Chamley Pipe and Salvage Discovers Untapped Oil Industry Business Opportunity
Years ago, before the oil boom took over the prairies of western North Dakota, Will Chamley was a solitary businessman roaming the oil fields renting power swivels and mud pumps for servicing cased oil wells.
"The year 2005 was a quiet time," Chamley recalls. "Not much was going on. I started to see discarded scrap metal on the ground around the oil well sites, and looking for some additional income, I began to collect the material on weekends. I cut the scrap metal with a torch, put it in a small dump trailer and sold the iron. Eventually, it turned into a full-time job."
The enterprising Chamley was able to recognize this opportunity because everyone else working in the area was so focused on the oil that there was almost no interest in collecting garbage and scrap iron.
"There did not seem to be anyone who wanted to clean up jobsites and remove the junk," he says. "Nobody likes that type of work. My take, however, is that if there is money to be made, I am interested."
As the oil boom vaulted North Dakota up the rankings to become the second highest crude-oil-producing state in the United States, most businesses around the Williston area prospered home builders, plumbers, electricians, restaurants, hotels, retail stores and equipment dealers. They, and others, all did very well as the oil flowed and workers flocked into the area. The population of Williston increased by 41 percent between April 2010 and 2013, climbing above 20,800 local residents, according to the U.S. Census Bureau.
For comparison, the North Dakota Department of Mineral Resources reports that there were 252 wells producing in the Bakken region in North Dakota in December 2005. Fast forward to December 2014, and the Bakken region had 8,944 wells producing more than 1 million barrels of crude oil daily. Even with the steep drop in crude oil prices, the number of wells eclipsed 9,000 in early 2015.
Away from the bright lights shining on all of the spectacular economic growth, Chamley Pipe and Salvage was quietly building a profitable business cleaning up and recycling the oil industry's waste.
"When I started working here about four-and-a-half years ago, the company had five employees, two trucks and 20 roll-off containers," says Mitchell Phillips, Yard Foreman for Chamley Pipe and Salvage. "Today the company has 50 employees, 15 trucks and 850 roll-off containers. That is almost exclusively the result of the oil industry and associated businesses."
By constantly adapting and growing to meet the demands of all of the oil-related activities around Williston, Chamley Pipe and Salvage is picking up 10 to 20 loads of scrap metal and sometimes up to 20 to 30 loads of other trash per day. Much of the material is dumped into the company's three types of roll-off containers: open-top 20- and 30-yard and 20-yard lid style. The latter model is said to be suited for "man camp" disposal needs, where groups of men who work in the oilfields live together. About 50 percent of the roll-offs haul scrap metal; 50 percent collect garbage.
All of the material is delivered to the company's 10-acre site for processing. Chamley says a new 40-acre lot is in the works. Scrap metal is the only material accepted from the public. Five Bobcat skid-steer loaders with attachments sort and move the trash into different areas around the yard.
Scrap Metal Takes a Ride
Although the company recycles almost everything it can, there is no doubt that scrap metal is No. 1. "We typically handle 12,000 to 15,000 tons of scrap metal a year," Chamley says. "That total will likely grow this year because we have a large job, chopping up 18 old drilling rigs."
Once the scrap metal is cut into smaller pieces at the yard, it is put into special 15-ton-capacity roll-off containers for delivery to a railroad loading site located approximately 30 miles away. These are the same east-west tracks that run through North Dakota, hauling crude oil and agricultural crops. The tracks also carry Amtrak passenger trains.
While the travel distance for the containers of scrap metal is an inconvenience, the loading process has become more efficient this year with the addition of a new Doosan DX225MH-3 Material Handler. The high-production, 166-horsepower machine features an optional hydraulic 6.5-foot cab riser for enhanced operator visibility.
Chamley leases space from another company that has a little rail spur off the main track. The outgoing scrap metal is placed in 90-ton piles until railcars are available. At that point, Phillips travels to the rail site to operate the material handler. He loads most of the 90 tons of iron that each car holds with a grapple attachment. He switches to a 48-inch magnet to clean up the remainder of the scrap metal on the ground. With both the grapple and magnet, Phillips has up to 35 feet, 5 inches of reach to efficiently load the railcars.
"The DX225MH-3 has made this job so much more efficient," Phillips says. "Compared to the excavator with bucket and clamp I previously used, this machine grabs more material and holds it better. Because I can see into the railcar, I can do a better job of placement. I can identify gaps in the load and fill in material where needed. With the excavator, I relied on someone to guide me in positioning the scrap metal. Sometimes the lack of clear vision would cause me to stack the material above the railcar sides. That is not permitted, so I would have to spend time using the bucket on the excavator to pack it down."
"Everything is so simple," Phillips says. "All I have to do is flip a switch to raise the cab in order to see right where I am placing material. It only takes a couple of hours to load a railcar."
Chamley adds: "When Mitchell was loading the railcars with the excavator, he was sort of operating blind. The material handler makes his job 100 percent easier."
Producing Other Products
The material handler is also used to load the company's 700-horsepower wood chipper. Old pallets are turned into landscape mulch and livestock bedding. The material handler operator has a good view of what he is loading into the chipper and is able to spot unwanted items such as metal.
Along with scrap metal and wood, Chamley also recycles paper, aluminum, tin, plastic and pipe. The company sends the best old oil field pipe to the North Dakota state penitentiary, where inmates turn it into corral panels for farmers and ranchers. The company markets those products on its website.
While falling oil prices have reduced the amount of drilling, the impact on Chamley Pipe and Salvage has been negligible.
"I think we have actually picked up more work as some firms move out of the area," Phillips says. "They are cleaning up their sites, getting rid of trash and throwing away scrap metal. There is still plenty of production going on and that means pulling out pipe, putting in new and redoing locations. All that is keeping us busy."