business & professional
at a well
Native Michigander makes his mark in fracking out West.
ou won't see the typical white,
J.R. Ewing, Texas-style cowboy
hat perched on Jeff Binder's
head, but after a few minutes of talking
to him, you'll notice that the affable but
razor-sharp Franklin native knows his way
around an oil well.
Binder, 39, took the circu-
itous route in becoming presi-
dent of Overland Oil and Gas
LLC in Denver. After graduat-
ing with a law degree from
University of Michigan and a
master's degree in accounting
and finance from the London
School of Economics, he
became an attorney in New
York City. He then started a
commercial real estate finance investment
company in Chicago, which invested in
hotels, which led him in 2009 to a hotel in
oil-rich Williston, N.D.
The hotel was always sold out because
corporations like Halliburton would keep
the rooms for their workers. Binder would
hang out at the bar at night and, after a
while, befriended some of the oil service
workers there. He met one guy from an oil
service company who wanted to start his
own pressure pumping service.
"The company was turning down about
$250 million of work a week because they
didn't have the capacity:' said Binder, who
is married and lives in Denver. "The guy
wanted to try to fill the void:'
40 August 29 • 2013
He had the expertise, and Binder had
the connections. Binder helped raise the
funds from the same people who invested
in the hotel. After it took only six months
to raise the money, it was time to get the
"In the midst of the financial crisis,
companies were looking to sell off some
of their equipment, and we went on a tour
to buy what we needed:' he
said. "Getting an engine was
easy, you used a Caterpillar,
but getting the pump was a
science. We ended up buying
used equipment including an
Once they brought it back
to North Dakota, they tempo-
rarily set up shop out of the
hotel parking lot, and their
offices were some rooms in
the hotel, but they got a real shop before
winter of 2010.
"I never would have imagined, as a kid
from Michigan, that I would end up in this
industry," he said.
After 13 months, Binder asked his part-
ners in the oil service company to buy him
out, and with the profit he started Overland,
an exploration and production company.
"There are the Exxons and Shells, then
there are the large independents — some
are multi-billion dollar companies;' he
said. "Then there are a lot of guys that are
way smaller than them but way bigger
than us, and everywhere in between:'
But as the saying goes, "Thar's gold in
them thar hills:'
"It's an inefficient market and a huge
market, which leaves a huge opportunity.
It's very risky in a lot of ways, but what
we're doing in North Dakota, I don't view
as risky," he said. "You have commodity
price risk, but there's not really a dry hole
risk, where you put a drill in the ground
and you don't turn up anything. That's
why North Dakota and south Texas are
so sought after. The wells are expensive,
$8-$10 million, but you don't hit a dry hole
— the rock is all over:'
Fracking For Natural Gas
The procedure, called hydraulic fracturing
or fracking, pumps pressurized water with
sand and a bit of chemicals deep in the
ground, which breaks up the shale depos-
its and releases natural gas.
Environmentalists and other scientists
say that the water pressure, chemicals and
horizontal drilling used may, among other
things, poison the ground water, pollute
the environment and cause earthquakes.
Binder, of course, takes the side of the
He said that he doesn't know of any
instance of ground water contamination
from fracking, that the amount of chemi-
cals used is less than 1 percent of the flu-
ids, that farmers use more water to irrigate
their crops and, that in most areas, it is
economically feasible to recycle the water.
"There's no doubt that in any mining
industry, where you're extracting some-
thing, it has a dirty aspect to it," he said.
"The environmental interests keep oil
companies on their toes. These companies
don't want to have a problem or an acci-
dent because they're kind of motivated by
Drilling areas are usually parceled in
640-acre sections, he said. Within a sec-
tion, whoever leases the most of each sec-
tion drills the well. The profits and costs
are split up among the other partners
in the section according to the percent
leased by each.
Marathon Oil is drilling wells in one
section that Overland has an interest, he
said. Even though they dig containment
pits to catch any leakage, "they have a
1-acre square pad made of absorbent red
crushed rock that absorbs engine grease;'
he said. "They make you buy these mas-
sive tarps at a cost of about $15,000 each
that would catch the oil or grease coming
from the engine, even though the pad is
The fracking issue has been noted in
the Jewish community as well.
"The American Jewish Committee
strongly believes that a multifaceted
approach to reducing our dependence
on foreign oil must include, at least for
the short- and medium-term, develop-
ment of domestic oil sources, including
use of off-shore drilling and fracking,
with, of course, substantial environmen-
tal and safety protections;' said Kari
Alterman, Detroit Regional Director
of the American Jewish Committee.
"Fracking should be utilized under regu-
lations that make it as safe as possible:'
The Coalition on the Environment and
Jewish Life, Michigan Region was more
"Hydrofracking is proceeding in
Michigan with little oversight or regula-
tion. To date, the potential adverse effects
on Michigan's drinking water supply, air
quality, health, local land use, tourism,
natural resources and increase of green-
house gases have not been adequately
weighed against corporate interests;' said
COEJL-MI in a statement.
"Although hydraulic fracturing for gas
is not new to Michigan, this new form of
hydrofracking, using much higher vol-
umes of fresh water and introducing toxic
chemicals, could be construed to be a
way around the regulations for deep well
toxic waste disposal:'
The fracking process is being used in
Michigan near Kalkaska and Traverse
City, but the price of natural gas isn't high
enough right now to increase drilling,
Binder said. Prices are regional and natu-
ral gas is hard to transport.
Binder believes in natural gas — and
believes in Michigan. "If there were more
widespread exploration it would certainly
create tons of jobs;' he said. "And land
owners would become quite wealthy
and would pump a lot of money into the
economy in the form of investment and