WILLISTON, N.D. — Seated around a table in a warehouse next to a drilling rig next to a neighborhood, Interior Secretary Sally Jewell led with something that went over well in this oil-rich crowd.
“I have fracked wells before,” said Jewell, who is known most for her eight years as CEO of outdoors retailer REI. Less well known is the fact that she started her career in the late 1970s working in the oil industry in Colorado, Alaska, and Oklahoma.
“It is a great crude you produce here,” Jewell said to executives from Continental Resources, the company whose drilling rig she was touring that day.
At the request of North Dakota’s two senators, Republican John Hoeven and Democrat Heidi Heitkamp, Jewell visited last week to see firsthand the oil drilling that’s turned upside down not just the way of life in North Dakota, but the entire country’s energy agenda by displacing foreign oil imports.
In her opening remarks before the tour, Jewell commended Harold Hamm, founder, chairman, and CEO of Oklahoma-based Continental Resources.
“Congratulations on what you’ve done here in the Bakken,” Jewell told Hamm, referring to the shale-rock formation where the oil drilling is occurring. “You’re a pioneer.”
Hamm’s company has the biggest footprint in the Bakken, drilling 11 percent of the formation, which spans an area the size of West Virginia. Hamm has made millions drilling for oil in this vast state: He’s worth $11.3 billion and ranked 32nd on the Forbes list of richest Americans.
“It took us a while to convince people this is here to stay,” Hamm said to the group of almost 40 people — a mix of Interior officials, oil executives, and a handful of reporters.
Jewell’s experience in the oil industry was praised by those in the industry and North Dakota lawmakers alike throughout the time she was touring the state.
“She comes with so much credibility in this field that that is really to her advantage and the president’s advantage,” Heitkamp said in an interview after Jewell’s visit. “She can ask the tough questions that need to be asked but also understand and appreciate the technology.”
When it came to one particular topic — methane emissions — Jewell asked tough questions all day long. “A good part of what we’re here for is to learn about that,” Jewell said about methane flaring.
With so much oil being developed in the Bakken over the last few years, much of the natural gas that’s inadvertently withdrawn has been flared off, in part because the infrastructure doesn’t yet exist to process and transport the gas.
Not only is the gas being wasted, it is dispersed into the atmosphere as methane, a greenhouse gas 20 times more potent than carbon dioxide (that is, its impact on warming the planet is much more intense in a shorter amount of time).
About a third of all wells in the Bakken are flared, and that’s a statistic on display driving around the region. The methane flares look similar to an Olympic torch or, in some cases, a campfire.
As a preview of her focus for the rest of the day, Jewell broached the topic of flaring methane early on during the conversation in the warehouse. It’s “really important in terms of emissions but also royalties to the state,” she said.
Judging by the questions Jewell asked throughout the day to executives of Continental and also Statoil, a Norwegian company whose drilling sites she visited later in the day, methane emissions were foremost on her mind.
She was in her element, asking questions only a trained petroleum engineer like herself would understand.
“How wet is your gas?” Jewell asked of a Continental petroleum expert while walking around the company’s drilling site. She then confirmed that Continental was, in fact, capturing all of the methane at this particular rig. Continental flares no more than 10 percent of its natural gas, Hamm says.
Environmentalists, though, say anything above a few percent is too much given its potential to exacerbate global warming.
Jewell’s visit to a Statoil facility included a look at some of the latest technology that enables producers to capture natural gas for use rather than waste it. None of Statoil’s sites were flaring gas either. Jewell’s tour didn’t include any sites that were flaring gas, but such rigs are easily visible from the road.
“One of the problems with flaring is you end up with a lot of gas that basically comes at you with very high pressure and that makes it very difficult to plot a gathering system,” said Heitkamp, who also has extensive experience in the oil industry. “You don’t need to explain that to her; she gets it.”
That knowledge will be important for Jewell, as the Obama administration is in the early stages of drafting regulations to control flaring of methane and other aspects of drilling and hydraulic fracturing on federal lands.
The oil executives showing Jewell around were careful to stress that the federal government should not regulate in either case, comments that Jewell took with a very slight nod of the head. The Obama administration is, after all, moving ahead to regulate in both cases.
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