Bakken Transport Trends: Newson Gale Feels Safe

Newson Gale highlights a transport-related Bakken firm that is navigating the changing needs of moving Bakken crude within the Williston Basin and out of the region.
By The Bakken Magazine Staff | March 02, 2016

Mike O’Brien wants to take the shock out of the Bakken. As the head of marketing for Newson Gale, O’Brien oversees the global operations of the U.K.-based static control service and product provider that works with a range of companies from small trucking firms to major oil refiners to ensure static electricity ignitions do not happen. The company continues to expand into the upstream, midstream and downstream sectors of the U.S. oil and gas industry, including the Bakken. O’Brien is in-tune with the many ways used to reduce the static sparking possibility present when fluids are moved or transferred from one vessel to another. He is also focused on the changing percentage of Bakken crude transported via rail, truck or pipeline as his team works to expand.

“In 2012, we had some loading rack builders that said we needed to be in the Bakken,” he says. “That spawned a new product development effort and launch for us. The expansion of the industry and the pace for which it took off was astounding.”

In the past three years, the company has moved nearly 2,000 truck mounted grounding systems in North America through its work with a vertically integrated oil major. Its experience in working with trucking outfits could be a boon for O’Brien’s efforts in the Bakken, even though the company is well positioned to serve the crude by rail sector. Although O’Brien is certain the opportunity for helping to minimize static grounding-related incidents exists anywhere in the Bakken from the wellhead to the truck to the oil loading facility, he is focused most on rail and trucking.

The amount of Bakken crude shipped out of the region via rail has changed over the past year, however. Historically, the lack of pipeline takeaway capacity has forged crude-by-rail as the number one transport method. But, as more pipeline capacity has been installed coupled with the tightening crude price differential between Brent and West Texas Intermediate, crude by rail shipments have now become the second transport method used today. As of December, rail shipments from the Bakken accounted for 41 percent of all transport methods used, now trailing pipelines.

This year, several midstream entities have updated their plans to build and bring online pipeline takeaway capacity or pipeline gathering capacity within the Bakken. Future pipeline infrastructure capacity shows that within the next three years, pipeline will be the dominant means to move Bakken crude. When the price differential between WTI and Brent remains small, producers are able to allow for the added time to move Bakken crude to market without the fear of losing out on a more favorable price that could have been achieved by sending oil via rail faster to a hub.

Even with the changing dynamics of moving crude out of the Bakken starting to happen, O’Brien believes his company’s approach to reducing static electricity in the Bakken will prove successful as companies continue to update their safety efforts and compliance protocols. “We have a range of equipment that offers various levels of protection,” he says. Static grounding procedures, according to O’Brien, need to happen whenever a combustible fluid is being transferred from one vessel to another. Such procedures should take place on the well site or at the transload facility where trucks pass tanker-stored oil into rail cars. To cancel out the possibility of a static-electricity-induced spark and a resulting explosion, the vessel from which the oil is being transferred needs to be grounded to the earth. “Even at the basic grounding level we add value. We use tungsten carbide teeth on the clamps to ensure the teeth are sharp and the tips will penetrate any paint or debris present on the clamping surface,” he says.

Even with the changing trends in Bakken crude takeaway transport methods happening, O’Brien says the main hurdle for his transport-linked firm is still about appropriately serving the massive Bakken market. “Our opportunities are big, but organizationally we are struggling to keep up,” he said.

The opportunity is directly linked to cancelling out static electricity, an element of the oilfield O’Brien says is becoming a more serious concern of oilfield entities. “With our stuff you can avoid a lot of bad press for something that is easy to take care of,” he says.