhibiting and distorting crystal wells or introduced into water-
themselves. growth, even in the presence of injection and other water-handling
as much as 200 ppm of iron. The facilities to control bacteria. The
Regional and specific needs chemistry can be winterized to chemistry also can be used as an
Oilfield specialty chemical additive for packer fluids, drilling
companies have been developing Pathways to compliance fluids and workovers. Treatment
and deploying so-called green guidelines for hydraulic fracturing
chemical formulations since at
can become rather applications normally range from
least the early 1990s, which exhibit tortuous for companies 50 ppm to 1,000 ppm.
low toxicity to living things, low trying to comply with With so much regulator y
rates of bioaccumulation, and high uncertainty surrounding
rates of biodegradation. As a result, existing and expected hydraulic fracturing, developing
numerous high-performance, low- rules in more than one and deploying better frac-fluid
dose biocides and scale inhibitors chemicals is one measure the
with advanced environmental shale play. industry can implement that could
attributes are available for hydraulic help stave off over-regulation in
fracturing applications. -40F and is compatible in high TDS the future. The year 2012 may well
One of the greener scale brines. At the wellsite, the inhibitor prove to be a watershed regulatory
inhibitors marketed by Houston- can be pumped totally on-the-fly at year for hydraulic fracturing, but
based Champion Technologies recommended dosage rates of 500 the evolution of fracking rules will
that is achieving high levels of ppm to 1,000 ppm. continue to be a complicated and
performance in numerous shales Blends of quaternary ammonium dynamic process for years to come.

Make Safe Decisions at
Railroad Crossings
ByPATRICIA EDWARDS
______________________________
Louisiana Operation Lifesaver
I
f you had the opportunity to save a life, would Lifesaver held a mock crash exercise in DeSoto
you? By simply being alert near railroad crossings, Parish, part of the Haynesville Shale area, last fall to
looking and listening for an approaching train, bring this safety issue to the publics attention, said
you can avoid serious collisions that may result in Edwards. The drill simulated a train crash with an
fatalities and/or injuries. 18-wheeler, (photo above) which gave local and state
Operation Lifesaver is concerned about increased law enforcement and emergency response units the
truck/vehicle traffic in areas where oil and gas opportunity to practice in the event of a true disaster.
production is bringing commercial drivers into new Operation Lifesaver wants to partner with the oil and
parts of the country. We want drivers of any type gas industry to spread our safety message to employees
of vehicle to be safe near railroad tracks, said Pat and their communities. By getting our message to
Edwards, executive director of Louisiana Operation people in these corporations and businesses, we hope
Lifesaver. When you see a railroad crossbuck sign to reduce the number of vehicle-train crashes, fatalities
(Fig. 1), you should yield. Always expect a train. and injuries in the country, said Edwards.
Operation Lifesaver, Inc. is an
international rail safety education Remember these tips
organization dedicated to reducing Here are eight safety tips from Operation Lifesaver
collisions, fatalities and injuries at to follow when approaching a railroad crossing:
railroad crossings and railroad rights- 1. Approach the railroad crossing with care. Slow
of-way. down when you see the yellow Advance Warning Sign.
We all know not to cross a track Be alert and prepare to stop. Turn down the music;
when a train is coming. However, roll down the windows. Look and listen for a train.
Figure 1 nationally in 2010, approximately 2,000 2. If you see a train, stop at least 15 feet from the
collisions occurred between vehicles nearest rail. Do not be fooled the train you see is
and trains at railroad crossings. In these collisions, closer and moving faster than you think. Wait for it to
more than 1,000 people were either killed or injured, go by before you proceed across the tracks. Never race
said Edwards. The Federal Railroad Administration a train to the crossing. It is illegal, and could be deadly,
will release 2011 statistics very soon. to drive around lowered gates or past flashing lights.
Life is demanding and it is so easy to become 3. Be aware that trains cannot stop quickly. Even if
distracted when driving, said Edwards. We all rely the locomotive engineer sees you, the average train
on our cell phones to be connected with work and moving at 55 miles per hour can take a mile or more
family, but it is so important that we stay focused when to stop once the emergency brakes are applied.
approaching railroad tracks. 4. When you plan a safe crossing, be certain that the
In Louisiana and other states, targeted outreach back end of your vehicle or materials attached to your
is being provided to encourage drivers to make safe vehicle will not hang over the railroad tracks. Allow at
decisions near railroad crossings. Louisiana Operation least two car lengths on the other side of the tracks.
Why? The width of a train also extends at least three
feet on each side of the tracks. If your vehicle has a
trailer, factor that in when you estimate your vehicles
length at the crossing.
5. Before you proceed, look twice in both directions.
If you see more than one set of tracks, it is possible
that a train is approaching on another set of tracks. Be
sure that you have clear visibility before you proceed.
Always expect a train!
6. Cross the railroad tracks with care. If your vehicle
has a manual transmission, use a gear that will not
require shifting until you reach the opposite side.
7. Keep going once you start, even if the lights start
to flash or the gates come down. Be sure that your
vehicle clears the railroad tracks.
8. If your vehicle stalls on a track when a train is
coming, get out immediately and move quickly away
from the tracks in the direction from which the train
is coming, in order to avoid flying debris upon impact The average train moving at 55 miles
(Fig. 2). Call the toll-free number posted at that per hour can take a mile or more to stop
crossing to alert the railroad and call 911 or your local
law enforcement agency for assistance. once the emergency brakes are applied.
Free safety presentations to audiences of any age
and profession, including industry safety meetings for
commercial drivers.
Exhibits and promotional materials at safety fairs,
conferences and other events.
Educational brochures, videos and statistics on
the national website www.oli.org.
Take the ProDriver Challenge, an online, interactive
game that offers drivers quick thinking and critical
decision-making skills needed to safely cross railroad
tracks. Find the Challenge at www.oli.org/prodriver.
Operation Lifesaver needs your help to save lives,
said Edwards. To schedule a presentation for your
Figure 2 company or organization, please visit www.oli.org or
call (225) 921-8381.
Exercise patience. Take time and be alert when ABOUT THE AUTHOR: As executive director/state coordinator
approaching a railroad crossing. Nothing is more of Louisiana Operation Lifesaver since August 2008, Pat Edwards
precious than a life, said Edwards. The extra time oversees the activities of approximately 120 certified volunteers
that you spend waiting for the train to pass is worth who promote rail safety to all ages and professions statewide.
every second of your life. She works closely with representatives of Class 1 and short
line railroads on the LA OL Board, as well as state and federal
transportation safety officials. LA OL coordinates activities with
Safety education available the national organization, Operation Lifesaver Inc., (www.oli.
Operation Lifesaver provides several methods to org), produces a quarterly email newsletter and maintains the
educate the public on safety near tracks: state website, www.laoperationlifesaver.org
MILL LOG EQUIPMENT COMPANY

Your Call Ron Wilson Oil Field Product Manager
Technical Ofce: 541-485-2203
Mobile: 541-501-3200
Resource wilson.ron@milllog.com
We Put Horsepower To Work

www.milllog.com

Cable Length
Ho w to calcu late it acc u r a t e l y
ByTERRY MOFFATT and THAKUR SEKHON

_______________________________________
Quality Wireline and Cable Inc.
T
here are many times when then the error in cable length could T = 42F
there is a need to verify be very significant. Graph 1 shows L = (RT / Rk) x (458/(390+T) x (1000)
the cable length. Reasons the error in cable length that could L = (63.15/4.11) x (458/(390+42)) x
include: the cable has been cut occur due to not temperature (1000)
and it is unclear as to the length compensating. The example is a L = 16,280 feet, length of the cable
removed, verification of the cable 7/32" mono-conductor, 25,860 feet
record book, checking a cable in length. When determining the RK can be found from three
length in the yard, or just being length, if temperature compensation sources:
sure you have enough line to get was not accounted for, it would give 1. An average value of RK (DC
to bottom. Whatever the reason, a range from 23,000 feet at 110F in conductor resistance) found on the
having a quick, easy and accurate the heat of the summer; to 33,000 cable spec sheet should only be
means of determining the cable ft. in northern winters. Clearly the used if the actual calculated values
length is invaluable. error is not insignificant. cannot be found.
This article outlines the formulas 2. Each cable should come with a
on how to accurately determine the certificate that contains the actual
length using only an ohmmeter and value of RK as determined at the
access to both ends of the cable. manufacturing plant.
For best results use a good quality 3. When the cable is first
meter with 5-digit resolution and purchased and installed, the
follow these steps. resistance (Ri), length (Li), and
1. Short the meter test leads and temperature (T i ) should be
record this resistance; RL () recorded in the cable record book
2. Measure end-to-end cable and r should be calculated using
conductor resistance plus the the following formula.
resistance of the test leads; RM ()
RK = (Ri / Li) x 458 / (390 + Ti) x 1000
3. Total cable conductor
resistance is RT = (RM RL ) at Example:
shop temperature () Li = 25,100 ft
4. Listed on the final inspection Ri = 260.2
report supplied with cable is RK, Ti = 77F
which is the cable resistance /1000 RK = (Ri / Li) x 458 /(390 + Ti) x 1000
ft. @ 68F RK = 10.1 /kft (this is the value of
Metric Formula: RK that should be recorded in the cable
Calculate cable length: L = (RT / RK) x (254 / (234 + T)) x 1000 record book)
L = (RT / RK) x (458 / (390 + T)) x 1000 L = Length of the cable in meters
L = Length of the cable in feet T = Shop temperature at the cable Metric Formula:
-390F is the inferred zero resistance location (C) RK = (Ri / Li) x 254 / (234 + Ti) x 1000
temperature RK = is the resistance of the center Ti = TC, Li = m, Ri = , RK = /km
T = Shop temperature at the cable conductor per km at 20C
location (F) If you have web access go to
Example: 1-A-224-12/18-G (Sample www.qualitywireline.com and under
The component of the imperial
Cable) technical support you will find two
formula (458/(390+T)) is used
RL = 1.50 Ohms applications that will be of use to
to temperature compensate the
RM = 64.65 Ohms you in these calculations:
resistance back to 68F where RK
was calculated. If the temperature RT = 64.65 - 1.50 = 63.15 1. Unit Converter (which converts
compensation was not performed, RK = 4.11 /1000 ft any engineering units desired) and;

2. Cable Length calculator, which assessment of cable length. The monitoring systems using wireline,
allows you to select the cable type, tools provided on the website and in the manufacture of electro-
input the resistance and ambient simplify the process further. mechanical wireline.
temperature and it calculates the Thakur Sekhon, mechanical engineer
ABOUT THE AUTHORS: Terry Moffatt, is currently manager of engineering
cable length. For better accuracy P.Eng., ME, PET, is president of Quality at Quality Wireline and Cable Inc. His
override the cable type and directly Wireline and Cable Inc. His experience experience includes chief development
input the value of RK as explained includes co-founder and president of engineer at Wireline Works. He has a
above. Wireline Works Inc.; and president and broad range of experience, from building
By using the information and founder of PROMORE Engineering Inc. wireline manufacturing equipment,
techniques described here, anyone He has 20 years experience in the designing cables and troubleshooting
should be able to make an accurate design and installation of permanent wireline issues.
WHERE THERES RISK,

NBIS is there.
Safeguard Your Business. NBIS is the Insurance Market that will stand by your side to give you
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Classes of Business include well servicing, cementing, cleaning/swabbing, wireline operators, instrument logging
or survey work, oil rig or derrick dismantling, erecting, rigging and specialized transportation.

Oilfield Job Market
By ANDY MASLOWSKI
__________________________
Contributing Writer
New wellsite work is being conducted in about half of Photographer John Boykin
the states. It's basically non-existent in the other half.
E
ven away from the drone of ages of 18 and 65, about 10,000 service this year. Other young
the presidential campaign, Americans are celebrating their people will start a new path in
the mantra of jobs, jobs, birthdays every day for every age life, possibly getting a new job or
jobs can be heard loud and clear. It group! beginning vocational training or
is a common topic of conversation This also presents all kinds college.
around the nation, from corporate of ramifications for legal What these statistics show is
boardrooms and government representatives, actuaries, school this: just to keep up with the birth
forums to the kitchen tables of administrators, government rate, the workforce in the USA
concerned citizens worried about agencies, young people wanting to must conservatively increase by an
their present and future prospects. drive or consume alcohol, or older average of about 300,000 per month.
For certain parts of the nation, people wanting to retire, etc. It also Actually, it could be double that
oilfield employment plays a big role influences the size of the potential considering all the young people
in these discussions. Not only does workforce of the nation. graduating from or leaving high
it create useful American energy, school and college at different
but oil and gas work directly and Like gold, oilfield work ages, from say age 16 to age 23.
indirectly generates cash flow that Remember, the population is
supports local economies in so
is where you find it. still increasing. However, these
many ways. To borrow a phrase, However, it is not always statistics also do not consider
an infusion of capital makes the welcomed by everyone variables like death, retirement,
world go round! workers who were born in other
Like gold, oilfield work is where especially in new areas. countries or other factors.
you find it. However, it is not Every week, the U.S. Department
always welcomed by everyone For example, the Census Bureau of Labor, Bureau of Labor Statistics
especially in new areas. estimated 3.47 million people were (DOL) publishes statistics regarding
born in the USA in 1946 the first workers filing for unemployment
Numbers game year of the baby boomers. So insurance. During the past few
Since World War II, U.S. Census beginning last year, each day more years, these numbers have ranged
Bureau statistics indicate than 9,000 Americans began turning from about 350,000 to more than
approximately 4 million babies 65 years old, qualifying for Medicare 650,000 (in March 2009). Every
have been born in the USA every and possibly other benefits. week! More than 1 million a
year, plus or minus a few hundred More examples: in 1994, 18 years month! Before the recession in
thousand. Divided by 365, that ago, an estimated 3.95 million 2008, the number was still in the
computes to a daily average Americans were born in the USA, 300,000-range.
between about 9,000 and 11,000. while in 1991, 21 years ago, it was Of course, in a population north
Lets round it off to 10,000/day. That 4.11 million. For males turning of 300 million, jobs are always being
means for most people between the 18, they must register for military created and lost. And employment

statistics can be spun many ways in from Canada come to mind.
to make them look better or But thousands of other oil and
worse than they really are. At gas industry projects, upstream
the start of 2012, more than 13 and downstream, collectively add
million Americans were officially up. After all, each new well or a
unemployed, producing a DOL servicing job is a new project!
unemployment rate (less known
as the U-3 rate) of 8.5 percent. Hot spots
The so-called U-6 rate was The relationship between energy
much worse. It measures total and jobs has never been clearer.
unemployed plus all persons Indeed, it is an issue that has
marginally attached to the labor moved to the front burner in the
force plus total employed part- presidential campaign.
time for economic reasons. At the This year the American Petroleum
start of the year the U-6 rate was Institute (API) is cultivating the
more than 15 percent and included theme through a new promotion COMMITTED TO QUALITY...
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at home. SCheDuLe
The best indicators
of petroleum oil and gas ToDAy
activity are working rigs in
the field.
According to Baker
more have dropped out of the labor Hughes, the drilling rig count was
force, are under-employed, working hovering in the 2,000 rig range in +1.713.849.7400
under the table, or have just given early 2012. This was up about 300 www.wellcontrol.com
up. They fall into an unmeasured rigs from the start of 2011. States
category, not even a statistic. showing healthy increases were
Thats why new jobs should Texas (up 194 rigs), North Dakota
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WCS_014_1163_201203.indd 1 2/28/12 4:40:33 PM
At its peak in 1982, In its well service rig count, Well hats might visit the rig before,
DOL records indicate Servicing magazine reported there during or after operations. This
were between 2,000 and 2,200 active includes contractors for dirtwork,
more than 800,000 service rigs working in the USA drilling mud and other chemicals,
people were employed through most of the months of 2011. mechanics, engineers, company
Not surprisingly, most of these were men, geologists, wireline crews
in the oil and gas in the West Texas/Permian Basin, and drivers hauling water, fuel or
extraction business. Mid-Continent, Rocky Mountain frac sand. All counted, only about
and West Coast areas. Back in 50 people might work in the field
activity is hot. Business has been 2008, Guiberson/AESC tracked more during the time it takes to drill a
booming in and around towns like than 2,600 active service rigs in shallow well, including some people
Williston, North Dakota (Bakken the USA. That means some 400 or who visit the working rig only once.
Shale); Cotulla, Texas (Eagle Ford It may take about
Shale) and Towanda, Pennsylvania 100 workers or
(Marcellus Shale). more to complete
Thousands of workers are a deeper onshore
streaming toward these areas. well. Offshore,
One 2011 study conducted by the hundreds of
University of Texas Center for personnel are
Community and Business Research required with
said the 24-county Eagle Ford play rotating crews
supported an estimated 12,600 full from the mainland.
time jobs and by 2020 could account Although more
for $11.6 billion of economic activity than 30 of the
and almost 68,000 jobs if business 50 states yield
levels keep up. some commercial
Naturally not all of these jobs quantities of
are in the oilpatch, with workers crude oil or
lifting pipe, swinging chain or doing natural gas, about
yard work. Supply companies are 500 servicing rigs have been idled, a bakers dozen are responsible
also doing well, selling items like stacked, recycled or sent overseas for the bulk of the production
tubular goods, wellhead equipment, during the past four years. and drilling rig activity. Most of
fuel, frac sand and so on. New Likewise, the drilling rig count the wellsite work is conducted
business is also being created has been halved during the past
for construction workers, truck 30 years, although it has climbed Of course, in a population
drivers, retail stores and hospitality back to about the 2,000 mark. north of 300 million, jobs
establishments like RV parks, According to Baker Hughes, the
motels and restaurants. all-time record high number of are always being created
drilling rigs working in the USA and lost.
was announced in December 1981
at 4,530 rigs. in only about half the states.
At its peak in 1982, DOL records Its basically non-existent in the
indicate more than 800,000 people other half.
were employed in the oil and gas Each producing state contributes
extraction business. The number to the total supply mix, providing
dipped to about 160,000 in 2008, valuable American energy as well
but has been climbing since then. as jobs, taxes, and other business
Preliminary numbers from the DOL opportunities. But many people
Timothy L . Wells placed it at an estimated 187,000 at make a living trying to stop business
CSHM, WSO-CSM the end of 2011. There may be more development wherever they can,
President and CEO professional environmentalists including big projects with the
and regulators on federal or state potential to produce or transport
payrolls than there are workers in millions of barrels of oil and billions
O 2 81.4 0 8 .42 62
the upstream oil and gas industry! of cubic feet of gas over time.
F 8 6 6 . 511.79 9 4
C 8 32 .797. 914 4
Over-regulated and over-taxed, These are the same people who
H 2 81. 516 . 2 027 many companies have left the oil drive their cars to work every day,
and gas industry for good. The fly in jet-fueled planes or fill their
twells@stss-i.com ones that remain are leaner and bellies with food grown, harvested,
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Steven Chu?
BySHARYN ALDEN
_____________________
Contributing Writer
I
f you dont know the name of
the current Energy Secretary, The brilliant Nobel Prize physicist is a high profile,
youre not alone. Many
Americans dont recall the person controversial figure in Washington.
leading this Cabinet post except
when energy issues matter most.
But to those who have been A born problem-solver Chu, who received mathematics
following Steven Chu, Ph.D., a Who is Energy Secretary Chu? and physics degrees from the
well-known physicist and current He grew up on Long Island, New University of Rochester and earned
Energy Secretary, there is a chasm York and was raised with high his Ph.D. in physics from the
of differences as to how well he is expectations. It was assumed from University of California, Berkeley,
performing. And that matters to when they were young, that Steven holds honorary degrees from 15
a lot of people in the oil and gas and his two brothers would grow universities. He is the first person
industry as well as the business up to be scientists. In fact, when with a Nobel Prize to be appointed
community. he was seven-years-old his father by the U.S. Cabinet. He received
In December 2008, when President told him to stay focused and make the Nobel while he was at Stanford.
Obama nominated Steven Chu, sure he got his Ph.D. before he got Its no secret that Chu found
Ph.D., as the 12th U.S. Secretary of married. his niche as a lab scientist who
Energy, he became the public face Keeping his eye on the prize built state-of-the-art lasers from
of President Obamas clean energy of a career in science may have spare parts. As a whiz-kid he
mission, to slash carbon emission been challenging and stimulating could often be found looking for
by 80 percent by 2050. He was also given that his family was known for new ways to solve problems. He
the public face to take on climate being overachievers. Stevens older won the Nobel doing just that
change and tackle the countrys brother Gilbert was a straight-A supercooling atoms into optical
dependence on foreign oil. student who studied physics molasses. These breakthroughs
The timing seemed perfect as and later became a biochemistry inspired improvements in GPS
Obama was gearing up to push professor at Stanford. His younger tracking and oil exploration.
through a climate change law that brother, Morgan, who earned four Besides sharing the 1997 Nobel
would significantly change the advanced degrees before he was Prize in physics, he has devoted
countrys energy economy. 25, became a well-known lawyer. his work to looking for solutions

to current energy challenges and
stopping global climate change.
Chu is probably best known for his
lifes work in clean energy research.
When he led Lawrence Berkeley
National Laboratories (LBNL)
in 2004, he immediately started
looking for realistic solutions to
Make no doubt about

it, the world needs
far thinking, brilliant
visionaries like Chu,
but some who are NO Ink
impatient with long-
range, long lens views
Cartridges
of energy solutions, say
thats not enough.
NO Ribbons
big energy problems. His team
investigated new ways to store
solar energy.
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reducing energy demand by The C81, developed from a partnership between
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what some insiders say is his major
shortcoming. for Zero Inkan amazing new way to print in full color
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world needs far thinking, brilliant
visionaries like Chu, but some who One inch per second plot speed
are inpatient with long-range, long
lens views of energy solutions, say Fan fold and roll paper
thats not enough.
Still, in his last job at LBNL, he Prints on black and white media at 4 inches per second
shook things up when he tackled Desk top and rack mount configurations
real-world energy problems and
became a leading expert on energy Both USB and Ethernet interfaces
innovation.
The real world of

Washington politics
When Chu was sworn in as
Secretary of the Department
of Energy on January 21, 2009,
President Obama lauded his
appointment by calling him a www.printrex.com
scientific trailblazer teacher, and ALSO NEW FROM PRINTREX
leader pursuing new solutions for
energy alternatives and renewable
energies.
The idea behind the climate C98VeryHighSpeedInkjetPrinter
change law was to ramp up
research in clean energy over the
next decade. One key element
toward transforming the nations
energy economy was through 276 East Gish Road, San Jose, CA 95112 (408) 573-1200

When the 2010 Gulf oil spill was
going on, Chu was a high profile
problem solver. Even though he
hasnt been trained in geology,
seismology or oil technology, he
became proactive in helping stop
the leaking well. He was not a formal
member of the spill response team,
but as Obamas Energy Secretary
he used his authority to stop the
top kill.
To some observers, it looked
like his policy decisions were
being reined in when the Energy
Depar tment hired Richard
Kauffman to be Chus senior
adviser. Kauffman, former CEO
of Good Energies, a renewable
energy company, came with the
necessary business leadership skills
He was hand-picked to lead the climate change the Department wanted and what
they may have felt Chu lacked.
charge at the Energy Department and implement Even in the wake of the Solyndra
President Obamas agenda on reducing the (solar) scandal, Chu has plenty of
admirers in Washington, and that
countrys dependence on foreign oil. includes the White House.
When the Fukushima nuclear
pollution permits paid to the years on record were in the last disaster unfolded after Japans
federal government by oil and 12 years. But in Washington the 2011 tsunami, Chu was the go-to
coal companies. An estimated $150 political landscape is fraught with person who advised the Obama
billion from these permits would be opinions. administration on nuclear energy
invested in clean energy research As the leader of the Energy issues facing Japan and beyond the
overseen by the Department of Department, he is at the core of countrys borders.
Energy. what is referred to as an explosive
And thats why the Obama clean energy controversy. The Admittedly, hes a
administration looked to Steven climate-change bill never made it
Chu for his expertise. He was hand- through Congress and while the brilliant scientist, but
picked to lead the climate change economic stimulus law pumped some argue he might be
charge at the Energy Department about $30 billion into clean energy,
and implement President Obamas the Energy Department has come better suited to lead the
agenda on reducing the countrys under increasing criticism as to how Department as a chief
dependence on foreign oil. that money has been used.
In Washington, Chu learned first-
scientist instead of being
hand that some GOP leaders dont Attracting controversy in charge of energy
believe global warming exists. If Now, three years after Chu policy and jobs creation.
you asked him if global warming stepped into the role of Energy
was real, a question hes heard Secretary, some Washington Obama has also given credit to
many times, he might point to a insiders have publicly wondered Secretary Chu, who made six trips
chart showing that 10 of the hottest if hes the right person to lead to the Gulf of Mexico during the
the Department. Deepwater Horizon debacle. He has
A d m i t t e d l y, been given credit for designing the
hes a brilliant cap that ultimately plugged the leak.
scientist, but Whether Chu designed the cap that
some argue he made the difference or whether he
might be better chose a cap design from several
suited to lead thousand that were submitted for
the Department that purpose, is not clear. What he
as a chief did do is suggest several tactics like
scientist instead using gamma ray imaging to find
of being in out the condition of the BP well. It
charge of energy was a suggestion well taken and one
policy and jobs not considered by others directly
creation. involved in stopping the leak.

The Gulf Oil spill was followed by When the Fukushima nuclear disaster unfolded
another highly visible challenge.
That occurred last August when after Japans 2011 tsunami, Chu was the go-to
Solyndra, a California-based solar person who advised the Obama administration.
panel manufacturer, declared
bankruptcy. A solar panel
companys bankruptcy doesnt asked why his Department had not credit in his credit column in
often become front-page news, foreseen the impending disaster Washington to satisfy his critics.
but prior to declaring bankruptcy that was Solyndra? The question is will he stay or leave
Solyndra had been offered and Chu acknowledged the unfortunate if Obama is elected to a second term.
accepted $528 million in federal situation, but he did not apologize If he doesnt leave the Energy
loan guarantees. for the Energy Department. He Department on his own terms,
How could the governments said the loan was made when some question if hell be forced out.
judgment been as wrong as to pending problems for solar energy Others question if he would want
have approved this large loan? companies were unforeseen. At to stay given that the clean-energy
In September 2011, Jonathan the time of the loan origination, campaign that he was expected
Silver, one of those in charge of new solar plants were being built to lead when he was appointed
loan guarantees for the Energy in China and other countries, but in 2008, has taken a back seat to
Department, resigned. turbulent economic situations other issues.
in Europe and Some energy secretaries have
Some Washington insiders have elsewhere resulted chosen the timing of a presidents
publicly wondered if hes the right in changing market
conditions. It turned
new four-year term as an opportune
moment to end their term as
person to lead the Department. out that solar panels secretary.
were not a hot In this case, it may be a fitting
On November 17, Secretary Chu button commodity. In two and a time for Chu to bow out, particularly
was called on the carpet when he half years prices of solar panels since a scandal has been attached
testified before the House Energy dropped by 70 percent. to the Energy Department during
and Commerce Committee. He was Many still feel Chu has significant his tenure.
Gill Services Inc.
By AL PICKETT
___________________
Contributing Writer
Company remains strong after

35 remarkable years
G
ill Services, Inc. celebrated its 35-year Absolutely not, she says. I was a psychology
anniversary in February at its corporate major (at Texas A&M). I came to work here just to help
office in Houston. Gay Gill Wathen, company my Dad.
president, acknowledges that it has been a remarkable In 1992, however, Wathens world was turned upside
and unique 35-year run for a company that is down. Her father, Bobby Gill, the founder of the
still going strong after originally being established company, died of a heart attack at age 57. That was
as a distributor of the Foster Cathead product lines at 2:50 in the morning, and at 8 oclock I had to go into
(catheads, Kelly spinners, power tongs, bucking units, the office to sign payroll checks, she recalls.
etc.) and evolving into a manufacturer of spare parts
while the Foster name and products transitioned Wathen admits she never expected to
through a variety of owners during the 1980s.
Gill Services is now recognized as an industry leader
be running a manufacturing company
in the supply of equipment, parts and repair services that now includes five sales and service
for the drilling and well servicing industries with a branch offices as well as its domestic
worldwide distribution network.
Wathen admits she never expected to be running a and international distributors.
manufacturing company that now includes five sales
and service branch offices as well as its domestic and Wathen says her father had worked for the Foster
international distributors. Cathead organization in Wichita Falls and Odessa. The
family moved to Houston 46 years ago, and Bobby Gill
started Gill Services in 1977 as a distributor for Galveston
Houston Company, which had bought out Foster.
Just before Bobbys death, Gill Services had started
some minor manufacturing of Gill-type tongs, according
to Wathen.
There are six of us who have now been with Gill
Services for 30 years or longer, she explains. After
Daddy died, we decided to take Gill Services to the
next level.
Wathen says the company first tried outsourcing
some of its manufacturing, but in 1993 Gill Services
bought its first (computerized) CNC lathe.
In 1994, we decided to step into full manufacturing,

she continues, and added a number of items to the Foster 54-02, and the Gill Model 100 Kelly spinner
our product line, including different sizes and brands is totally interchangeable with the Foster Model 77.
of tongs. Although utilizing identical parts, Gill has been able to
Gill Services has been manufacturing and supplying improve upon the performance of the Foster products
replacement parts for Foster Rod & Tubing Tongs, through better alignment of the gears and a tightening
Kelly spinners and catheads since 1986. Gill Services of overall tolerances, according to Wathen.
pioneered the concept of replaceable inserts for As a result of alliances formed with other OEMs, she
jaws, allowing operators says Gill Services, which proudly touts its long-time,
to handle a variety of We are now active membership in the Association of Energy Service
tubing sizes by using Companies, is the exclusive worldwide distributor of
inserts only, instead of fully capable of the Torque-Tite Cathead product line manufactured
changing out the entire providing chain- by Texas Western Co. in Lubbock. The Torque-Tite
jaw set. This innovation, product line is totally interchangeable with the Foster
according to Wathen, driven, gear-driven, equivalent. Gill also stocks and supplies parts for BJ,
provided the industry open-face or Oil Country, and Peck-O-Matic power tongs.
with tremendous In addition to the companys corporate headquarters,
savings in its day-to-day closed- face tongs service center and machine shop in Houston, Gill
workover programs. for workover well Services also has four sales and service branches in
Then in 2002, Wathen Texas in Midland, Kilgore, Wichita Falls and Alice.
says the company
servicing rigs. Wathen says service is an important part of Gills
landed a contract with business.
Key Energy Services, which wanted an open-faced tong. The company offers both in-house and field service
Foster made only closed-face tongs. So Gill Services repairs, from the simple to the complex, of the Gill
expanded its product line. Services equipment, as well as most other brands of
We are now fully capable of providing chain- power tongs, rod tongs, Kelly spinners and catheads.
driven, gear-driven, open-face or closed- face tongs Our skilled technicians have more than 20-plus years of
for workover well servicing rigs, she claims. We also
manufacture catheads and Kelly spinners for smaller
drilling rigs, as well as bucking units for uncoupling
or threading in pipe yards. Wathen says Gill also
manufactures power units, which, for example, can be
used with a bucking unit. Perforating Charges
As an original equipment manufacturer (OEM), Gill
and Supplies
Services has developed and manufactures a range
Cased Hole Logging Tools
of power tongs and Kelly spinners that are totally
Supplier of Wireline Trucks
interchangeable with the equivalent item carrying the
Foster brand. For example, the Gill Model 500 Power
Tong is totally interchangeable with the Foster Model 58-
93R, the Gill 600 Tong is interchangeable with the Foster
54-93 Tong, the Gill 700 Tong is interchangeable with

hands-on experience in diagnosing and repairing most
major brands, and they can often assist a customer
over the phone with simple repair issues, resulting in
little or no downtime to the unit, notes the companys
website.
When I graduated from college, Dad

kept telling me to not go to work
for anybody for less than $1,000 a
month, Then, when I came to work
here for him, he said here is your
desk and you will get $800 a month.
Wathen laughs as she recalls first coming to work for
Gill Services. When I graduated from college, Dad kept
telling me to not go to work for anybody for less than
$1,000 a month, she comments. Then, when I came
to work here for him, he said here is your desk and
you will get $800 a month. I said I thought you told me

never go to work for less than $1,000 a month. But he
never treated me like the boss daughter. I worked in
shipping, accounting and cleaned toilets, or anything
else that a small company requires. I think that made
it easier for me to be accepted when I was promoted
to president. I have grown up with a lot of the people
working here and we are a strong team. I still like to
get up and go to my job every day.
She acknowledges that the growth of the company,
through all the ups and downs, has been amazing.
And just to prove that point, Gill Services has been
named recently to the Aggie 100, a list that identifies,
recognizes and celebrates the 100 fastest growing
Aggie-owned and operated companies in the world.
We have grown the company eight or nine times from
what Dad had it, Wathen reflects, and we are having
a record year. I often wonder what my Dad would think
of his company now. He might say, Girl, what are you
doing? But I think he would be pretty proud of where
we started to where we are now.

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Congressional
Spotlight
As a regular department in Well Servicing magazine, Congressional Spotlight profiles an elected official at the
state or national level of government. Interviewed by Kristin Van Veen-Hincke of Vikki Cooper &Associates.
Representative
Steve Palazzo (R-MS)
A
s the Gulf Coast struggles to recover from
the BP oil spill, lawmakers from that
area are continuing to fight legislation
and regulations that are hindering job growth
and economic stability for the region. Among
those lawmakers is a relative newcomer to the
fight, Rep. Steven Palazzo representing the 4th
District in Mississippi. Congressman Palazzo was
sworn into office on January 5, 2011 and from
the get-go has been an outspoken proponent
for the Gulf Coast region and its needs. Born in
Gulfport, this former Marine and current member
of the Mississippi Army National Guard, owns a
small CPA firm with his wife Lisa that specializes
in helping Americans living abroad with their
income taxes. In addition to his work as a CPA (L-R): Erbie Massengill, AESC Member; U.S. Representative
and his military service, the Congressmans Steve Palazzo; and Bob Stone, AESC Past President.
well-rounded career includes time spent working
as a rigger, materials manager, and eventually a
senior cost accountant in the offshore drilling
industry. His first-hand experience and knowledge of His backing of the Gulf and its economic interests
the business has proven to be an asset in a district included the Congressmans support in May 2011 of
where the oil and gas industry makes up a significant H.R. 1229 which proposed to end the Administrations
portion of the local economy. de facto moratorium on drilling in the Gulf of Mexico
by setting strict time lines for administrative action
on drilling applications. Likewise H.R. 1231 proposed
to lift President Obamas ban on additional offshore
drilling by requiring the Administration to support new
energy production in areas along the coasts containing
the most natural gas resources. Both measures
passed the House, but languished in the Senate.
One man has stood in the way of jump starting our
economy and saving 12,000 offshore jobs, Palazzo
said in a statement. That man is the President and
Americans are frustrated each time they fill their
tanks with $4 gasoline. The common sense legislation
passed by the House of Representatives will develop
more energy from all of our available resources

and reduce energy prices. Rigs have left the Gulf of Mexico for international
We need more American
jobs and more American waters with more favorable regulatory environments.
energy, and these bills would
force the Obama Administration to stop dragging the attack on hydraulic fracturing, the EPAs attempt
its feet when it comes to allowing American to restrict mining of coal, and regulating CO2 and
companies to explore for American energy. greenhouse gases. America has the most abundant
When discussing the BP accident, Palazzo suggests natural gas and coal fields in the world and they should
there are two lessons to be learned. First, all companies be fully utilized. In order to combat this attack on
should assure that fail safe devices work properly and fossil fuels, the Congressman encourages three ideas:
secondly, the United States should not halt all energy 1. Educating the public on the safety of the oil and
production including permitting of other wells due to gas industry;
one incident. Rigs have left the Gulf of Mexico for 2. Addressing the economic impact and the
international waters with more favorable regulatory potential of good paying American jobs;
environments, Palazzo said. Each platform is a 3. Supporting friends of the industry
multi-million dollar economy. Over 15,000 jobs have A recent report found that U.S. domestic energy
been lost due to the de facto moratorium and those resources are currently the largest on earth greater
jobs likely will not return any time soon. Now I dont than Saudi Arabia, China and Canada combined
blame BP for the loss of jobs, I blame President Obama. and thats without including Americas shale oil
Its about fracking time! This was the Congressmans deposits. However, the President continues to refer
response when asked his thoughts regarding a plan by to fossil fuels as yesterdays
the federal government to expand fossil fuel production energy. This attitude is a Its so
in this country. Rep. Palazzo believes there is a need constant challenge for those important
for an American energy policy in order to stop the lawmakers on Capitol Hill fighting
regulations that drive up the cost of energy. He endorses for the interests of energy on
that we have
a plan that expands production to include not only a daily basis. Congressman available
offshore, but also onshore drilling from the east coast Palazzo believes reduced affordable
to the west coast and all areas in between and includes regulation is the step needed
an all of the above energy development mentality. for these resources to be utilized. energy
Its so important that we have available affordable The focus of the 112th because our
energy because our economic and our national security Congress has been on reducing
depend on it, he stated. Palazzo believes the Obama the regulations that are restricting economic and
Administration has provided regulations that hold back Americas energy potential, he our national
Americas energy potential which has led to higher said. Weve passed several laws
energy prices. He supports reversing these restrictive that would open access to lease security
policies and once that is accomplished, we will start sales to currently limited areas depend on it.
to realize our American energy potential, put Americans such as offshore, but these bills
back to work, and leave American energy strong at have not even seen the light of day in the U.S. Senate.
home rather than relying on the uncertainty abroad. Im hopeful that if we continue to fight for reduced
regulatory environment and allow investors to put
His first-hand experience and capital in the energy portfolios, we will be successful in
knowledge of the business has tapping our vast reserves. Carbon-based fuels are not
yesterdays energy. Americas demand for affordable
proven to be an asset in a district and available energy, the need for all natural gas and
where the oil and gas industry coal is not decreasing, the need is only increasing.
Carbon fuels are efficient and they are affordable, and
makes up a significant portion of we should continue to use them not restrict them.
the local economy. Along the lines of over regulation, Rep. Palazzo
In May of 2011, the House of Representatives

Committee on Oversight and Government Reform
released the report called Rising Energy Costs: An
Intentional Result of Government Action. The report
concludes that the [Obama] Administration is
aggressively suppressing the use of carbon-based
energy sources in the United States. Many lawmakers
in oil and gas producing states are referencing this
report in an effort to show their colleagues and
constituents that the rhetoric coming from the
White House, at times, doesnt give a clear picture.
Well, theres no doubt that common carbon fuels
are under attack by this Administration, Palazzo
commented, just look at the moratorium offshore,

The President On the one hand, we can ignore
the potential that we have,
continues to refer domestically, like the President
to fossil fuels as did with the Keystone pipeline, or
we can fully tap Americas energy
yesterdays energy. potential and begin creating good
This attitude is a high paying jobs. Weve also
seen the experiment of the past
constant challenge three to five years, the practice of
for those lawmakers subsidizing unaffordable energy
and placing tariffs on imports
on Capitol Hill of affordable, renewable energy.
fighting for the We have little to show for these
interests of energy taxpayer expenses and as a result
I believe the U.S. will, in the next 10
on a daily basis. years, focus on increasing supply,
reducing onerous regulations,
supports state regulation and eliminating unfair energy
of the hydraulic fracturing subsidies and as a result, we will
process. Although he believes win this fight and increase oil and
it is probable that legislation gas production through private
will be introduced again to sector investment and innovation.
restrict fracking or to amend Rep. Palazzo has plans to
the Safe Drinking Water Acts
exemption for the process, he does not see I believe the U.S. will, in the next
widespread support in the House for such a measure.
Any time the EPA tries to take over regulatory 10 years, focus on increasing supply,
processes from the states, we should be concerned, reducing onerous regulations, and
he commented. Its definitely not the best way nor is
it the right solution. The EPA should actually work in eliminating unfair energy subsidies
conjunction with the states as well as with the industry and as a result, we will win this fight
to understand what the best
Any time the practices are and what
and increase oil and gas production
EPA tries to take already exists and establish through private sector investment
over regulatory those rules as the standard
for moving for ward.
and innovation.
processes from So where does participate in 2012 Offshore Energy Tour. He also
Congressman Palazzo see participated in last years tour with Rep. Steve Scalise
the states, the oil and gas industry of Louisiana, Energy and Commerce Committee
we should be in 10 years? I believe Chairman Fred Upton of Michigan, Energy and
concerned. Its American domestic oil and Environment Subcommittee Chairman Ed Whitfield
gas production will increase of Kentucky, Rep. Gene Green of Texas, and Rep.
definitely not over the next 10 years, Steve Womack of Arkansas. Last years tour included
the best way nor he predicted. Americas meetings with stakeholders from the Louisiana energy
perpetually bleak economic industry, a visit with offshore production workers,
is it the right situation will force our a tour of an offshore production platform, as well
solution. leaders to make a decision. as boat and aerial tours of the Louisiana coast.

The Voice of
By AL PICKETT
Contributing Writer
T
here is a new leader of the Alaska Oil and Gas are similar to those in the Lower-48 as well. On the
Association. After 41 years with the AOGA, state level, the AOGAs primary issues are taxation and
Marilyn Crockett has retired and Kara Moriarty permitting, according to Moriarty.
took over as the associations executive director on Amazingly, Moriarty says a recent study claimed
January 1. one-third of all jobs in Alaska can be attributed to the
It is amazing. Marilyn had one boss for her entire oil and gas industry. Despite that, she says the public
career, says Moriarty, who has been with the AOGA still forgets the impact the industry has on the state.
since 2005 and has served as its deputy director since We havent paid a state income tax in Alaska since
2007. 1980, and each resident in the state receives an annual
When Crockett first came dividend from the states
to the AOGA, Cook Inlet was Permanent Fund, which is
Alaskas crown jewel in terms of funded by the oil and gas
oil production. That was before industry, she adds. Last
Prudhoe Bay and the Trans-Alaska year, that dividend payment
Pipeline, according to Moriarty. was approximately $1,200 for
The AOGA started in 1966, each resident in the state.
initially as a committee of But we now have a
the Western States Petroleum generation of residents
Association, she states. After who dont remember what
the pipeline was built (it was it was like before the oil
completed in 1977), folks industry came to Alaska,
recognized that it should be a continues Moriarty, who
stand-alone association, so the says she reminds people
AOGA broke out on its own in that the oil and gas industry
the 1980s. also contributes 85 to 90
Moriarty inherits the reins of Kara Moriarty percent of Alaskas general
one of the most unique trade AOGA Executive Director fund, which pays for schools
associations in the industry. Unlike and roads, etc.
most state associations, the service industry is not part Oddly enough, the high crude oil prices, which the
of the AOGA. Instead, the service companies in the state industry has enjoyed for the last several years, are
belong to the Alaska Support Industry Alliance, better detrimental in some ways to the oil and gas industry
known as The Alliance, an organization that she says in Alaska. Production is declining in Prudhoe Bay, but
AOGA has a close working relationship. it is still a giant, Moriarty offers. It is still the largest
oilfield in North America. But because we have such
On the state level, the AOGAs a high tax structure with the windfall provision that is
part of our law, we are penalized during periods of high
primary issues are taxation and oil prices. Our jobs are remaining steady, but we have
permitting, according to Moriarty. had no spikes in employment or production. Prudhoe
Bay is a 30-year-old field, so it costs one-third more to
We have only 16 members in the AOGA, Moriarty do business and we are getting one-third less oil over
explains. We represent the producing companies, the last 10 years.
those that hold leases, three in-state refineries and She points out that Alaskas production has dropped
the Pipeline. to 600,000 barrels a day, compared to 700,000 barrels a
While the organization may be unusual in its makeup, day when the Pipeline was first turned on. We peaked
the challenges AOGA faces are not. In fact, many of at two million barrels a day in 1988 and 89, Moriarty
the issues facing the oil and gas industry in Alaska contends. It was a million barrels a day just seven

the fields potential. Because it is so far north and there
isnt any infrastructure, it will take 12 to 15 years before
production can begin.
Then, of course, Moriarty says there is also the
ongoing political controversy of whether or not
Congress will allow drilling in ANWR (the Arctic Natural
Wildlife Refuge), a 19,000,000-acre protected wilderness
on the north Alaska coast.
As the AOGA continues to battle the states severance
tax structure and permitting issues, as well as numerous
federal regulatory hurdles, Moriarty has a piece of
advice for those living in the Lower-48. We have vast
resources in Alaska, and we can develop them safely,
she emphasizes. We can contribute to the energy needs
years ago. But when we get a spike in prices, there is Moriarty says the AOGA has decided
a huge tax increase, which is depressing the incentive
to drill for new oil. That is why we are advocating a to support a public awareness
change in the states severance taxes. campaign this year in the hopes of
Moriarty says the AOGA has decided to support a
public awareness campaign this year in the hopes of encouraging a change to the states
encouraging a change to the states oil tax structure. oil tax structure.
It is also doing a grassroots program with its website,
newsletter and meetings with stakeholders, including of the United States. Learn the facts before you read
members of the Alaska legislature, in an attempt to some literature that has a picture of polar bear on it.
educate them on the issues and challenges facing the Why not develop our own resources? That is the key.
oil and gas industry. It is a challenge she believes has far-reaching
implications for not only the Alaska Oil and Gas
We havent paid a state income Association but also the entire United States effort
tax in Alaska since 1980, and each for energy independence.
resident in the state receives an
annual dividend from the states
Permanent Fund, which is funded by
the oil and gas industry.
On the federal level, the challenge is regulatory
issues, she continues. Some federal initiatives are
very Alaska-centric. We face regulatory issues with
access, the endangered species list, the Environment
Protection Agency, Congress, and Fish and Wildlife
Service, just to name a few. Really, it is pick your
acronym. We have such iconic wildlife in Alaska, such
as the polar bear and the walrus, that we are a target
for all the environmental groups. The polar bear is
the first species to be put on the endangered species
list whose population has not dwindled. But because
we are losing sea ice, the polar bear has been put on
the threatened list because they think the population
might go down.
As an example of the challenges that companies have
in gaining access to drill both onshore and offshore
in Alaska, Moriarty cites the Chukchi Beaufort Seas in
federal waters on the Outer Continental Shelf, about
50 miles north of Alaska.
They think it may hold 25 to 30 billion barrels of oil,
she explains. By comparison, Alaska has produced 17
billion barrels since 1977. Shell has already invested
$4 billion in its Chukchi Beaufort Seas project, and it
hasnt punched a single exploration well yet. Even if
Shell is successful this spring (in drilling its first well),
it will take a couple more seasons before it can prove

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BySHARYN ALDEN Market Report
Information in the Market Report is researched, gathered, compiled and reported by contributing writer Sharyn Alden.
The Market Report provides market intelligence, forecasts, trends and operational data on the U.S. and international energy
service segment of the oil and gas industry.
Six Members of Congress want a

Reasonable Profits Board to Monitor Profits
S
hould excessive profits the board would be comprised more than the country needs a
or windfalls from the of three presidential nominees board to monitor oil and gas profits.
sale of oil and gas be who would each serve a three-year Other objectors say why not
controlled by a government board? term. They would not be nominated implement a Reasonable Earnings
Should companies that exceed a by any member of Congress and Board that monitors the earnings
reasonable profit be penalized would not include oil and gas of people like movie stars who
with a windfall profit tax? industry representatives. No one make considerable money from
Those are the questions being with a financial interest in the entertainment industries? Next
bandied about after six House businesses which have made a might be a Reasonable Athlete
Democrats proposed a Reasonable reasonable profit under the Boards
Profits Board be set up to apply a rules would be considered for board If the sale of oil and
windfall tax on excessive oil and gas service.
profits. The surplus earnings tax Heres how the windfall tax would
gas yields 100 and 102
could range from 50 percent to 100 work. The tax would be based percent of a reasonable
percent of all excess earnings of a on reasonable profits on excess profit, the seller would
certain range. The definition of what earnings. If oil and gas companies
exactly is an excessive reasonable are the sellers, they pay the windfall be in line for a 50
profit has yet to be determined. taxes. Of course the tax begs the percent windfall tax.
question, what is a reasonable
The definition of what profit? Salary Board to monitor the
exactly is an excessive If the sale of oil and gas yields earnings of sports super stars.
100 and 102 percent of a reasonable There could also be a Reasonable
reasonable profit has profit, the seller would be in line Executive Salary Board to make
yet to be determined. for a 50 percent windfall tax. Now sure heads of companies dont
lets say the sellers profits ranged make too much money.
The point of the bill is to control between 102 and 105 percent. In The arguments go on and on, but
rising gas prices and use windfall that scenario, you are looking at opponents of a Reasonable Profits
tax dollars to fund mass transport a 75 percent tax. If the profit goes Board have a point. If oil company
programs and also to fund a tax- above the 105 profit mark, youre profits were monitored to make
credit program when Americans in line for a 100 percent tax. sure a reasonable profit wasnt
buy fuel efficient cars. With a tongue-in-check approach, exceeded, where does it stop?
The new board idea was led by opponents have issued a challenge Would Google, Facebook, Apple
Rep. Dennis Kucinich (D-Ohio) who that says the country needs a and other successful companies
said his group is concerned about Reasonable Spending Board to also be fair game to monitor? Stay
high gas prices. Under their plan monitor Congressional spending tuned as the debate continues.
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Market Report
Polands Shale Gas Corruption

Leads to Seven Arrests
S hale gas isnt just a hot commodity in the U.S.,

Poland is looking to make significant strides in
the shale gas market, but government corruption has
drilling arrangements outside of Poland, primarily with
companies in North America.
Shale gas corruption practices have been associated
temporarily derailed efforts. with farm-ins an arrangement not uncommon in
The country has been the focus of worldwide other countries but difficult to implement inside Poland.
attention after a U.S. oil and gas survey predicted A farm-in or farm-out agreement allows the owner of
Poland may have the biggest recoverable gas reserves a gas or oil lease to assign a working interest to another
in Europe. party for drilling rights on the property. Farm-ins are
Since then drilling opportunities have attracted especially popular as a way to connect a business in
some of the worlds biggest players including Chevron, one country with a foreign company.
ExxonMobil and Marathon which are operating along In this type of arrangement the owner will
with local Polish shale gas operators. usually retain a royalty interest in the property
For several years, it has been but they can transfer interest called the farm-out
An oil and known that Poland has an often- portion of the agreement to a drilling assignee.
gas survey times corrupt way of doing business The assignee or the company receiving the
when it comes to granting shale interest is the benefactor of the farm-in portion of
predicts gas licenses to certain companies. the agreement.
Poland In January, the ABW, the Polish According to Polish regulations there are problems
may have internal security agency, detained when a company that receives a license to drill share
seven people alleged to have a gas cannot legally split the equity stakes and share it
the biggest role in granting shale gas license
recoverable in exchange for bribes. Shale gas corruption practices have
The arrests of the group that
gas reserves included state officials didnt come been associated with farm-ins an
in Europe. as a big surprise to some insiders. arrangement not uncommon in other
The members of the detained group
include three officials of the Environment Ministry, countries but difficult to implement
representatives from three companies looking to obtain inside Poland.
shale gas exploration licenses and a representative from
the Polish Geological Institute which does the geological with any company they so choose. Ownership problems
surveys. The investigation is being carried out by the can result when equity is split. Instead, the primary
Warsaw Deputy Appellate Prosecutors Office. license holder is expected to maintain the license but
As of early 2012, about 100 licenses have been granted they can authorize drilling rights with a registered
from Warsaw. The goal is to have shale gas production subsidiary.
in operation in 2014. While some insiders see the news about Polish
The large state-owned shale gas companies that arrests as a positive step in slowing down and halting
own concessions are Polski Koncern Naftowy Orlen corruption connected with shale gas licensing, others
(PGNiG) or PKN Orlen. Both are said to be exploring say only time will tell if changes are in the wind.
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Market Report
Obama Administration Takes Credit for Gas Production

Some Say Not So Fast
I n his State of the Union address

on January 24, President Obama
said domestic oil production was
Some Republicans and insiders
say that high production numbers
cant be traced to what the Obama
youre in the White House, you have
a right to say that the positive gains
happened on your watch.
the highest it had been in 8 years. administration has done to advance Regardless of whose side youre
Thats an encouraging message, the cause. In fact, they say the on, U.S. oil production has increased
but it was overshadowed by this opposite is true. in the last five years. According to
previous statement from the Republicans point to onshore oil the Energy Department, production
President, We have subsidized oil and gas production on federal lands level has been on a steady incline
companies for a century; thats long as being down by 40 percent since from 5.1 million barrels of oil a day
enough. Last year the President Obama has been in office compared in 2007 to 5.5 million barrels a day
called for eliminating billions of to production figures 10 years ago. in 2010.
taxpayer subsidies for oil companies A spokesperson for Republican Doc The expectation is that output
and instead suggested the money Hasting and Chairman of the House from shale oil resources, as well
would be better used to invest in Natural Resources Committee in as the Gulf of Mexico will move
renewable sources of energy. Washington pointed out 2010 saw domestic production even higher
Sure, overstatements are to the lowest number of offshore over the next 10 years. Projections
be expected in an election year, drilling leases since 1984. are for 6.7 million barrels a day
but sometimes statements dont Still, others say that if positive, the highest production number
accurately match actions. For exciting energy news happens while since 1994.
example, the administration has
said it wants to ramp up domestic
energy development, including
oil and gas. But the American
Enterprise Institute called Obamas
January 18 decision to deny a permit
for TransCanada Corporations $7
billion Keystone XL oil pipeline
project, a contradictory action.
Thomas Pyle, president of the
Institute for Energy Research,
echoed that feeling by pointing
out that the Obama administration
has been unwilling to open
federal lands for exploration and
vigorously pursue offshore drilling
opportunities.
The American Petroleum Institute
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Market Report
Eastern Ohio sets its Hopes on Drilling Boom

Residents Listen to Governor
T he promise of oil and gas industry jobs balanced

with environmental concerns was the topic on
many minds in Ohio when the governor gave his annual
Many have dreamed of a windfall that would change
their life for some time. The Steubenville area has been
hard hit by the economic downturn over several years.
State of the State address in early February. As expected, the February crowd gathered to support
Governor John Kasich spoke in Steubenville, both sides of the hydraulic drilling argument.
an economically depressed area in the
heart of gas and oil drilling country along the Both sides probably left disappointed since
Ohio River.
It was an historic address because it was the
Governor Kasich didnt say what specific
first time in the states history that the State measures were needed to ramp up drilling
of the State address was presented outside and keep the environment intact.
Columbus, the states capital.
The area has been the focus of attention as oil and Both sides probably left disappointed since Governor
gas companies have swarmed here to study deeds in Kasich didnt say what specific measures were needed
hope of hitting the drilling jack pot. to ramp up drilling and keep the environment intact. He
While only a small portion of the governors 90-minute did point out that more research needs to be done in
speech focused on oil and gas, throngs of people order to develop the Mahoning Valley near Steubenville.
gathered to hear what the governor said about fracking, Governor Kasich, a Republican, reiterated that he
a controversial topic in this eastern Ohio County. wants to take a cautious approach to natural gas
and oil drilling here. He noted responsible drilling is
a balancing act it shouldnt be characterized by
overcomplicated rules.
He agreed that an energy boom would be a shot in
the arm for the local economy as well as the state, but
added, We cant degrade the environment at the same
time were developing the industry.
Controversy about fracking is pervasive in the Ohio
legislature. A state-wide moratorium bill to curtail
fracking has been introduced but has stalled. Another
bill that requires the disclosure of fracking chemicals
is also stagnant.
But near to where Governor A state-wide
Kasich gave his State of the moratorium
State address, a moratorium
on drilling is in effect. In this bill to curtail
Your Artificial area, hydraulic fracking had fracking has
Lift Specialists on Call been underway in Trumbull
and Mahoning counties. been introduced
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Market Report
Dramatic Cut Back Proposed

for Oil Shale and Sands Development in Western States
O n February 1, Republicans
passed a bill in Congress
forcing the Interior Departments
Their position is that technologies
need to be developed to expertly
and efficiently extract oil from the
drilling and development are taken.
BLM states that orderly approach
involves better technology for
Bureau of Land Management to areas earmarked for future growth. mining the oil sands.
open up more lease sales for shale Their premise is that it is too soon When the American Petroleum
and oil sands development. to open up the areas for commercial Institute learned about BLMs
The bill, which sailed through development. decision to withhold commercial
the House Natural Resources lease sales until technologies have
Committee, gave Interior an The strict new proposal improved, they issued a terse reply.
ultimatum by 2016 the Committee limits commercial In a prepared statement, they
directed Interior to have five said, Within a week of encouraging
commercial lease sales on property
development to less than an all of the above energy strategy,
that had the most potential for 830,000 acres in the the administration continues to
development. combined three states. introduce actions that delay and
Then two days later BLM issued restrict development.
a stunning blow. You may wonder why it seems API pointed out BLMs tactics
On February 3, BLM issued an like the government is stalling and send a negative message all
Environmental Impact Statement, why Canada appears to be ahead around. In addressing the
which makes significant changes of the curve? Canada, as you may governments proposal API said,
to oil shale and sands development know, has been successfully mining The administration is continuing
in Colorado, Utah and Wyoming. oil sands which are refined into oil. actions that send negative signals
The intent of the proposal was BLM has countered by saying to industry and capital markets
to re-examine the Bush-era plan for that Canada is extracting oil-rich at exactly the wrong time for the
drilling kerogen and developing oil bitumen from water-wet, oil sands American public.
sands that contain bitumen. The deposits. In the U.S., we have not
Bush agenda suggested 2 million yet commercially developed oil The route to commercial
acres in three western states be set from the countrys hydrocarbon development of oil shale
aside for commercial leasing and wet tar sands. BLM clarified its
developing of oil shale and oil sands. stance further by saying, This and oil sands in three
Fast forward a few years to the difference means that U.S. tar sands western states has been
recent BLM game changer. The strict will require different processing
new proposal limits commercial techniques. deliberately slowed.
development to less than 830,000 So the route to commercial Its too early to know how this
acres in the combined three states. development of oil shale and oil will play out, but for now, both
Plus, the government wants to limit sands in three western states has sides have made their positions
drilling only for research and to been deliberately slowed down known. It wont come as a surprise
showcase the viability of oil shale due to unanswered questions and if a compromise is reached, but it
and sands development. until an orderly approach to may not be anytime soon.
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Market Report
U.S. Makes Strides Toward Energy Independence

Reversal of a Steady Downhill Trend
I f you talk to insiders about the

U.S. becoming more energy
independent, youll likely hear that
One telling sign that the U.S. is
ramping up domestic production
is the operations move announced
Even with technology moving
production forward, some insiders
see future gains being pulled back
the country is more self-sufficient by Methanex, the worlds biggest by the past and current concerns.
now than since the late 1980s. methanol maker. The U.S. is Don Briggs, president of
Its been a long time since the producing so much natural gas; Louisianas Oil and Gas Association
words energy self-sufficient has Methanex is closing its factory in (LOGA) recently said the biggest
described the countrys energy Chile and moving it to Louisiana concerns facing the future of
production. The last time the U.S. to take advantage of low natural drilling involve not only foreign
achieved that status was in 1952. gas prices. markets but domestic drilling
The Federal Regulator y concerns on the home front.
Some optimists predict Commission says the country is Addressing the associations
the U.S. will become not yet in a position to completely local members in February, Briggs
rely on high domestic production. said legacy suits are one of the
the worlds No.1 energy Some experts say that since energy biggest problems facing oil and
producer by 2020. prices have fallen by 80 percent gas producers today. He told
since 2008, it now may be time to his audience that 56 percent of the
Today, the U.S. has reversed a boost exports. top 50 oil and gas producers have
steady downhill trend in energy With Methanex moving to been hit with legacy lawsuits for
dependence and is the closest its Louisiana, the government may environmental damage. Its worth
been to becoming truly energy find the time is right to approve the noting that some of the damage
sufficient in over 20 years. building of an export terminal. A goes back 70 years when the
Some optimists predict the U.S. new export terminal shows how far drilling techniques were perfectly
will become the worlds No.1 energy weve come from the long gas lines legal.
producer by 2020. If that happens, Fracking is another domestic
the implications for business With Methanex moving issue that is making it difficult for
expansion and growth, jobs, some domestic producers to gain
government revenue and decreased
to Louisiana, the momentum. Briggs pointed out
trade deficit are significant. It would government may find that about 85 percent of todays
also give the country a better the time is right to natural gas wells involve fracking
bargaining position in dealing with and there is no proof that the
instability in the Middle East. approve the building hydraulic fracturing process, which
Last year crude oil production of an export terminal. has been around for more than 60
notched up by 3.6 percent with years, is harmful.
an average of 5.7 million barrels during the 1973 Arab oil embargo, Still, he said its an issue that
a day. According to the Energy to today when technologies have makes it difficult for operators to
Department, thats the highest opened doors to unprecedented gain momentum. Im not sure were
domestic oil production since 2003. levels of production. winning that battle.

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Personality Profile By MARK CRAWFORD
Contributing Writer
___________________
Daniel Comalander
Committed to the Mission
G
rowing up in Houston, Daniel Comalander got his start in the oil and gas business
Comalander learned the value
of hard work from his father, on the manufacturing side. After graduating from
who put in long hours on multiple jobs to high school he worked several jobs as a welders
support his family of seven. apprentice and machinists apprentice.
Dad worked on a roustabout crew,
welded pressure vessels and tanks, and and drilling rigs for Keys operations group. months he was transferred to the weld
also picked up construction jobs as a Comalander got his start in the oil and shop where he repaired castings, welded
part-time general contractor, says Daniel. gas business on the manufacturing side. up rejected parts, and fabricated power
He was always working on something or After graduating from high school in 1973 tong trailers and tong hangers. He moved
going somewhere. he worked several jobs as a welders quickly through the union process and was
Today Comalander is a project control apprentice and machinists apprentice. He at the top of his labor grade in a year (a
manager at Key Energy Services in Odessa, was then hired as a shop helper with Joy process that normally takes 30 months).
where he provides project management Manufacturing in 1975, building oilfield A year after getting married, Daniel
and coordinates budgets, schedules and equipment and pipe handling tools for moved his young family to Odessa in 1977.
delivery while ensuring the quality and drilling. He hired on with Midway Manufacturing,
efficiency of capital expenditure projects. My first job there was sweeping the a water rig well manufacturing company
He also works closely with manufacturing, floors and cleaning out the various lathes and subsidiary to Skytop Brewster, where
purchasing, and their vendors to refurbish and drill presses, he remembers. he worked as a welder before moving into
existing equipment or manufacture new His welding and mechanical skills various shop leadership, management,
mud pumps, power swivels, mud systems impressed his supervisors; after a few and sales positions over the next six

In operations support, we are all
stakeholders and work toward the
same goal of making every project
come in on time and within budget.
years. After the company was acquired by moved into the
Cooper Manufacturing his duties expanded project control
to include accounting and bookkeeping. position in 2007.
Id go to the field and work on the In operations
drilling rigs as a welder and mechanic, support, we are
which always seemed to be at night, and all stakeholders
then do paperwork during the day, he and work toward
says. In 1989 Cooper transferred him to the same goal
Brady, Texas for inside sales, parts sales, of making every
technical sales and as service manager. project come
Over the next 15 years I covered the U.S. in on time and
and overseas sales and service for Cooper, within budget,
Loadcraft and HRI, he says. Part of the says Daniel. We have the advantage of and try to balance projects with other
job was traveling overseas to serve as having only one customer ourselves various customers.
field technical advisor for customers in but also realize we are in competition One of the most satisfying parts of
Indonesia, Poland, France and New Guinea. for the same work with every other his job is working with great people and
rig manufacturer. Our advantage is that seeing a quality product go to the field.
A key move we can start work immediately on any We are always looking to enhance the
In 2004 Comalander joined Key Energy project for Key, whereas the manufacturing safety and efficiency of our rigs, he
Services as procurement manager and vendors may have to schedule the work says. For example, Key has installed
Achilles JQS
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Vacuum systems Centrifugal pump skids Operation, rental and sales
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Mud skips Cleaning chemicals
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on-road, clean-idle, electronic engines sustaining member status. There is not a are expanding at the same time. It used
for its rigs in California. Rig crews are meeting that I have attended where I did to take just a few weeks to get blocks,
also using hydraulic work floors instead not come away with new ideas, or better for example; now it takes several months.
of raising them manually. Key continues informed on topics that affect our industry, Steel is in shorter supply as well, adding
to expand the size of its fleet as it adds including the ever-changing regulatory to lead times.
new rigs to its projects to meet the needs environment, he says. Our goal is to maintain a world-
of customers. class fleet of well servicing equipment
One of our biggest challenges is the Meeting new challenges to help meet customer production needs
ever-changing timelines, but whats really The oil and gas industry faces new in 2012 and beyond, without harming our
amazing is that the guys in the shop will challenges all the time. In addition to employees, communities, or environment,
usually meet the time constraints, says the typical challenges of the evolving says Comalander. We are committed to
Comalander. Everyone works together regulatory environment and strained this mission and will always employ the
as a team. Our mission is always to get supply chains, another serious best practices and latest technological
the job done, look out for each other, getconsideration is the ongoing drought know-how to make it happen.
home safely and take care of our families.
in the Permian Basin and other parts
of the West. This is
becoming a critical
issue and companies
need to be proactive in Inside Look:
dealing with it, says Daniel Comalander
Comalander. Some
towns have essentially Recent Book: The Servant
run out of water; others
by James C. Hunter
are cutting back on selling Best Advice: My father always told
water for frac jobs. If me to work harder when people
we keep experiencing arent watching than when they are.
low precipitation levels Favorite Quote: Its not the
like we have in the destination, its the ride.
Permian Basin, water will Favorite Movie: Seven Days in Utopia
become very expensive
or impossible to Hobbies/Interests: Motorcycles,
supply locally. Oil and
church, volunteering, working,
exercising, visiting my children
gas companies must and grandchildren, science fiction
invest in new systems movies, thrill rides at amusement
Everyone works together as a that conserve and recycle parks (the faster the better)
team. Our mission is always to water.
Favorite Getaway: Motorcycle road
For 2012, Key Energy
get the job done, look out for Services will continue to
trip with friends
each other, get home safely and increase its production to People would be surprised to learn
take care of our families. help meet the needs of its that . . . I was a bull rider in high
customers by building more school (short-lived career!)
Daniel started attending AESC meetings rigs and making other capital investments.
in 1989 as an associate member; when he Equipment lead times are also becoming
joined Key Energy Services he acquired a challenge because so many companies

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ted
e Keystone
c XL pipeline
Rej
By BRANDON WILLIAMSON
Correspondent
________________________________
TransCanada, the firm behind the existing
Keystone pipeline and proposed Keystone XL
T
he fallout after President Barrack expansion, announced on January 18, it would
Obamas January 18, 2012
rejection of the Keystone XL re-apply for a Presidential Permit and remains
pipeline is a perfect reflection of politicscommitted to the project.
in America. Emotions on either side of the
subject are high and opinions are split down party lines. could dramatically raise the price of energy in Midwest
TransCanada, the firm behind the existing Keystone America.
pipeline and proposed Keystone XL expansion, The raucous debate for and against the project has
announced on January 18 it would re-apply for a its roots in 2005, when phases 1 and 2 of the Keystone
Presidential Permit and remains committed to the Pipeline were proposed. These stages completed
project. construction in 2010.
Keystone XL, a bastion for those seeking shovel-ready Phase 1 consists of 1,853 miles of pipe running from
jobs, has been under attack since it was announced Hardesty, Alberta in Canada, southeast to Steele City,
in 2008. Everyone from small-town mayors to Nobel Nebraska and then east to Patoka, Illinois.
Laureates and even the Dahlia Lama has rejected the Phase 2 of the Keystone Pipeline added nearly 300
proposed pipeline extension. miles of new pipe, running from Steele City, Nebraska
There wasnt as much objection to original to Cushing, Oklahoma.
Keystone because people werent organized, Joe The proposed 3rd and 4th Phases, known as the
Uehlein, executive director of the Labor Network for Keystone XL, would be a 1,661-mile expansion.
Sustainability said. Now we are together and will fight Phase 3 contains 435 miles of pipe from Cushing,
the Keystone XL expansion all the way. Oklahoma to Port Arthur, Texas. Phase 4 follows 327
The Keystone XL expansion would create 20,000 new miles of new pipe in Canada, which would then extend
jobs and could provide over $20 billion in private-sector southeast through Montana and South Dakota to Steele
economic stimulus to the United States, according to a City, Nebraska.
January 2012 press release from TransCanada. Also proposed is a 47 mile pipeline to transport
However, the September 2011 report Pipe Dreams? crude from Liberty County, Texas to Houston, Texas.
by Cornell Universities Global Labor Institute believes Altogether, Phases 1 through 4 create a direct route
many of the jobs created by Keystone XL would be for crude to flow from Hardesty, Alberta, through
fleeting, ending upon completion, and its construction America, to the Gulf of Mexico.

Convincing arguments
can be made on both sides
of the Keystone XL debate,
which is why its future is still
undecided.
The already-operating
Keystone Pipeline has
delivered over 160 million
barrels of oil to the U.S.
Midwest since the summer of
2010 and created 9,000 jobs,
according to TransCanada.
The already-
operating Keystone
Pipeline has
delivered over 160
million barrels of
oil to the U.S.
TransCanada also stated the Keystone XL expansion The company also claims the expansion would
would create thousands of new American jobs. This provide $20 billion in private-sector economic stimulus
would include 13,000 new jobs in construction: as well as $5 billion in property taxes to the communities
pipefitters, welders, electricians, foremen and others. the pipeline passes through. These tax dollars could
There would also be 7,000 jobs created for the be spent to rebuild roads, hospitals, schools and other
manufacturing sector: building the pipe, as well as infrastructure.
engines and transformers. It is worth noting that these figures, though not false,
are speculative.
In a January press release, TransCanada summed
up the energy crisis in America: The fundamental
issue here is that the U.S. imports 10 million barrels
Quality of oil each day, Russ Girling, TransCanadas president
and chief engineering officer said. So the question is
Oilfield Tank where will that oil come from? Will it come from U.S.
and Canadian sources or will it continue to be higher
Fittings prices conflict oil from the Middle East and Venezuela
regions that do not share American values.
With a Government clamoring for shovel-ready jobs
and an unemployment rate around 9 percent, the
project makes sense. We would be hard-pressed to find
such a massive privately-funded project that brings
together numerous industries: transportation, oil and
gas, construction, manufacturing, as well as federal
Air Grip Union
Inflatable Tube
and state governments.
O-Ring
Mud Tank Union The fundamental issue here is that
the U.S. imports 10 million barrels of
oil each day. So the question is where
will that oil come from?
For all of the potential benefits Keystone XL offers,
it is important to look at how the pipeline could
Frac Tank Fittings hurt America.
The completion of Keystone XL represents a delivery
system for a carbon bomb, Uehlein said. If this bitumen
1312 West 2nd Street Odessa, TX 79763
(a dense and extremely viscous form of petroleum) they
1-432-333-4652 1-800-444-9504 are going to deliver is burned, it is pretty much game
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over for the planet.
Uehlein also noted the proposed plans would pose
www.bulldogspecialties.com threats to the Boreal Forest and Ogallala Aquifer.

All pipelines spill, Proposed Route of Keystone XL Pipeline On December 22,
Uehlein said. That is what 2011, The House of
they do. Every pipeline has Representatives passed
at one time leakedWe a payroll tax extension
all know job creation is including a provision that
important. Lets take the President Obama make
pipefitters and welders his decision on Keystone
that would have built the XL by February 21, 2012,
pipeline, and give them according to nrdc.org.
equal paying jobs updating Earlier in November,
Americas water network. Obama had announced his
TransCanada has a less decision to put off making
than sterling reputation a decision on the pipeline
when it comes to spills in until 2013.
their pipelines. The report President Obamas
Pipe Dreams? noted the choice not to provide a
Keystone Pipeline had 14 Presidential Permit to the
different spills in its first Keystone XL expansion
year of operation. This was self-admittedly a
was after TransCanada political decision.
assured landowners and This announcement
government officials they is not a judgment on the
only expected one spill merits of the pipeline, but
every 20 years. the arbitrary nature of a
The report also states deadline that prevented
Keystone XL will increase the State Department from
the price of heavy crude in gathering the information
the Midwest states by up necessary to approve the
to $4 billion per year. This project and protect the
could increase gas prices in American people, Obama
these states by 10 to 20 cents per gallon. It will do this said in a statement. Im disappointed that Republicans
by diverting oil in Midwest refineries to the Gulf Coast, in Congress forced this decision.
so it can be sold at higher prices in the export market. This could very well be the most exhaustive review
process for a crude oil pipeline in U.S.
This could very well be the most exhaustive review history. Since 2008 there have been over
process for a crude oil pipeline in U.S. history. 100 open houses held in six states. The
Department of State has created a draft,
What should be a debate of pros and cons concerning supplemental draft, and a Final Environmental Impact
the Keystone XL has become a massive, cumbersome, Statement. Fourteen different routes have been studied.
diluted political battle. Over 300,000 comments on the pipeline have been
For example, the Department of States environmental taken. Thousands of manhours have been expended
review of the Keystone XL, the Final Environmental and the future of Keystone XL is still up in the air.
Impact Statement (FEIS), concluded that there were TransCanada will reapply for approval and this
no significant impacts to resources along the proposed process will start over.
Keystone XL route. The route studied and approved by Speculation and opinion has bogged down the
the review was contested and rejected by the Nebraska pipelines approval process since 2008. Still, the facts
legislature. This action may be unconstitutional as remain it would create jobs in America, comes at
the pipeline crosses state and national borders, thus zero cost to the taxpayer and brings in tax dollars that
putting it under federal jurisdiction. do not come from American wallets.
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Natural
Gas
Electric
Plants
ByANDY MASLOWSKI
_____________________
Contributing Writer
Operated by AEP, the Darby

Generating Station near
Mt. Sterling, Ohio is a natural
gas, simple-cycle power plant
with a nominal generating
capacity of 480 megawatts
Andy Maslowski Photo
N
atural gas doesnt toot its
own horn enough. How
can it? Its an inanimate The greater use of natural gas will bring about
substance! a cleaner environment, more jobs, a stronger
But people who work with the gas
know of its versatility and power.
economy and energy security, all hinging upon
Everyone should know about it. reasonable access and prudent development.
All said and done, over 310 million
Americans use about 22 trillion energy for everything from mining in a press release that the natural
cubic feet of natural gas (Tcfg) a minerals to processing food. gas industry can competitively
year for a variety of purposes. More Another 14 percent is used in the meet a near-doubling of demand for
and more, this includes natural gas commercial market for heating and natural gas, which could happen
to generate electricity at thousands cooling office buildings, hospitals by 2035. This includes increased
of plants across the USA. and schools, and for cooking in demand for electricity power.
restaurants. Most of the remaining The interaction between the
Gas fired amount, about 22 percent, is used natural gas and electric markets
More than 7 Tcfg is now delivered in the residential market, providing should be harmonized, and we
to the U.S. market to generate electric energy for home heating, hot water, are looking forward to the FERCs
power. This is approaching one-third cooking, clothes drying and air leadership in navigating the industry
of the total domestic supply! conditioning. A smaller amount, through this challenging yet critical
Theres more. According to the less than 1 percent, is used for policy area, Horvath explained.
Natural Gas Supply Association vehicle fuel, compressed natural The greater use of natural gas will
(NGSA), a trade association gas (CNG). bring about a cleaner environment,
headquartered in Washington, Many people and companies want more jobs, a stronger economy and
D.C., approximately 30 percent of natural gas. Theyll want even more energy security, all hinging upon
the American gas mix is used for in the future. Last September, R. reasonable access and prudent
industrial purposes providing Skip Horvath, NGSA president, said development.

Among other things, the Federal
Energy Regulatory Commission
(FERC) regulates the interstate
transmission and wholesale sales
of natural gas and electricity. It
also oversees new natural gas and
electric projects. So there very well
could be a need for harmonized
markets where these two power
makers interact.
The NGSA explains that both gas
turbines and combustion engines
are used to generate electricity.
In these types of units, instead of
heating steam to turn a turbine,
hot gases from burning fossil
fuels (particularly natural gas)
are used to turn the turbine and
generate electricity. Gas turbine
and combustion engine plants
have been traditionally used for
peak-load demands, because it is
possible to quickly turn them on
and off. However, these plants Many of the new natural gas fired power plants are known as
have increased in popularity due "combined-cycle" units. In these types of generating facilities,
to advances in technology and the there is both a gas turbine and a steam unit, all in one.
availability of affordable natural
gas. Hence, a number of them
run 24/7, providing the juice many electricity. Because of this efficient relied mostly on nuclear energy
states need. use of the heat energy released from (8 states: Connecticut, Illinois,
the natural gas, combined-cycle New Hampshire, New Jersey, New
The interaction plants are much more efficient than York, South Carolina, Vermont and
steam units or gas turbines alone. Virginia), hydroelectric (4 states:
between the natural In fact, combined-cycle plants can Idaho, Oregon, South Dakota
gas and electric achieve thermal efficiencies of up and Washington) and petroleum
to 50 to 60 percent. (Hawaii). Approaching the 1 trillion
markets should be Established in 1965, NGSA kilowatthours (kWh) level in recent
harmonized, and we encourages the use of natural gas years, natural gas generated
within a balanced national energy electricity now represents about 24
are looking forward to policy, and promotes the benefits percent of Americas total domestic
the FERCs leadership of competitive markets to ensure supply.
in navigating the reliable and efficient transportation In 1989, about 20 some years
and delivery of natural gas U.S. ago, natural gas generated about
industry through this customers. NGSAs members 352 billion kWh of electric power
challenging yet critical produce approximately one-third in the USA. That was about 12
of the American natural gas supply. percent of the electric power at that
policy area. time, according to EIA statistics.
Gas states
Some of the new natural gas At least 11 states derive the In terms of pure power,
fired power plants are known as majority of their own electricity via natural gas derived
'combined-cycle' units. In these natural gas. This includes some of
types of generating facilities, there the biggest and the best petroleum electricity has hit a
is both a gas turbine and a steam producers like Alaska, California, home run for our nation!
unit, all in one. The gas turbine Louisiana, Oklahoma and Texas.
operates in much the same way Six others do it too: Florida, Maine, So on a percentage basis, gas-
as a normal gas turbine, using the Massachusetts, Mississippi, Nevada fired electricity has doubled. In
hot gases released from burning and Rhode Island. terms of pure power, natural gas
natural gas to turn a turbine and The U.S. Energy Information derived electricity has hit a home
generate electricity. In combined- Administration (EIA) also reported run for our nation! Wind and solar
cycle plants, the waste heat from that in 2009 coal was still the energy are more like single and
the gas-turbine process is directed most widely used electricity double hitters (see Well Servicing,
toward generating steam, which is source nationally and in 26 November/December 2011, Natural
then used to generate even more individual states. The remainder Gas and the Real Smart Grid).

In 2010 there were 5,529 large
natural gas generators in the USA
with a combined nameplate capacity
of about 467,214 megawatts (MW),
the EIA said. This included some
cogeneration and other units run by
factories or manufacturing plants
for which waste heat is the primary
energy source. That calculates out
to an average capacity of about
84 megawatts per generator.
However, there are also thousands
of smaller, individual generators
serving American households and
commercial establishments as
backup or standby units, capable
of producing from less than 1,000
watts to about 10 megawatts.
These can be rigged to fire up
automatically during a power
outage, for safety and security,
to keep a furnace, sump pump or
computer system working.
Each state has some version
of a public utility commission,
overseeing about 140 different
electric companies in the USA. New technology has allowed natural gas to play an increasingly important
Admittedly, these commissions role in the clean generation of electricity.
have their hands full, trying to
balance service and reliability with
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during the past couple of years, and
more are scheduled to shutdown, in
part to satisfy new environmental
regulations.
For example, at the end of January
[2012] FirstEnergy Corporation
announced it was retiring six coal-
fired plants with a total capacity
of 2,689 MW in Maryland, Ohio
and Pennsylvania. The decision to
close the plants is based on the U.S.
Environmental Protection Agency
Mercury and Air Toxics Standards
(MATS) and other regulations.
More than 500 workers will be
directly affected, although they may
be open for other considerations
Natural gas is easier to transport and burn in the company, explained James
Lash, president, FirstEnergy
than coal, creates less dangerous waste than Generation and chief nuclear officer.
nuclear energy, and is even more popular than its The decision is not in any way a
reflection of the fine work done by
hydrocarbon cohort, crude oil. these employees. But we recently
completed a comprehensive review
costs. Advocacy groups dig their oil. It is also more reliable than of our coal-fired generating plants
heels in at different points of the intermittent wind and solar energy. and determined that additional
regulatory process, trying to secure People just dont complain as much investments to implement MATS
whatever they can. Some even about natural gas prices as they do and other environmental rules
want utility service to be free, about other items such as gasoline. would make these older plants
making it more of a charity than a This is especially true during the even less likely to be dispatched
business. As a result, many deals past couple of years since natural under market rules.
are being made across the country gas prices have been so low, even On average, these six plants
between public utilities, regional dipping below the $3/million Btu generated approximately 10 percent
transmission organizations (RTOs) mark on wholesale and futures of the electricity produced by the
and public utility commissions markets earlier this year. company during the past three
regarding what rates they can charge Along with the weather, the
certain customers residential, economy, storage and production, People just dont
commercial and large industrial. natural gas for electricity has to be
Rates matter. As electricity one of the five main components
complain as much about
costs escalate in most regions, of the supply-demand paradigm. natural gas prices as
it is and will be a major factor in In recent years, winter weather they do about other
calculating the bottom line for has been generally milder in
many businesses. If you were a most areas of the country so gas items such as gasoline.
big user of electric power, would storage levels are above their
you rather locate your company 5-year averages. Many believe the years. After the coal-fired plants
in a state where the utilities charge economy is strengthening, but are retired from FirstEnergys
10 cents/kWh or 15 cents/kWh for industrial demand for natural gas generating fleet, the company
their biggest consumers? is just inching up over its recession plans to replace the power with
levels of 2008-2009. Successful resources that are non-or-low
Friendly gas exploration and production, such emitting, including nuclear, hydro,
Without a doubt, natural gas is as the horizontal shale experience pumped-storage, natural gas and
the most popular fossil fuel. Even sweeping across the oilpatch, have scrubbed coal units.
some environmentalists (not all of added gas reserves and supply, so Meanwhile, gaseous hydrocarbons
them) back its increased use as much that some E&P companies are from Mother Earth, collected from
a so-called bridge fuel, linking cutting back on their exploration wells drilled and maintained by
the nation as it moves away from budgets. energy service contractors will
fossil fuels toward renewable energy That leaves electricity production. continue to provide a reliable
sources like wind and solar. Encouraged by new emissions supply of natural gas. Electricity
Natural gas is easier to transport standards, and low natural gas makers will remain in line to secure
and burn than coal, creates less prices, some utilities are switching their fair share too, helping to fire
dangerous waste than nuclear from coal and oil to natural gas to up portions of their electric grid in
energy, and is even more popular brew their electricity. Numerous many states.
than its hydrocarbon cohort, crude coal plants have already closed

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& Alonzo Aranda 6304 Lovington Hwy. (575) 433-7777 Phone
Hobbs, NM 88241 (575) 433-7780 Fax
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(575) 492-7777 Midland, TX 79707 (432) 563-2777 Fax

Superior Safety
SE New Mexico
Cavaloz Energy Inc.
Rental Tool Division

Fishing and Rental Tools
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Reverse Units Foam Units
Kristi Goodwin
President
James Chenault
Vice President
EUNICE 575-394-3155
CARLSBAD 575-234-9616
Cava Cavaloz
James Chenault
Vice President
Energy Inc.
Well Servicing Division
Completion / Workover
Kristi Goodwin
President
EUNICE 575-394-2518
HOBBS 575-392-4595
PO BOX 1500
HOBBS, NM 88241

AESC Members
California
10840 Norwalk Blvd

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Quick Look
BP settlement of $7.8 billion with Ohio Oil and Gas Association responds
businesses and individuals to Kasich administration tax-increase
BP has struck a $7.8 billion settlement with businesses and proposal
individuals over the Deepwater Horizon disaster. But the company Ohios oil and gas producers have serious concerns
has warned this may not pave the way for a deal with the U.S. and questions about the proposal put forth by the Kasich
Department of Justice. administration, which includes an increase of the severance
Brian Gilvary, BP's chief financial officer, said that the company tax. Crude oil and natural gas exploration in the state is still
was "prepared to settle with others on terms that are reasonable, in its infancy and increasing the severance tax at this critical
but equally we're prepared to go to court." juncture will negatively impact the economic future of Ohio and
The U.S. government has vowed to press ahead with its $18 its residents, said OOGA's Executive Vice President Thomas E.
billion legal action against BP. This is despite the settlement Stewart. "For this reason, we oppose a tax increase of any kind,
with the Plaintiffs' Steering Committee (PSC), which represents particularly one targeting an emerging industry."
110,000 property owners, fishermen, hoteliers, restaurateurs "Though we would generally support an income-tax decrease,
and others who were affected by the 2010 oil rig explosion and we do not support asking one industry to disproportionately fund
subsequent spill in the Gulf of Mexico. it. We also believe that Ohioans who have struggled during the
BP's general counsel, Rupert Bondy, said there was "nothing economic downturn would prefer to have a good-paying job now,
specific" in the agreement to take to the DOJ to support the instead of a small tax break years down the road."
company's view on who was to blame for the disaster, which Ohios current oil-and-gas tax structure, which was reformed
killed 11 workers and leaked 4.9 million barrels of oil. only two years ago with the bi-partisan passage of Senate Bill
165, is fair, competitive with neighboring states and attractive to
Sierra Club rejects $30 million donation investment, which may total more than $34 billion in the state
fromChesapeake throughout the next several years.
The Sierra Club, the nation's largest environmental group, is This investment, which is already reviving the economies of
rethinking early support of natural-gas development after activists communities throughout the state, will benefit all Ohioans through
and scientists linked the drilling to tainted water and increased air decreased energy prices, increased tax revenue of more than
emissions, Executive Director Michael Brune said in an interview. $1 billion at the state and local levels and tens of thousands of
The group turned down $30 million from Oklahoma City-based new jobs. For all this, the industry asks for nothing in return.
Chesapeake after he took over in 2010, he said.
Brune disclosed last month that the San Francisco-based Sierra Marcellus pipeline to be build
Club got $26 million from subsidiaries or individuals associated A six-mile pipeline for gathering natural gas extracted from
with Chesapeake Energy, the second-largest U.S. natural-gas Marcellus Shale is planned to span two Washington County,
producer. Brune said that in 2010, after he became executive Pennsylvania, townships and cross beneath local streams.
director, he halted the corporate gifts, meaning the group walked MarkWest Liberty Midstream and Resources LLC of Cecil plans
away from an additional $30 million from Chesapeake. The group to build the pipeline in Robinson and Mount Pleasant townships,
hasn't returned the donations, used to "kickstart" its Beyond according to MarkWest's engineering and consulting firm, Tetra
Coal campaign, he said. Tech Inc. of Green Tree. Plans include approximately 32,600 feet
Chesapeake also aided the American Lung Association. In its of 12-inch and 20-inch pipes within a 100-foot-wide right of way
2010 annual report, the group credited the Oklahoma City-based on multiple properties.
company, saying it "generously funded" the Fighting for Air
public-service campaign. The amount wasn't disclosed. U.S. passes Russia on dry gas production
Estimates of annual dry gas production from the Energy
Louisiana shale slump Information Administration indicate the U.S. passed Russia and
For the past four years, the Haynesville Shale has meant took the lead on dry natural gas production beginning in 2009.
prosperity for many residents of Desoto Parish. But a recent Dry natural gas is methane, which typically is used in home
decline in drilling activity may mean a significant decrease in heating or power generation. Conversely, wet gas is natural gas
revenue. that is heavy with other chemicals such as butane or ethane.
"The Haynesville Shale has been very good to Desoto "Dry natural gas production in the United States rose 18 percent
Parish in every way," says Walter Lee, Desoto Parish Schools between 2005 and 2010 mainly due to growth in shale gas
Superintendent. "It's the sales tax because of drilling activity production," the EIA reported in its "Today in Energy" website
that has really helped the school system." post. "Increased use of horizontal drilling in conjunction with
Helped it so much that Mansfield was able to build a new hydraulic fracturing spurred natural gas supply gains."
high school two years ago, as well as improve all other existing
educational facilities in the parish. But falling natural gas prices
have caused energy companies to decrease drilling, meaning a
drastic slump in revenue for the area.
Technology ByMARK CRAWFORD
in the Service Sector ____________________
Contributing Writer
Greener Hydraulic Fracturing Technology

Quieter, cleaner and more efficient
hydraulic fracturing solution
made from ingredients
sourced entirely from the
food industry, including acids
and enzymes. Halliburton
has also been successful in
eliminating biocide from its
solutions, a common chemical
additive that kills bacteria
to prevent pipe corrosion;
instead CleanSuite utilizes
ultraviolet light to disinfect
the water before it is pumped
into the well.
Chesapeake Energys Green
Frac program evaluates
all chemical additives in a
hydraulic fracturing solution
to determine environmental
friendliness before it is used
on a job. The most harmful
chemicals are removed and
GASFRAC Energy Services gelled LPG fracking equipment. alternative chemicals are
tested and substituted. This
process has allowed for
H
ydraulic fracking of shale basins to release elimination of about 25 percent of the least-friendly
oil and gas has incredible potential for additives from frac fluids.
boosting domestic production, reducing U.S. There is also a growing interest in totally eliminating
dependency on foreign oil, and keeping the economy chemical-laden water from the fracking process by
running until alternative energy can be produced at
large, sustainable scales. There is, however, resistance Producers and oilfield service
to this new method of stimulation and recovery because
of its potential negative impacts to the environment equipment manufacturers are
and water quality. Key concerns include: developing innovative new products
Contamination of groundwater
Excessive water consumption
and technologies that make fracking
Gas flaring safer for the environment, as well as
Fortunately producers and oilfield service equipment reducing operational costs by saving
manufacturers are developing innovative new products
and technologies that make fracking safer for the time, money, materials, fuel and labor.
environment, as well as reducing operational costs by
saving time, money, materials, fuel and labor. using gelled LPG instead to force open the oil-and gas-
bearing strata. Some major environmental benefits are
Cleaner water immediate, such as not depleting local water sources
The industry is working hard to develop downhole or dealing with contaminated wastewater. Eventually
products that are safer for the environment. For example, the propane returns to the surface as gas, where it is
Halliburtons proprietary CleanSuite technologies captured and mixed with the natural gas to be sold.
have greatly reduced the need for many drilling GASFRAC Energy Services Inc. of Calgary is a leader
chemicals and additives. A key part of CleanSuite is a in this technology.

Water conservation
One of the biggest criticisms of hydraulic
fracturing is that it consumes huge amounts
of water. Forward-thinking companies are
developing new systems for recycling this
precious resource, especially in drought-stricken
areas like the Southwest.
Chesapeake Energys Aqua Renew program
uses state-of-the-art technology to recycle
produced water in its Barnett Shale operations
in North-Central Texas and the Marcellus Shale
of northern Pennsylvania. This water is a by-
product of natural gas and oil extraction; its
typically high salt content makes it difficult to
recycle in completion operations. Chesapeakes
evaporative reduction and solidification system
(EVRAS) captures heat from the natural gas
compressor stations that is used to evaporate the MicroSeismic Inc. has installed its BuriedArray
water, releasing clean water vapor into the atmosphere. service for multiple clients in the Haynesville,
Halliburtons CleanWave technology relies on the Bakken and Marcellus shale plays
process of electrocoagulation to treat flowback and
produced water at rates as high as 26,000 bbl/day. An Gas flaring
electrical charge separates the suspended colloidal Gas flaring is a growing concern for shale field
matter, which either sinks to the bottom or floats to operators. Due to a lack of pipeline infrastructure,
the surface and is removed by a skimmer. The resulting excess CO2 is burned off, releasing large quantities of
clear water is suitable for drilling and production heat-trapping gases into the atmosphere. According to
operations. This procedure reduces transportation, a 2011 report by GE Energy, 150 billion cubic meters of
procurement and disposal costs, with up to 40 percent gas are flared each year, the equivalent of the emissions
of the treated water being reused again on-site. of 77 million cars and approximately 5 percent of the
Yet another way to conserve water is through worlds natural gas resources wasted.
improving the conductivity of the fracture channels.
MicroSeismic, a geophysical technology company in
Houston, has developed a method that provides real-
time monitoring and mapping of hydraulic fracture
operations. Its BuriedArray acquisition process places
a series of geophones below the surface to measure
the rock breaking during hydraulic fracturing. The data
is then modeled to increase production and recovery
without drilling unnecessary wells; the information
Chesapeake Energys Aqua Renew program uses

an evaporative reduction and solidification system
(EVRAS) to recycle produced water.
also helps avoid underground aquifers and other

environmentally sensitive areas. Pumping rates can be
maximized to reduce the amount and type of proppant
and fluids going down the hole.

Santa Barbara-based Carbon
Sciences Inc. has developed
a proprietary process that
uses excess CO2 and natural
gas as feedstock to produce
transportation fuels, eliminating
the need for wasteful flaring.
Although a shift to alternative energy
technologies will eventually take place, these
advances are still decades away from being
large scale and economic to operate.
While waiting for renewables to mature,
Clean turbine pumping technology has been achieved by we need an interim solution that bridges our
Green Field Energy Services, lowering emissions, reducing current and future fuel consumption needs, such
overall footprint, and providing multiple fuel options. as our GTL technology, which allows efficient
transformation of CO2 and methane (the primary
constituent of natural gas) into a synthesis gas that
Santa Barbara-based Carbon Sciences Inc. has can be processed into gasoline and other transportation
developed a proprietary process that uses excess CO2 fuels, Elton states.
and natural gas as feedstock to produce transportation
fuels (gasoline, diesel, and jet fuel), eliminating the
need for wasteful flaring. This unique, dry-reforming
methane conversion process produces CarbonCrude
a synthetic crude oil converted from CO2 that can be Combining Forces
mixed with traditional crude oil. The cost of producing
CarbonCrude is competitive with $80/barrel crude GASFRAC Energy Services Inc. in Calgary has signed an agreement
oil. The gas-to-liquid (GTL) technology is undergoing with Green Field Energy Services in Lafayette, Louisiana, to combine
rigorous commercial testing; it should also be a big their unique proprietary oil and gas production enhancement
benefit to operators in small- to mid-sized oilfields, technologies Green Fields turbine frac pumps (TFPs) and
where traditional natural-gas saving techniques have GASFRACs gelled LPG technology to improve performance and
not been considered economically viable to pursue. reduce environmental impacts.
Once commercialized, the Carbon Sciences process GASFRAC currently delivers its proprietary liquefied petroleum
will enable the world to reduce its dependence on gas (LPG) stimulation services through conventional diesel-powered
petroleum by using natural gas to produce cleaner, pressure pumping units. Green Fields unique split shaft turbine-
greener liquid fuels. powered frac pump is capable of pumping multiple fuel sources,
President Obama has called for cutting consumption including natural gas. The TFP improves energy efficiency, delivers
of imported oil by one-third in a little more than a exceptional power density, reduces emissions and offers a smaller
decade through a renewed commitment to energy physical footprint.
conservation and the development of new sources Combining GASFRACs waterless fracturing technology along with
of clean, renewable energy, says Byron Elton, Green Field Energy Services clean turbine pumping technology will
president and CEO for Carbon Sciences. Even with provide one of the industrys most environmentally friendly hydraulic
the achievement of this aggressive goal, however, fracturing solutions, indicates Rick Fontova, president of Green
we will still be consuming seven million barrels of Field Energy Services.
imported oil a day.
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ELECTION 2012
As a special department in Well Servicing magazine, Election 2012 profiles both primary and general elections
as well as candidates positions on energy issues during the 2012 races. Compiled by Kristin Van Veen-Hincke of
Vikki Cooper &Associates.
Election-Mania Sweeping the Country
Y
ou would have to be living
in a hole not to have seen
coverage of the election
mania that is sweeping the country.
With partisan bickering at an all-
time high in Washington, this year
promises to be full of non-stop
accusations and finger pointing.
Both parties have revved up their
fundraising machines in an effort to
win as many seats as possible. The
Democratic Congressional Campaign
Committees (DCCC) Red to Blue
program, which began in 2004,
highlights top Democratic campaigns
across the country and offers them
financial, communications, grassroots
and strategic support. In January,
DCCC Chairman Congressman Steve
Twenty eight states conduct just
The Democrats need to win 25 Republican seats to ThisPrimary one Election on the same day.
election encompasses both the
retake control of the House of Representatives. Presidential Primary and the General
Primary. However, the other 22 states
Israel (NY) announced that 36 races have qualified to will conduct two primaries during 2012, a Presidential
be part of this program. The list includes 18 races the Primary and a General Primary. The following are
committee is backing regardless of whether there is a races to watch in general primaries occurring prior
primary and another 18 where the DCCC is waiting for to August 11.
one Democratic candidate to emerge. The Democrats
need to win 25 Republican seats to retake control of Arkansas: Primary Election May 22
the House of Representatives. The only Democratic member of the House delegation
The National Republican Congressional Committees Rep. Mike Ross has said he wont run for re-election
(NRCC) Patriot Program is focusing on the 87-member instead focusing his efforts on a run for governor in
freshman class. The Patriot Program, which started 2014. This announcement is especially troublesome
in 2009, requires members to agree to meet a series for Democrats given the fact that two Democratic
of campaign benchmarks to be eligible for financial Congressmen retired before the 2010 election and
backing. All Patriot Program members represent Republicans gained both of those seats. The field of
districts won by President Obama in the 2008 election. Republicans vying for this coveted seat is crowded
The NRCC also has its Young Guns program that with former Huckabee staffer and Miss Arkansas 1994
is dedicated to electing open seat and challenger Beth Anne Rankin and Army Veteran and attorney
candidates nationwide. Tom Cotton leading the fundraising race. Cotton has

already met the benchmarks necessary to be included in Iowa: General Primary Election June 5
the NRCCs Young Guns program, and Rankin is listed as In the redistricting that occurred after the most
an On the Radar candidate. Longtime state legislator recent census, Iowa lost a congressional seat. As a
Sen. Gene Jeffress is the Democrat front runner. result, Rep. Tom Latham (R-4), a NRCC Patriot, has
announced he is moving to the 3rd district currently
Kentucky: Primary Election May 22 represented by Rep. Leonard Boswell (D) to avoid
Democratic Congressman Ben Chandler will again running against Republican Rep. Steve King after their
be challenged by Lexington attorney Andy Barr for the territories were merged. Democrats have recruited
6th District seat. These two faced each other in 2010 former Iowa First Lady Christie Vilsack to challenge
in one of the closest races of that season even though King for the 4th district.
Chandler outraised Barr by more than a million dollars.
Montana: Primary Election June 5
California: Primary Election June 5 The battle between incumbent Sen. John Tester
Californias new congressional districts were drawn (D) and his challenger six-term Republican Rep.
last year by an independent commission creating Denny Rehberg (R) is too close to call with both sides
a unique set of contests not normally seen when throwing mud at every turn. At press time, Rehberg
politicians do the redistricting. Rep. Elton Galleghly has proposed to Tester that they agree not to accept
(R-24) announced his retirement after his home was campaign donations from sources outside of Montana,
drawn into fellow Republican Rep. Buck McKeons a proposition that could have a dramatic impact on
(R-25) district. Frontrunners in this race include the Tester campaign.
Republican state Sen. Tony Strickland and Ventura
County Supervisor Steve Bennett who is a Democrat. New Mexico: Primary Election June 5
After 35 years in Congress, Rep. Wally Herger (R-2) is With Sen. Jeff Bingaman (D) retiring, the field to
retiring. He has endorsed former state assemblyman replace him has filled up quickly. Top Democratic
and rice farmer Doug LaMalfa to replace him. Two candidates include two-term Congressman Martin
other Republicans and a Democrat have also announced Heinrich (D-01) and State Auditor Hector Balderas,
for this race. Redistricting has also changed the race a favorite with the states Latino population. On
for the newly re-drawn 48th district where Rep. Dana the Republican side, former Rep. Heather Wilson
Rohrabacher (R-46) has announced that he plans to is considered the front-runner ahead of current Lt.
run for the seat currently held by Rep. John Campbell
(R-48). The DCCC has targeted incumbent Rep. Brian
Bilbray (R-52) as part of their Red to Blue program.
Bilbray, who served in Congress from 1995 to 2001,
won a special election in 2006 to replace disgraced
Congressman Randy Duke Cunningham. Three
Californias new congressional

districts were drawn last year
by an independent commission
creating a unique set of contests
not normally seen when politicians
do the redistricting.
Democrats and two Republicans are vying for this seat.
Another incumbent seen as vulnerable to the Democrats
is Rep. Dan Lungren (R) who currently represents the
3rd district, but is running in the 7th against Democratic
challenger Ami Bera, a physician who most recently
served as Associate Dean of Admissions at the UC
Davis School of Medicine. With the DCCCs support,
Bera has been able to raise nearly $400,000 more than
Lungren. Likewise, the NRCCs Young Guns program has
listed Ricky Gill, former member of the California State
Board of Education, as a Contender candidate in his
race against incumbent Rep. Jerry McNerney (D) with
both candidates running neck and neck in fundraising
efforts. The Republicans have also targeted 12-term
Congresswoman Lois Capps (D-23) now running in
district 24 against former Lt. Gov. Abel Maldonado (R).

Gov. John Sanchez, and businessman Greg Sowards, includes Little Dixie saw the first Republican elected
although her reputation as a moderate might affect in 2006 to represent this area in the state legislature.
her in the primary. Top Republican candidates include state Rep. George
Faught and local businssman Markwayne Mullin while
Nevada: General Primary Election June 12 former Assistant U.S. Attorney and Rob Wallace and
Incumbent Senator Dean Heller (R) has only been in businessman Wayne Herriman are expected to challenge
office since May. Just as his third term in the House each other for the Democratic nomination. The states
was beginning, Heller was appointed to serve the filing deadline is not until April so the list of candidates
remaining months of disgraced Senator Jon Ensigns could increase dramatically.
term after he resigned amid a sex scandal. This
race could be a tough one for Heller. His opponent With Congressman Dan Boren (D)
Democratic Rep. Shelley Berkeley has solid backing in
her district which includes Las Vegas, home to nearly announcing his unexpected retirement,
70 percent of all Nevadans. Although popular in his Republicans are poised to take the
former Congressional district, Hellers base is located
in the northern, more rural part of the state.
only seat held by a Democrat in the
Oklahoma delegation.
North Dakota: General Primary Election June 12
With the retirement of Sen. Kent Conrad (D) after Utah: Primary Election June 26
20-plus years in the Senate, the race to replace him The state gained a seat in reapportionment which
has become one of the tightest of this election year. resulted in a change to the boundaries of the 2nd
Former state Attorney General Heidi Heitkamp (D) leads district currently represented by Rep. Jim Matheson
Rep. Rick Berg (R) in recent polling. With Heitkamps (D). Matheson has announced his plan to run in the
popularity with independent voters and Bergs low new 4th district. Even before the Blue Dog Democrat
approval rating, this race is anyones call. announced his intentions, the NRCC had targeted
him by running ads criticizing his voting record and
In North Dakota, with the retirement linking him to the Obama Administration. The six-term
incumbent is way ahead of his Republican challengers
of Sen. Kent Conrad (D) after 20- in fundraising which includes state Reps. Stephen
plus years in the Senate, the race to Sandstrom and Carol Wimmer.
replace him has become one of the Watch Well Servicing during 2012 for information on
upcoming elections. It is essential that you support the
tightest of this election year. industry. Let your voice be heard vote!
South Carolina: General Primary Election June 12

The 2010 census allotted for an additional
congressional district for South Carolina. The list of
candidates vying to represent this new district is long. States General Primary Dates
There are 14 Republicans and four Democrats running.
Front runners include former Lieutenant Governor
Andre Bauer (R); Ted Vick (D), the South Carolina April 24, 2012 Pennsylvania* July 31 Georgia
House of Representatives minority whip; attorney Jay May 8 Indiana* August 2 Tennessee
Jordan (R); and Tom Rice (R), chairman of the Horry North Carolina* August 7 Kansas
County Council. West Virginia* Michigan
May 15 Idaho Missouri
Nebraska* Washington
Colorado: General Primary Election June 26 Oregon* August 11 Hawaii
As part of its Red to Blue 2012 program, the DCCC has May 22 Arkansas* August 14 Connecticut
targeted incumbent Rep. Mike Coffman of Colorados Kentucky* Florida
6th Congressional District. State Rep. Joe Miklosi and June 5 California* Minnesota
Greenwood Village physician Perry Haney will face off Iowa August 21 Wyoming
in this Democratic primary ahead of Novembers battle Montana* August 28 Alaska
with Coffman. In the 3rd district race, the DCCC has New Jersey* Arizona
thrown its support behind Colorado House Minority New Mexico* Vermont
Leader Sal Pace who is challenging incumbent Rep. South Dakota* September 11 Delaware
June 12 Maine New Hampshire
Scott Tipton, a Republican who was elected to Congress
Nevada New York
in 2010. Both Tipton and Coffman are part of the NRCCs North Dakota Rhode Island
Patriot Program. South Carolina September 16 Massachusetts
June 26 Colorado
Oklahoma: General Primary Election June 26 Oklahoma * One primary only
With Congressman Dan Boren (D) announcing his Utah*
unexpected retirement, Republicans are poised to take
the only seat held by a Democrat in the Oklahoma
delegation. This historically blue part of the state which

Choose the Right Partnership
Partner with leaders who
will listen to your needs

will take action

will represent our industry
VOTE 2012
Your Well Servicing Partner!

Vermejo Energy Services Perryton, Texas 79070 806.434.2498
www.vermejoenergyservices.com
Regional Roundup ByANDY MASLOWSKI
_____________________
Contributing Writer
Malaysia The former British

colony is another
target zone for oil
and gas in Asia
The twin Petronas Towers reach

more than 1,400 feet above the
cityscape in the capital city of
Kuala Lumpur.
Background
For centuries sailors have followed trade
routes through the Strait of Malacca and
the South China Sea that intersect at the
Malay Peninsula, the southernmost point
of the Asian continent. Europeans began
to arrive about 500 years ago and British
colonies were established in the region
during the mid-19th century. These were
later occupied by the Japanese during
World War II.
After the war, the independent federation
of Malaysia was created in 1957, consisting
of the British-ruled territories on the Malay
Peninsula, Singapore and the East Malaysian
L
ast year, the United Nations announced the states of Sabah and
worlds population surpassed 7 billion. More Historically, Sarawak on the northern
than 40 percent of the planets human residents Malaysias most coast of Borneo. In
live in Asia, including the only two members of the
Billion People Club China and India. important natural 1965, Malaysia took its
current shape as a nation
All these people require abundant supplies of resources are tin after Singapore seceded
food and shelter. Many of them also need more
refined oil and natural gas products. To meet this
and rubber. from the federation,
mainly to appease the
demand, many companies are turning to Southeast Asia majority of Chinese living there. Now about half
with its proven petroleum pedigree. Among them is of the people in Malaysia are Malay in ethnicity,
Petronas, the national oil and gas company of Malaysia. while a quarter are mainly Chinese. The remainder
Headquartered in the capital, Kuala Lumpur, the firm claim Indian, indigenous or other ancestries.
is fully integrated and active in E&P work at home Likewise, about 60 percent of Malaysians are
and abroad. It is also an important manufacturer of Muslim, 20 percent are Buddhists, 9 percent
petrochemicals and liquefied natural gas (LNG) which are Christian and 6 percent are Hindu in their
it exports to other nations, principally in Asia. religious affiliations.

Historically, Malaysias most important
natural resources are tin and rubber.
Rubber production really kicked in during
the early 20th century with the start of the
automobile age. Motor vehicles needed
rubber tires something to kick when
buying a new car!
Oil and gas exploration soon followed in
the states of Sarawak, Sumatra, Sabah and
Terengganu. Esso Exploration Inc. was
awarded exploration concessions during
the 1960s and discovered oil offshore
Sabah in 1971 and offshore Terengganu in
1973. Since then, offshore activity in the
South China Sea has led the way.
During the 22-year term of Prime Minster
Mahathir bin Mohamad (1981-2003), Malaysia is defined by the lightest tan areas of the map.
Malaysia was successful in diversifying
its economy from dependence on exports
of raw materials to expansion in manufacturing, services 5.92 billion cubic feet per day (Bcfg/d). This was up
and tourism. The 2011 CIA World Factbook also reported about 1 percent from the previous year (fiscal year 2010,
that the current Prime Minister Mohamad Najib bin which ended March 31, 2010), estimated at 5.84 Bcfg/d.
Abdul Razak (in office since April 2009) has continued The Bintulu LNG complex in Sarawak is the main hub
these pro-business policies. for the countrys natural gas business, processing gas
from offshore fields.
Malaysia produced an average of During the last fiscal year, approximately half of
627,000 barrels of crude oil and Malaysias natural gas was converted to about 24.3
million tonnes of LNG and exported mainly to term
condensate a day, of which about customers in Japan (60 percent of total LNG sales),
512,000 barrels was crude oil.
Malaysias oil production comes 14th Annual Prayer Breakfast
from the Tapis Field in the offshore Oilfield Christian Fellowship
Malay Basin. Tuesday, May 1st, 2012
Crowne Plaza Hotel (Kirby & 610) Houston
Today, exports drive the Malaysian economy, Doors open at 6:30 am Breakfast at 7:00 am
particularly of electronics, oil and gas, palm oil and Guest Speaker
rubber. The World Factbook described it like this: As Terry
an oil and gas exporter, Malaysia has profited from Looper
higher world energy prices, although the rising cost Texon
President/CEO
of domestic gasoline and diesel fuel, combined with
strained government finances, has forced Kuala Lumpur Entertainer
to begin to reduce government subsidies. Gordon
Mote
Singer and Pianist
Petronas for Bill Gaither
Petronas (officially known as Petroliam Nasional
Berhad Berhad is a Malay term for private) was TickeTs
incorporated in August 1974. From the famous, twin
Petronas Towers that stretch more than 1,400 feet Individual Tickets $40
into the sky in Kuala Lumpur, the company oversees Table Sponsor $400 (table of 8)
Malaysias extensive oil and gas industry. About the Underwriter Table $1,000 (table of 8)
same size as New Mexico, the nation of some 28 million Platinum Underwriter $3,000 (table of 16)
people receives about 40 percent of its revenue from Title Underwriter $10,000 (table of 16) In all
petroleum-related businesses. Pay by check: Mr. Gayle Stimson your ways
20714 Auburn Pine Ct.,
According to the Petronas 2011 annual report,
Malaysia produced an average of 627,000 barrels of Kingwood, TX 77346 acknowledge
crude oil and condensate a day, of which about 512,000 Pay online: Him, and He
www.OilfieldChristianFellowship.com
barrels was crude oil. This was about 5 percent lower
For more info, call 713-899-1675 will make your
than the previous years 657,000 barrels/day average.
More than half of Malaysias oil production comes from
All proceeds from this event benefit the
OCF Bible and other
paths straight.
the Tapis Field in the offshore Malay Basin. ministries. Non-profit 501(c)(3) Proverbs 3:6
Natural gas production was even better, averaging

South Korea (18 percent), Taiwan (13 percent) and Petronas has also signed on as a participant in
China (5 percent). No wonder Japanese investment has business enterprises overseas, including the Gladstone
been so critical for the establishment of the nations coalbed methane to LNG venture in Australia and the
LNG facilities. Malaysia is now the worlds third leading Carabobo 1 Project in Venezuelas Orinoco region.
exporter of LNG, behind Qatar and Indonesia. Some Malaysian oil ends up in the USA, but not that
Production was sustained by the addition of one much by American import standards. The U.S. Energy
new gas field (Serampang) and two new oil fields (West Information Administration (EIA) estimated the USA
Belumut and D30). This increased the total number of imported only about 2.7 million BO from Malaysia in
producing fields in Malaysia to 117, comprising 73 oil 2010; and about 3.6 million BO in 2009.
fields and 44 gas fields.
In discharging its responsibilities as a custodian South China Sea
to the people and nation, the Petronas group of Rich oil and gas deposits in the South China Sea have
companies deliver a solid financial and operational been developed for years. So naturally the countries
performance that reflects the enduring strength of that border the sea Malaysia, Vietnam, China, the
its proven strategy of integration, adding value and Philippines, Indonesia and Brunei are all interested in
any new potential reserves that may be at stake there.
This issue has come to the forefront during the past
decade involving conflicting claims for the Spratly
Islands and other atolls in the South China Sea. These
claims are not just about new petroleum deposits but
also sovereignty and fishing rights.
In 2002, Malaysia was a signatory to the Declaration
on the Conduct on Parties in the South China Sea
agreement that eased tensions for a while. However,
Malaysia was not a party to a 2005 accord between
China, Vietnam and the Philippines on conducting
marine seismic operations in the sea near the Spratly
Islands.
Tensions have heated up on occasion, complete
with saber rattling. Last year, Chinese patrol boats
threatened to ram a Philippine-contracted seismic
survey ship that was working near the islands. One
Chinese newspaper warned that nations involved in
the territorial dispute should mentally prepare for
the sounds of cannons if they remain at odds with
The Bintulu LNG complex in Sarawak the Beijing government. Luckily cooler heads have
prevailed as diplomatic discussions continue.
is the main hub for the countrys In theory, a land rig could be placed on one of the
natural gas business, processing gas islands or larger coral reefs in the South China Sea.
But the logistics in doing so would be challenging. A
from offshore fields. trailblazing operator would have to transport equipment
hundreds of miles to a tropical site, most likely
globalisation, explained Dato Shamsul Azhar Abbas, negotiating shallow waters where land approaches. On
Petronas president and CEO. During the past year, the positive side, Malaysia and neighboring countries
world oil and gas demand staged an exceptionally are located near the equator, so cold weather or ice
vigorous rebound as momentum in the global economic would not be an issue during operations.
recovery, led primarily by the emerging countries, The Spratly Island question is one of several where
continued to strengthen. sovereignty and natural resource development collide.
Among a number of operational highlights, the Others that come to mind include conflicts between
Petronas president said new projects, domestic and China and Japan in the East China Sea, between Great
international, have begun. These involve the revitalizing Britain and Argentina near the Falkland Islands and
and development of new LNG, refining and pipelining Russia and other countries in the Arctic Ocean.
infrastructure in Malaysia as well as a second look at There is no known method to solve these issues,
small and marginal fields in the country. especially in international waters, but there are shared
Petronas owns and operates four refineries with a interests for the parties involved, especially where there
total capacity of about 500,000 BOPD. Sales of crude are oil and natural gas reserves. One day these issues
oil and petroleum products, including petrochemicals, will have to be resolved in order to collect hydrocarbon
are responsible for about two-thirds of the companys deposits located in more remote prospects around
revenues. LNG sales, valued at about $15.1 billion the world.
last fiscal year (or RM45.3 billion. In February, 1 US Meanwhile, exploration in Malaysia will continue in
dollar converted to about 3 Ringgit Malaysian = RM, the South China Sea. Many of the residents of Asia
the official currency) amounted to about 19 percent need the reliable supply of petroleum that Malaysia
of Petronas sales. can deliver and will be counting on it in future years.

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Gen Ys
impact in the workplace
By AMY CHULIK
CareerBuilder Writer
Copyright 2011, CareerBuilder, LLC Do not doubt that this generation will change the
___________________________
Reprinted with permission
face of the American workplace as their parents
did. Aaron Kesher
W
hat words come to
mind when I say time we as a collective workplace that throughout Gen Ys public
Gen Y? Aaron learn more about Gen Y so that we education, the majority of the work
Kesher asked the many attendees at can understand them, appreciate was done in groups, and that their
2011s Society for Human Resources their unique strengths, and more role wasnt usually as the leader
Management conference who were successfully integrate them with of a group instead, many were
packed into the room. Entitled! other generations in the workplace. equal team members. Therefore,
shouted one person. Job hoppers, many Gen Y members function
chimed in another. Soon, many in What is work from a Gen Y fairly well as a group and as team
the room (many of them non-Gen perspective? players, but some struggle in
Yers, with some Gen Y members Work ethic: Job loyalty, for a standing out as individual, assertive
sprinkled in) were shouting things long time, was shown by how long leaders.
like smart, rsum builders, you stuck around and paid your Money: Employers, listen up: Gen
technically savvy, stereotype, dues and older generations still Y is talking to each other about the
comfortable with change, and think in line with this. Gen Y, on the money they are (or arent) making
creative. other hand, says, I show you love at your organization. They are
Obviously, we all have specific by how hard I work, not how long comparing how competitive your
words and phrases and ideas that I stick around. salary is with your competitors
match how we perceive Gen Y to and theyre not afraid to share their
think and behave in the workplace. Its not so much that findings. One audience member
Gen Y, made up of those born mentioned recently hearing Gen
between 1980 and 2000, have their Gen Yers are tech savvy, Yers discussing openly the job
own notions of themselves, too. In Kesher pointed out offers and bonuses they were
Aaron Keshers, Why Y? Plugging getting and she was shocked.
Into a Generational Powerhouse theyre tech dependent. After all, discussing how much
session, Kesher encouraged all of us money you make is one of the last
in the room to rethink our notions Tech savvy: Its not so much great American taboos yet Gen
of what we think Gen Y is all about, that Gen Yers are tech savvy, Y seems more comfortable with
to consider the strengths they Kesher pointed out theyre discussing this sort of information.
bring to todays dynamic workplace tech dependent. Theyre the
and to use this knowledge and generation thats come of age with I show you love by how
understanding to more successfully the explosion of technology, so
recruit and retain Gen Y workers. its natural that they would be hard I work, not how
Do not doubt that this generation comfortable with it. long I stick around.
will change the face of the American Communication and teamwork:
workplace as their parents did, Gen Y is not necessarily entitled;
Kesher said. In the next five to they just feel comfortable asking Recognition: Gen Y is a
10 years, the number of Gen Yers for what they want. When it comes generation of the there are no
in the workforce will increase to communication, you can often losers everyones a winner
dramatically. count on Gen Yers to spread mentality. But they didnt make
As the number of Gen Y workers out the message fast and often. that up (boomer parents), Kesher
is only getting larger, its about We need to realize, Kesher said, pointed out, to a round of laughter.

Work versus life: I love my job,
but I love my life more thats
something you may hear a lot of
Gen Yers say. One of the critical
issues that will need to be ironed
out at work in the future, Kesher
said, will revolve around workplace
flexibility. Were increasingly seeing
workplace flexibility issues evolving
in the workplace, and Gen Y workers
in particular (though theyre not
alone) want to know how they can
maintain their relationship with
work while still having the flexibility
to live the life they envision. As
mentioned above, Gen Y has no
problem with work or with the idea
of working hard its just that
their job will never be the whole
of their identity. They were raised
with the imperative to follow your
dreams! and their job and life may
intersect in new ways than weve
seen in past generations. Gen Y,
Gen Y is talking to each other about the money Kesher stressed, doesnt want a job
they are (or arent) making at your organization. they want a life that hopefully
includes a job.
They are comparing how competitive your salary Being green: This is the
is with your competitors and theyre not afraid generation thats leading the green
movement so give them the
to share their findings. power to build, make changes,
and become leaders in your
Gen Yers dont care how it gets they will think youre not living up organizations (existing or non-
done they just want to get it to your diversity message. This existing) green movement.
done. And they want to be told generation has grown up with a
they did a good job once they do greater awareness of and comfort Why worry about Gen Y?
it; recognition is very important. with diversity of all kinds. From Ensuring that the different
Diversity: Why do only white home lives, to school experiences, generations working together under
people work here? might be to messages absorbed from pop one roof actually work well together
something a Gen Y worker thinks culture, they often dont see what is a big concern for many employers.
while viewing a company site or all the fuss is. This can manifest After all, if knowledge isnt able to be
sitting in the lobby while waiting as difficulty in understanding why sufficiently shared from generation
to be interviewed and noticing the others struggle with issues around to generation, older generations will
lack of diverse employees. Gen Y differences. A question of whether eventually retire taking with them
doesnt embrace diversity they gay marriage should be legalized, decades of experience. In addition,
expect it and if your company for example, is a non-issue for workers who work well together are
says you believe in diversity, but many Gen Y individuals and this likely to be happier, more productive
then a Gen Y worker shows up shift ties into a larger cultural shift and better brand ambassadors
and all workers look the same in general. for companies.

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Political
Focus
Political Focus addresses legislative and regulatory issues, as well as lobbying efforts of the AESC.
The information is compiled and reported by Kristin Van Veen-Hincke of Vikki Cooper & Associates.
The Dunes Sagebrush Lizard... again
A
fter months of study and survey in areas of to the proposed listing. A similar letter was sent to
West Texas and southeastern New Mexico, Secretary Salazar from Sen. John Cornyn (R-TX) as
opponents of the proposed endangered species well as Sen. James Inhofe (R-OK) whose home state of
listing of the Dunes Sagebrush Lizard have won a Oklahoma is facing a similar situation with the Lesser
small battle in their war with the U.S. Fish and Wildlife Prairie Chicken. Both New Mexico Senators Tom Udall
Service (FWS). and Jeff Bingaman sent a letter to Secretary Salazar
In the December 5, 2011 issue of the Federal Register, questioning the science available for this decision.
the Fish and Wildlife Service announced a six-month The House letter stated, as with all listings, the
extension of the final determination of whether to list crux of our concerns is the science underpinning
the dunes sagebrush lizard as endangered. Agency this decision; there simply is not enough available
officials have delayed the proposed listing due to information to credibly argue that the species is
concerns expressed by the public, landowners and declining. There are also important questions about
industries working in the affected areas that the the science on which FWS based this proposed listing.
agencys data on the lizard and its habitat was not Perhaps most obviously, a paper referenced in the
accurate. This announcement followed a bipartisan proposed listing contradicts the conclusions drawn
letter sent to Secretary of the Interior Ken Salazar by by FWS. The study, by Sias and Snell, shows that the
Rep. Steve Pearce (NM-2) and 17 other members of lizards population actually increased by a factor of 2.4
the U.S. House of Representatives voicing opposition in areas where oil and gas wells were present compared
to an increase by a factor of Agency officials have delayed the proposed listing due
1.6 in areas without wells.
Yet, FWS asserts that oil and to concerns expressed by the public, landowners and
gas wells are detrimental to industries working in the affected areas that the agencys
lizard populations.
data on the lizard and its habitat was not accurate.
More credible science
According to a press release from Rep. Pearces office, over 800,000 acres, Pearce said. These voluntary
the House letter which was sent November 28 called for conservation agreements have already produced
a six-month delay to allow for the gathering of more payments by these private sector entities in excess
credible science and to allow for current conservation of $2.5 million to protect the lizard. The process was
efforts to enroll additional participants and grow its working until the Washington office of FWS suddenly
private funding base. This press release mentions decided [in 2010] that the lizard should be listed. If the
conservation efforts currently underway in New Mexico lizard is listed, it will end locally managed cooperation
where FWS and the Bureau of Land Management have efforts for this species and others.
collaborated to develop a Candidate Conservation On December 14, 2010, the Fish and Wildlife Service
Agreement (CCA) and the Candidate Conservation published a rule to list the Dunes Sagebrush Lizard as
Agreement with Assurances (CCAA). endangered under the Endangered Species Act of 1973.
According to the FWS website, CCAs are voluntary A public comment period was opened at that time
conservation agreements between the [Fish and and two public meetings were held in April 2011. The
Wildlife] Service and one or more public or private comment period was reopened after these meetings
parties. The Service works with its partners to identify and closed again on May 9, 2011.
threats to candidate species, plan the measures needed According to the December 5 Federal Register, the FWS
to address the threats and conserve these species, decided to delay the listing by six months for several
identify willing landowners, develop agreements, and reasons. Since the publication of the proposed rules,
design and implement conservation measures and there has been substantial disagreement regarding
monitor their effectiveness. Likewise, the CCAAs the interpretation of the limited surveys used to
expand on the success of traditional CCAs by providing determine the dunes sagebrush lizards status and
non-federal landowners with additional incentives trends, the report stated. This has led to a significant
for engaging in voluntary proactive conservation disagreement regarding
through assurances that limit future conservation the current conservation The ranching
obligations. The CCAA program was developed to status of the species in community in New
address landowner concerns about conserving a New Mexico and Texas.
species that may become listed and then being faced In addition, there was Mexico signed
with potential increased regulatory implications of sparse information on the agreements with
having a listed species on their land. The CCAA Dunes Sagebrush Lizards
program specifically targets non-federal landowners presence in Texas, FWS to protect over
and provides them with the assurance that if they leading to substantial 1.5 million acres,
implement various conservation activities, they will disagreement on the
not be subject to additional restrictions if the species accuracy of our analysis and the oil and
becomes listed under the ESA. of the status of the lizard gas industry has
These agreements were enacted in New Mexico in Texas.
in December 2008 so landowners in that state were One of the surveys
similarly enrolled
especially surprised when in December of 2010, FWS noted by the FWS was over 800,000 acres.
proposed listing the lizard on the endangered list. conducted by Texas A&M
The ranching community in New Mexico signed University Professor and Curator Lee Fitzgerald. Dr.
agreements with FWS to protect over 1.5 million acres, Fitzgerald conducted a survey of 50 sites from June 8 to
and the oil and gas industry has similarly enrolled June 15, 2011. During this season of high lizard activity,
The Power of the

AESC Network
Join the network today
800-692-0771
713-781-0758
www.aesc.net

another 28 locations of lizard habitat were located Congressman Mike Conaway (TX-11)
in West Texas in the counties of Andrews, Ward and
Winkler. This study reaffirmed that the lizard prefers supported the request for a delay in
to live within shinnery dune blow outs in shinnery the decision by FWS. However, he
oak, eats a variety of insects, and its predators include
snakes and other mammals. Dr. Fitzgeralds study also cautions that the fight is not over.
noted that land practices have led to damage of the
lizards habitat in both New Mexico and Texas; however, Industry should heed Congressman Conaways advice
he stated in his research paper that we did not find and remain steadfast in the fight. Keep in mind, the
clear statistical evidence to support our hypotheses issue is not about saving the lizard, it is about attacking
that oil and gas development at our study sites had a the oil and gas industry.
direct negative effect on quantity of habitat, quality of Evidence that environmental groups will continue to
habitat, and populations of lizards. apply pressure to the Fish and Wildlife Service over the
As expected, environmental groups have voiced next six months is already apparent. The push began
displeasure with the six-month delay. Controversial in January when the Center for Biological Diversity in
non-profit WildEarth Guardians issued a press partnership with WildEarth Guardians issued a press
release criticizing the decision by FWS and attacking release touting a report by the Endangered Species
Congressman Pearce for spearheading efforts to stop Coalition called Fueling Extinction: How Dirty Energy
the listing of the dunes sagebrush lizard. Drives Wildlife to the Brink that lists the sagebrush
lizard as one of the 10 U.S. species most
We did not find clear statistical evidence threatened by fossil fuel development.
According to the release, the report
to support our hypotheses that oil and gas highlights the 10 most endangered animals,
development at our study sites had a direct plants, birds and fish at risk of extinction
negative effect on quantity of habitat, quality due to fossil fuel development, and shows
how wildlife suffers displacement, loss
of habitat, and populations of lizards. of habitat, and the threat of extinction
from the development, storage, and
Conservationists support using all the best available transportation of fossil fuels.
science to make species listing decisions, but we dont The fact that Dunes Sagebrush Lizard habitat spans
see the need to delay listing in this case, said Mark less than 2 percent of the Permian Basin hasnt stopped
Salvo of WildEarth Guardians. In the end, we expect oil-polluted politicians from claiming that protecting
the species to be listed. the lizard will destroy industry, said Taylor McKinnon
We hope the Fish and Wildlife Service wasnt with the Center for Biological Diversity. The lizard,
badgered into taking a delay by Representative Pearce not the oil and gas industry,
and the oil and gas industry, who have declared a jihad is at risk of extinction and As expected,
against a 3-inch lizard, Salvo said in a press release. industrys refusal to yield even
Congressman Mike Conaway (TX-11) supported the the last tiny slivers of habitat environmental
request for a delay in the decision by FWS. However, to prevent that extinction groups
he cautions that the fight is not over. underscores the need the
I am pleased that U.S. Fish and Wildlife Service federal protections. have voiced
decided to delay their final determination regarding Americas outsized reliance displeasure
the Dunes Sagebrush Lizard for another six months, on dirty and dangerous fuels
he said. However, it is imperative with this extension is making it much harder to
with the six-
that we do not sit on our heels. After almost a year protect our most vulnerable month delay.
of effort spent compiling overwhelming evidence to wildlife, said Mark Salvo of
prove the lizard is not endangered, we have just six WildEarth Guardians. We should not sacrifice our
more short months to convince the Service that listing irreplaceable natural heritage in order to make the
the lizard is not warranted. fossil fuels industry even wealthier.

Agenda-driven rhetoric meets
cold, hard reality
ITS TIME TO FILL UP ON TRUTH.
When politicians from both parties, big oil, and environmental groups
are offended by your message, you know youre close to the truth!
Newsman turned filmmaker, Mark Mathis, wants all of us to stop for a moment and question
what we thinkwe know about petroleum. Is oil destroying the environment? Are oil companies
gouging us at the pump while they rake in record profits? The answers to these questions will
surprise, shock, anger and even inspire you. Its time to fill up on truth.
spOILedthemovie.com
See it. Share it.

Association news
New member profiles
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Oh, clay pigeons...
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Oilfield Helping Hands

9th Annual
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Join Oilfield Helping Hands in support of this worthy cause. Funds raised from
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Industry Items
Lufkin Industries acquires Datac National Oilwell Varco completes McKissick Tubing Grab
Instrumentation and RealFlex flexible pipe acquisition McKissicks patent pending Tubing
Lufkin Industries, Inc. has completed National Oilwell Varco, Inc. has signed Grab is designed to provide a quick,
the acquisition of Datac Instrumentation a definitive agreement to acquire NKT easy and efficient attachment for the
Limited (Datac) and RealFlex Flexibles I/S (NKT) for approximately lifting of tubing to and from the rig
Technologies Limited (RealFlex) US $670 million or 3,800,000,000 Danish floor in well servicing
pursuant to an agreement of December Kroner in cash. NKT, a joint venture applications. Specifically,
6, 2011. Datac, based in Dublin, Ireland, between NKT Holding and Subsea 7 the McKissick Tubing
is a solutions company serving the S.A., is based in Denmark. The company Grab engages the tubing
oil and gas, power, water and waste designs and manufactures flexible pipe adjacent to the flared end
water, and transportation and marine products and systems for the offshore allowing the tubing to be
industries that provides systems oil and gas industry, including products moved from storage to
integration for supervisory control associated with Floating Production, the rig floor where the
and data acquisition "SCADA." RealFlex, Storage and Offloading vessels (FPSOs) elevators can then be utilized to upright
also based in Dublin, provides real-time and other offshore vessels, as well as the tubing vertically. With a 500 lbs.
server software packages for SCADA subsea production systems including working load limit, the McKissick
and process control applications. flow-lines and flexible risers. Tubing Grab will work with 23/8" or
"These two acquisitions are a Pete Miller, chairman, president and 27/8" tubing.
good cultural fit with Lufkin, and CEO of National Oilwell Varco, stated Individually proof tested to 125%
Ireland provides a business-friendly "The incorporation of NKTs highly working load limit, the McKissick
environment. We welcome Datac and technical design capability and business Tubing Grab is fitted with a 3/8" G-2130
RealFlex's talented employees to the into our Rig Technology group is an Crosby Shackle for attachment to the
Lufkin family," said John F. "Jay" Glick., exciting and strategic opportunity for air tugger line. A secondary lifting eye
Lufkin's president and CEO. NOV. The addition of NKTs technology is provided for the attachment of a tag
and expertise to our current suite of line. All sizes are RFID equipped.
Bishop Lifting Products, Inc. adds a products for the offshore production
new location in Oklahoma City market significantly increases our Postelwait retires from Crosby
Bishop Lifting Products, Inc. (BLP), footprint in this growing segment of The Crosby Group, a global leader
a fabricator and distributor of slings the oil and gas industry." in accessories for lifting and material
and rigging supplies, has opened a handling applications, has announced
new regional office in Oklahoma City, Mill Log Equipment hires Boyd that Larry Postelwait is retiring after
Oklahoma that will be the one-stop Mill Log Equipment announced the more than 40 years with the company.
source for servicing the oilfield rigging hiring of Bob Boyd as the territory He has led the organization for the
needs in the Mid-Continent region. manager for the Rocky Mountain past 25 years as its president and
Our Oklahoma City office will region. Boyd will operate out of a newly CEO, and in that time has established
provide rigging solutions and local established sales office in the region the company as the standard for
MaxiRider support to businesses and will be an extension of the Sales innovation, quality, and performance
in the region, says Jeff Bishop, Department operating out of Mill Logs across the many industries that it
president of Bishop Lifting Products. corporate headquarters in Coburg, serves. Jason Struthers has been
The new office enables BLP to host Oregon. Boyd will report directly to named as his replacement effective
key customers and prospects, as well Mill Log Equipment Director of Sales immediately.
as the ability to offer essential product & Marketing Don Lindsey.
and solution services, such as onsite One of our goals this year is to WCS Deepwater Well Control
product testing and training. increase the Twin Disc presence within Drilling Course
This is the third new branch for the Rocky Mountain region and I am Well Control School and AXON
Bishop Lifting Products in the past year. excited to be bringing such a highly Energy Products announce the newly
skilled outside sales person with a developed Deepwater Well Control
Parco acquires Double E tremendous amount of experience in Drilling Course which is IADC WellCAP
Parco acquired Double E on the oilfield as Bob, said Lindsey. Plus Accredited. This competency-
December 2, 2011.The combination of based training course will facilitate a
Parco and Double E creates one of North Cudd Energy appoints Burleson highly effective learning approach to
Americas largest companies supplying Larry Burleson has been appointed critical thinking along with improving
rubber seals and machined parts to the director of business development problem solving skills. A facilitator-
oilfield machinery industry.Double for Corporate Services. Burleson will led training delivery method will
E will continue to operate from its provide leadership in building a global enhance effective decision making skills
current facility in Dallas, Texas. All clientele for the companys integrated regarding well control in deepwater
Double E employees will remain active solutions. Burleson joins Cudd Energy drilling operations. Additionally,
in the business to ensure that Double E Services from Weir Seaboard, where AXON Energy Products will provide
customers continue to receive excellent he was VP of Sales. He has more a state-of-the-art Intellectus hiDRILL
service.Parco has a modern 154,000 than 36 years of experience within the integrated drilling simulator and drilling
square foot facility in Ontario, California petroleum industry, with extensive software technology, from its subsidiary
and 250 employees. knowledge of downhole tools, well Oiltec Solutions and affiliate eDrilling
control and turnkey drilling solutions. Solutions, which are utilized in this
course at WCSs Training Center.

Membership application
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Class I Associate: Class II Associate:
Members include companies serving or doing business in more than Members include companies whose business is confined to a single
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Producer members are business entities whose focus, products or services are connected with the energy industry. These companies are categorized
as Exploration and Production companies, Operating Companies, Refiners, Marketers and Royalty Owners.
Class I Producer: Class II Producer:
Members include companies serving or doing business in more than Members include companies whose business is confined to a single
one geographic (chapter) area. Dues: $800/year. geographic (chapter) area. Dues: $700/year.
Individual / Non-Profit / Educational / Trade Associations

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Industry Items
Tuppen joins Wild Well Control Renegade Services named as
Wild Well Control, a Superior Energy part of 100 Best Companies
Services company, announces that I n t o d a y s b u s i n e s s
James Tuppen has joined the company environment, it is a distinction
as manager, International Well Control to be named one of the 100
Operations. Best Companies to Work for in
Tuppen has more than 30 years of Texas. This program was
experience in the oil and gas industry designed to recognize the best
involving snubbing services, pressure employers in the state, the
control and well control operations. ones that make it a priority to
Based in Dubai, UAE, Tuppen will assist create better workplaces for
in maintaining Wild Well Controls their employees.
commitment to fully supporting Renegade Services is an
client needs globally in well control, employee owned oilfield
prevention and response services. service company which provides Receiving the 2012 Best Companies to Work for
cased hole and tagging services in Texas award in Austin for Renegade Services
NRG Manufacturing adds new facility to the oil and gas industry. are: (front row) Matt Gray, David Gray, (second
Positioning itself for continued Every employee is a shareholder row) Ken Nester, Steve Gray, Jim Blair, (top row)
growth, NRG Manufacturing has and has a vested interest in the Dwayne Hutchinson, Larry Cavanna, Gary Gunset.
acquired a new facility at 2200 Lauder success of the company. The
Road in north Houston that provides company is dedicated to creating a and Blackberry will soon be published.
100,000 square feet of crane-served culture which exceeds its customers In the near future, customers will also
manufacturing plant with 10 acres of expectation in terms of safety and be able to track and monitor their
stabilized rig-up yard. Combined with operational excellence and is truly a fleets using tablets such as the iPad
their other facilities, NRG now offers great place for its employees to work and Samsung Galaxy Tab.
clients over 200,000 square feet of and prosper.
covered manufacturing space and more J-W Wireline names Harris
than 20 acres of stabilized yard. The MiX Telematics launches mobile app Perry A. Harris has accepted the
acquisition frees up bay space at the MiX Telematics extends its innovative position of president of J-W Wireline
Tomball plant, which will now be able to MiX Mobile suite of smartphone Company. Harris has over 30 years of
concentrate on ASME pressure vessels, applications to its broad base of Fleet senior management experience in the
process skids, subsea structures and Manager (FM) customers with the new oil and gas industry. He graduated from
other custom weldments.The well MiX Fleet iPhone application. MiX Fleet West Virginia University with a Bachelor
servicing plant has expanded as well to is now available for iOS in English, of Science in Mining Engineering. He
better facilitate the packaging of new German, Dutch, Italian, French, Spanish has worked in various technology, sales
blender, hydration, and chem-add units. and Chinese and versions for Android and management roles at Halliburton
since June 1981.
Colville succeeds Hunt at IADC

Stephen A. Colville has been
appointed president of IADC, following
In Memoriam the retirement of Dr. Lee Hunt, who has
held that office for the past 22 years.
Richie Wayne McGowan November 27, 1961 - February 13, It has been a privilege and a pleasure
to be afforded the opportunity to serve
2012. Family and friends will always remember Richie for his this great industry, Dr. Hunt remarked.
one-of-a-kind loving heart and generosity. Richie had a larger Many friendships, fond memories and
than life personality that gained him lifelong friends everywhere shared experiences have made the
he went. He was an amazing man who will be missed by all last quarter-century the absolute best
who knew him. Richie Wayne McGowan was born on November career anyone could imagine.
27, 1961 in Bakersfield, California. Richie worked for his father,
Mel McGowan, at MMI Services from the age of 16. He enjoyed Devin promotes Miller
working hands-on in every aspect of the company. Devin International, a subsidiary of
In 1982 Richie met the love of his life, Renee Ferguson and they were married a year Greenes Energy Group, has promoted
later. Richie and Renee were blessed with three daughters; Sarah, Crystie and Tina. Joe Miller to vice president and
general manager. Miller has 31 years of
In 2010 Richie was blessed with more girls who would steal his heart with the birth experience in the oil and gas industry.
of his granddaughters, Kirrah Perez and Cadence Arnold. In December 2011, finally a Throughout his career he has held
little boy! Richie was elated to hear the news of his grandson Paul Perez, and another sales and management positions with
granddaughter Bethany Arnold. Richie was involved in many competitive sports and Downhole Rental and Supply, and Grant
excelled in all of them.He finally satisfied his competitive nature and need for speed Norpac Inc., in addition to co-inventing
when he became involved at the Bakersfield Speedway in 2002. His competitiveness, four U.S. equipment patents.
however, was trumped by his heart of gold and generosity!

Advertisers' Index
ABM Well Service....................................... 89 Hill's Specialty ............................................. 22 Permian Pipe Rental.................................... 24

Absolute Professionals.............................. 105 Horizon Cable Service Inc. ......................... 94 Permian Services Co. LLC........................... 85
ACEUNICO.................................................... 61 Houston Specialty Products Co................... 31 Pete's Weight Indicator Repair ................... 66
Aries Well Service Inc.................................. 87 Howard Supply Co....................................... 95 Petro Rubber Products Inc........................... 97
Atlas Copco.................................................. 45 Impressions Advertising Specialties........... 75 Petroleum Equipment Co. ........................... 59
Aztec Well Servicing Co. ............................ 85 J & R Well Service LLC ................................ 89 Pettigrew Speciality Company Inc............ 106
B&H Rig and Tong Sales ........................... 61 J A S Distributing LLC................................... 51 Polymer Services LLC.................................. 50
B C M & Associates Inc. .............................. 85 Jet Research Center .................................... 24 Portfolio Advisory Council LLC ................ 109
BVM Corporation ......................................... 6 Jet Well Service ........................................... 90 Pratt Well Service ........................................ 85
Basic Energy Services ................................. 49 Jet-Lube Inc. ................................................. 52 Precise Energy Products Inc...................... 106
Beckman Production Services Inc. ............ 89 Justiss Oil Co. Inc......................................... 84 Precision Pump & Compressor................... 70
BenchMark Wireline Products ................... 39 Kelton's Truck Parts..................................... 55 Precision Well Service Inc. ......................... 89
Bishop Lifting Products................................ 62 Kemper Valve & Fittings Corp. ................... 16 Printrex......................................................... 47
Bituminous Insurance Companies.............. 63 Kennedy Wire Rope & Sling........................ 32 Q M C Hydraulic Cranes .............................. 33
Bogan, Dunlap & Wood Insurance............. 31 King Well Service Inc. ................................. 90 R & L Hyrdrostatic Tubing Testing .............. 83
Bulldog Specialties Ltd................................ 74 L & W Diesel Service Inc............................. 56 R & S Well Service ....................................... 89
Buster's Well Service Inc. ........................... 85 Lewis Friction Products ....................... 15, 48 RAPAD Drilling & Well Service Inc............. 84
C & H Well Service Inc. ............................... 89 Loadcraft Industries..................................... 17 Rangeland Inc.............................................. 23
CC Forbes Company LP ............................. 82 Longhorn Tubular Services........................... 7 Reeco Well Services Inc. ............................ 87
Carter Tool Co. ............................................ 21 Lucky Health & Safety LLC.......................... 86 Reliable Well Service .................................. 84
Cavaloz Rental Tools.................................. 87 Lucky Rental Tool ....................................... 86 RigPro Inc. ................................................... 62
Cavaloz Well Service................................... 87 Lucky Services Inc. ...................................... 86 S T S Solutions............................................. 44
Cavins Oil Well Tools ............................... 120 Lufkin Industries Inc. .................................. 64 spOILed....................................................... 111
Charles A. Templeton Machine................... 73 M P & A Wireline Products............................ 32 Standard Energy Services LLC.................... 85
Citadel Advisory Group................................. 6 MTU .............................................................. 4 Stride Well Service Inc. ............................... 83
Cogco Wireline Services Inc. ...................... 88 Martex Well Services LLP............................ 82 Stuart PC....................................................... 22
Concho Services LLC .................................. 90 Maverick Sales Co. Inc. .............................. 12 Sun Well Service Inc. .................................. 84
Continental Town Car................................ 110 Mercer Well Service .................................... 82 Sutherland Well Service Inc. ...................... 83
Cummins Inc................................................. 67 Merrimac Manufacturing Inc. ....................... 8 Synergy Wireline Equipment ...................... 56
Doc's Reverse Units .................................... 85 Mesa Southern Well Servicing LP .............. 83 T E C Well Service Inc. ................................ 82
Dragon Products Ltd. .................................... 9 Mesa Well Services LP................................. 87 TRM LLC....................................................... 86
Energy Fabrication Inc. .............................. 66 Mill Log Equipment Company..................... 39 Target Logistics............................................ 18
Energy Service Co........................................ 84 Moncla Marine LLC...................................... 53 Taylor Industries.......................................... 27
Excalibur Well Services Corp. .................... 88 NBIS.............................................................. 41 Texas Energy ............................................... 83
Flowstone Energy Services.......................... 90 National Oilwell Varco ......................... 11, 57 Threlkeld & Co. Insurance ......................... 52
Freeman Mills PC ........................................ 65 Norris Production Solutions ..................... 119 Titan Specialties Ltd.................................... 65
Gardner-Denver .......................................... 76 Oil Center Research..................................... 71 Towerstone ................................................ 107
GEFCO ......................................................... 54 Oil States Industries .................................... 93 Ultimate Oilfield Guide................................ 79
Genie Well Service ...................................... 83 Oil Well Service Co. .................................... 88 Venturetech Group ...................................... 94
Geo-Log Inc. ................................................. 21 Oilfield Christian Fellowship.................... 101 Vermejo Energy Services ...................... 90, 99
Gill Services Inc. ......................................... 70 Oilfield Helping Hands ............................. 113 Watson Truck & Supply Inc......................... 60
Giuffre Bros Cranes Inc................................ 20 Oilfield Safety Anchor Service ................... 88 Weatherford ................................................... 2
Guiberson, A Cameron Technology ................ 13 Oilfield Service & Supply Co. Inc. .............. 84 Well Control School .................................... 43
GulfStar Group............................................ 103 Onsite Treatment Technologies.................. 69 Westco International Consulting Inc........... 81
Hawkins Lease Service Inc. ....................... 89 Operation Lifesaver..................................... 37 Williams Cleaning Systems......................... 12
Hickman Sales & Service Inc................ 16, 35 Patterson Motor Freight Inc....................... 105 YNF Consulting LLC................................... 110

WSM Ma 12

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March/April 2012

CEMENT EVALUATION MORE DETAIL AND HIGHER RESOLUTION

National, Oilwell, LEWCO and Wirth.

Introducing the quintuplex mud pump. A five-cylinder design makes

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Drilling Evaluation Completion Production Intervention

Executive Director: Kenny Jordan

Well Servicing: www.wellservicingmagazine.com 38 Safe Decisions at Railroad Crossings

CHANGE OF ADDRESS: Please send copy of

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Well Servicing (USPS 537-670) 38 42

POSTMASTER: Send address changes to

Well Servicing March/April 2012 3

Designed for the future.

58 The voice of AOGA 42 Oilfield Job Market

100 Regional Roundup

CEMENT EVALUATION MORE DETAIL AND HIGHER RESOLUTION

Malaysia Photographer: John Boykin

108 Political Focus

114 Industry Items For questions and comments,

The Good Old Days

6 Well Servicing March/April 2012

Want to improve your crews performance?

Why the PIPEHANDLER Beats the Competition P.O. Box 1234

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these tools lack radial resolution. evaluation of the volume of cement

Well Servicing March/April 2012 15

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Well Servicing March/April 2012 17

The Target Logistics Williston Complex in North Dakota, USA

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