News Column

Oil, Gas Boom Offers Opportunities

July 2, 2012

Larry Avila

Mark Berge recognized a good opportunity was right in front of him.

In December, Berge and his business partner, Tom Marohl and a group of private investors, purchased the large-scale equipment fabrication and engineering unit from Veolia Enviromental S.A. of France. The company now operates as 1 Engineering & Manufacturing or 1EM and is positioned to provide equipment for the natural gas and oil industry now experiencing a resurgence thanks to growing global demand for energy.

"We're at the beginning of a very large boom cycle," Berge said. "It used to be the oil and gas booms would bust after five or six years, but given the world population is now over 6 billion and energy consumption is at about 85 million barrels of oil per day and increasing, the demand is just growing."

It has been known for years that energy reserves exist in many parts of the world but were considered too expensive to tap until a method known as hydraulic fracturing was seen as a lower-cost extraction solution. Hydraulic fracturing, or fracking, is a form of drilling that blasts water, mixed with sand and chemicals, deep underground to fracture shale formation, allowing natural gas or oil to escape.

Berge said this type of energy exploration is happening around the world. In the U.S. alone, particularly in North Dakota and Texas, opportunities are plentiful.

Berge said oil reserves in North Dakota offer long-term growth potential. His company wants to supply components to the businesses entering that market and others globally.

"In North Dakota alone, there are 800 wells drilled and 6,000 more are planned over the next five years," he said. "They're also starting to look at drilling in Nevada and California. Certainly there is an end but it's difficult to predict when that will happen but it won't happen in five years, (the expectation) is it will go on much longer than that."

Riding the wave

Joshua Paul Fershee, associate professor of law and associate dean for academic affairs and research at the University of North Dakota School of Law, has been monitoring the latest energy boom in North Dakota and has researched hydraulic fracturing.

He said fracking has made oil and natural gas once deemed "not economically recoverable" attainable.

Opponents to the process have said it has the potential to pollute groundwater sources but President Barack Obama has supported more domestic energy exploration provided environmental safeguards are in place.

Fershee said western North Dakota has been a magnet for companies hoping to cash in. The boom has generated as many as 22,000 jobs for the state past five years.

Fershee said North Dakota recognizes the job boom only is temporary and expects once drilling slows, the oil industry likely will retain between 10,000 and 12,000 jobs.

Source: (c) 2012 The Post-Crescent (Appleton, Wis.)

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