Breaking Into the Shale Business

Even if you don’t live in one of the states with shale under your feet, you can hardly turn on the news or read a paper without seeing something about it. Most of the coverage deals with environmental concerns. While all of that is certainly worth a read, it doesn’t necessarily tell you how it impacts your business.

By 2035, the Energy Information Administration, “projects that shale gas production will rise to 13.6 trillion cubic feet. When you consider that 1 tcf of natural gas is enough to heat 15 million homes for one year, the importance of this resource to the nation becomes obvious.”

There are seven major shale basins: Bakken in North Dakota and Montana; Hayensville in Louisiana and Texas; Antrim in Michigan, Ohio, and Indiana; Woodford in Oklahoma; Fayetteville in Arkansas; Barnett in Texas; and Marcellus in New York, Pennsylvania, and West Virginia. Plus, there are many others in other states.

Currently, natural gas prices are in a slump due to the abundance of wells, a mild winter, and other factors. While there are rumors of some companies scaling back some of their operations, others are ramping up. Regardless, there has to be some activity on a lease or a drilling company can loose the lease.
Koberlein Environmental Services has had great success in working with the energy companies. “It’s been a great success story for small to medium size businesses in Pennsylvania,” says Chris Ravenscroft, president of Koberlein. “It’s allowed our company to grow tremendously.”

So How Does This Affect Your Business?

There are several ways that you can take advantage of drilling in your state. The easiest and most likely way is to provide portable restrooms for the well site. “Portable slide in units are often used on site,” says Tim Lightner from Pik Rite. There are several recommendations for restrooms per person and per site. Most state associations have this information if you don’t already know what the requirements and/or recommendations are for your state.

Another way to get involved is to haul fresh water to the site. However, this can be costly. Lightner has seen customers convert their septic trucks to haul fresh water to the site and the mud from the site. Although modifications are not always required, he suggests making them. “If you have a lever valve on your truck, you probably want to change it to a butterfly valve,” he says. “They are very concerned with leaks on the site and you absolutely cannot have a leak.”

Other modifications include a heavy-duty rear bumper with a drip pan and a heavy-duty front bumper for being pushed and pulled around locations.

“One of things that also comes into play is the size of the truck,” says Lightner. “Drillers often want a 110 barrel tank for hauling water. You also typically want to have an interior coating to help protect the tank from water if you don’t already have it. A level indicator is also needed. However, certain companies don’t allow certain indicators so you would want to check with the subcontractor before putting one on. Some drilling operations require certain hook ups (either 4 inch or 6 inch). You will also need heated valve jackets to keep the valves from freezing because they sit outside.”

If you were to make all of those adjustments, then it could cost you $10,000, with the front and rear bumpers and epoxy lining being the most expensive.

Ravenscroft adds, “You also need to be prepared to have dedicated equipment for the well site. They have special requirements and you won’t be able to use a truck to pump residential one day and haul for a energy company the next.”

You will also want to make sure that you have the proper safety equipment, such as strobe lights, hard hat, fire retardant suit, and safety glasses.

“When we had one drilling customer ask us to obtain $10 million in insurance coverage, it was a large expense, but it’s the industry standard and one you have to have,” says Ravenscroft. “This is definitely not for septic companies with one or two trucks.”

If you already own a hydroexcavator or Guzzler with hydroexcavator package, then your truck is most likely ready to go. “You will need to make sure you have hot water,” says Tony Fuller with FS Solutions.

Who Do You Talk To?

After you have your truck ready, you will need to find who the subcontractor is for the drilling site. “If you only have one truck, then you will want to contract with someone else,” says Lightner.

Fuller adds, “You will need to hit subcontractors to find out who is actually drilling for Chesapeake Energy. Otherwise, going through large corporations to figure out who is who can be a long process. Once you hook up with subs, then you can get in. If you can’t find the subcontractor, then you can try to get in touch with Chesapeake, and they may tell you. You can also look at rig counts to tell you who is drilling and who isn’t. There are a lot of companies from Oklahoma and Texas in Pennsylvania, Ohio and Wyoming.”

Local newspapers are often your best free source for getting rig counts and drilling information for your area. Even if it isn’t printed in the paper, you can always call the newspaper and see if anyone has done a story on drilling.

If that doesn’t work in your area, then you can look at Baker Hughes’s interactive rig count map. Simply select your state and county to find where drill sites are in your area. At press time, the site showed that there are 1,973 rigs in Pennsylvania and 99 percent of those are for gas. The company Rig Data offers more detailed information for sites including location, driving directions, drilling contractor and operator.”

Shale drilling has been big business for those in it. In the last three years, Pik Rite has increased from 40 to 75 employees and gone from producing 48 tanks to 215. “You hear a lot of the negative with shale drilling, but we have been blessed with the little part that we have. It’s created a lot of jobs. In addition to the production of the trucks, there is also a service component for the trucks.”

“There are high barriers for entry into the drilling business, but if you have the understanding and resources to do it, it can be a great way to grow your business,” says Ravenscroft. “You have to be prepared for what you are getting into and really put it all on the line.”

Story by Jennifer Taylor

Please follow and like us:

No comments yet... Be the first to leave a reply!

Follow by Email