New type of storage for well-site chemicals prevents spills

Seth Martin - Appalachian Drilling Services

In the second of our weekly interview features we are talking to Seth Martin, President and CEO of Appalachian Drilling Services. One of the winners of the Ben Franklin Shale Innovation Awards for their innovative spill-proof containment solutions, Appalachian Drilling Services is a pure play oil and gas services company supplying chemicals and lubricants to the oil and gas industry.

Monica Thomas (Shale Gas International): We know from the contest that you provide rig friendly waste storage units specifically built to mitigate the chances of any type of spill, but can you tell us a bit more about yourselves?

Seth Martin (President/CEO, Appalachian Drilling Services): Well, Appalachian Drilling Services is a pure play oil and gas services company. Our breadth of services – we service currently Ohio, West Virginia, Pennsylvania, Kentucky, with obviously an appetite for expansion. But we are first and foremost an environmental company, we take environmental storage very seriously, that’s why we offer some of our patent-pending equipment. That’s all about mitigating opportunities for spills, and any type of reportable incidents with the DEP, but as far as our services go, we’re really a chemicals and lubricants supplier, we sell drilling chemicals, soap defoamer, inhibitors, lubricants, that type of stuff, and we also have a full breadth of lubricants as well; motor oils, hydraulic oils, and that type of thing.

MT: When it comes to the shale innovation contest, you were particularly recognised for the containment solutions, if I understand correctly?

SM: That’s correct. So we threw our hat in the ring this year for the event and particularly we were focused on our patent-pending spill-proof containment which is for chemicals, lubricants and waste storage and management.

MT: Okay. So can I just maybe ask you a bit more about those containment solutions? According to your website you provide separate solutions for storing drilling chemicals and drilling lubricants and waste storage. Can you maybe tell us a little bit more – are these all different solutions for different substances?

SM: Sure. The chemicals and lubricants containers are essentially the same units – they come in different configurations depending on the need of the customer; there’s 4-compartment, 2-compartment, single-compartment; fluids and / or lubricant containment, and those are all heavy-gage steel, double-walled, spill-proof, epoxy-lined, and they’re built specifically for the purpose of being on active drilling rigs or frack-sites. They’re very durable and heavy-grade, and 100% spill-proof and puncture-proof.

As it relates to our services, we typically provide those pieces of equipment at no charge with the commitment from the customer to purchase the chemicals or lubricants from us.

MT: So you basically provide the chemicals and the lubricants and then the containers are added as a part of the service.

SM: Correct. We provide our equipment at no cost. The only cost incurred by the customers is the purchase of the chemicals, housed in our containment. Does that make sense?

MT: So, when it comes to storage, do you also provide storage for water for hydraulic fracturing operations or for flowback and produced water, or is it just for the chemicals that are used in the process?

SM: Just for the chemicals and the lubricants used in the drilling and / or fracturing process. We do have manufacturing facilities so we customise containers specifically for customers that are a little out of the norm when it comes to the scope of our services but we don’t really build anything on that scale – not that we wouldn’t – we just haven’t seen any demand for some of that stuff yet.

MT: The containment solutions are obviously an innovative product. Could you tell me a little bit more about what would be the outdated solutions that your company’s products replace?

SM: The standard mode of transporting and delivering chemicals and lubricants to drilling-related facilities – whether its and active drilling rig, frack-site or a pipeline company – are 275 gallon IBC totes; plastic wrapped in metal, and 55 gallon steel drums.

We weren’t always in the containment business, we were in the chemicals and lubricants business, but we figured there had to be a better mouse-trap and some of the stuff that we got into was at the behest of our customers. Plastic totes get punctured and spill, or the tops go missing, they fill with rain water contaminating the contents and they’re repurposed on the rig-site very frequently; they cut the tops off and reuse them for solid waste.

Same thing with the 55-gallon drums. They call them Envirodrums and they’re using them for waste. There’s really nothing “enviro” about them; they’re just steel drums and the same scenario repeats itself with those – they tip over, the tops go missing, they’re not spill-proof, and the operator or the driller has to dispose of those at the end of the day when they’re empty, so we skirt the whole IBC tote and drum issue with our service.

MT: So after the operation is complete, you just take the containers back?

SM: Yes, so typically, we service our containment on the rig-site and our services are built around our containment so we fill up our containment, whether it’s chemicals or lubricants, with custom-built trailers that have air-compressors and retractable hose-reels. It’s important for us when we are servicing our equipment that we are not interrupting the rig-operations to borrow any equipment or man-power; so we’re self-sufficient on the rig-site and we also pick up our equipment when they’re moving – typically what happens is that they’ll drill a hole or two or six on a pad – we’ll pick our equipment up and bring it back to our facility; inspect it, top it off and clean it and re-deliver to their new pad once they set the rig down at a new location.

MT: I understand that there seems to be a transition towards higher standards when it comes to environmental safety during drilling operations. In your presentation you mentioned the requirement of Chapter 78 of the Pennsylvania Code – can you, maybe, tell us a bit more about that? How does that change the containment solutions within the industry?

SM: Sure. Waste is a hot-button-issue with the DEP and the citizens of the counties that have active drilling rigs – it’s always been a hot-button-issue. Regulatory change is not something that is particularly news-worthy in and of itself because regulatory change is always coming in the drilling industry. It’s note-worthy where we operate because they’re paying specific attention to how waste is transported and stored and what people are doing with their waste once it leaves the rig-site.

Our equipment, our way-side solutions, speak directly to those issues. We are the only oil and gas company in the entire Appalachian region that is permitted by the DEP to transport stuff off rigs, what is called a “transport permit” – we bring our containment back to our facility and we recycle all the recyclables – typically spent filters, waste oil – the non-recyclables which are just what they call oily rags and diapers are squeezed for oil and go to a licenced landfill. And it’s the same with the waste oil – we’re the only company in the Appalachian region that is permitted by the DEP as a residual waste oil treatment transfer facility. So we use it for beneficial re-use.

MT: But that would not include things like flowback water or produced water or NORM?

SM: Correct. We’re looking at that actively because that’s a big issue – safe and legal disposal of the incredible amount of flowback water and drill-cuttings that are produced, and that’s something that is in our hopper, but today we’re pretty laser-focused on our solid waste and waste oil containment units and the services associated with that.