Eagle Ford Shale - Texas' Single Largest Economic Development

We're just a few years into development, but the Eagle Ford Shale is looking the part of the single largest economic boom in the history of the state of Texas. UTSA estimates total revenue from the Eagle Ford in 2011 was almost $14 billion and that revenue could grow to almost $50 billion by 2020. In addition to revenue, almost 30,000 jobs related to the play were created in 2011 alone.

Reserve estimates also paint a rosy picture. If there are 20 billion barrels of liquids to be recovered in the Eagle Ford, revenue from oil, condensate, and NGL sales will reach somewhere in the neigborhood of $1-2 TRILLION over the life of the play (at $100/bbl oil and current NGL prices). Add the 100+ tcf of gas that could be recovered and revenue from hydrocarbon sales could easily reach 2 trillion dollars. Our country's deficit is the only other topic where I use the word trillion.

For reference, the caller.com provided a few interesting statistics.

The Eagle Ford will have a larger impact than the entire Corpus Christi Metro Area in 2012.

  • GDP for the area was $15 billion in 2011, compared to estimates of $14 billion in Eagle Ford revenue during that same time

Eagle Ford jobs are coming by the thousands.

  • There area 184,000 jobs (total) in the Corpus Christi Metro Area and on its current path the Eagle Ford might created over 75,000 jobs in 2020 alone

Drivers - Be a Compliance Safety Accountability Hero

The Federal Motor Carrier Safety Administration's Compliance Safety Accountability program (CSA) seeks to reduce commercial motor vehicle crashes, fatalities and injuries on the nation's highways. CSA measures safety performance, using inspection and crash results to identify carriers whose behaviors could reasonably lead to crashes. If warranted, a carrier may have to pay fines and can be levied with other civil penalties. Carriers whose CSA scores characterize them as unsafe ultimately can be put out of service and the carrier will have to cease all motor vehicle operations. Also, a driver’s roadside inspection performance can be viewed by future employers through the FMCSA’s Pre-employment Screening Program. Obviously it is in everyone’s interest, the carrier’s and the drivers’, to keep CSA black marks off the carrier’s record.

Driver Performance Counts

Much of the responsibility for safety compliance lies with the carrier. But the driver's performance also plays a big role in how the carrier is graded under the CSA ranking system. Driver performance factors that come into play with respect to a carrier’s CSA score are:

UNSAFE DRIVING

  • speeding
  • reckless driving
  • improper lane changes
  • inattention

DRIVER FATIGUE

  • hours of service violations
  • logbook violations

DRIVER FITNESS

  • lack of training
  • lack of experience
  • being medically unqualified to operate a CMV
  • lack of a valid or appropriate CDL

DRIVER IMPAIRMENT

  • alcohol
  • illegal drugs
  • the misuse of prescription and over-the-counter medications

These factors are so important to safety that CSA includes these in its On-Road Safety Performance “BASICS,” the Behavioral Analysis and Safety Improvement Categories.

Cargo Must Be Secure

Cargo securement issues can also negatively affect a carrier’s CSA score. Drivers have to guard against:

  • spilled or dropped cargo
  • load that shift due to improper securement
  • overloading
  • unsafe handling of hazardous materials

Vehicles Must Be Safe to Operate

However, vehicle maintenance issues are also important. CSA tracks 220 maintenance-related violations and around 170 driver scores are also maintenance-related. An out-of-service order doubles the severity of the CSA violation.

Common maintenance violations include:

  • inadequate tire depth
  • brakes out of adjustment
  • broken stop lamps or headlamps or other lighting defects
  • cracked brake hoses
  • missing or unsecured fire extinguisher

Some maintenance issues can seriously affect the carrier’s CSA score. These are:

  • defects in the suspension, brake and steering systems
  • tire defects
  • lighting defects

The wrong time to find these flaws is during a roadside inspection. Drivers can be CSA heroes by taking their pre-trip inspection seriously and documenting defects that could result in an out-of-service order, so these defects can be repaired before the vehicle is driven again. Not only does this help to ensure a safe working environment for the driver, it also helps to keep the carrier’s CSA score low.

AC-Induced Corrosion on Pipelines in the Eagle Ford Shale

New pipeline construction is going “fast and furious” in the Eagle Ford Shale region, in the West Texas “Wolfcamp”, “Bone Spring” and related shales, and all across mid-America with the Bakken, Niobrara and other successful unconventional oil and gas plays.  Companies who build and operate pipelines must attract customers with product to move, secure the land over which pipeline right-of-ways will be cobbled together, and then construct the pipelines.

What happens when a pipeline runs near a high-voltage AC power line?

When soil resistivity is lower, and the voltage driving current along the AC power lines is high enough, the pipeline acts like the “secondary winding” of a transformer.  It receives AC power from the high-voltage lines by what is called “electrical induction.”  Once that power builds on the pipeline, AC electric current flow is going to happen.  When that AC current finds a place to “jump off” the pipeline to go back to the AC power grid, corrosion holes are created in the pipeline metal.  This is AC-induced corrosion, and it is a severe threat to pipeline integrity.

This induced AC power may even pose safety risks to the welders, laborers, operators and other people building the pipeline!  AC power can actually build up on the pipe as it sits above grade on cribbing.  Any time a pipeline is located in “near parallel” to parallel arrangement with high-voltage AC power lines, even for just a mile or two, a qualified corrosion engineering consultant should be brought in to check the situation.

Risks of AC-induced Corrosion and Voltage Buildups

These risks for AC-induced corrosion and unsafe voltage buildups are significant.  A recent story about a Barnett Shale area worker, directed to do some repair to a chemical injection system for a pipeline’s internal corrosion control system, tells the tale.  The gentleman walked up to a chemical injection point and reached up to close a small ball valve, before changing out some injection equipment.  The AC voltage buildup on this pipeline was so great that, when he touched the valve handle, he was hurled backwards by the jolt of “grounding out” the induced AC power!  From what was passed on, he did not suffer lasting injuries.  But this was way more than 15 volts of induced AC (the maximum “safety” voltage threshold), and a significant current passed through part of his body for the instant he was in contact with both the pipe and the earth.

AC Mitigation Systems Might Be Needed

If the opportunity for AC power buildup on the pipeline is pronounced, then "AC mitigation" systems must be designed and installed.  Similar to electrical grounding and lightning protection approaches, these mitigation systems are specialized in design, construction and monitoring.  Recognizing the need for them is paramount, especially when soil resistivities are low and chemical ions such as chlorides are present in higher concentrations in soils.  A lot of the soils in the Eagle Ford Shale play have this “not good” combination of resistivity and soil chemistry factors.  The same can be said, too, for a lot of West Texas and southeastern New Mexico.

Eagle Ford Consortium Highlights

Just a few thoughts from the Eagle Ford Consortium Conference last week:

  • Production is outpacing expectations - Almost double early predictions from UTSA
  • Housing remains a concern, but investors are beginning to consider major multi-family developments
  • Peak drilling in the Eagle Ford is expected at 2,500-3,000 wells per year
  • The success/economics of downspacing will ultimately decide how far we go below the range of 65-130 acre spacing currently
  • More than 70,000 direct Eagle Ford Shale jobs will be created by 2020
  • Permits issued over the past three years in the Eagle Ford have gone 2009 - 94; 2010 > 1,000; 2011 > 3,000
  • In the most active counties, sales tax revenue increases have been as high as 500%
  • Oil prices remain the major risk to development

UTSA is currently working on an updated economic impact study and the expectation is for almost all figures to be revised upwards. The new study will be out in April.

Use the comments below to share your thoughts and notes from the conference. I only hit on the major themes I heard from talking to everyone in San Antonio.

Personal Safety in the Eagle Ford Oilfield

The Eagle Ford Oilfield is a busy workplace. The work itself can be hazardous, involving expensive heavy machinery and tools, all of which merit your undivided attention. Regulations of the federal Occupational Health and Safety Administration and company policies are designed to protect worker health and safety. However, the most important guardian of your personal safety in the workplace is YOU.

Personal Safety Tips

Here are some simple steps for personal safety around commercial motor vehicles. They'll help you to avoid non-driving motor vehicle-related accidents.

  • As you approach the vehicle, take a look around. Make sure it's secure. Don’t get under, in front of or behind a truck or piece of heavy equipment if there’s any chance at all that it could move.
  • Be aware of the condition of the vehicle. Now would be a better time to notice a defect than when you’re miles down the road or in the middle of a critical operation.
  • If this is an unfamiliar vehicle for you, look around and identify the location of all the controls. Make sure that there are no loose objects that could hit you if you start or stop abruptly. Adjust the seat so that you can reach the controls easily.
  • Do a little personal inventory. Are you fit to operate a heavy truck or piece heavy equipment? If you’re too fatigued, hung over, distracted or preoccupied to perform safely, you’re putting yourself as well as others at risk.
  • Fasten your safety belt.

Get in the habit of using the Three-Point Stance to enter and exit a vehicle safely. Have at least three points of contact. Use both hands and one foot, or both feet and one hand.

  1. As you approach the vehicle cab, eyeball the footholds. Dirt or grease could cause you to slip and fall.
  2. Enter the cab with one foot on the ground, one on the truck’s foothold and one hand on the handhold.
  3. Exit by climbing out backward, as if you were using a ladder. Never jump out of the cab.

Practice being safe around cargo. A load can shift while in transit, so use caution when you open cargo doors or release tiedowns. Open only one side of a van trailer and stand behind the other latched door. This will give you some protection from any falling cargo.

Use caution around forklifts. The only one who should be in or on a forklift is the forklift driver.

Don’t listen to music and don’t wear earbuds while you’re in the field. You should be listening for the sounds of moving and approaching equipment or instructions from team members and supervisors. Do follow your company policies regarding wearing hearing protection in the workplace.

Be Alert and Aware in the Workplace

A little extra awareness of yourself, your equipment and your environment can go a long way toward ensuring the personal safety of you and your coworkers around commercial motor vehicles.