business & professional Jeff Binder at a well Liquid Gold Native Michigander makes his mark in fracking out West. Harry Kirsbaum Contributing Writer y 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 1/P P. School of Economics, he Jeff Binde 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 JN 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 equipment. "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 800-horsepower pump:' 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 oil companies. 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 their stockholders." 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 underneath it:' 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 blunt. "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 consumption:' ❑