Interior Secretary Shows Her Energy Savvy in North Dakota

Interior Secretary Sally Jewell, right, and Sen. John Hoeven, R-N.D., tour a drilling rig in North Dakota operated by Norwegian company Statoil.
National Journal
Amy Harder
Aug. 11, 2013, 8 a.m.

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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