Interview With A Frack Hand
A good friend of mine works in the Bakken oil fields in North Dakota. I thought it might be of interest to do an interview with him to give readers some insight into what’s happening on the ground in one of the leading shale plays in the U.S.
To avoid getting him in trouble with his employer, I gave him a pseudonym to protect his identity. For the purpose of this interview, he is “Walter White,” denoted as “WW” (which is not far off from his actual name). I am of course “RR.”
RR: What brought you to North Dakota?
WW: I first came up during the initial oil boom a few years ago. There were numerous jobs for anyone willing to work hard. I started out as a transloader. My company owned a facility where shippers could transfer a load of oil that had been brought from the field by truck to a railcar. The company had crude storage tanks, and it stored crude oil on site and ultimately moved it to a train. From there, it could be shipped to the coast (e.g., Delaware or Washington state). It seems like BNSF was always the rail carrier; they appeared to have a monopoly up there on rail shipment.
RR: But then the bust came, and like many others, you left. But now that things have started to pick back up, you are back. What has changed?
WW: Activity is picking back up, but it’s still well short of where it was during the previous boom. Housing was an expensive nightmare before. A two-bedroom trailer that rented for $4,000 a month during the last boom can now be rented for $800. So the cost of doing business for many of these companies has gone down a lot.
RR: You are doing a different job this time around, right?
WW: Yes, I am a water transfer specialist. I provide water to oil wells that are carrying out hydraulic fracturing operations.
RR: What exactly does that entail?
WW: A frack job requires substantial volumes of water. We contract that water from various locations. For example, we could buy it from a farmer who owns a lake. It could be from a well or a river. We also have strategically located water depots to help with the water demand.
My job is to transport the water to the well site. We use drainage ditches whenever we can, but the job requires running a hose of 8 to 12 inches in diameter from the water source to the oil well. We could require two miles of hose, or we could need twelve miles. If we have to run the hose across farmland, we will end up paying that farmer something like $10,000 to $20,000 for the temporary use of his land. It’s usually $1 per linear foot, and the line may cross his land for a few weeks or a few months. For perspective, there’s probably savings of a million dollars or more versus trucking all that water in.
Once the water has been moved to the well site, we temporarily store it in something we refer to as a Poseidon. It’s basically like a large, above-ground swimming pool that can hold several hundred barrels of water per inch of level. It has 12-foot steel plate walls and can take up an acre of space. During the frack job, we can use 60-80 barrels of water a minute. A single frack stage may require 1.5 hours at this rate to complete. A well may have 35 stages, and depending on whether everything is going according to plan, we can get about five stages done in a 12-hour shift.
[RR note: Apparently the Poseidon comes from a company called Poseidon Concepts. One of the company executives was charged with securities fraud a few years ago for overstating revenues. The company went bankrupt, but the name and concept live on].
RR: What kind of things can go wrong?
WW: On my end, we have to make sure the lines don’t freeze. We achieve that by rapidly transferring the water. In cold weather, we deploy heater units for the water. But there are many companies working together to complete the frack job, and if any of them have a problem there could be a delay.
RR: What are the roles played by the different companies?
WW: You will have a company that is in charge of the overall frack. Someone like Baker Hughes (NYSE: BHI) or Halliburton (NYSE: HAL). Then there are the companies supplying the water. There will be a company delivering sand. There will be wireline operators in charge of the explosives downhole. Everyone has to be in constant communication.
RR: Does your company also handle the wastewater?
WW: No, different companies do that. One thing that may not be common knowledge is that sometimes the wastewater comes back up “hot,” or radioactive from background radiation. That requires special handling.
RR: Interesting. That sounds like an idea for another article. Thanks for taking the time out of your day to speak with me about your job. I certainly appreciate it.