Content about oil

WILLISTON, N.D. — A four-hour drive northwest from Bismarck, N.D., will lead motorists to the city of Williston, where a modern-day gold rush has incited oil miners to flock to the area to mine for natural gas trapped beneath the state’s water table in the Williston Basin.

Oil is mined through a process known as hydraulic fracturing—or fracking—which involves drilling a mixture of water, sand and additives into a reservoir, ultimately creating a passageway for miners to procure the previously trapped natural gas, says energy services company Halliburton.

Oil production and takeaway capacity in the Williston area has steadily increased over the years, with the U.S. Energy Information Administration reporting last April that 600,000 barrels of crude oil were being produced per day.

While the oil business has brought a financial boom to the Williston area, a new necessity has emerged, roused by the influx of workers and their families: “greaser” laundry facilities.

“You have people all over living in man camps [or] living in RV parks that don’t have laundry [facilities],” says Terry Anderson, a coin laundry equipment salesman for The Minnesota Chemical Co., a distributor headquartered in St. Paul, Minn.

In the past year, Anderson has had a hand in answering the area’s laundry needs by designing and building two laundries: one in neighboring Watford City (population 1,759) and the other in Tioga (population 1,230), each about an hour’s drive from Williston.

CLEAN JEAN’S EXPRESS LAUNDRY

Owner Charles Barton consulted with Anderson to build his facility, Clean Jean’s Express Laundry, in Tioga. His family has been in the area since the late 1930s. In addition to owning Clean Jean’s, he has also set up an RV park to cater to workers from the oil fields.

“I have 31 spaces since putting that in three years ago,” says Barton, who’s seen about a half-dozen more parks built within a three-mile radius and believes more are on the way.

Clean Jean’s, which opened in August 2012, is an attended coin laundry located three blocks up Tioga’s Main Street, and sits at the far end of Barton’s RV park. A portion of the facility, encompassing 1,760 square feet, was originally a Quonset hut built in 1956 for a cement plant. Barton’s family took ownership of the building in 1976, and in the construction process ended up adding another 480 square feet at the front of the facility.

His store offers Speed Queen industrial equipment, including 15 front-load washers with capacities of 20, 30, 40 and 60 pounds, as well as 28 dryers with capacities of 30, 45 and 55 pounds.

Like many coin laundry stores, Barton’s has taken advantage of the added service of wash/dry/fold.

“We started off primarily with self-serve and then there [was] a need for [wash/dry/fold],” says Barton, who began offering wash/dry/fold service in October. “We started off with 10 customers the first month, and we’re well past 200 customers now.”

But what sets his facility apart from others, he believes, is the fact that he accepts greaser laundry—garments that oil workers wear in the oil fields—which he explains is “just about impossible to get cleaned.”

“You can’t just throw it in the washer and go through the same motions that one does for non-greaser clothes,” he says.

Barton’s facility sees mostly uniforms and coveralls that have “heavy oil on them,” he adds.

SUDS LAUNDRY

Robert Trupe processes similar greaser garments at his store in Watford City.

“You’ll get anything from gloves to their jeans or shirts [or] coveralls,” Trupe says. “Other companies that do have uniforms [will] bring in their uniforms. It’s really any of the exterior clothes that these guys are getting muddy.”

Trupe also consulted with Anderson in building Suds Laundry, a 3,600-square-foot Laundromat he opened last September on Watford City’s Main Street. His store, which employs six attendants and a full-time manager, also offers added services such as shower stalls, mailboxes and a Wi-Fi lounge area, in addition to wash/dry/fold.

“We took the approach that we needed to be more than a Laundromat,” says Trupe. “We see it as kind of taking the pain away from laundry, because it’s a little more [of a] relaxing atmosphere.”

Like Barton, Trupe invested in Speed Queen equipment—washer-extractors ranging in capacity from 20 to 80 pounds, and dryers up to 75 pounds in capacity.

Check back Thursday to learn how these two stores tailor operations to serve these special needs!

WASHINGTON — Falling crude oil prices will help continue to push the retail price of gasoline lower this year and next, according to this month’s Short-Term Energy Outlook from the U.S. Energy Information Administration (EIA).

EIA expects that falling crude prices will help national average regular gasoline retail prices fall from an average of $3.63 per gallon in 2012 to annual averages of $3.44 per gallon in 2013 and $3.34 per gallon in 2014.

Diesel fuel retail prices averaged $3.97 per gallon during 2012 and are forecast to fall to an average of $3.87 per gallon in 2013 and $3.78 per gallon in 2014.

Meanwhile, the cost of natural gas is expected to go up, EIA reports. Working inventories, which were at record-high levels in early November, ended 2012 at an estimated 3.5 trillion cubic feet (Tcf), slightly above the level at the same time the previous year.

EIA expects the Henry Hub natural gas spot price, which averaged $4 per million British thermal units (MMBtu) in 2011 and $2.75 per million MMBtu in 2012, to average $3.74 per MMBtu in 2013 and $3.90 per MMBtu in 2014.

PEMBROKE, Mass. — Kids come into the Laundromat with their parents. Often, they must hang around for an hour or two waiting for clothes to be cleaned. The question is, how do you get them to behave? Even better, how do you get them to want to come back, because if they don’t like your establishment, Mom might choose a more kid-friendly spot.

You must do something to make your Laundromat child-friendly. Children can’t sit still for two hours. If you do nothing, they might create such a commotion that they annoy other customers. Or they might “decorate” a machine front using crayons they brought from home. Or they might run around your place, trip on a wire and end up breaking a tooth. Great, now you’re involved in paying for a kid's medical care. Worse yet, the unthinkable might happen: a child could run across the street and get killed. In that case, you’re involved in a lawsuit that could send you into bankruptcy.

At a minimum, have some children's toys in a designated area. Plastic trucks, dolls, wooden trains on rails, and maybe a toy stove will do. A log cabin building set will give a youngster a lot of pleasure. A diorama for plastic soldiers will enable kids to conduct make-believe wars. They can play “house” with, you guessed it, the doll house.

Offer new toys periodically. You don’t have to buy them at toy stores. Goodwill and other second-hand stores are perfectly good sources. Yard sales are another excellent toy-buying opportunity. Spend $20 every six months, if you find something intriguing.

Without a doubt, a table and chairs so that children can color is another excellent offering. Kids love to color. An oil-based tablecloth is easy to clean. Crayons, markers and coloring books are always available at great prices at office supply back-to-school sales in August. An even better source for drawing paper is print shops, which generally have bins of used paper stock in storage; excess stock is often available for the asking.

On a nearby wall, hang a bulletin board to feature creative efforts, but do not place it within reach of children. You don’t want to see little ones getting pricked by pushpins. Mothers appreciate seeing their youngsters' Picasso efforts.

Having handheld electronic equipment isn't a good idea. Items would most likely disappear or be broken. One situation you do not want to get into is having to accuse a tot of breaking a toy. So avoid the problem altogether by not having any breakable items. Besides, generally, many children will bring their own things, which they will use to entertain themselves.

On the other hand, many Laundromats have coin-operated video games. They are a popular pastime for slightly older children, especially those in their early teens. It is beyond the scope of this article to suggest what kind of games. You can go too wrong to offer a shoot-'em-up that showcases murder-and-mayhem entertainment. Scout out video arcades in your neighborhood to see the popular offerings before deciding to buy something.

If possible, enclose the kids’ playroom with one entrance. An opening rather than a spring gate will avoid accidents. If it is in the middle of the floor, four-post fence will do the trick. If tucked in a corner, only a two-sided fence suffices. This separation is worth it. Giving the children their “own” space will keep the toys from being scattered all over. Also, the youngsters will enjoy having their private area. But always make sure to place the kids’ space in view of parents. Nothing would be worse than to have a child out of view for 10 minutes before a mother goes over and find him or her crying.

Taping posters or cutouts to the adjacent side wall entertains a child's curious mind. A map of the United States, a photo of the cosmos, images of favorite heroes—Harry Potter, cartoon characters—will do the trick.

Alongside these entertainments, set up the standard of parental obligation. Post a sign on the wall that reads, “Please Supervise Your Children.” In case something untoward happens, your attendant can always point to the sign and say, “You were supposed to keep your eyes on him.”

Train your attendants in “kid management.” If a child misbehaves, the attendant gets down on her knees and gently says, “We do not do that here.” Additionally, the attendant talks to the parent. Never, ever scold the mother or child, or you will never see this customer again.

On the other side of the behavior spectrum, it would not be a bad idea for the attendant to go inside the kid space every so often, look at the children’s creative work and say, “That’s very good.” Ditto for complimenting parents, saying, “Your child’s so good.” Mothers and fathers invariably appreciate compliments.

One Laundromat I know does this. When a kid is playing and behaving himself, the attendant sometimes comes up to the child, asks his first name, and pulls out a large-letter magnetic letter set. She creates the child’s name on a blank, and affixes it to the washing machine the mother is using. Then, with fanfare, announces that the machine has been named “Eddie” (or whatever the child's name is) for the day. Done well, this act makes the kid feel cool. Of course, the parents feel great that the kids are so pleased.

Having said how much Laundromat staffers should be kid-friendly, I offer this caveat. Be friendly, welcoming, appreciative, but don’t get involved. That is, don’t allow a gaggle of kids to speak because they will go on and on, and disrupt your work routing. When one starts, another wants in, and before you know it, 15 minutes will have elapsed. You want to respond to kids, but do not engage them. The skill of “smiling and running” is definitely something to cultivate with staffers.

Make your Laundromat kid-friendly. It is just another service you provide.

WASHINGTON — With crude oil prices going higher, the U.S. Energy Information Administration (EIA) has increased the average regular gasoline retail price forecast for the third quarter to $3.49 per gallon, 10 cents higher than last month’s Short-Term Energy Outlook.

EIA expects regular gasoline retail prices to average $3.53 per gallon in 2012 and $3.33 per gallon in 2013.

The Brent crude oil spot price will average about $103 per barrel during the second half of 2012, about $3.50 per barrel higher than in last month’s Outlook, and is forecast to fall to an average of $100 per barrel in 2013. The projected West Texas Intermediate (WTI) crude spot oil price discount to Brent crude oil narrows from about $14 in third-quarter 2012 to $9 by late 2013, assuming certain gross domestic product (GDP) growth.

U.S. total crude oil production is expected to average 6.3 million barrels per day (bbl/d) in 2012, an increase of 0.6 million bbl/d from last year, and the highest level of production since 1997. Production increases to 6.7 million bbl/d in 2013, EIA forecasts.

Drought conditions affecting corn harvests and prices throughout the Midwest pushed ethanol production lower, and EIA has reduced its 2012 forecast to 870,000 bbl/d, or 13.3 billion gallons. But the agency expects production to recover in the second half of 2013.

Natural gas working inventories ended July at an estimated 3.2 trillion cubic feet (Tcf), about 17% above the same time last year. EIA expects the Henry Hub natural gas spot price, which averaged $4 per million British thermal units (MMBtu) in 2011, to average $2.67 per MMBtu in 2012 and $3.34 per MMBtu in 2013.

CHICAGO — Operators in three of the four regions reported May sales increases compared to the prior year, led by the South’s 8.7% gains, according to this month’s unscientific AmericanCoinOp.com StatShot survey. Nationally, operators saw monthly sales rise 2.5% compared to May 2011.

The West saw sales rise 4.2%, the second straight month of gains there. May-to-May sales in the Midwest were up 2%. The Northeast was the only region to report a business slowdown, with monthly sales falling 0.6% from the previous May.

As we near the halfway mark of the year, sales have increased in at least three regions every month during 2012.

“We’ve had the best five-month start ever,” raves an operator from the West, while another says “oil drilling has had a great impact on (our) current year sales increase.”

“Monthly gross income has been relatively stable for over a decade,” says an operator from the Midwest. “Raising prices doesn’t seem to affect income.”

AmericanCoinOp.com’s StatShot includes information on sales, wages, costs and other financial data based on anonymous survey information provided by industry owners and operators.

CHICAGO — Credit is the oil that lubricates the machinery of business. Whether it’s a loan to buy supplies, to support expansion, a capital purchase, or just the need for a short-term loan to meet payroll or other operating expenses, most coin-op laundry owners need to depend on credit at some point. Unfortunately, the upheaval in today’s economy has resulted in a credit crunch that seems to have made it tougher than ever for business owners to swing a loan.

Still, for those in the know, there are enough options available to make the task a little easier. Money may be tight, but business loans are being made every day to those who know how to ask.

“In today’s banking climate, good deals still get done, but with more equity, more collateral and much higher credit scores required of the borrower than in the past,” says Linda Feltman, Pennsylvania State University, Small Business Development Center.

If you’re looking for financing for your coin-op business, now or in the future, here are some choices along with hints on how to greatly improve your chances of coming away with the money you need:

Banks

The first place most coin-op laundry owners turn to when they need a business loan is their local bank. That’s why it’s essential to build a solid business relationship with your bank well before you need to ask them for money. Allowing your bank to become familiar with your business sets the stage for the time when you need to ask for a loan.

“The news media tends to lump all banks together when it come to tight money,” says Bob White, president of Abington Bank, Jenkintown, Pa., “but there are big differences among banks. Like many other small community banks, we have always followed conservative lending practices. As a result, our default rates haven’t suffered and we’re in the same healthy position for making loans now that we were four years ago.”

Even after establishing a relationship, some business owners meet with frustration when the bank turns down their loan application. Most bankers agree that this is often because the owner has failed to come prepared with the information a lender needs to make a positive decision.

“How to find the money to finance a renovation, expansion, or other need is the last thing that many business owners think about when they plan a project,” says James G. Marshall, vice president, Fulton Bank, Lancaster, Pa. “It’s best to have a team lined up behind you when you plan a major financial move — and your bank should be a member of that team.”

How should you prepare for a meeting with a bank loan officer? Marshall suggests that you come armed with:

• Financial statements for your existing business
• Accountant-prepared financial projections and cash-flow analysis
• Marketing feasibility study for the project
• Owner’s personal financial statements and tax returns
• Information on the background and experience of owner(s)

“With this information,” says Marshall, “the bank can give proper consideration to your loan application.”

Be careful to avoid the red flags that may raise concerns in the mind of a loan officer. “One of the things that would turn me off,” says White, “is an applicant who has over-leveraged himself or recently financed the purchase of an expensive asset. And, of course, it’s absolutely essential that the applicant be honest and up-front with all pertinent information.”

Check back tomorrow for Part 2: What happens when the bank says no?

BISMARCK, N.D. — Oil field clothes can tear up a washing machine. Several laundry businesses have had to close their doors to workers but others are building their businesses around the boom.

A sign on the door of King Koin Laundrette Car and Dog Wash at 2125 E. Thayer Ave. reads “Because of odor and residue problems, we no longer allow oil field clothes in this establishment.” Owner Mike Walsh hung it there about two years ago when damage to his washing machines and dryers became too much.

“We tried for about three years,” Walsh said. “Now we refer them to somebody else when they call ... It was just getting out of hand.”

A similar sign hangs at Interstate Laundry and Carwash at 1438 Interstate Loop. Customers can be charged for washing oily clothes at Boulevard Laundromat at 1310 E. Boulevard Ave. A new machine can cost as much as $10,000 and the upkeep became too high as more oil field workers made their way to Bismarck.

Walsh said the gloves the workers wear are saturated in oil and it was getting left behind in the washers.

“It wasn’t a good fit for us,” Walsh said. “We had to protect our other customers so when they bring their stuff in, they don’t get their stuff ruined.”

Walsh also is short on dryers. It can take as long as an hour and a lot of cleaning supplies to get one back in working order after oil field clothes have been in it.

“The dryers are the worst because it just bakes in there,” he said.

Soap and Suds Laundry Mat at 122 W. Bowen Ave. has opened its doors to the rig workers, though. Owner Louis Baltrusch thinks he is the only self-service Laundromat to allow oil field clothes in Bismarck.

“Why shouldn’t I work with them?” Baltrusch said.

It just takes a lot of soap to make it work.

“Before, guys would come in and use the top loaders and leave a mess behind,” he said.

Baltrusch now has three washing machines at the front of the Laundromat that he asks rig workers to use. He sees at least 30 to 40 workers each week.

“It’s really picked up the last couple years,” he said. “I’m going to have to get some more of them because they’re used so much.”

Interstate Laundry and Carwash used to have machines set aside for oily clothes too, but had to stop when the number of oil field customers increased.

Baltrusch watches for any workers as they come in the door to tell them which machines to use and what to do.

“If I see somebody coming in with a pretty dirty tote, it’s a pretty safe bet he’s a rig worker,” he said.

Baltrusch has oil field customers put two scoops soap to the washing machine in each of the first two rinse cycles. Then he has them take a towel and wipe it down when they’re finished.

“You could put in a white comforter right after and not have a problem,” he said.

Baltrusch said the water in the washer looks like mud during the first rinse cycle, but by the final cycle the water is clear. The oily clothes are then clean and don’t mess up his dryers.

Rig workers can drop off their oily clothes at Arrowhead Cleaners and Laundry Inc. at 1140 N. Third St. The company has two older machines that it uses. Turrito’s Dry Cleaners at 1041 E. Interstate Ave. and 1131 E. Main Ave. and Dakota Dry Cleaners at 820 E. Broadway Ave. do not take oil field clothes.

With very few places in Bismarck taking oil field laundry, many workers are dropping their clothes off in other towns on their way home and picking them up on their way back to work.

“I have a lot of guys call me and ask if I take oil field clothes,” said Melvin Pirkl, owner of Superior Laundry Cleaners in Dickinson, N.D. “They say we just came from Bismarck and they won’t let us.”

Pirkl said his business has more than doubled because of the oil boom. It really picked up for him about a year ago.

“I’m so busy, I don’t know which way to turn,” he said. “I have laundry bags sitting in front of me and I don’t know what to do first.”

Pirkl said he even comes in to work at night to try to get caught up. The biggest problem he faces is equipment damage due to overload.

(This article originally appeared in the Bismarck (N.D.) Tribune and is posted here by permission. You can find the original article here.)

CHICAGO — Upon studying the results of this year’s American Coin-Op distributor survey, there are reasons to be optimistic about the state of the self-service laundry industry.

Nearly half of respondents said business was better in 2010 than it was in 2009. Better yet, nearly two-thirds of respondents predict that 2011 business will be better than 2010.

Every distributor listed in the American Coin-Op Distributors Directory prior to June 1 was invited to participate in the unscientific survey.

2010 BUSINESS

Last year was a bounce-back year for many distributors, based on the survey results. Forty-six percent of respondents said business (sales of newly constructed stores plus replacement business) was better in 2010 than 2009. Approximately 21% said business was worse in 2010 than 2009, and 32.1% said business was comparable in both years.

In the 2010 survey covering 2009 business, only 15.6% said business was better in 2009 than 2008, while 49% said business was worse in ’09 than ’08.

For those experiencing a change in business in 2010, the No. 1 reason, by far, was the economy. But it’s interesting that it was cited either as a positive or a negative, depending on the respondent.

Those who thrived saw investors who were inspired by upticks in the economy, or who chose to look into the coin laundry business after losing their jobs.

Distributors whose business suffered in 2010 lamented over changing demographics, tight lending/lack of financing, and potential investors unwilling to spend. One businessman partly blamed his company’s downturn on the BP oil spill.

REPLACEMENT BUSINESS

Replacement-business figures also showed signs of improvement from our report one year ago. In replacement business only, 39.3% of respondents said business was up last year compared to 2009. That’s compared to 20% who saw their replacement business increase from 2008 to 2009.

Roughly 29% saw replacement business fall in 2010, and 32.1% said their level of replacement business was unchanged from 2009.

The figures in this category have proven to fluctuate over the last several years. In the 2009 survey for 2008 business, 40% of respondents saw replacement business rise, and only 29% saw business dip.

NEW-LAUNDRY CONSTRUCTION

American Coin-Op asked distributors how many new laundries they built and/or to whom they supplied equipment in 2010. Fifty-six percent of respondents built or supplied equipment to three or fewer new laundries. In the 2010 survey for 2009 business, this figure was 62%.

How many new laundries are distributors dealing with in some fashion? Here are the most popular answers from this year’s survey:

1. 2
2. 0
3. 1
4. 4
5. 5

Distributors were also asked if their 2010 new-construction total was more, less or the same when compared to 2009. Nearly 41% said new construction was up in 2010 (by comparison, that figure was only 14% in the 2010 survey for 2009 business), 37% percent said new construction was down, and 22.2% said new construction was the same in 2010 and 2009.

EQUIPMENT MIX

How to equip a store is a critical decision for an owner. Generating revenue is vital to an operation’s success, but overcrowding with equipment can be a detriment.

Fifty-four percent of the new stores had at least one top loader, down just a bit from last year’s figure (62%). (It should be noted that a handful of respondents chose to skip the top-loader question when taking our online survey, so the figure may be even a bit lower than 54%. It’s possible some respondents didn’t install any top loaders, and skipped the question as a result.)

More specifically, here are the most popular numbers of top loaders put into new stores in 2010:

1. 0
2. 6
3. 5
4. 10
5. 12

Newly constructed laundries in 2010 have 3.8 top loaders. (This figure factors in the stores with no top loaders.)

Here are the most common numbers of front loaders installed in newly constructed laundries last year:

1. 40
2. 30
3. 15
4. 12
5. 37

Newly constructed laundries in 2010 have an average of 26.9 front loaders. This is down only slightly compared to last year’s figure (27.3).

The average newly constructed laundry in 2010 has 32.1 dryer pockets. That’s compared to 32.6 dryer pockets in 2009.

Wednesday: Does size matter …

WASHINGTON — The Henry Hub spot price averaged $4.31 per MMBtu in May, six cents higher than the April average and 11 cents higher than forecast in the agency’s previous report. This increase is reported amid growing consumption, even though inventories remain robust and the production forecast was “revised upward significantly.”

U.S. Energy Information Administration (EIA) expects total natural gas consumption will grow by 1.4% to 67.1 billion cubic feet per day (Bcf/d) in 2011. Forecast industrial and electric power consumption are expected to rise 3.1% to 18.7 Bcf/d in 2011 and 0.4% to 20.3 Bcf/d, respectively, the report says.

Projected total consumption rises slightly in 2012 to 67.2 Bcf/d, according to the EIA. Growth continues in the industrial sector at 1.6%, as the natural-gas-weighted industrial production index rises 2.7%. Consumption also increases in the electric power sector (2.1%). Residential and commercial consumption, however, decline by 2.8% and 2.2%, respectively, stemming from the forecast decline in heating demand for natural gas, the report says.

Working natural gas in storage was 2,107 Bcf at the end of May, 237 Bcf below last year’s level at this time. Inventories, though lower than last year, are expected to remain robust due to higher production throughout the 2011 injection season, the agency says.

The 2011 production forecast has been revised upward significantly due in part to unexpectedly strong March production reported in EIA’s latest report. The agency now expects total U.S. marketed natural gas production to increase by 4.5%, up from the 2.3% predicted in last month’s report.

EIA expects that the Henry Hub price will average $4.25 per MMBtu in 2011, a decline of 13 cents from the 2010 average. The agency says that the slowing growth in production will contribute to a tightening domestic market next year with the Henry Hub price averaging $4.58 per MMBtu in 2012.

Meanwhile, route drivers can expect gas prices to remain high. It’s the same old story: crude oil supplies are expected to tighten amid growing demand in the emerging economies and slowing growth in non-OPEC supply. The EIA reports that crude oil spot prices averaged $103 per barrel in March, $110 per barrel in April, and $101 per barrel in May. The agency predicts per-barrel prices in 2011 to average $102, compared to 2010’s $79 per barrel.