Moving Toward Crude Conditioning

New oil conditions regulations spotlight the role of burner management systems for the Bakken shale play in North Dakota. Small investments in well site management systems can increase both safety and revenue.
By Luke Geiver | February 09, 2015

For Utah-based Profire Energy Inc. the Bakken offers incredible potential for the burner management company. The future of Profire—and other firms capable of managing heating elements on well pads and tank battery sites—is linked to the play’s ongoing push to better control flaring and to condition all crude prior to rail transport. Although the company has operating facilities in Texas, Canada, Utah and the East Coast, it is the Bakken that has the team excited for the future. “We call the Bakken our sleeping giant,” Andrew Limpert, CFO says. “We are just getting started there. Our presence there is more a function of our ability to get there than our opportunities that exist there.”

Profire’s major entrance into the Bakken represents the start of a new era for the shale play. In late 2014, the North Dakota Industrial Commission implemented new crude conditioning rules that will take effect April 1. The new rules require all crude set for transport to meet certain pressure and temperature limits. The limits, the state believes, will ensure that Bakken crude transported via rail matches the volatility levels of gasoline used in car engines or lawnmowers and ensure all entities involved in the movement of the commodity that the crude in the cars is safe and within average volatility levels. Prior to shipment, oil will need to be stored at or below 13.7 Reid Vapor Pressure and at a temperature of 110 degree Celsius.

The Bakken magazine spoke with Limpert the day the NDIC issued its ruling on crude conditioning and it was clear then why the team—and others that offer similar services—has such high hopes and plans for its service offerings in the Bakken.

Burner Management Background
Prior to the final ruling on the crude conditioning order, the NDIC had held several hearings on the subject. In September, a packed house offered several hours of testimony opposing, supporting, and explaining new technology and commenting on the NDIC’s reasoning and plans for conditioning. Before the initial hearing on the subject, the NDIC received 1,114 pages of testimony from 33 groups or individuals. Roughly two months, later, the NDIC held another hearing and re-opened the call for testimony on the subject. The call created another 141 pages of testimony submitted by 25 various groups.

Armed with more than 1,200 pages of testimony, the NDIC arrived at its decision to implement crude conditioning regulations despite calls from the exploration and production community calling the regulations unneeded. According to the N.D. Department of Mineral Resources, the ruling would impact only 15 percent of the existing operators in the Bakken. But, all new well pads and tank batteries would have to meet the requirements for temperature and pressure standards. Failing to do so will result in a $12,500 fine for every day the oil is out of compliance. DMR field representatives will check pressure and heat gauges during site visits. Transload facilities also need to ensure oil moved onsite is under the 13.7 Reid Vapor Pressure threshold.

Although the Profire team believes it can play a major role for the operations of those looking to ensure compliance, it also has another reason for optimism.

After forming the company in the mid-2000s, Harold Albert and Brent Hatch learned that the oil industry is constantly in need of evolution to remain profitable and safe, Limpert says. Albert, a former field service operator who worked on burners in Alberta, Canada, was once tasked with maintaining and relighting burners in the field. “He learned then that they could be hazardous,” Limpert says. The hazardous nature is best linked to the home BBQ. Imagine when you attempt to light the unit and the only reaction after pushing the ignition button is the sound of propane hissing. Eventually, Limpert says, when it lights you get a big boom. Inspired by his negative field experiences with that hissing sound, Albert formed Profire to offer a burner management system to the oil industry. His work to offer a safer tool for lighting burners in the oilpatch was also one that would open his team up to a massive market. Nearly every well pad in North America has some form of heating element present on the pad. Profire’s main burner management tool  has evolved and now includes the ability to not only reignite a failed burner but also manipulate the amount of desired temperature needed for any application. Manipulating temperature in the oil patch is the main reason for optimism amongst the Profire group, according to Limpert.

Conditioned Crude
To keep Bakken crude properly conditioned to state-set standards, the use of heater treaters or heated liquid emulsifiers must be used. The systems use heat as the main method to strip out natural gas liquids that cannot be transported with the liquid crude under the new standards. The need for heat is the variable that Profire believes it can better manage.

Once installed for roughly $4,000, the system can maintain a given temperature for a certain application and detect and reignite a low flame if needed. It can also help to mitigate downtime created when oil tanks are not heated appropriately before transport trucks arrive. In North Dakota, weather causes the viscosity of oil to change, Limpert explains. When weather is cold and oil viscosity is low, a truck driver will have to wait to fill until the oil is heated and flowing at the appropriate level.

In the case of flaring, pilot lights do go out, he says. “Our technology makes sure they stay consistently lit.”

While the new crude conditioning rules for North Dakota mean the Bakken is officially entering a new era, Limpert hopes the new era isn’t seen as a negative or inefficient, uneconomic hassle to oil producers and well site servicing firms. Implementing a burner management system can also help save money in low crude price times, he says.

“We have the ability to measure the amount of temperature that a tank can arrive at,” Limpert says. “Most people that have some kind of minimum requirement overheat their tanks and they run the burner almost around the clock. If you run it all day you are wasting money and overheating your oil.”

The Profire technology allows a user to manage and tweak temperature ranges. “Heating your tank all day is like leaving your car idling all day long. Sure it will be plenty warm, but it isn’t the most efficient way to achieve your goal,” he says.

The state’s new conditioning regulations, in combination with the cost savings related to remote, instant temperature manipulation, has made Limpert keen to talk of burner management systems. “Burner management technology is going to be coming to the board room,” he says, “either from a regulator or a safety issue.” When it does, Limpert believes the work of company founder Hatch and the rest of the team over the past eight years will pay off for more than just the boardroom.

Author: Luke Geiver
Editor, The Bakken magazine
701-738-4944
lgeiver@bbiinternational.com