There's an intersection in North Dakota, where coal meets oil, that leads to thousands of pits out in the oil patch.

Burning lignite in power plants creates a fly ash residue that - turns out - is perfect and relatively cheap for solidifying drilling waste buried in pits next to oil wells.

Sales of fly ash are turning into a decent source of revenue for power plants out in Coal Country. Not only do power producers not have to pay to dispose of the ash - oil companies pay good money to take it off their hands, mix it into drill cuttings and bury it for them.

That intersection could become a parting of the ways with the potential for fly ash to be labeled a hazardous waste, rather than a solid waste, by the federal Environmental Protection Agency.

Even an exemption for beneficial use of fly ash probably wouldn't hold the two together. Besides the fly ash in oil pits, about a half-million tons of fly ash from the Coal Creek Station at Underwood is sold as a substitute for Portland cement in concrete.

Al Christianson calls himself the "face" of fly ash, having been instrumental in managing its development into a lucrative byproduct for his company, Great River Energy.

Now, nearly every last ton made at Coal Creek is sold into the cement industry.

Great River doesn't have any fly ash left from Coal Creek to sell into the oil fields, but it does from its smaller Stanton Station.

At that plant, located on the Missouri River, about 70 percent of the fly ash is sold into the oil patch, some louvered into those white 1-ton plastic bags also used for hauling fracture treatment sand and ceramic sand, some loaded bulk into pneumatic tankers.

Jim McKay, Stanton Station utility supervisor, said sales to the oil field increased recently and the plant hasn't hauled any ash to its own disposal pit for the past two months.

In fact, his company is building a new storage building next to the fly ash bagging operation so it can build up a reserve inventory. Stanton Station is the only utility that bags fly ash. Others, like Basin Electric Cooperative's Antelope Valley Station, make it available in bulk.

Christianson said Great River would change its mindset about fly ash sales if the EPA makes its move.

"If we have to make a left turn with some loads of fly ash (because it's hazardous) and a right turn with other loads because it's OK (for beneficial use), I can guarantee we'll be making all left turns. Utilities are risk-averse. We have the deep pockets and if they're going to sue someone, it's always going to be the utilities. What if a truck overturns out there on the highway?" Christianson said.

For now, though, fly ash sales are booming right along with all else in the oil patch.

Tavish Vestal, whose family owns Red River Supply, of Williston, sells up to 800 tons daily of bagged fly ash to oil companies. Many are in a hurry to get pits covered before winter to avoid pit runoff if there's another snowy winter as predicted.

You have free articles remaining.

Become a Member

He said it's not a fun part of his job because supply is limited, buying is very competitive and demand is growing. He's had to resort finding fly ash in other states like Montana and Wyoming.

Fly ash from South Dakota isn't allowed in pits here because it's slightly radioactive.

"It's gotten to be such a nasty market to be in, in the last few years. It's pretty ruthless. Somebody takes them on a golf trip to Florida and it cuts us out of three loads," Vestal said. "A lot of customers buy it and resell it. It's too fast-paced."

Vestal said he pays up to $100 a ton and resells it for $225 a ton bagged and delivered.

His company started bagging all the fly ash it buys because of customer preference.

Get Breaking News delivered directly to you.

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

"We had to make a choice between bulk and bags and we just said the whole thing is moving to bags," Vestal said.

In an illustration of how fast things are moving, he said he only learned a few months ago that the fly ash has to be registered with the state Health Department even though it's been used around the oil patch for years.

Christianson refers to some suppliers as "ash cowboys," and says Great River has had its fly ash tested and approved for use by the Health Department. "I just hope everyone else has done the same thing," he said.

In Coal Country, the fly ash sales market is dominated by a company called Headwaters Inc., the same company that joined Great River Energy to build the ethanol plant co-located with Great River's Coal Creek Station power plant in Underwood.

Headwaters' area manager Jim Glass said he secured contracts with some Coal Country utilities for sales of about 150,000 tons of fly ash into the oil field every year for about $30 a ton raw.

He said the price has been slowly escalating along with demand.

That's a small fraction of the 3.2 million tons of fly ash produced in Coal Country, but Glass said he's working with other utilities to secure additional fly ash contracts.

He estimates there's a potential for up to 400,000 tons, since oil companies typically need anywhere from 100 tons to 250 tons per pit to bind the squishy drill cuttings into a hardened mix before dumping in the lined pits. Some 1,800 new wells will be drilled this year alone, according to Department of Mineral Resources spokeswoman Alison Ritter.

"Then all the fly ash going into our oil fields will be coming out of North Dakota, with very little coming out of Montana," Glass said. "It's a perfect application for this."

Get Breaking News delivered directly to you.

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

Reach reporter Lauren Donovan at 220-5511 or lauren@westriv.com.