By Evelyn Pyburn

“How to Make America Competitive” according to Leen Weijers requires nothing more than lowering the cost of oil – the cost of competitiveness – and fracking has done that.

Weijers, as the featured speaker at the Montana Petroleum Association’s Appreciation Luncheon, explained how improved technology and efficiencies in the industry has lowered costs, increased production, reduced negative impacts and is drawing new business and companies into the US in order to better access natural gas.

Weijers is a highly experienced professional, currently serving as the VP of Engineering at Liberty Oilfield Services.  Weijers has been instrumental in developing hydraulic fracture growth simulators and conducting real-time fracture analysis.

“The amount of energy you have available to you, reflects how well you live your life,” asserted Weijers. Technology has made dramatic changes to the fracing industry and “the economic and humanitarian benefits are massive,” he said.

The technology of fracking allows the extraction of petroleum from shale, which holds vast quantities of petroleum that had never before been accessible. Fracking involves the fracturing of formations in bedrock by a pressurized liquid. The process involves the high-pressure injection of “fracking fluid” – mostly water — into a wellbore to create cracks in the deep-rock formations through which natural gas, petroleum, and brine will flow more freely. When the hydraulic pressure is removed from the well, small grains of hydraulic fracturing proppants hold the fractures open, which allows the oil to flow.

According to Weijers, 80 percent of all hydrocarbons come from shale and fracking, and 67 percent of oil is natural gas.

Weijers reported that fracking has improved production by two and half times, from 60 barrels to 160 barrels. Fracking in the US has increased oil production 134 percent since 2010 and continues to increase at a rate of 2-3 percent each year. The cost of producing a barrel of oil is 60 percent of what it used to be before fracing technology was refined.

During the technology’s 70 year history, much has changed – “all kinds of things have been modernized,” said Weijers. Sand is moved in containers; it is dust free, quick to unload and with less noise. Costs have been reduced 30 percent and it is simpler to deliver the finished product.

Because of the improved technology “US oil and gas workers are way more efficient in what they do.”

“The price of natural gas has come down tremendously.” It’s five times as cheap as diesel, said Weijers, which has prompted many companies to use natural gas and the industry is building equipment that runs exclusively on natural gas. In fact, said Weijers, many companies are moving to the US because of the availability of natural gas.

Weijers emphasized the efficiencies that have been gained in the industry, saying that the petroleum industry employs 400,000 workers – so does solar and wind, but they produce only five percent of the energy that the petroleum workers produce.

“We pump faster at higher rates into a well at a hundred barrels a minute.” That keeps the sand in suspension so “we don’t need as many chemicals.”

The more oil that is produced the less expensive it is and the more competitive all of US industry can be, according to Weijers.

Also during a half day program which was part of the Montana Petroleum Associations (MPA) annual conference, Economist Pat Barkey of the Bureau of Business and Economic Research, presented an over view of what it is going to take to transition to a green economy and the unlikelihood of being able to achieve the goals that have been set. It will take longer than energy transitions of the past because of economic issues. In the past the economy was smaller and energy use was less. And, this transition is being driven by “policies and not economics.”

“In fact we have a well-run system of cheap energy,” said Barkey.

Also, hampering the transition is that it has to be complete in order to achieve the goal. Historically, the US transitioned from coal to petroleum, but coal is still present. “That can’t happen” with this transition, said Barkey. “To impact climate it must be carried out globally, not just in the US and in rich industrial countries. It is a global problem. ..The speed that is promised is unprecedented.”

Barkey pointed out that much of the energy that is produced and transmitted is wasted. “What you actually get is smaller than the energy that is wasted.” The job of achieving the goals “isn’t quite as big if we can do away with wasted energy.”

The transition to green energy alternatives means a “significant” increase in demand for the many different minerals that are necessary to produce the alternatives – such as copper, lithium, nickel, zink, rare earth metals, etc. The increased production of just one of those minerals, such as copper, would have to double in the US, said Barkey. In fact, it will require more copper than the world has ever produced. That requires more energy usage for mining and recycling.

“That’s a very tall order for just one narrow part of the transition,” said Barkey, especially in light of the timeline required in getting mining operations permitted and approved in the US. The Black Butte mine has so far taken 14 years. “This pace of new production is incompatible with energy transition as proposed by those who support it.”

Barkey also emphasized that cheap and abundant energy has enabled the industrialization of the world which has reduced, significantly, extreme poverty throughout the world. Since the 90s,  extreme poverty has declined by a third – much of that was in China.

There are many other issues that may be impacted by a transition to more expensive green energy, pointed out Barkey – all requiring greater energy usage.

In his message to the membership, MPA President Dave Linn stated, “The taxes and salaries of our businesses and employees significantly contribute to our schools and local governments. Our products and services are used by virtually everyone and are essential to all aspects of our modern life.”

He pointed out that “we are an industry at the forefront of an idealistic battle… For an engineer/project manager like me, it is easy to recognize that the goals and timelines for this change are best driven by technology, well-vetted plans, and the free market, not by politically driven government mandates”

Linn underscored the pressures under which the industry functions. “… it seems that every week there is new legislation or regulations being proposed with hard-hitting impacts to our industry and our sustainability.” As an example he pointed to the Montana court ruling regarding the Child Climate lawsuit. “Rarely are old laws revised if the new interpretation is contrary to existing policy. Meanwhile, for our industry, it’s business as usual as we are required to keep our operations and companies going and the critical products flowing to customers while these legal battles slowly move through the courts.”

During the conference there were panel discussions about the Child Climate lawsuit, about property taxes and about the Supreme Court Chevron decision.

Earlier this year, Dave Galt, a former MPA Executive Director, assumed the role of interim Executive Director, as Alan Olson resigned to serve as a director of government affairs for NorthWestern Energy.

Olson has been MPA Executive Director the past eight years.

Galt, too, commented about “the onslaught of federal regulations being hastily passed by the Biden administration.”

He stated, “Methane rules will dramatically increase costs for all producers and may be the demise of many of Montana’s marginal wells. This will have a huge impact on Montana communities. Recent rule changes of the Bureau of Land Management are just as egregious. Past changes in things like allowing leases for buffalo are curious. New BLM policies that will allow a ‘conservation’ to compete with oil, gas, mining, and grazing leases adds a whole new aspect to management of huge swaths of federal lands in Montana. Other than the initial lease payment, I see a huge potential change in recent income from activities on federal lands. If this actually comes to pass, I see a significant impact on Montana’s revenue, quality of life, and harm to rural communities.”