veryone in Alaska knows the big players in the oil patch: ExxonMobil, ConocoPhillips, Hilcorp, and potentially soon (again) Shell. They are responsible for petroleum production that returned $3.1 billion in state and local taxes and royalties in fiscal year 2019. Counting those dollars spent from public coffers, in addition to the industry’s direct spending, the oil industry drives about half of Alaska’s overall economy, according to the Resource Development Council. The sector also accounts for one-quarter of Alaska’s jobs—but not by those major players alone. They have help.
In the shadow of the giants, smaller operators with less familiar names carve out their pieces of the pie. They form a parallel industry: oil field support. These companies provide environmental services, management, engineering, contracting, and supplies. They would not be in Alaska without the major companies, yet the multinationals would not be able to function without their relatively Lilliputian assistants. Often locally owned, support companies draw on very specific expertise, allowing the big companies to focus on what they do best.
“We manufacture passive refrigeration devices that are used to keep the ground frozen up north,” says Edward Yarmak, president and chief engineer of Arctic Foundations, Inc. (AFI). But isn’t the North Slope permanently frozen? Indeed, oil and gas wells are drilled through permafrost as much as a quarter-mile thick, but the action of drilling, and later the extraction of oil or gas, creates heat. “You can imagine that hot oil coming up through permafrost is something that’s going to thaw things out,” Yarmak says. Softened earth can collapse around wells or underneath pipelines or buildings. That’s where AFI comes in.
AFI makes thermoprobes, which are two-phase thermosyphons that provide passive refrigeration to either create or maintain permafrost. These thermoprobes allow for the construction of heated structures on permafrost without the ground settling, and they also allow oil drilling without well collapse.
veryone in Alaska knows the big players in the oil patch: ExxonMobil, ConocoPhillips, Hilcorp, and potentially soon (again) Shell. They are responsible for petroleum production that returned $3.1 billion in state and local taxes and royalties in fiscal year 2019. Counting those dollars spent from public coffers, in addition to the industry’s direct spending, the oil industry drives about half of Alaska’s overall economy, according to the Resource Development Council. The sector also accounts for one-quarter of Alaska’s jobs—but not by those major players alone. They have help.
In the shadow of the giants, smaller operators with less familiar names carve out their pieces of the pie. They form a parallel industry: oil field support. These companies provide environmental services, management, engineering, contracting, and supplies. They would not be in Alaska without the major companies, yet the multinationals would not be able to function without their relatively Lilliputian assistants. Often locally owned, support companies draw on very specific expertise, allowing the big companies to focus on what they do best.
“We manufacture passive refrigeration devices that are used to keep the ground frozen up north,” says Edward Yarmak, president and chief engineer of Arctic Foundations, Inc. (AFI). But isn’t the North Slope permanently frozen? Indeed, oil and gas wells are drilled through permafrost as much as a quarter-mile thick, but the action of drilling, and later the extraction of oil or gas, creates heat. “You can imagine that hot oil coming up through permafrost is something that’s going to thaw things out,” Yarmak says. Softened earth can collapse around wells or underneath pipelines or buildings. That’s where AFI comes in.
AFI makes thermoprobes, which are two-phase thermosyphons that provide passive refrigeration to either create or maintain permafrost. These thermoprobes allow for the construction of heated structures on permafrost without the ground settling, and they also allow oil drilling without well collapse.
Yarmak says the company has thermoprobes around many wells in Alaska. AFI also manufactures load bearing thermosyphons, called thermopiles, for the foundations of buildings constructed on permafrost. The founder of the Anchorage-based company, Erv Long, invented the Long thermopile in 1956, and the devices have been used ever since for tundra homes, utility towers, and vertical support members of the Trans Alaska Pipeline System. AFI has also been involved in some active refrigeration projects at non-oil field sites, and Yarmak notes that active refrigeration might extend to oil fields in the future, as the climate warms.
NorthStar Supply’s main customers are contractors building infrastructure for oil and gas companies. In other words, it supports the supporters.
One of the company’s biggest selling items is its geotextile fabrics, used for separation and stabilization between road surfaces and the underlying ground. Mostly made of polypropylene, geotextiles make roads stronger and allow for structures to be built in certain areas where ground conditions might not be conducive to road building. Geotextiles are widely used in road construction. NorthStar Supply’s job is to deliver the material to the contractor. “We have a reliable freight network that allows us to get stuff anywhere we need to get it,” Carmichael says.
The company also supplies maintenance materials for roads and roadbeds. Its products are meant to extend the life of asphalt and reduce costs overall in the harsh Alaska environment. The company offers commercial-grade products for parking lots, taxiways, roads, and more.
President
Valley General Energy Services
NorthStar Supply also provides a variety of drilling fluids, which are circulated in the borehole to suspend cuttings, control pressure, provide buoyancy, stabilize exposed rock, cool, and lubricate. Without drilling fluids, oil and gas wells would be uneconomical, so a reliable supplier is essential to continued production.
“There are drinking water systems and wastewater systems that have to be tested regularly,” says Michael Priebe, director of sales and marketing. “They bring those samples to us.” Some analyses are performed at the company’s Deadhorse lab; others are sub-contracted to laboratories in Anchorage or out of state.
The company also provides emergency spill response services. “We have samplers in Prudhoe Bay that are available 365 days a year,” says Priebe. And the company’s lab is also operated twenty-four hours a day, seven days a week. Arctic Fox environmental scientists can accept, analyze, and collect samples in and around the Prudhoe Bay oil field area. They can also prepare and transport hazardous waste. “We’re not regulators,” Priebe says. “We provide the service for it. We do hazardous waste characterization, and obviously there’s demand for that on the Slope.”
Most days, the Arctic Fox lab is staffed by one person, flown in from Anchorage. This time of year, that’s lab manager Timothy Johnson. He says having water testing at Prudhoe Bay is an enormous benefit to the bottom line of major oil companies. “If we weren’t up here, they would be spending twice as much money, and it would take them three times longer to get things done.” Johnson takes pride in his company’s rapid turnaround for testing.
First, the company flies someone out in the summer to find the best A to B route for the road based on environmental dynamics. It will help the oil company pick the route, and it works on getting permits for the road. Valley General Energy will then create a construction design and put it out to bid, helping to choose the right contractor for the job. Once a contractor is chosen, Valley General Energy provides complete oversight and management of the project itself by embedding a staff member at the job site. And when the season is over, the company will perform the cleanup and a summer study to see if the project can run another year. If things are good with the summer study, the company will then plan another season of work.
Valley General Energy also does rig support services, which involves a robust transport capability. Company president Justin Shields explains, “The biggest part of the logistics is going to be all of the support, like transporting people and materials and setting up all of the transport into Alaska [in some cases] and then from in state to the field.” Part of the rig support provided by Valley General Energy also involves project management, which can include coordinating contracts for pipe, drilling products, and fuel. Shields says the company implements services with an eye toward schedule and budgeting that ensures success for clients.
Valley General Energy specializes in providing its services to projects in remote areas of Alaska, and Shields is proud of his business. “Our team has over 100 years of experience combined, and we support projects all over the state.” Currently, Valley General Energy is working with Hilcorp and Pantheon, but the company has worked with BP, Doyon, and Arctic Slope Regional Corporation. Shields opened for business in early January of 2016, and he hopes to continue growing his company. “I have two sons I’m raising,” he says, “and I hope they’ll be able to grow up and work in the oil and gas industry.”