Legislative energy tour looks at basin oil operations
On May 26, state legislators spent the second part of a day tour of energy fields in eastern Utah by visiting the Newfield Oil Rocky Mountain Operation south of Myton.
The group consisted of Senators Kevin Van Tassell of Vernal, David Hinkins of Orangeville, Margaret Dayton of Orem, Karen Mayne of Sale Lake and Representatives member Kraig Howell of Heber.
Newfield has a local headquarters north of the Monument Butte oil field in Duchesne County.
While the legislators did tour the actual field because of delays earlier in the day during visits to Nine Mile, Gate and Cottonwood Canyons in northern Carbon County, the informative session was scheduled in the company's meeting room.
Newfield district manager Mike Guinn told the delegation that, although the price of crude oil has risen to around $60 a barrel, the black wax crude produced in the Basin is sold at about $44 per barrel.
People often misunderstand when they think that all oil is the same, according to company representatives.
Texas light crude is the basis for the high price of a barrel of oil. The fuel that comes out of the ground in Duchesne County is heavy and full of paraffin wax. The oil flows fairly well deep underground because of the heat and pressure. But once it arrives at the surface, the fuel congeals into a semi-solid mass.
Because of that, the crude needs to be heated from the well head to the refinery and then a special refining process must be used to crack it into its various components.
During the meeting, Guinn passed out samples of the oil in small plastic bottles to show what the fuel looks like in its natural surface state to the legislators.
"Yes, it does look like shoe wax," noted Guinn. "We, in domestic oil production, have to be very good at what we do," From the severance tax point of view and from the operational point of view. Because if you do the simple math, it's very difficult to live in this environment if you're not good at what you do."
Guinn told the legislators that Newfield is currently running three drilling rigs in the area.
However, if oil prices remain stable or improve, the representative said the company could possibly bring on an additional rig.
Before the recession hit, the company had numerous drilling operations going on.
In 2008, Guinn indicated that Newfield drilled 251 wells in the Duchesne County field. The number of the company's operations will drop to 140 in the Monument Butte field in 2009.
Guinn told the legislators that, after the initial sput of oil comes out of the ground, the wells on average produce 10 to 12 barrels of crude per day on average.
With the wells that are presently producing the natural resource, the company pulls 16,500 barrels per day out of the ground in the area. It takes 65 trucks per day to haul the oil to the refinery, explained Guinn.
The company deals with wells on federal, state, private and tribal lands.
That evening, a meeting was arranged for the legislators to hear from Rob Behunin of Utah State University.
Behunin has been working on several industrial projects with Uintah Basin companies and from proponents of the Seep Ridge Road project that Uintah County wants to have built between Interstate 70 near Thompson and Vernal.
Joining the legislators was Utah Rep. Chris Watkins of Price and Sen. Ross Romero of Salt Lake.
The legislators also had a half an hour meeting with United States Interior Department Undersecretary David Hayes before the public session. The public gathering was in Vernal that evening.
The next day, the group traveled to Red Leaf Resources.
The company has developed a new way to extract the fuel from oil shale.
Editor' note: Today's story is the second in a series of articles about an energy tour Utah legislators particpated in during the week of Memorial Day.