Supply Chain

Industrywide Issues | Jobs | Litigation | Supply Chain

Thorny Issues in Using Independent Contractors in Shale Drilling
December 5, 2014December 5, 2014

Most exploration & production (E&P) companies–the ones who risk the money to have oil and gas wells drilled–don’t actually DO the drilling themselves. They hire it done by using oilfield services companies like Schlumberger, Halliburton and Baker Hughes. In addition, they hire just about everyone done–from security at well pads to earth moving to water trucking to you name it. The shale drilling industry, particularly in the Marcellus and Utica, is a bonanza for local businesses or “independent contractors” that plug in to the industry supply chain. However, there are some negatives for E&Ps when it comes to using independent contractors rather than having employees on the payroll do the work. The sharp lawyers at Vorys, Sater, Seymour and Pease say lawsuits alleging violations of the Fair Labor Standards Act are now more common than employment discrimination cases for oil and gas companies. They’ve just issued an alert/advisory on the pros and cons of using independent contractors in the oil and gas industry…
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Industrywide Issues | Pennsylvania | Supply Chain | Washington County

Marcellus Supply Chain Success for PA Company Producing Mulch
December 2, 2014December 2, 2014

We love a good supply chain story, and we’re always surprised at the innovations small business owners create to meet the demands of the growing Marcellus Shale industry. Here’s a new one for us: A company in southwestern Pennsylvania has quadrupled the number of employees–from 25 to 100–over the past five years by creating…mulch?! Yep, mulch. You know, wood chips. And the business has grown like a rocket because of the Marcellus Shale…
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Industrywide Issues | Supply Chain | Wastewater

New Report: Water is a $6.4B Part of the U.S. Shale Industry
November 21, 2014November 21, 2014

How much water is used, and how much is generated that needs to be disposed of (or recycled) in oil and gas drilling–particularly in U.S. shale plays? A new report by Bluefield Research says the U.S. fracking industry consumes over 1 billion barrels of water annually, producing 450-500 million barrels of wastewater for disposal. According to Bluefield, the U.S. shale industry will spend $6.38 billion (!) in 2014 on water management: supply, transport, storage, treatment, and disposal. Water is a big deal in shale drilling. The following article by Bluefield sheds interesting light on the topic. Among the things that caught our interest is the breakdown of which shale plays use the most water (how does the Marcellus and Utica stack up? see the graphic below), and the section at the end which talks about new opportunities for supply chain companies in the water space…
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Allegheny County | Industrywide Issues | Pennsylvania | Supply Chain

Non-Destructive Testing Company Opens Branch in Pittsburgh
November 13, 2014November 13, 2014

The depth and variety of companies that provide services for the shale industry never ceases to surprise us. Would you think that non-destructive testing (NDT) has a role in shale exploration and drilling? It does! And it has enough of a role that Applus RTD, a global energy service provider that delivers “technical assurance through non-destructive testing, inspection, and certification in every region of the world” has just opened a new branch office in Pittsburgh to service the demand for their services in the Marcellus/Utica region. One of their happy customers is Range Resources…
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Industrywide Issues | Monroe County | Ohio | Sand/Proppant | Supply Chain

Center Port Transload Facility Already Up & Running in OH
November 3, 2014November 3, 2014

MDN reported last Friday about an auction happening this week in Hannibal, OH at the old Ormet aluminum smelting plant (see Out with Old Ormet Plant, In with New Center Port Transload Facility). Niagara Worldwide is converting the old plant into a new transload facility that will accept and redistribute frac sand, pipes and other materials and equipment used in the Marcellus and Utica Shale. As part of that story we floated some questions to Eric Spirtas, president of Niagara Worldwide about what they have planned (and the timing) for the facility. Here are those questions and his responses…
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Industrywide Issues | M&A | Pennsylvania | Supply Chain | Westmoreland County

Big Georgia Engineering Firm Buys Marcellus Engr Firm in SWPA
November 3, 2014November 3, 2014

Bigger companies gobbling up smaller companies is certainly not a new story–even in the Marcellus/Utica region. However, when the bigger company is from outside of the region (Georgia, in this case) and the company being purchased is in our region (Pennsylvania), it bears coverage. Enercon Services, Inc. with headquarters in Atlanta (Kennesaw), GA and 29 offices (with 1,600 employees) nationwide is an engineering services/consulting/land surveying company. They’ve just purchased, for an undisclosed sum, TRI-COUNTY Engineering of New Stanton, PA. New Stanton is located in Westmoreland County, in the southwest region of the state–positioned perfectly for the flurry of Marcellus and Utica drilling in the tri-state region of PA, WV and OH…
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Industrywide Issues | Monroe County | Ohio | Sand/Proppant | Supply Chain | Trucking

Out with Old Ormet Plant, In with New Center Port Transload Facility
October 31, 2014October 31, 2014

MDN previously told you about the closure of the Ormet aluminum smelting plant in Hannibal (Monroe County), OH. The plant closed its doors as an active aluminum plant earlier this year after Ohio regulators and Gov. John Kasich failed to get high electric rates reduced for the plant, and refused to allow Ormet to burn coal to produce their own electricity until they could begin using natural gas to create electricity from recently drilled wells on the property (see Final Chapter of Ormet Plant Closing – Utica Could have Saved It). In all, over 900 are out of a job–thank you Ohio. But out of the ashes of that jobs disaster comes a ray of sunlight, at least for the Utica and Marcellus shale industry. Niagara Worldwide bought the plant out of bankruptcy and they are converting it into a huge transloading facility–where supplies like pipe and frac sand are delivered in bulk by barge and rail, broken down and sent back out by truck to drill sites throughout the region (see New Ormet Aluminum Plant Owner Shops Barge Facility to Shalers). It will be a huge staging site for at least three (so far unnamed) producers in the area. The re-purposed facility now has a name: Center Port Terminal. In order to get the facility ready for the shale industry, Niagara is conducting the auction to end all auctions (massive) to get rid of existing plant equipment. Here’s the details…
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Industrywide Issues | Sand/Proppant | Supply Chain

SandBox Logistics Begins Work in Marcellus/Utica
October 30, 2014October 30, 2014

SandBox Logistics (clever name) provides trans-loading, storage, and “last mile delivery” of frac sand used in hydraulic fracturing. Sandbox’s delivery process is patented. According to the company, their delivery process and the containerization process they use increases operational efficiency by eliminating many of the logistics problems and transportation bottlenecks that can happen. The SandBox system also substantially reduces silica dust and noise pollution. Why go on about SandBox? Because drilling services company U.S. Well Services has just signed a contract with SandBox to use them in their Marcellus/Utica operations. It marks the first time SandBox has done business in our neck of the woods…
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Aqua America | Energy Services | Hydraulic Fracturing | Industrywide Issues | Pennsylvania | Statewide PA | Supply Chain

Water Pipelines for Drillers Great Idea, But Few & Far Between
October 21, 2014October 21, 2014

An excellent article appears in today’s Pittsburgh Post-Gazette, written by one of the few (perhaps only) reporters they have who is objective when it comes to writing about the natural gas industry: Anya Litvak. Anya used to write for the Pittsburgh Business Times before the Post-Gazette poached her. Anya’s article addresses the issue of using water pipelines to feed the growing demand for water used by shale drillers. It’s a win/win because it tends to be cheaper and it reduces truck traffic. However, the up-front cost to build a pipeline (on the part of a water company) is not cheap and many drillers aren’t willing to commit to the 3-15 year term that water utilities want to have before they are willing to build such a pipeline. As part of the article we get this interesting update on PA water company Aqua America…
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Hydraulic Fracturing | Industrywide Issues | Supply Chain

Fortis Energy Adds New Workover Rig in Marcellus/Utica
October 21, 2014October 21, 2014

Oilfield services companies span the range from the Halliburtons and Schlumbergers to the mom and pop companies with a single drilling rig. Fortis Energy Services, a privately held company headquartered in Michigan (but with operations in the Marcellus/Utica) is not nearly as big as Halliburton, but it’s way bigger than a mom and pop. Fortis operates in the Midwest and northeast with a number of rigs. They’ve just added two more “workover” rigs to their fleet–one of them dedicated to the Marcellus/Utica. What’s a workover rig?…
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Industrywide Issues | Supply Chain

Key Secret to Landing New Business from the NE Shale Industry
October 17, 2014October 17, 2014

If you own, or work for, or manage, a small- to medium-sized business, how do you get potentially lucrative new deals from the flourishing Marcellus and Utica Shale drilling industry? It’s an important question and one we’re often asked. Although there’s no magic–networking and word of mouth and being in the right place at the right time helps–there is one thing that a small or medium-sized business can do to dramatically increase your chances of scoring new business from the shale industry. What is that one thing? Getting an ISNetworld certification. And what the heck is ISNetworld?…
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Harrison County | Industrywide Issues | Pennsylvania | Pipelines | Supply Chain | Washington County | West Virginia

Painting a Different Picture of Pipeline Companies
October 14, 2014October 14, 2014

You might think, when reading the claims of some groups, that pipeline companies are callous and will run their pipeline any ole place they want, landowners be damned. “See that hayfield? Who cares! Run that steel right on through it!” That’s the (false) impression you get from some people. The reality is, of course, far different. Let’s hear it straight from the horse’s mouth–from the people who do the surveying to figure out the route a pipeline will take…
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Industrywide Issues | Research | Supply Chain

IHS Shale Supply Chain Study: 56 Sectors, 524K Jobs, Major Impact
October 1, 2014October 1, 2014

Last week an important new shale supply chain study was released by top flight research firm IHS, or Information Handling Service, the publisher of choice for the American Petroleum Institute (API). The IHS study is titled “Supplying the Unconventional Revolution: Sizing the Unconventional Oil and Gas Supply Chain” (main report below). The supply chain is composed of all of those companies supplying goods and services to the shale industry that are not oil and gas producers. The report finds employment related to unconventional oil and gas production in shale supply chain companies totaled 524,000 jobs in 2012 and is expected to grow 45 percent to 757,000 jobs in 2025, equal to 41% of total direct and indirect employment in the shale industry. Conversely, the total number of jobs across the country directly attributable to the shale industry is 1.3 million. It’s not an overstatement that the shale revolution is the only thing that has kept the American economy out of the crapper over the past six years. Let’s dig in to this terrific report from IHS…
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Industrywide Issues | Pennsylvania | Statewide PA | Supply Chain

Rigmaids to the Rescue – Cleaning Up After Dirty Men (and Women)
September 29, 2014September 29, 2014

Let’s be honest, men are sometimes slobs. Men (and women) who work in a dirty profession like operating equipment at a drill pad, can generate a lot of filth. That’s where Pennsylvania company Rigmaids comes in. At every well pad is at least one (usually more) trailers where the men (and women) hang out–wash their hands, track mud, store food in refrigerators that sometimes go bad–the list goes on. Rigmaids will visit the pad site and clean out those filthy trailers and make them sparkle again. For a price…
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Education | Industrywide Issues | Pennsylvania | Research | Statewide PA | Supply Chain

GE Donates $10M to Fund New Penn State Shale Gas Center
September 26, 2014September 26, 2014

Earlier this week Penn State announced they are receiving a grant/investment from GE to the tune of $10 million to study and improve natural gas supply chains and systems. Penn State’s Center for Collaborative Research on Intelligent Natural Gas Supply Systems at Penn State (CCRINGSS) will, according to the announcement, have “researchers and students from many disciplines in collaborative work with various industry stakeholders. The center will seek to advance efficiency and environmental sustainability both through technological innovations and improved supply chain management.” The money GE is giving to Penn State for the CCRINGSS will be used for research projects, buying equipment and funding undergraduate, graduate and postdoctoral fellowships. More from the announcement…
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Industrywide Issues | M&A | Supply Chain

Big Congrats: ShaleNavigator Sells to Geospatial
September 19, 2014September 19, 2014

A hearty congratulation to MDN friend (and Databook partner) Ed Camp from ShaleNavigator. Ed has just reached an agreement to sell his company, ShaleNavigator, to Geospatial Corporation. Ed will then go to work at Geospatial and continue to run ShaleNavigator as a division of Geospatial. You may recognize the name ShaleNavigator because it is the software used to create the maps in MDN’s Marcellus and Utica Shale Databook. Have no fear, Ed will continue to generate those lovely maps that are the heart and soul of the Databook (speaking of which, Volume 2 of the 2014 series is due out in the next few weeks, stay tuned). Here’s the announcement that it’s time to pop the cork on the bubbly for a an all-around great guy, Ed Camp, and the marriage of his ShaleNavigator with Geospatial…
Read More “Big Congrats: ShaleNavigator Sells to Geospatial”