DENVER -- Midstream, hear this: Plan ahead or plan to go home.
“In midstream, we don’t have the benefit of being reactive,” said David Scobel , COO of Caliber Midstream . “We have to be out 18 months to two years in front of our partners to be able to respond to the needs facing us.”
Scobel outlined three risks in particular for the industry during his participation on the Bakken midstream panel during Hart Energy ’s recent DUG Bakken and Niobrara conference. John Westerheide , general manager of unconventional resources for GE Oil & Gas , and Gabe Claypool , president and COO of Dakota Plains Holdings , joined Scobel on the panel.
Scobel’s list of major risks for the Bakken includes:
- Evolving crude-by-rail regulations: “We’re seeing a lot of impetus to create a lot of regulations around rail to create a safer environment for transport and crude-by-rail.”
- Flaring and emissions: “Almost every topic at the conference has some emissions component to it.”
- Downspacing trend and batch completions: “There are some logistical, physical and complexity risks. Midstream can be a part of the solution.”
Tackling these challenges requires collaboration with upstream partners, he said.
“We need to be thinking about how this batch completion process is going to work out in the future,” said Scobel, ticking items off his list. “We need to be working together to get the flames out on location. There are safety issues with having live flames on a hydrocarbon location. Flares go out. People have to relight them now in a hydrocarbon-rich environment.
“We have emissions that are associated with all this stuff,” he said. “We [could] have 10-well [initial production] coming on with 8,000 barrel per day (bbl/d), 10,000 bbl/d, 12,000 bbl/d, whatever that IP looks like. So, the alternative to putting [vapor recovery units] out there is midstream’s. We need to figure out how to get all this to a centralized location, get the fires down, get a zero-emissions pad."
“Let’s get that happening today.”
With the first risk on Scobel’s list, rail regulations, knowing exactly what to expect is the biggest challenge.
“There are going to be changing regulations, and how do we handle regulations when we don’t know what they’re going to be and how that’s going to change?” Scobel asked. Most rail carriers are already complying with the anticipated 50 mph speed limit.