I never realized what I was taking on coming into this position. The oil industry is very regulated - reminds me of my government jobs - but why shouldn't it since the government regulates the oil industry? But the regulations run DEEP and WIDE! What I mean by this is there's a proverbial pecking order and everybody wants a piece of the pie when it comes to making money on the bakken.
First of all you have the little oil company trying to make their way in a sea of larger oil tycoons. We little companies catch the brunt of regulatory reasoning. We come in to partner with the oil tycoons and they in turn smack us with this reg, that policy, this procedure, that issue...it's always something.
The DEEP has to do with initial set up of the company - you MUST be compliant or they can't use you. It's the death sentence of the small subcontractor because it can fee you and fine you to death.
To work with an oil company you have to be compliant. To be compliant you have to implement several measures within your company - you must first have a few basic things in place -
1) Insurance - this is coverage for your company, liability for covering the company you're working for, workers compensation to cover your crew, coverage for all your equipment and any possible thing that could go wrong out in the field. Each of these coverages involves a premium and unemployment insurance in North Dakota seems incredibly high!
2) Training - to quality to go work in the field our guys have to have training. What sort of training? OSHA10, H2S and several trainings required by each individual oil company, as well as equipment training and certification on things such as manlifts/genies, excavators, backhoes, cranes, etc.
3) Registration - you have to register every vehicle, truck, and trailer. It's interesting when registering a commercial truck because you don't just pay the $1000 for annual registration which expires December no matter WHEN you register (so I don't suggest registering in November), you also have to file form 2290 which runs you approximately $1500 per truck. This goes into a government slush fund that supposedly goes towards repairing the roads. If by chance you have out-of-state plates, you must also do special permits if you are running your rigs or vehicles more than 90-days within the state of North Dakota.
4) IS Networld - this is a compliance network nightmare. They say they're doing oil companies a favor, but for the smaller companies - not so much! Not only does it charge you $2600 per year to become a member, it costs a small company hours of work getting things set up and online. For a startup this is a nightmare deluxe! I have spent numerous hours tracking down compliance information, safety training companies and options, and writing up our safety manual to make it compliant as well. AARGGGHHHH!! I could go on and on about IS Netmare but I'll spare you my frustrations. (Except one...DEADLINES! They're killing me!)
5) Safety Manuals - a safety manual can make or break an oil industry company. It protects the company from law suits and keeps employees accountable. For the one writing them...well let's just say it is another nail in the coffin. I realize I may seem a bit overly dramatic here but truly, it is amazing just how much information and how many details must be covered in a safety manual. In the end though, it is well worth it and that's all I have to say on this matter.
6) TERO Cards - and I'm not talking the ones used to foretell the future. I'm talking about having your company located on the reservation. So, it's not just the regular governing agencies who have a hand in things, it's their extensions and in this case the Indian agencies that also want their rightful piece of the pie. With the initial boom - their fees were reasonable, but as things progress they (as well as everyone else) are wanting more of the cut. So we went from $1000 last year to over $3000 this year for registering our vehicles to drive on the reservation. Unbelievable!
7) Permits - not just one permit agency but two! County Road Permits AND State Highway Permits. To use these permits companies have to build and register their company profile and rigs. They have to make sure everything is in order and to make things more complicated they have to know WHERE they're going. I don't drive these roads, I have NO idea where I am going but I am the one required to submit permit requests and hope and pray I have the right directions. But that's not all, you also have to know how much your rig weighs with the load it's carrying, how long it is, the measurements between the tires, how many tires your rig has, etc. But that's not all, you also need to know if the roads they're hauling on are 6 ton or 7 ton or 8 ton, etc. If you are overweight you have to request ton mile fees be added on to the regular permit fee. THIS CAN BE SO COMPLICATED. I personally like registering rigs once and having permission to do self-issue permits. A much easier way to go and less time consuming and definitely less wasted time - self-issues have no down time where the ones you request online leave you at the mercy of the permit agency to APPROVE your trip - which could take anywhere from 1-5 hours, leaving your guys waiting on the side of the road.
8) DOT - another agency wanting their cut. You must have a DOT number to operate your equipment legally. That number must be ON your vehicle where everyone can see it. So you don't just pay the money for your DOT application and registration fee, you have to pay to have the vinyl cut and installed on your truck. Then you must be DOT compliant with your CDL drivers which leads to the next expense and policy/practice...
9) Drug and Alcohol Testing - any agency working in the oil field is required to have a legitimate drug testing policy in place. All employees have to have an initial screening prior to employment, especially CDL drivers. But CDL drivers have to go through the DOT drug and alcohol screening which is apparently different than just laborers or heavy equipment operators. Needless to say, there are stiff fines for not implementing a good Drug and Alcohol Testing program and the likelihood that you will be barred from working in the oil field if you don't comply.
SO - this covers A PORTION OF the deep. Later I'll talk about the WIDE.
In the meantime let's just say, PEACE OUT...THE BAKKEN!
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