VIEWED in a bucket, sweet crude oil from the Permian Basin region of West Texas looks a lot like diesel fuel. This low-density, low-sulfur crude oil is a preferred feedstock for many of the refineries along the Gulf Coast and in the Midwest.
Getting that sweet crude to the refineries can be a challenge due to pipeline infrastructure and capacity limitations. Rail shipments of crude oil have increased steadily since 2008, and truck-to-rail transloading is becoming a critical component of the rail process.
Atlas Oil Company is one of the companies that embraced the growing crude oil transload opportunity. The Taylor, Michigan-based fuel supply and distribution specialist opened its first crude oil transload facility in July in Odessa, Texas. Crude oil transload volumes at the facility started at 30,000 barrels a month and are expected to more than triple at full capacity.
“This is an extremely exciting new business opportunity for Atlas,” says Sam Simon, chief executive officer and owner of Atlas Oil Company. “We are always looking for ways to add value for our customers, and this is a prime example of how you can take a customer need and put some fresh thinking and ingenuity into the process to come up with a great solution.”
Atlas Oil's Odessa transloading site is a multi-function facility than was designed to handle renewable fuels including ethanol and biodiesel in addition to crude oil. It is the third transloading facility owned and operated by the company. The other two are in Albuquerque, New Mexico, and La Feria, Texas, and currently are used for transloading ethanol and biodiesel.
The Odessa location occupies five of 10 available acres and has 14 carspots. While the acreage is less at the other two sites, the Albuquerque location has 10 carspots, and the La Feria facility has 17 carspots. All three transload sites have room to grow.
“We're building our transloading capabilities for the longterm,” says Bob Kenyon, executive vice-president of sales and business development at Atlas Oil. “We also have plans to grow beyond the current three locations. We want to add a fourth location in early 2012 and possibly another later during the summer.
“We're looking at transload markets that are underserved, and there is a strong likelihood that the facilities we add over the next year or so will be located in or near oilfield areas. Demand for US-produced crude oil is growing, and we see some real opportunities for Atlas Oil.
“Atlas Oil has invested technology that allows the transload system to operate much like a loading rack at a terminal. These are first-class facilities that have all necessary product containment capabilities and are fully secured.”
For Atlas Oil, the transload capability is the latest addition to the company's broad portfolio of fuel trading, marketing, distribution, and logistics services. Established in 1985 by Simon, the company serves businesses, municipalities, and government agencies in 23 states. Customers include nearly 400 convenience stores.
“We handle a full range of refined fuels, with the exception of jet fuel,” Kenyon says. “We're also a distributor of BlueDEF diesel exhaust fluid. Other services include fleet fueling and remote storage tank monitoring. We have worked aggressively to grow and diversify our core fuels focus. To that end, we opened a fuels supply and trading office in Houston (Texas) in 2007 and built our first transload facility (Albuquerque) in 2009.
“To continue growing, we realize that we must do everything we can to optimize our marketing and distribution capabilities. We have to be able to buy and distribute product through multiple channels.”
The company runs a fleet of approximately 100 petroleum transports and tankwagons operating primarily in the Midwest. All of the tractors and most of the trucks are Kenworth T800s with 425-horsepower Cummins ISX engines and Dana drive axles. About a third of the tractor fleet was specified with Allison six-speed automatic transmissions. Four-compartment Heil petroleum trailers have a 9,500-gallon capacity.
In addition to Atlas Oil bulk plants in Michigan and Ohio, the fleet hauls product from a number of petroleum terminals throughout the company's marketing area. The fleet and the distribution network enable Atlas Oil to provide customers with 24/7 service every day of the year.
Operations are directed by the Atlas Logistics Team at the headquarters office in Taylor. In addition to the Atlas Oil fleet, the logistics team has access to a national fleet operated by one of the largest bulk transportation and logistics providers in the industry.
Outstanding customer service is a critical objective of the logistics team, and customer service representatives answer all customer calls. Shipments are computer dispatched for speed and accuracy. Advanced logistics software manages and integrates fuel deliveries via multiple markets.
Working with the Atlas Logistics Team is a well-trained cadre of company drivers. In selecting truck drivers to hire, Atlas Oil looks for individuals willing to embrace the company's core values (Passion, Grow or Go, Pride and Image, Customer Focus, Solution Driven, and Do the Right Thing) and with some technology savvy and a desire to grow with the job. Basic requirements include three to five years of solid truck driving and a commercial driver license with tank and hazardous materials endorsements.
With the growing driver shortage, Atlas Oil's management realized they needed new sources of candidates. In March, the company began recruiting new drivers through the US Marine Corp's Troops-2-Truckers program, and it joined the US Army's PaYS (Partnership in Youth Success) program in September.
Several drivers have been hired through the Troops 2 Truckers program, including one now assigned to the La Feria transloading facility. The Troops 2 Truckers program focuses on active-duty service members reaching the end of their military commitment. It provides transportation and logistics training and credentialing to improve employment opportunities for those leaving the military.
“Troops 2 Truckers is a great program for everyone involved,” says Shawn Ryan, Atlas Oil vice-president of operations. “We get well-trained individuals who are not only CDL and hazmat certified, but they are also safety minded, disciplined, and tested in tough conditions.”
The Army PaYS program is similar, but it focuses on soldiers at the beginning of their enlistments. PaYS is a strategic partnership between the Army and a cross section of US corporations and public sector agencies. Under the terms of the agreement with Atlas Oil, the Army will make it possible to enlistees wanting specific civilian sector job training and qualification to get those skills while still in the Army.
For instance, as part of the enlistment process, recruits would sign a statement of understanding of intent to work for Atlas Oil upon completion of their term of service. As they near the end of enlistment, soldiers would have the opportunity to interview with Atlas Oil for a specific job at a specific location.
“Military veterans help satisfy our need for better resources for recruiting drivers,” Kenyon says. “Some in the military have driven fuel trucks, and we can teach them our way of hauling fuel. We're making a big outreach to those in the military, and it is helping us attract some of the best talent in the market. This is giving us a great resource for expanding into new markets, and we are looking for more than just truck drivers. We're also looking for truck mechanics and people with other skills that fit our company.
“This is a real win-win arrangement. We have access to a great pool of potential new truck drivers, and we are teaching them a skill set that they can use for a lifetime. We're very selective in who we hire from these programs, because we have to find just the right candidates.”
Driver training is a critical factor for Atlas Oil, and new hires must successfully complete a 240-hour training program for new drivers. Atlas Oil also requires a 12-hour annual recertification for all drivers.
Much of the driver training (at least 80%) is handled by members of the Atlas SEAL (Safe Educated Atlas Leaders) program. Every market has at least one SEAL member in place, and each new employee is assigned a SEAL member as a mentor.
Kenyon points out that SEAL members are the best of the best. They receive extensive training on how to teach, how to communicate, and how to improve managerial effectively. Management works with SEAL members to help them become resourceful team leaders who are focused on customer needs.
In addition to training and mentoring drivers, SEALs help out when Atlas Oil expands into new markets and locations. For instance, SEALS helped with driver recruiting when Atlas Oil added more than 20 trucks in the northwest Indiana region.
SEALs have been very involved with the transloading operation. SEAL members are at each of the company's three transload locations. In Odessa, the SEAL team member is Phil Pruchnic, and he is Odessa team lead and site manager.
When tanker loads of crude oil are being transferred at the site daily, Pruchnic and assistant Dustin Forehand have plenty to do. Tanker rigs collect the crude oil at gathering stations within a 60-mile radius of Odessa. When the trucks arrive at the Atlas Oil facility, they go directly to the transload station.
“The transfer process is relatively straightforward,” Pruchnic says. “The sweet crude oil has a good flow rate, and we face little risk from hazards such as hydrogen sulfide. We do wear hydrogen sulfide monitors for safety.
“Typically, the only time we encounter a transloading delay is when we fill up a railcar and have to move our equipment to the next railcar. Disconnecting and reconnecting hardware adds 45 to 50 minutes to the job.”
Crude oil transfer is handled by portable carts called transloaders, and the equipment usually is prepositioned and ready to go. The Odessa facility has two of the transloaders, while the other two Atlas transloading sites have one unit each.
During the transload process, the driver draws a sample for each barrel (42 gallons per barrel) of crude oil transferred. Samples are tested each month to give the customer an average for the quality of oil shipped during that period.
At the end of each transload, the product hoses are purged of all product. Atlas Oil personnel and the truck drivers for the contract carrier go to great pains to ensure that no crude oil hits the ground at the transload facility.
Full rail cars are collected multiple times a week by the Union Pacific Railroad, and empty tank cars are dropped off. The UP hauls the crude oil to refineries in the Gulf Coast area of Texas.
“The industry has found that this is an economical way to ship crude oil from oil wells in the area to the refinery,” Pruchnic says. “This is a non-stop process that goes on every day. The oil wells keep producing, and the oil has to be moved. We make sure that the process is as smooth and trouble-free as possible.”
(Includes images not in the magazine)