SHALE Magazine Jan/Feb 2021 by SHALE Oil & Gas Business Magazine

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MAGAZINE

JANUARY/FEBRUARY 2021

BITING THE HAND THAT FEEDS YOU: VIRTUE SIGNALING AGAINST OIL AND GAS

ONE FUTURE PURSUES ONE GOAL FOR

JIM WRIGHT,

LOOKING OUT FOR TEXAS IS A WAY OF LIFE

WHERE DOES ENERGY ON OUR PLANET COME FROM?

YES, THE BLUE WAVE HIT A RED BRICK WALL, BUT NOW WHAT?

EATING WELL IN THE NEW YEAR SHALEMAG.COM

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BUSINESS

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MOVING AMERICAâ&#x20AC;&#x2122;S ENERGY The Port of Corpus Christi puts its energy into what matters most - the needs of our customers. With our proximity and connections to Eagle Ford Shale, the Permian Basin, and beyond, we are built to meet the increasing production throughout Texas and the rising demand for energy across the globe.

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JANUARY/FEBRUARY 2021

CONTENTS SHALE UPDATE

Shale Play Short Takes

While guidance documents and flaring are key issues for Wright, they are not the only ones he will be focused on when he hits the ground running in January

FEATURE

Where Does Energy on Our Planet Come From?

COVER STORY

The new president may not care about what happens in South Texas, but the new member of the Railroad Commission definitely does. He and generations of his family have grown up and worked and rodeoed and raised cattle and lived their lives there. He built businesses that thrived because of the innovation used to extract oil and natural gas from shale formations. He cares deeply about the land, so much so that he became an expert in waste management and land restoration. It’s those reasons and more that help explain why he chose “wrightfortexas.com” as his campaign website URL.

INDUSTRY

COVER AND TABLE OF CONTENTS PHOTOGRAPHY BY: DARREN CARROLL

FERRUPS FX

INDUSTRY

BUSINESS

34 ONE Future Pursues One Goal 36 Biosurfactants: The ESG-Friendly Technology Reviving Shale

60 Biting the Hand that Feeds

Profitability and Production

You: Virtue Signaling Against Oil and Gas

38 2021: What Now for Flaring? 40 2021 Oil and Gas Industry Outlook

62 Oil and Gas and the

POLICY

LIFESTYLE

Economy in 2021

44 Instead of a Prediction, Here’s a Plan 46 Yes, the Blue Wave Hit a Red Brick Wall, but Now What? 48 The U.S. Oil and Gas Industry Sighs With Relief as 2020

68 Eating Well in the New Year 70 Staying Fit From Home

50 What Rocky Mountain Producers Can Expect Under a

72 SAPA Luncheon

Comes to a Close

Biden Administration

54 Why Natural Gas is the “Greenest” Energy of Them All 56 The Future of OPEC+

SOCIAL

POLICY

Some Reasons for Optimism at the End of a Troubling Year

BUSINESS

Protecting Against Overtime Lawsuits During the COVID-19 Pandemic

LIFESTYLE

From Feeling Great SHALEMAG.COM

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VOLUME 8 ISSUE 1 • JANUARY/FEBRUARY 2021

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For editorial comments and suggestions, please email editor@shalemag.com. SHALE MAGAZINE OFFICE: 5150 Broadway St., Suite 493, San Antonio, Texas 78209 For general inquiries, call 210.240.7188. Copyright © 2021 Shale Magazine. All rights reserved. Reproduction without the expressed written permission of the publisher is prohibited.

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LETTER FROM THE CEO

HELLO, 2021. GOODBYE, 2020. If we have learned anything from 2020, it is to expect the unexpected. The entire year was a learning experience for the whole world. Crude oil saw negative numbers for the first time. When leaving the house, we now have to check for wallet, phone, keys - and mask. 2021 is going to be an exciting year. While the future is unpredictable, it’s hard not to wonder what will happen next. Our cover story is an interview with Jim Wright. He will begin his first six-year term on the Texas Railroad Commission this month amid the chaos. He has big plans for the commission and for Texas. We wish Jim well in his new role. SHALE Magazine and In the Oil Patch radio show will continue to be with you every step of the way of 2021. As always, we will strive to keep you up to date on the myriad changes the energy industry sees as each new day unfolds. Make sure to subscribe to our newsletter and follow us on Facebook, Twitter and Parler.

KYM BOLADO

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CEO/Editor-in-Chief kym@shalemag.com

SHALE MAGAZINE  JANUARY/FEBRUARY 2021

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SHALE MAGAZINE  JANUARY/FEBRUARY 2021

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SHALE UPDATE

SHALE PLAY SHORT TAKES By: David Blackmon

Bakken Shale – North Dakota/Montana Natural-gas flaring volumes in North Dakota’s Bakken play area dropped dramatically during 2020, and the industry in the state is far better equipped now to continue capturing much higher gas volumes into the future, according to North Dakota Pipeline Authority Director Justin Kringstad. “The gas capture landscape has improved dramatically from 2019,” Kringstad said during an interview with NGI’s Shale Daily. “North Dakota’s gas production exceeded gas processing capacity for much of 2019, but during the second half of that year, the gas processing industry added 700 MMcf/d of new processing capacity to the region.” Overall processing capacity in the Bakken should remain stable through 2025, Kringstad said. Denver/Julesburg (DJ) Basin - Colorado Producers in Colorado now face the most stringent setback restrictions in the country after new regulations were enacted by the Colorado Oil & Gas Conservation Commission. The rules will apply to future permit applications starting Jan. 15. Oil and gas companies will have to re-apply with new permits to replace still-pending applications submitted under the prior rules. The new rules not only increase drilling setbacks from homes and businesses from 500 feet to 2,000 feet but also give local governments more voice in approving new permits. Permian Basin – Texas/New Mexico The Texas Commission on Environmental Quality (TCEQ) implemented its “Find It and Fix It” program in early December. The program, which is designed to facilitate air-quality compliance for companies with oil and gas operations in the Permian Basin, will run through the end of January 2021. The program will be available to those companies that: (i) provide notification to TCEQ of their intent to participate in the program and (ii) submit a compliance plan to return covered facilities to compliance.

SHALE MAGAZINE  JANUARY/FEBRUARY 2021

Eagle Ford Shale – Texas Even after suffering a decline of over 10% in crude oil production during 2020, the Eagle Ford Shale region is expected to lose another 10% of overall production during 2021, according to a new report by GlobalData. The company’s latest report, ‘Eagle Ford Shale in the U.S., 2020,’ projects that the gross crude-oil production in this play would average at 1,017 thousand barrels per day (mbd) in 2021, down from 1,130 mbd in 2020. The gross natural-gas production also may decline to 5,873 million cubic feet per day (mmcfd) in 2021, down from 6,327 mmcfd in 2020.

Marcellus/Utica Shale – Pennsylvania/West Virginia/Ohio A proposed new LNG export terminal planned for Gibbstown, New Jersey, received a key permit approval in December from the Delaware River Basin Commission. The proposal is to transport LNG via truck or train to the Gibbstown dock from a plant that New Fortress Energy Inc. is developing in Wyalusing in Bradford County, Pennsylvania. That plant would liquefy natural gas from the Marcellus Shale. The LNG would then be exported by ship from the Gibbstown terminal, operated by New Fortress Energy, to customers in the Caribbean and elsewhere.

Haynesville/Bossier Play – Louisiana/East Texas SCOOP/STACK Play – Oklahoma The SCOOP/STACK play area in Oklahoma continued to lose active rigs even as the overall U.S. domestic rig count rose throughout November and December. As of the week ended 12/11/2020, the region’s active rig count stood at just 13, according to Baker Hughes. Tapstone Energy purchased Chesapeake Energy’s Oklahoma assets during November for $130.5 million. The sale includes more than 700,000 net acres covering a wide variety of producing formations in west and northwest Oklahoma.

In a move that could enhance future demand for Haynesville-produced natural gas, Tellurian canceled a plan to build a new natural-gas pipeline designed to bring natural gas from the Permian Basin in West Texas into Louisiana to provide feedstock for LNG export operations. Tellurian said in a filing with the Federal Energy Regulatory Commission that “current market conditions do not support the economic thresholds to pursue the (Permian pipe) further at this time.” The 625-mile (1,005-km) Permian pipeline was designed to transport up to 2.3 billion cubic feet per day (bcfd) of gas from the Permian shale in West Texas and eastern New Mexico to southwest Louisiana near where Tellurian wants to build the Driftwood LNG export plant.

About the author: David Blackmon is the Editor of SHALE Oil & Gas Business Magazine. He previously spent 37 years in the oil and natural gas industry in a variety of roles — the last 22 years engaging in public policy issues at the state and national levels. Contact David Blackmon at editor@shalemag.com. SHALEMAG.COM

 FEATURE

Where Does Energy on Our Planet Come From? By: Tom D. Tamarkin

There are three primary sources of material amounts of energy on Earth. The word material means an amount of energy greater than 3% of total worldwide energy demand, combining all transportation sectors, industrial, commercial, residential, agricultural, potable water production and its movement. (Energy sources such as thermal piles, batteries, and the like are not considered material.) These are: Energy from the sun. The most prevalent form of useful energy today comes from the sun in the form of hydrocarbon-based fossil fuels like petroleum, coal and natural gas. The energy is transformed to do useful work by chemical reactions that generate heat when these fuels are combined with oxygen and burned. Fossil fuels were created through photosynthesis combined with the processes of plant and animal life from the energy provided by the sun over the last 400 million years of the Earth’s existence. Over a 500 year period, man will have depleted economically viable fossil fuel reserves. Vastly smaller amounts of energy generated by the sun can be produced through solar-energy processes such as photovoltaic and concentrated solar. Additionally, wind and river water movement can generate electricity, which is a form of energy. Both wind and the movement of water in the Earth’s immense system of rivers occur because of solar energy. Ocean tidal movement is created by solar system gravitational forces. Ocean currents can be induced by solar energy. Both tidal and ocean current hydrokinetic are not practical for material energy collection. Energy from nuclear fission. In nuclear fission, energy is released by the atomic reaction of splitting heavy elements such as uranium, element 92, isotope 235, or thorium element number 90, isotope 232. Thorium 232 is relatively abundant on Earth. Uranium 235 is far less abundant. It is estimated that there is enough usable thorium 232 on the Earth to provide the electrical energy consumed by the United States for the next 1,000 years based on current energy use. The nuclear process of splitting atoms, however, results in many problems such as nuclear radiation, long term dangerous radioactive waste, possible explosive chain reactions, meltdowns of fuel cores, and basic fissile fuel sources having military uses in weapons and the related threats. Contrary to a common belief, however, a nuclear reactor cannot explode in the sense of an atomic bomb, nor can it melt ground beneath it and drill down. Energy from atomic fusion. Fusion is what powers the sun and all the stars. Energy is produced by the process of nuclear fusion when two light element atoms are fused into a slightly heavier atom along with a corresponding large release of energy. An example is the well-known and well understood fusion reaction of D (Hydrogen 2) + T (Hydrogen 3) > He4 (Helium) + 17.6 MeV (energy units) + n (neutron.) This is the fundamental process resulting from the big bang or creation of the universe event. This is also the fundamental process of the sun. As we understand fusion

SHALE MAGAZINE  JANUARY/FEBRUARY 2021

in the future, other fusion reactions can use helium, boron, and sub-atomic particles such as protons. The Earth has enough of these abundant materials to power the entire world’s energy needs, literally for eternity. Fusion is more difficult to accomplish in a controlled environment than fission. Fusion is a creation process, whereas fission is a destruction process. In fission, once a critical mass of heavy element fissionable material is assembled, it destroys itself and decays into highly radioactive elements of lower atomic mass. Fusion, on the other hand, requires energy to be pumped into the system to a point where the net energy gain resulting from the bringing together of light atoms is considerably greater than the energy pumped in. Based on the above analysis, we can see that all material energy forms on Earth come from atomic reactions, either the sun or its fusion counterpart on Earth or nuclear fission. What is energy? In physics, energy is defined as the capacity for doing work. It may exist in potential, kinetic, thermal, electrical, chemical, atomic or various other forms. There are heat and work — i.e., energy transferring from one body to another. After it has been transferred, energy is always designated according to its nature. Hence, heat transferred may become thermal energy, while work done may manifest itself in the form of mechanical energy. All forms of energy are associated with motion. For example, any given body has kinetic energy if it is in motion. A tensioned device such as a bow, spring or water storage reservoir, though at rest, has the potential for creating motion; it contains potential energy because of its configuration. Similarly, atomic energy is potential energy because it results from the configuration of subatomic particles in the nucleus of an atom. Thermal or heat energy comes from atoms’ vibration as energy is absorbed through emitted photons from electromagnetic radiation. Energy can be converted from one form to another in various ways. Usable mechanical or electrical energy is, for instance, produced by many kinds of devices, including fuel-burning heat engines, generators, batteries, fuel cells and magnetohydrodynamics systems. Energy can be neither created nor destroyed but can be converted from one form to another, and energy and mass are different manifestations of the same thing and each can be converted to the other form in the proportion of E=mc2. Conservation of Mass and Energy Law The Law of Conservation of Energy states that energy cannot be created or destroyed but can change its form. The total quantity of matter

and energy available in the universe is fixed and never any more or less. The Law of Conservation of Mass or Matter, also known as the Lomonosov-Lavoisier Law, states that the mass of substances in a closed system will remain constant, no matter what processes are acting inside the system. It is a different way of stating that though matter may change form, it can be neither created nor destroyed. The mass of the reactants must always equal the mass of the products. This law works fine for anything that is not approaching the speed of light; at high speeds, mass begins transforming to energy (for which reason, we now have the Law of Conservation of Mass and Energy). However, this means that in most situations, the Law of Conservation of Mass can be assumed valid using standard Newtonian based classical physics. However, the mass-energy relation of E=mc2 states that the universal proportionality factor between equivalent amounts of energy and mass is equal to the velocity of light squared. This also serves to convert units of mass to units of energy, no matter what system of measurement units is used. Antoine Lavoisier first formulated this law in 1789, but Mikhail Lomonosov in 1748 had also expressed similar ideas earlier. It was the key to making chemistry into a real science instead of an offshoot of alchemy; prior to this, the buoyancy of gases made it difficult to determine before and after measurements of weight. In nuclear reactions and in very large astronomical objects, this law becomes questionable. After this, the ideas of chemical elements, the process of fire and oxidation, and many other basic chemical principles could be understood. One of the first conservation laws to be discovered was the conservation of mass (or matter). Suppose that you combine a very accurately weighed amount of iron (Fe) and sulfur (S) with each other. The product of that reaction is a compound known as iron sulfide or FeS. Suppose you also weigh very accurately the amount of iron sulfide formed in that reaction. In that case, you will discover a simple relationship: The weight of the beginning materials (iron plus sulfur) is exactly equal to the weight of the product or products of the reaction (iron sulfide). This statement is one way to express the Law of Conservation of Mass. A more formal definition of the law is that mass (or matter) cannot be created or destroyed in a chemical reaction. A similar law exists for energy. When you turn on an electric heater, electrical energy is converted to heat energy. If you measure the amount of electricity supplied to the heater and the amount of heat produced by the heater, you will find the amounts are equal. In other words, energy is conserved in the heater. It may take various forms, such as electrical energy, heat, magnetism or kinetic energy (the energy of an object due to its motion), but the relationship is always the same: The amount of energy used to initiate a change is the same as the amount of energy detected at the end of the change. In other words, energy cannot be created or destroyed in a physical or chemical change. This statement summarizes the Law of Conservation of Energy. At one time, scientists thought that the Law of Conservation of Mass and the Law of Conservation of Energy were two distinct laws. In the early part of the twentieth century, Albert Einstein (1879–1955) demonstrated that matter and energy are two forms of the same thing. He showed that matter can change into energy and that energy can change into matter. Einstein’s discovery required a restatement of the Laws of Conservation of Mass and Energy. In some instances, a tiny bit of matter can be created or destroyed in a change. The quantity is too small to be measured by ordinary instruments, but it still amounts to something. Similarly, a small amount of energy can be created or destroyed in a change. But, the total amount of matter PLUS energy before and after a change still remains constant. This statement is now accepted as the Law of Conservation of Mass and Energy. Einstein went on to express

the relationship between energy and mass as E=mc2, where E is energy, M is mass, and C is the velocity of light (299.8 million meters per second) squared or 8.98 X 1016. Because C2 is such a big number, this means a very small amount of mass can be converted into a huge amount of energy. This is why fission and fusion produce so much power from so little “fuel.” Examples of the Law of Conservation of Mass and Energy are common in everyday life. An electric heater manufacturer can tell consumers how much heat will be produced by a given model of heater. The amount of heat produced is determined by the amount of electrical current that goes into the heater. Similarly, the amount of gasoline that can be formed in the breakdown of petroleum can be calculated by the amount of petroleum used in the process. And the amount of nuclear energy produced by a nuclear power plant can be calculated by the amount of uranium-235 used in the plant. Calculations such as these are never quite as simple as they sound. We think of an electric light bulb, for example, as a way of changing electrical energy into light. Yet, more than 90% of that electricity is actually converted to heat. (Baby chicks are kept warm by the heat of light bulbs.) Still, the conservation law holds true. The total amount of energy produced in a light bulb (heat plus light) is equal to the total amount of energy put into the bulb in the form of electricity. In an automobile internal combustion engine, heat is produced by the combustion reaction of gasoline and oxygen, which pushes a piston down when the mixture of oxygen and fuel rapidly expands, which, in turn, is coupled to a crankshaft which turns and is coupled to the wheels. Modern gasoline engines have a maximum thermal efficiency of about 25% to 30% when used to power a car. In other words, even when the engine is operating at its point of maximum thermal efficiency, of the total heat energy released by the gasoline consumed, about 70-75%, is rejected as heat without being turned into useful work (i.e., turning the crankshaft). Approximately half of this rejected heat is carried away by the exhaust gases, and half passes through the cylinder walls or cylinder head into the engine cooling system and is passed to the atmosphere via the cooling system radiator. Some of the work generated is also lost as friction, noise, air turbulence and work used to turn engine equipment and appliances such as water and oil pumps and the electrical generator, leaving only about 25-30% of the energy released by the fuel consumed available to move the vehicle. Today, fission, coal, natural gas and oil-fired electricity plants work by heating water (or in some cases salts) to its vapor point and using that heat energy to turn an electrical generator motor. Where does today’s energy to convert to electricity come from? Energy Source

Quads

Percent of Total

Coal

10.2

27.6%

Natural Gas

11.7

31.6%

Nuclear

8.46

22.9%

Hydro

2.48

6.7%

Wind

2.73

7.4%

Biomass

0.45

1.2%

Petroleum

0.19

0.5%

Solar

0.65

1.8%

Geothermal

0.14

0.4%

1 Quad = 1.055 X 10 joules. The above table is based on the following: 18

(continued next page) SHALEMAG.COM

Boiler (furnace)

Turbine Steam

Transmission Lines

Coal

Water

Generator Transformer

River Condenser Cooling Water

Condenser

Coal fired power plant schematic How power is generated Electricity is actually the flow or movement of electrons through a material. An electron is a subatomic particle. Electric generating plants typically produce electricity using magnetic induction and conduction. This happens when a large number of conductive wires are spun around inside a magnetic field, causing electrons to move in those wires, thereby generating electricity. In a generating plant, the potential energy of various types of fuels such as coal, natural gas, oil, nuclear and concentrated solar energy is converted into mechanical energy using heat energy to produce the mechanical energy. This mechanical energy is used to turn fan-like blades inside a turbine. These blades are attached to a pole-like shaft. When the blades inside the turbine begin to turn, the shaft begins to turn. This causes wires located inside a magnetic field within the generator to turn. The resulting

SHALE MAGAZINE  JANUARY/FEBRUARY 2021

flow of electrons is electricity. More or less electricity can be created by varying certain factors, including the type of materials used in the wire, the speed at which the turbine rotates, the size of the magnetic field and the number of wire coils inside the magnetic field, among others. Wires coming from the generator are used to conduct the flow of electricity out to a neighboring switchyard, where the electricity is “stepped up” or raised to a much higher voltage using transformers to be sent to customers over the transmission and distribution grid. Steam-electric plants produce electricity by using heat energy to turn water into steam. The highly pressurized steam then travels through pipes to the blades in the turbine. When the steam hits the turbine, it causes the blades to spin. Hydroelectric generating facilities use mechanical energy from the movement of water to cause the blades in the turbine to turn. In a steam-electric solar generating facility, heat from the sun’s rays is used to create the steam needed to rotate the turbine. The plants’ generator portion is virtually the same regardless of whether it is driven by water at a dam, coal, oil, natural gas, nuclear or concentrated solar. Nuclear Power plant schematic

Energy Flux Density Energy density is the amount of energy stored in a given system or region of space per unit volume. Specific energy is the amount of energy stored per unit mass (weight). Only the useful or extractable energy is measured. It is useful to compare the energy densities of various energy sources. At the top of the list is fusion, followed by nuclear fission and then hydrocarbon fuels derived from petroleum, coal and natural gas. At the bottom of the list are batteries, which either generate energy or store energy, as well as “renewable energy” such as solar. Controlled nuclear fusion energy density Here are the underlying calculations supporting the statement above: The energy released by the fusion of one atom of Deuterium with one atom of Tritium is 17.6 Mev = 2.8 X 10-12 Joules. The energy liberated by the fusion of 1 Kg of Deuterium with 1.5 Kg of Tritium is 2.8 X 10-12 X 2.99 X 1026 = 8.3 X 1014 Joules = (8.3 X 1014) / (3.6 X 10-12) = 230 GWHours. This energy is released as heat. A conventional steam turbine power plant with an efficiency of 38% would produce 87.4GWH of electricity. 1 Deuterium is a naturally occurring isotope of hydrogen readily available from seawater. 2 Tritium is produced in the fusion reactor from lithium as part of the fuel cycle and energy exchange process. Lithium is an abundant naturally occurring element. Comparison of conventional fuel energy density

(preferably a much lower one). This is how geothermal heat pumps work. Typical ground temperature is 52°F (284 K). On a 90°F day, such a system has a peak efficiency of 7% and a power density of only 0.05 mW/m3 (Stopa and Wojnarowski, 2006): typical surface power fluxes for geothermal wells are on the order of 50 mW/m2 and have typical depths of 1 km. To find the energy density, a characteristic time must be included. The time used should be that of the time required for water being pumped into the ground to circulate through the system once. This number is on the order of ten days (Sanjuan et al., 2006). The resulting energy density is 0.05 J/m3, or roughly two to three orders of magnitude lower than wind or waves. 3 Wind is driven by changes in weather patterns, which in turn are driven by thermal gradients. Tides are driven by fluctuations in gravity caused by lunar revolutions. The energy densities of wind and water systems are proportional to the mass, m, moving through them, and the square of the speed, v, of this mass, or ½mv2. At sea level, air with a density of about one kilogram per cubic meter moving at five meters per second (ten miles per hour) has a kinetic energy of 12.5 joules per cubic meter. Applying Betz’s Law, which limits efficiency to 59% (Betz, 1926), yields about seven joules per cubic meter. Thus, wind energy on a moderately windy day is over a million times more energy-dense than solar energy. There are two prevalent mechanisms for extracting tidal energy. In one system, barrages move up and down, extracting energy with the tides’ rise and fall. On the second strategy, tidal stream systems act more like underwater wind turbines, extracting energy from tidal waters as they move past. As with wind, the energy of a moving volume of water is also ½mv2. Tidal systems have the advantage over wind systems in that water is approximately one thousand times denser than air. Their disadvantage lies in generally low tidal velocities of only ten centimeters per second to one meter per second. Thus, a cubic meter of water, with a mass of about 1000 kg, yields an energy density of about five joules per cubic meter for slow water1 and five hundred joules per cubic meter for fast water. These are also subject to Betz’s law and represent only peak values, so the average energy densities are closer to one-half of a joule per cubic meter to fifty joules per cubic meter or about the same as wind. kinetic energy (tidal low velocity) = ½ mv2 = ½ · 1000 kg · (0.1 m/s)2 = 5 joules. kinetic energy (tidal high velocity) = ½ mv2 = ½ · 1000 kg · (1 m/s)2 = 500 joules.

1 2

1 How much solar power per cubic meter is there? The volume of the space between a one-meter-square patch on Earth and the center of our orbit around the sun is 50 billion cubic meters (the Earth is 150 billion meters from the sun or 4,000 Earth circumferences). Dividing the usable 100 watts per square meter by this volume yields two-billionths of a watt per cubic meter. Sunlight takes about eight minutes (499 seconds) to reach the earth. Multiplying 499 seconds by twenty-six billionths of a W/m3 reveals that solar radiation has an energy density of 1.5 microjoules per cubic meter (1.5 x 10-6 J/m3). 2 The only way to extract thermal energy from the atmosphere is to construct an insulated pipe between it and a reservoir at a lower temperature

About the author: Tom Tamarkin formed Tamar Corporation, which developed the nation’s first “Smart Meters.” The Tamar meters integrated its “Smart Meter’’ systems with its “Tamar 2000” in-home display. The Tamar meters introduced the concept of “Time of Use’’ rates and “Peak Demand” rates for residential utility customers and gas and water meters. In 1997, Tom formed USCL Corporation, later to be merged into EnergyCite, leading the development of the modern electrical utility “smart meter,” which Tom is generally credited with inventing. Tom Tamarkin is the organizer and manager of the Fusion4Freedom website, which serves as a significant educational resource for atomic fusion energy, and is the Fusion Energy Consortium founder. In 2019 Tom formed ClimateCite, Corp., a U.S. IRS 501(c)(3) compliant not-forprofit company to further his efforts in defeating the climate hoax worldwide.

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cover story

JIM WRIGHT,

FOR

LOOKING OUT FOR TEXAS IS A WAY OF LIFE By: David Blackmon Photography by: Darren Carroll

SHALE MAGAZINE  JANUARY/FEBRUARY 2021

JIM WRIGHT, TEXAS’S NEWEST ADDITION TO THE TEXAS RAILROAD COMMISSION (RRC), LEARNED THE VALUE OF HARD WORK GROWING UP ON A WORKING RANCH — ONE WITH ITS OWN MINING BUSINESS TO BOOT — NEAR THE TINY SETTLEMENT OF BLUNTZER, TEXAS. The lessons he learned at a young age served him well during 2020 when he embarked on his first-ever campaign for a seat on the RRC. It started with a tough primary race against incumbent Commissioner Ryan Sitton. After a surprising primary win, he took on Democrat Chrysta Castaneda, a Dallas attorney whose campaign received $2.5 million from billionaire New Yorker Mike Bloomberg during the race’s closing weeks. Bloomberg, it seems, had become convinced by the speculative and sometimes hopeful reporting by the Texas and national news media that this election would be the one where Texas flipped to blue. However, Texas voters failed to cooperate. Despite all of the out-of-state money coming into his opponent’s campaign coffers, Wright won his race against Castaneda by about 10% of the vote, roughly the same margin by which U.S. Senator John Cornyn was reelected in his own race. With the Republican Party winning every statewide race, as it has in every election since 1994, and with the balance of power unchanged in the state legislature and the Texas congressional delegation, Texas remains as red as ever, at least for the coming two years. Wright’s willingness to get his hands dirty to solve difficult problems will also serve him well in his new job at the RRC. The Commission has been dealing with the ongoing issue of natural-gas flaring for the past few years, especially in the Permian Basin in West Texas, where the issue has gained national attention. Regulation of hydraulic fracturing has been a matter of national and even global controversy for a dozen years now, and the RRC still finds itself the target of frequent criticism from the environmental left despite its strong enforcement efforts and regulatory improvements in that area.

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DURING THE CAMPAIGN, HE DEVELOPED A SET OF KEY POLICY PRIORITIES, KEPT HIS GUIDANCEDOCUMENTS TASK FORCE UP AND RUNNING AND CREATED ANOTHER WORKING TASK FORCE FOCUSED ON THE CRUCIAL ISSUE OF EMISSIONS AND NATURAL-GAS FLARING IN THE STATE

Tensions have also risen in the midstream part of the business in recent years. Disputes over permitting and the exercise of eminent domain powers by pipeline companies have increased as thousands of miles of new pipeline infrastructure have been built across the state. Eminent domain has become a matter of increasing tension between the industry and landowners for a generation now, and representatives of all stakeholders have tried in vain to reach an acceptable compromise in every legislative session since 2009. All of these issues and more will become focal points of RRC activity during Wright’s first year in office. Then there’s the budget. As the Texas legislature convenes in mid-January for its biennial 140-day session, it will face a significant revenue shortfall for both the past two-year cycle and the next budget cycle due to the impacts of the COVID-19 pandemic. As tough as the overall state budget picture shapes up to be, the RRC has been hit doubly-hard given that its budget is funded almost entirely from fees levied on the oil and gas industry in the state. It is no secret that 2020 was one of the most trying years the oil business has ever faced, with a collapse in oil prices initially caused by the price war between Saudi Arabia and Russia and exacerbated by the demand-killing impacts of the pandemic. The resulting collapse in prices led to an 80% decline in the domestic rig count and similar drops in the number of permits for drilling, frac jobs, workovers and other oilfield activities from which the Commission collects fees. While things certainly picked up in the fourth quarter of the year, the level of Texas oilfield activity remains a fraction of what it was just a year ago. Wright and his fellow Commissioners, Christi Craddick and Wayne Christian, will have to work with legislators and the industry itself to find ways to arrive at a healthy budget to keep the gears at the RRC turning for the next biennium. Make no mistake about it, the maintenance of a properly funded and staffed Railroad Commission is in the best interests of all concerned, especially the industry itself. The history of the oil and gas business in Texas clearly demonstrates that the industry thrives during times when the Commission is diligently and proactively executing its responsibilities. Regulatory stability allows landowners, environmentalists and the industry to plan ahead, ensuring we are able to benefit from the plethora of natural resources in our state. It’s safe to say that there will be no shortage of work as Wright embarks on his new role as a statewide elected official. Our interview with him clearly demonstrates he is ready to hit the ground running.

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A FAMILY WITH AN INDEPENDENT STREAK “If you head south on Hwy 666, you’ll run into Hwy 624, which takes you back into Corpus Christi. Right there at that corner is an old school building, and that is Bluntzer,” Wright told us when we sat down to interview him in early December. “I grew up about a mile from that school building. From there, I lived in Robstown for a while, then moved to Orange Grove. That’s pretty much where I’ve been ever since.” Bluntzer is not big enough to be an incorporated city or even officially a town. It is instead a community, like so many others in the state, made up mainly of farms and ranches grouped close to one another. Wright grew up on one of the working ranches in the community that was home to a rodeo arena and his immediate and extended families. “About a mile away from Bluntzer was where all my cousins grew up on the ranch there,” he told us. “Everyone had their little houses, and if you opened the back door to our house, you’d actually almost hit the corner of the local rodeo arena. So, all of my brothers and sisters, my cousins, we all rodeoed in some form or fashion. That’s just what I grew up doing.” Ultimately, the rodeo became a long-term passion for young Jim Wright, one that he continued to pursue well into his adult years. He became a member of the Professional Cowboy Rodeo Association (PCRA) and rode in events all over the country for more than 20 years. “I think the first bull I ever climbed on was when I was nine years old. My grandfather raised the largest herd of longhorns in Texas. He had that for a number of years,” Wright said. “I remember my uncle really getting angry with me because I’d go out and gather the longhorn bulls so I could practice on them. He didn’t much like that, but he’d let me do it.” Like so many parents of young rodeo enthusiasts, Wright’s parents were not especially enthralled with the sight of their son being tossed around by thousand-pound bulls on a regular basis and tried to steer him over to the less dangerous events in the sport. “My mom and dad wanted me to be a roper, not a bull rider,” Wright said with a chuckle. “Dad even bought a bunch of steers and sent them to Raymondville and sent me down there for a summer to rope them because they needed another set of hands there.” As the story goes, that summer, there was a screwworm epidemic. Wright and five or six others spent the summer roping steers to doctor screwworms. “I told Dad after that summer that I never wanted to see another rope in my life. I said ‘I’ll stick to bull riding; it’s safer.’”

SHALE MAGAZINE  JANUARY/FEBRUARY 2021

Wright stuck with riding bulls, and he continued on the pro rodeo circuit well into his 30s. “I did high school rodeo, then got out of high school and went to a lot of open rodeos and eventually got my PCRA permit card. This was back in the days when for pro rodeo, you had to win $2,500 a year to keep your card, and there were some years back then when it was really hard to do that. “A good year for me would be making $10,000 in the summer, and I thought I was rich. But it cost every bit of that to go to those rodeos. I finally quit one night in Pennsylvania in 1996. Got on a bull there and got hooked pretty good and dislocated my knee, and I thought, ‘You know, I’m too old for this.’ I was up there with Lloyd, a guy rodeoing with me at that time, and I said to Lloyd, ‘Take me to Newark, and I’m getting on a plane, and I’m going home, and I hope I never see another bull again in my life.’” Of course, being a rancher, Wright did continue seeing bulls, even though he had quit riding them. “I bought a bunch of bulls and started raising bucking bulls and did that for a long time,” he said. “We went to a lot of PRC rodeos with them and even made it to the national finals with a few.” Wright remembered back to a day when his wife, Sherry, was grinding feed and asked him why they were still raising those bulls since it was a lot of work, and they weren’t making any money. He said, “I thought that was a really good question,” and shortly after that, each time he would return home from a trip, they would have fewer and fewer bulls because she was selling them. “It was a family business,” he said, “and she knew when it was time to move on.” Wright is the proud father of five children, and we asked if any of them had also taken an interest in rodeo or ranching. As is the case with most ranching families, the answer is that

a few have, and a few have decided to pursue other interests. “My oldest son actually runs a ranch now in Camp Wood,” Wright told us. “I really admire him. He used to tell me all the time, ‘You know, Dad, you’ve got a business; you’ve got these bulls; you’re into everything. Every day you wake up, and you're worried about something. I hardly ever see a smile on your face. But you know what, I may not make a bunch of money, but I love being around cows and horses, and I wake up with a smile on my face every day.’ “To this day, every time I see him, I smile. He’s like, ‘It’s good to see you smiling now.’ So yeah, he didn’t chase all the things I did. He loves bulls; he loves horses; he loves cattle. That’s what he wants to do. He rode for a long time, too. Kind of followed my footsteps in that regard, got his card and rode. The only thing about him is he broke more bones than I did.” That oldest son, Luke, also preaches at various cowboy churches in the area where he lives. “He found Christ and got started in a lot of the cowboy churches. He knows a lot of the preachers in the cowboy churches, and he’ll go and step in for them when they’re sick or on vacation. Or he might just show up and give a testimony. He still attends rodeos and preaches at those events too.” Wright said his other kids have gone into their own paths in life, away from ranching and rodeoing. “My oldest step-daughter runs a bed and breakfast in South Texas. Our other daughter works for Ernst and Young and runs her own program team for them. My stepson works for CPS in San Antonio and loves what he does there. “Then our youngest is in college. He wants to be an electrical engineer. I wanted him to play football because he filled out. He’s now 6’4” and 250 lbs. I probably could’ve talked him into riding bulls, but he’s too big for that. I told him maybe he could try steer dogging. And he said, ‘Nah, I’ll just stick to what I do.’” Sounds like a trait that runs in the family.

SHALE MAGAZINE  JANUARY/FEBRUARY 2021

A PRESSING NEED FOR GUIDANCE AND CLARITY When we asked what could possibly lead someone with such a great family and happy life in a rural part of Texas to invest the time, energy and money to run for Texas Railroad Commissioner, Wright didn’t have to give it a lot of thought — his answer was direct and immediate: He wants to clarify the interpretation of the rules. “I started my company (a diverse set of businesses that offer oilfield services ranging from consulting and transportation to industrial recycling) after working at a hazardous waste landfill in 1991,” he said. “We started out doing mainly emergency response for the utility industry. However, since the discovery of shale, the oil field just bloomed and blossomed, and naturally, our revenues tracked that. So, we were dealing less with the Texas Commission on Environmental Quality (TCEQ) and more with the RRC. I realized that the problems I encountered with the RRC were related to unclear interpretations of a rule or how the particular person we were dealing with applied those rules. It was difficult. When you read the code of federal regulations, or you read rules that are at the commission or rules in general that are written by an attorney, it’s like reading the Bible. Different people interpret that type of language differently.” “One thing I applaud TCEQ on in working with them for all these years is the lack of ambiguity because you could always refer to a guidance document, and that would give you the clear definition in layman’s terms of what that rule meant and how it was to be applied, evenly and fairly across the board. Working with the Railroad Commission, you soon find that there are no guidance documents.” In 2018, Wright, in discussions with several customers, came up with an idea of forming up a task force to work with Commission staff to develop a set of guidance documents. Their

goal was to help standardize the interpretation and applications of some of the more complex rules. He also approached one of the Commissioners to see if they would be willing to help facilitate the effort. “I asked the Commissioner if they had ever considered having someone come in and help write guidance documents. The answer was essentially, ‘No, but if you’ve got people who want to volunteer, I’m happy to do what I can to help give you access to staff, and we’ll go from there.’ And the Commissioner did.” But the new task force’s first call with Commission staff was with an employee in the IT department, and it did not go well. “I remember that day as clearly as yesterday,” Wright said with a laugh. “We were actually all sitting around a conference room table, and when we hung up with the staff member we were talking to, we kind of looked at each other and said, ‘Does anybody think the tail is wagging the dog here?’ I apologized because it was clear we weren’t going to get very far with the staff. I said, ‘You know guys, I’m sorry that I wasted y’all’s time. I don’t know how else to get this accomplished.’ Then two or three of them looked at me and said, ‘Well, we do. Why don’t you run for Railroad Commissioner?’ “That was July of 2019, and I went home and considered it. Then on December 6th, three days before the deadline to register to run, I was getting ready to go to Lake Charles with my wife for our anniversary. We got on the airplane, and I asked her, ‘Do you mind if I stop in Austin?’ That’s when I made my mind up to do it. I said, ‘Do you mind if I stop in Austin and register to run for Railroad Commissioner?’ She looked at me and said, ‘You know, you’ve always been a nut, but I really know you're a nut now.’ But then she said, ‘Sure. Let’s stop in Austin. Go do it.’”

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STARTING A NEW JOB WITH AN ACTION PLAN Wright is not just coming into his new role with a blank slate. During the campaign, he developed a set of key policy priorities, kept his guidance-documents task force up and running and created another working task force focused on the crucial issue of emissions and natural-gas flaring in the state. The flaring of large volumes of natural gas has been a chronic, ongoing issue that has negatively impacted the industry’s reputation in every new shale play since the initial development of the Barnett Shale in North Texas more than 20 years ago. Flaring mainly occurs in wells classified as oil wells, but which also produce significant volumes of associated gas. Producers and royalty owners want to be able to produce and sell the oil production, in many cases, before the wells can be hooked up to a natural-gas pipeline. For many years, producers facing this situation around the country were allowed to simply vent the natural gas into the atmosphere. But the elevated focus on climate and the environment beginning in the 1960s brought with it the realization that this was bad policy. Most states, including Texas, have long required the gas to be flared at the wellhead rather than just vented into the atmosphere, and also sets a time limit on how long a producer is able to do this before the well must be hooked up to a sales line. This avoids methane pollution but still results in the emission of trace amounts of other pollutants. Prolonged flaring of large volumes of gas also results in a tremendous waste of one of the state’s most precious natural resources, an aspect of the issue that Wright said he considers to be key. “I look at flaring as a waste of our natural resources,” he told us. “I think that certainly, man is having an impact on our atmosphere, but I don’t think flaring is the only cause, which is what you kind of read

SHALE MAGAZINE  JANUARY/FEBRUARY 2021

in the papers today.” Wright said that after hearing from many Texans about the issue across the campaign trail, he decided to create a task force to look at the issue. His task force is made up of individuals from midstream companies, producers and other stakeholders. “Flaring is such a complicated issue, to be honest with you,” Wright said. “It isn’t just as simple as just doing away with flaring.” He said the task force is looking at how it can minimize the flaring of natural gas and also educating people on the facts about flaring. While guidance documents and flaring are key issues for Wright, they are not the only ones he will be focused on when he hits the ground running in January. In fact, he’s already up to four task forces he wants to quickly form to address issues. “As of right now, we’ve got a total of four task forces that we are working on creating,” he told us when we talked in early December. In addition to his task forces to address guidance documents and flaring, Wright also plans to create groups of experts to address public education about the industry and one to work on market sustainability. Wright said that all of the task forces feed into one another, and each plays a role in helping him achieve the two promises he set out to fulfill as Commissioner. “I made two promises on the campaign to streamline enforcement (governance documents) and increase transparency (education) at the commission with my ultimate goal of creating a sustainable and dependable lifestyle for all Texans supported by our state's abundant natural resources,” he said. “If I can accomplish this goal, I will feel like I have done a lot for Texas in my sixyear term. It's clear by the outcome of the election that this resonated with Texans, and that's what I've come to Austin to do,” he said.

THE IMPORTANCE OF BORDER SECURITY Wright also talked a lot about the importance of border security during his campaign. His focus on this issue is a natural one, given where he grew up, but also relates to a tragic incident in which his wife was involved in 2017. “I'm passionate about border security. And I really said this during my campaign. It is no secret that much of the trafficking of human beings, drugs and other illicit activities that come across the border must traverse through oil and gas well sites and other installations and that oil sites can be used as shelter by those in the country illegally. Employees working on leases along or near the border often see the signs of such activities and even come into direct contact with the people engaged in them. Wright sees this as an opportunity and responsibility for the industry to play a larger role in addressing the problem. “When we talk about border security, I think that the oil and gas industry, especially in South Texas, needs to do a better job of working with our border patrol to recognize the illegal activity that’s going on there. We need to have a way to report it and get these incidents responded to immediately. That’s my focus when I talk about border security. I want to try to work with border patrol to start to educate our folks out in the industry so that when they see these things happen,

they have a safe way to report it so that it’s dealt with.” We asked Wright how he expects border policy to change in a new Joe Biden administration. His response was direct and to the point. “Everyone knows what’s going to happen there,” he said. “There’s going to be a lot of immunity, and I think we’re going to go backwards from what has been accomplished in the last four years. But I can tell you, in experiencing what I’ve experienced in my family, I’m going to continue to fight for that border protection. I’m going to do everything that this office allows to make sure we have a secure border in Texas.” The new president may not care about what happens in South Texas, but the new member of the Railroad Commission definitely does. He and generations of his family have grown up and worked and rodeoed and raised cattle and lived their lives there. He built businesses that thrived because of the innovation used to extract oil and natural gas from shale formations. He cares deeply about the land, so much so that he became an expert in waste management and land restoration. It’s those reasons and more that help explain why he chose “wrightfortexas.com” as his campaign website URL. For Jim Wright, that’s not just an address; it’s a way of life.

WHEN WE TALK ABOUT BORDER SECURITY, I THINK THAT THE OIL AND GAS INDUSTRY, ESPECIALLY IN SOUTH TEXAS, NEEDS TO DO A BETTER JOB OF WORKING WITH OUR BORDER PATROL TO RECOGNIZE THE ILLEGAL ACTIVITY THAT’S GOING ON THERE

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INDUSTRY

By: Jay Queen

or over 25 years, Eaton’s FERRUPS uninterruptible power supply (UPS) has been the workhorse providing clean and reliable power to mission-critical and industrial applications. An uninterruptible power supply (UPS) is an electrical apparatus that provides emergency power to a load when the input power source or main power fails. A UPS system performs three primary functions: it conditions the incoming dirty power from the utility company to give you clean, uninterruptible power; it provides ridethrough power to cover for sags or short-term outages; it enables seamless system shutdown during a complete power outage. In the oil and gas industry, consistent power is a necessary component to ensure operations run smoothly, and any loss of power can have devastating impacts. For example, in April 2012, a Los Angeles facility experienced a power surge during a lightning storm which caused the hydrocracking unit to trip, emitting sulfur dioxide and hydrogen sulfide into the air. With compression and decompression points in gas pipelines and harsh industrial infrastructure in oil applications, traditional UPS models are susceptible to surge events limiting their effectiveness in these environments. In fact, according to the U.S. Department of Energy, power supply disruptions and electrical equipment failures represented over 80% of electrical problems in refineries between 2009 and 2013. The Eaton Ferrups FX is an ideal solution for the industry as it can withstand harsh power environments and help avoid downtime.

The Ferrups FX combines the reliability of the legacy FERRUPS UPS with new options for customization and flexibility. The remote-control display with a LED status bar allows for quick and easy status updates to ensure systems are protected and running without interruption, while the user-replaceable outlet panel enables on-site updates as applications change. The ferroresonant transformer-based backup power solution delivers the highest level of reliability expected of an industrial UPS. Additionally, as the Industrial Internet of Things has emerged, oil and gas companies have realized an opportunity to leverage enhanced connectivity in critical infrastructure to achieve new levels of efficiency, safety and security. Eaton’s Ferrups FX can be purchased with either the Eaton Gigabit Network Card or the Industrial Gateway Card. The Gigabit Network Card (Network-M2) is Eaton’s latest UPS connectivity device that improves business continuity in two ways: by providing warnings of pending issues to administrators and by helping perform an orderly shutdown of servers and storage. The Industrial Gateway Card combines the features of an SNMP agent, HTTP/web server and a Modbus card to facilitate remote monitoring of your UPS system through any Building Management System. The cards give users the ability to customize and schedule actions, like shutdown protocols and load shedding and receive immediate notifications during power events without having to be onsite. Finally, enhanced connectivity of devices creates the possibility for cybersecurity risk as

With enhanced cybersecurity features including encryption, password management and more, both cards have been rigorously tested for vulnerabilities and provide peace of mind for oil and gas users that they can benefit from connected capabilities, while their data remains protected from intrusion 32

SHALE MAGAZINE  JANUARY/FEBRUARY 2021

About the author: Jay Queen is the Single Phase Product Manager for Modular IT and Industrial OT UPS at Eaton. Jay has been involved in the Electronics Industry since 2011, when he graduated from Rensselaer Polytechnic Institute with a degree in Electrical Engineering. During his career, he has designed and collaborated on numerous products ranging from gasoline pumps to tablet computers. He joined Eaton in 2016 and now manages the 9PXM and BladeUPS series of modular UPSs as well as Eaton’s upcoming next-generation Industrial UPS offering, Ferrups FX

PHOTO COURTESY OF EATON.COM

FERRUPS FX

would-be cyber-attackers identify access points as potential opportunities to penetrate critical systems. The Gigabit Network Card and Industrial Gateway Card are the first UPS network cards to achieve dual cybersecurity certifications from industry organizations UL and the International Electrotechnical Commission (IEC). With enhanced cybersecurity features including encryption, password management and more, both cards have been rigorously tested for vulnerabilities and provide peace of mind for oil and gas users that they can benefit from connected capabilities, while their data remains protected from intrusion. Most of the UPSs in this sector have exceeded their recommended lifespan, yet digitization now makes it easy to justify a UPS upgrade. The Ferrups FX UPS can help de-risk oil and gas industry power infrastructure by reducing downtime, optimizing equipment life cycles and lowering operating costs. It can also help ensure continuous uptime, providing intelligence and insight and increasing operational predictability. To learn how the Ferrups FX UPS can help protect your critical system, please visit Eaton.com/FerrupsFX.

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INDUSTRY

ONE Future Pursues One Goal By: Nick Vaccaro

SHALE MAGAZINE  JANUARY/FEBRUARY 2021

Hyde identifies the importance of the team’s ability of its members to share technology. Because no regulations stipulate any specific technology to decreasing methane emissions, the team is able to take advantage of a flexible structure and adhere to an approach best suited to their own business model. In addition to a proactive approach to preserving the environment as an industry team, ONE Future’s membership requirements are equally enticing. Their fee structure is dependent upon gross revenue. Attempting to increase enrollment, Hyde stated the coalition is reducing those fees next year. “We are trying to remove deficiencies to allow for smaller companies to join us,” said Hyde. “More members allow for lower prices.” Hyde further explained the group’s reasoning for increasing membership, saying, “The more members we have only makes us better with increased participation and the potential of better practices shared.” Walking down memory lane, Hyde recounted that he was employed by Southern Company Gas, which was one of the founding companies of ONE Future. He became a loaned employee in 2016 and served in an executive role for the coalition. “It was getting too much to handle,” said Hyde. “The board asked me to contract part-time.” 2017 brought Hyde’s retirement, and his attention was solely diverted to managing ONE Future. With a background in governmental affairs, he saw a need and was challenged by an opportunity he described as both challenging and interesting. “I knew something along the lines of what ONE Future was

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he oil and gas industry has always been themed with using technology to improve processes. Using a similar approach, companies have sought to improve regulatory compliance and environmental protection. Established during the Obama administration in 2014, seven firms united as Our Nation’s Energy Future, better known as ONE Future, in search of a significant reduction in methane emissions. Harnessing a rejuvenated commitment and innovation in technology, ONE Future has made great strides in accomplishing its goal. “Attempting to be proactive, ONE Future approached the EPA with our performance-based program,” said Richard Hyde, Executive Director of ONE Future. “They agreed to our protocol and approved our math for calculating the methane intensity rate.” ONE Future has laid down the gauntlet and identified its emissions reduction goal of one percent by 2025. To accomplish this, the coalition tapped the industry’s individual sectors for participation and transfer of knowledge. The sectors targeted include production, boosting and gathering, processing, transportation and storage, and distribution. According to Hyde, the focus targets each member contributing in their own way and capability. “We ask each member to contribute what they can,” said Hyde. “It doesn’t matter how we get to the goal just as long as we get there.” ONE Future’s makeup consists of 33 natural-gas companies who work together as one team to accomplish one goal. Their members include some of the industry’s largest companies, such as Atmos Energy and Boardwalk Pipelines. In addition to the Executive Director, ONE Future consists of 26 board members who are employees of member companies. Hyde indicated that ONE Future’s contribution has been a monumental success. It has provided members a platform to join and work for the common good as a team in giving back to an industry that has provided so much for so many. “There are no individual goals,” said Hyde. “It is a team effort.” That team effort recently led to happily reported emissions statistics. The coalition released the ONE Future 2019 Methane Emission Intensity Report in November 2020. The report proudly noted that ONE Future exceeded their goal by 67% with a reported 0.334% methane intensity of member companies compared to the 1% goal for 2025. The report further identified substantial growth in membership. 2018 brought methane intensity reporting by 17 ONE Future Members while 2019 witnessed an increase to 24. With increased membership, total methane intensity remained flat while production increased by 32% and deliveries to customers by 58%. But for the third consecutive year, however, ONE Future significantly surpassed its 1% goal. Observations made from this data show that the industry has the ability to lower methane emissions and still increase production while supplying energy both domestically and globally. The 2019 report drilled down and revealed useful information to its members. As each member contributes individually to the numbers used to formulate the statistical data, each sector of which they comprise exceeded their goal expectations. Production exceeded their goal by 70%, while Gathering and Boosting accomplished the same by 59%. Transmission and Storage beat their goal by 63% and Distribution by 58%. Processing saw the largest windfall and surpassed theirs by 89%.

promoting was imperative to the industry,” said Hyde. “I saw the handwriting on the wall and decided to jump in.” Speaking on next year’s goals, Hyde stated that predictive analytics would encompass a vast amount of the group’s attention. He expressed great value in the ability to take data and use it as a tool to predict where problem areas can occur. Noting that this will be quite the undertaking, he validated the need for member companies who recognize the significance of this notion and the success of the program itself. These attributes combined will assist in new directives and accomplishments like predictive analytics. Acknowledging goals for next year, Hyde is focused on a more long term vantage point. He said that ONE Future is committed to achieving substantial growth over the next five years. Citing the potential of third-party audit, Hyde said, “We need to find a way to validate our members in our program. Data accuracy is very important in proving the value of our members.” ONE Future’s anticipated improvements between now and 2025 are clearly stated. Flexible emission reduction standards will be expanded through an uptick in enrollment. Additional reductions will be recorded as improvements are experienced in the collection of data. As the EPA updates the methodology, the coalition will make

updates of their own to the national emission intensity basis. The group will also be reviewing their practices annually to determine where improvements or changes must be made. They further documented an additional improvement of periodically reviewing collected data to determine if methane intensity targets should be altered. Hyde continues to stipulate that ONE Future’s eternal success will be possible through technological advancements. Coupled with the ability to drive down emissions, he expressed the need for everyone, both members of ONE Future and nonmembers, to use the same formula in calculating the intensity rate of methane. “Creating an industry yardstick for methane intensity rate needs to happen, so everyone is on the same page,” said Hyde. Contemplating the potential shift from the Trump administration to a Biden administration, Hyde stated ONE Future’s approach would be to create flexibility. “ONE Future is administration agnostic,” said Hyde. “Our approach did not differ between Obama and Trump.” Operating in 13 of the 38 production basins, and coupled with other areas of the value chain spanning from various regions of the United States, ONE Future’s data represents a large portion of U.S. natural gas supply. Committed to ensuring natural gas will remain a long term fuel supply, ONE Future plans to continue its drive in embracing technological advancements and collaborating with experts to achieve its goals and preserve the placeholding of natural gas in today’s society as well as that of the future. With its current enrollment including Antero Resources, Apache, Ascent Resources, Atmos Energy, BHE Pipeline Group, BHP, Boardwalk Pipelines, Caerus Operating LLC, Con Edison, Crestwood, Dominion Energy, Duke Energy, Eagle Claw Midstream, Enbridge, Encino Acquisition Partners, EQT, Equinor, Equitrans Midstream, HESS, Kinder Morgan, National Grid, New Jersey Natural Gas, NW Natural, ONE Gas, Oneok, Southern Gas Company, Southern Star Central Gas Pipeline, Southwestern Energy, Summit Utilities, TC Energy, Williams, Woodland Midstream, and Excel Energy, it is unmistaken that ONE Future’s goals can be achieved and the industry improved and secured as a whole. ONE Future describes its methodology as science-based and goal-oriented. It allows its members to succeed by allowing for their own cost-effective and efficient approach to achieving their methane intensity goal. Importance is placed on the progress made as it directly influences the total combined intensity rate. With its members remaining committed and implementing improvements, its 2025 goals should be accomplished with ease and allow for a world of natural-gas use paired equally with a socially and environmentally responsible industry.

Observations made from this data show that the industry has the ability to lower methane emissions and still increase production while supplying energy both domestically and globally

About the author: Nick Vaccaro is a freelance writer and photographer. In addition to providing technical writing services, he is an HSE consultant in the oil and gas industry with eight years of experience. He also contributes to Louisiana Sportsman Magazine and follows and photographs American Kennel Club field and herding trials. Nick has a BA in Photojournalism from Loyola University and resides in the New Orleans area. 210-2407188 nick@shalemag.com.

SHALEMAG.COM

INDUSTRY

Biosurfactants: The ESG-Friendly Technology Reviving Shale Profitability and Production MEET THE GREEN TREATMENTS OUTPERFORMING SYNTHETIC CHEMICALS AT A FRACTION OF THE DOSAGE RATE AND COST By: Martin (Marty) Shumway

hale is a big part of the U.S. energy industry supplying more than 63% of gross domestic oil and gas production, but it’s getting hit hard. Drilling new wells to offset steep production declines is difficult in the current capital-constrained environment. Current lower oil prices and decreased demand have made capital extremely limited for new drilling and completions. Added to these budget restraints are rising ESG pressures and discussions of potential regulations from a change in presidential administrations. It’s a lot to handle and poses a difficult challenge for producers — how to extract more oil from existing wells while maximizing sustainability and how to do so quickly and cost-effectively. New, environmentally-friendly hydraulic fracturing technologies are being introduced with the unique ability to outperform surfactants in maximizing initial production, maintaining those rates to extend the total life cycle of the well and improving profitability. A top solution is biosurfactants — deemed one of the most promising emerging technologies that’s both environmentally friendly and profitable. Biosurfactants offer benefits when applied in existing wells for enhanced oil recovery as well as when used in hydraulic fracturing of new wells. Biosurfactants are 100% naturally produced and have many advantages over traditional, hydrocarbon-based surfactants, including extremely low toxicity, high activity at elevated temperatures and low critical micelle concentrations that require as little as 1/50th the dosage rate. They can be used at a wide range of pH values and also perform well in high-salinity brines with elevated divalent ions, which can be challenging for synthetic surfactants.

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Reaching and Mobilizing Otherwise Immobile Oil Biosurfactants can penetrate the smallest shale rock “nanopores” that other treatments can’t reach, mobilizing otherwise immobile oil and enhancing recovery in unconventional tight formations where pore throats are extremely small (ex: Wolfcamp shale with nanopores ranging from 3-40 nm). This is due to their small micelle size and lower dosage requirements. Biosurfactants form micelles that are less than 2 nm in diameter, significantly smaller than the micelles formed by chemical surfactants (~100 nm) and nanoparticles (15-20 nm). This increases penetration in the reservoir during hydraulic fracturing and mobilizes oil from even the tightest shale reservoirs.

Recently starting use in hydraulic fracturing completions by oil innovation company Locus Bio-Energy Solutions, green biosurfactant solutions show an unmatched ability for displacement into the smallest reservoir pores to mobilize more oil than traditional surfactants, improving initial flow back performance and increasing total estimated recovery while also enhancing ESG profiles. The biodegradable biosurfactants outperform traditional surfactants in enhancing production in existing assets and improving production when used in new completions, at lower dosage rates and costs. The success of biosurfactants comes from their unique multifunctional properties that solve the biggest shale challenges:

Cost-Effectively Increasing Oil Recovery Biosurfactants effectively mobilize oil by reducing the “drag” between oil and the reservoir rock surface, resulting in maximized oil recovery and minimized fluid costs. They offer faster and lower surface/interfacial tension reductions and an unsurpassed ability to alter surface wettability at lower ppm levels and up to 50X lower concentrations. This is due to the critical micelles concentration (CMC) of biosurfactants, ranging from 1 to 2,000 mg/L. In comparison, interfacial (oil/water) tensions are typically 1 mN/m, and surface tensions are 30 mN/m. Biosurfactants can reduce water surface tension to 25 mN/m and can also reduce the interfacial tension of water/hexadecane to <1 mN/m. Sustaining Production Enhancements Unlike synthetic surfactants, which do not adsorb significantly onto reservoir rocks and are typically flushed out in early flow back, up to 50% of biosurfactants are retained by the

BIOSURFACTANTS ARE DEEMED ONE OF THE MOST PROMISING EMERGING TECHNOLOGIES THAT’S BOTH ENVIRONMENTALLY FRIENDLY AND PROFITABLE. minerals in shale reservoirs. After providing immediate production boosts during early flow back, these biosurfactants slowly desorb over weeks and months to ensure long-term positive impacts on fluid properties and long-term mobilization of oil after flow back. And because these biosurfactants are effective at extremely low dosage rates, they continue to boost production performance for months after application. When used as a tertiary enhanced oil recovery process in existing wells, these sustained production enhancements are being acknowledged by state government agencies for qualification in tax credits. For example, the Texas Railroad Commission (Texas RRC) approved Locus Bio-Energy’s biosurfactants as a tertiary enhanced oil recovery technology, qualifying users for a 50% annual severance tax credit for the next ten years on all oil produced — as long as a production increase is maintained.

SMALLER MICELLE SIZE AND LOWER DOSAGE REQUIREMENTS ALLOW BIOSURFACTANTS TO PENETRATE INTO THE SMALLEST NANOPORES AND MOBILIZE OIL THAT OTHER TREATMENTS CANNOT.

New, environmentallyfriendly hydraulic fracturing technologies are being introduced with the unique ability to outperform surfactants in maximizing initial production, maintaining those rates to extend the total life cycle of the well and improving profitability

Increasing Mobility and Extending Well Life Cycle Biosurfactants break up organic deposits and keep them in suspension, preventing post-completion fouling, ensuring long-term profitable well operations, and extending the well’s total life cycle. Fluids used during hydraulic fracturing can lower oil temperature and cause wax precipitation, making the well unable to reach maximum recovery, slowing cleanup and decreasing production. Biosurfactants outperform xylene and other BTEX solvents in wax dispersion and keep it in suspension, increasing production by removing blockages. The slow desorption of these biosurfactants inhibits paraffin redeposition for many months after application, extending oil recovery benefits. Exceeding ESG Requirements Biosurfactants maximize ESG compliance by reducing the need for new drilling, minimizing the use of BTEX solvents as chemical “carriers,” lowering water usage, reducing the carbon footprint of operations and providing treatments with low acute toxicity that are safe for handling and the environment. Current solutions available for use in shale wells from Locus Bio-Energy Solutions are naturally produced from renewable feedstocks, 100% non–GMO and fully biodegradable within 30 days, making them suitable for fragile environments. An analysis done by the oil company found that their water-based biosurfactants had 91% lower toxicity than that of reference surfactants, with a 37% lower carbon footprint. The cost-effective commercialization of green biosurfactants in the oilfield by companies like Locus Bio-Energy allows producers to maximize sustainability without sacrificing performance and profit. Biosurfactants are replacing synthetic chemistries at lower costs (<1/50th dosage rate), getting more from current assets and extending the lifespan. Their introduction has helped oil operators boost initial production (IP), sustain those higher rates for longer periods and maximize estimated ultimate recovery (EUR) — resulting in much-needed increases in profitability and return on investment (ROI).

About the author: Martin (Marty) Shumway is a licensed Professional Engineer (PE.72266), Certified Petroleum Geologist (CPG #6025) through AAPG and an industry speaker with more than 20 years of experience in the mining and petroleum industries. He currently serves as a Technical Director for the award-winning biosurfactant company, Locus Bio-Energy Solutions. He earned both his Bachelor’s and Master’s degrees in Engineering from Ohio State University.

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INDUSTRY

2021: What Now for Flaring? By: Mark Casaday, CEO, Edge LNG

ere in the U.S., we are among the top four countries for gas flaring in the world. According to the World Bank, together with our topfour peers — Russia, Iraq and Iran — we account for 45% of gas flaring worldwide and have done for three years running. What’s more, the same source identifies a 23% flaring increase in the States from 2018 to 2019. But those numbers are for 2019. And at the time of writing, we are on the cusp of 2021. I don’t need to tell anyone that 2020 has been a year like no other, and 2021 will bring more change with the inauguration of president-elect Joe Biden and the re-entry of the U.S. into the Paris Agreement. Which begs the question: What now for flaring? What does the future hold, and how will the practice’s fortunes differ here in the U.S. to the other countries in that top-four cohort?

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ministration will exert pressure and soft power on flaring, certainly more than the preceding one, but mostly, power in this matter resides at the state level. In any case, the changing political landscape should help nudge along action on flaring, and after a year where COVID-19 stalled progress on pretty much anything, that is to be welcomed. Changing the equation So, what does that mean for the operators? On the one hand, there is growing pressure from above to stop flaring, and I know many privately acknowledge that the writing is on the wall in the long-term, at least. But that doesn’t change the basic economic reality that flaring remains an economic necessity in most cases. What can they do, then? Innovate. Whenever faced with a challenge, the oil and gas industry has always found a way. That was true when deepwater fields were made economic; it was true when hydraulic fracturing opened up a whole new frontier of onshore activity, and it’s true now. The pertinent challenge here is finding an economical way to get the gas to market without expensive gathering pipelines. Capturing the gas is not difficult. Using it is not difficult. It’s just that step in-between. It’s a midstream problem. There are solutions to that problem. The industry has already found an inelegant one in CNG virtual pipelines — compressing

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Mounting pressure The statistics I quoted above come from the World Bank and its Global Gas Flaring Reduction (GGFR) initiative — the existence of which tells you everything you need to know about the perception of flaring on the global stage. And why shouldn’t it be in question? After all, this gas is a valuable commodity, capable of fueling power plants, driving vehicles and heating homes. Instead, it is simply burned, with all of the associated environmental impacts — all of the negatives, none of the positives. It’s a fairly simple conclusion to draw that this is an unacceptable waste. But that simple conclusion is often trumped by even simpler economics. If gas is produced as a by-product of oil extraction and the potential sale price of that gas doesn’t cover the cost of setting up and operating takeaway infrastructure, then you’re not going to do it (unless you’re forced to). It’s business. And an oil price depressed by the pandemic makes it even less likely that operators can make decisions against their strict economic interest, as well as tipping the scales of risk away from investing in long-term infrastructure, like gathering pipelines. Yet, that seemingly insurmountable economic disincentive appears to be losing its potency. Flaring in the U.S. does indeed seem to have increased from 2018 to 2019, but there are signs that the direction of travel has changed. In the Permian, for example, flaring hit a record-high of 661 mcf of gas over Q1 2019 — but that number fell to 500 mcf of gas by the end of the year and stayed there until the 2020 oil price crash. Similar statistics can be found elsewhere. For flaring, the pressure is on, and it’s mounting. Here in the States, I expect that trend to continue. This year we have seen Colorado ratchet up the pressure by tying pipeline permits to flaring activity — not an outright ban, but a clear statement of intent. Of course, Colorado isn’t quite in the same league as Texas or New Mexico when it comes to flaring, but it may well embolden regulators elsewhere. In fact, this year, we’ve also seen the Texas Railroad Commission, traditionally laissez-faire with flaring, publicly take a tougher stance. Some have also pointed to Joe Biden’s victory in the presidential race as another nail in the coffin for flaring in the States. In my opinion, this has been somewhat exaggerated. His direct influence will only extend to federal lands, making up a small parcel of the country’s flaring-heavy oil fields. No doubt the new ad-

As we look ahead to 2021, it looks like a case of America first, and it’s up to us to show the world what we can do the gas at source and taking it to market by truck, rather than waiting on pipelines. In most cases, however, the expense and limited storage capacity of each truckload has meant the numbers don’t add up. Certainly not for mass-market deployment. LNG is a much more promising alternative. The same basic principles apply; only each truckload can transport far more LNG than it could CNG: a big favorable swing for the economics. Historically however, the industry has lacked a cost-effective, small-footprint liquefaction and storage solution that can reach and deploy the small-scale sites dotted around the country. However, it’s precisely those sites that are least likely to have a pipeline connection and therefore where the flaring problem is most stubborn. Fortunately, today such a solution exists in the Edge LNG Virtual Pipeline. America First But what about beyond our shores? What about the other countries in that top-four and beyond? Suffice to say this really will be a case of America first. LNG is a large and growing market here. If you can get the gas to market, there is no shortage of buyers, whether they be power

plants, chemical companies looking for feedstock or gas utilities, not to mention the swelling export market. Elsewhere, that’s not the case. Russia is investing heavily in LNG but tends to do so where it can immediately be loaded for export by sea and at a large scale. The vastness and remoteness of the country mean that there would be little to no profit in sending their gas to these export terminals, even with a virtual pipeline. At least in the short term. Likewise, Iran and Iraq look set to carry on flaring in the short-to-medium term. Unlike neighbors such as Saudi Arabia, where a booming chemical industry represents a hungry market for natural gas; Iraq and Iran lack major buyers within their domestic markets. That’s not to say there is no demand, but it is low enough that there is little economic incentive to find solutions to flaring. Perhaps in the future other countries’ governments and regulators will begin to exert similar pressure on flaring as we are beginning to see in the U.S. now. In the meantime, though, as we look ahead to 2021, it looks like a case of America first, and it’s up to us to show the world what we can do.

About the author: Mark Casaday is the CEO of Edge LNG and a veteran of the natural gas industry with more than 30 years’ experience in gathering, processing and distribution companies. In the course of his career, Mark has held leadership positions at gas companies including Niska Gas Storage Partners, Penn Octane Corporation and Mainline Energy Partners.

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INDUSTRY

2021 Oil and Gas Industry Outlook By: David Porter

ere at the end of 2020, we are pausing and reflecting on what we can expect for 2021. I think most people are hoping for and expecting a better year in 2021 than we had in 2020. Of course, only time will tell if the new year will be better or worse. The COVID-19 epidemic was the primary defining factor for 2020 being such a bad year in most people’s minds. It was certainly a huge factor for the oil and gas industry. Long term, I am afraid the new regime will wreak even more havoc on this country than COVID-19 has. The long-term danger that a Biden/Harris administration represents to the national economy and the oil and natural gas industry can not be overstated. At the risk of oversimplifying things, I would say the single factor most representative of the oil and natural gas industry’s health is price. Shorthand, we can say high prices represent good times in the industry, and low prices represent bad times. The interaction between supply and demand primarily determines price. I have seen nothing that has substantially changed in supply and demand for 2021 from 2020. So, I see no reason for any substantial price changes, especially on the upside next year. The only major exception I can foresee is if COVID-19 is brought under some semblance of control and economic activity resumes back to somewhat close to normal, then we could get an increase in demand and some positive movement in price. Let us look at the microeconomic perspective of oil prices on one small production company before looking at the macroeconomic impacts on the general economy. I own a production company with some royalty and override interest and several non-operated working interests. Therefore, I have not only a public policy general interest in the price forecast, but I have a personal interest. My financial well-being is impacted by actions based on whether or not my understanding of where the oil and natural gas market is headed is correct. In late 2017 and early 2018, we entered a couple of drilling programs — horizontal wells — one was in the Eagle Ford, the other in the Permian. The Permian program would probably be in a slight profit status if prices had stayed close to where they were when we signed up for the drilling deal. However, we have gotten about 80% of our money back so far, and if we are fortunate and prices go up a little, and the production decline

SHALE MAGAZINE  JANUARY/FEBRUARY 2021

flattens out, we may make our investment back. I will be very surprised if we end up getting 30 to 40% of our investment back in the other program. With investment results like this, I will be extremely cautious about committing any more capital to oil and gas investments. I would only consider projects that have cash flow with a high probability of capital return and a short-term time frame. At current prices, I doubt if 2021 will be much more than a breakeven year for my company. With the current supply and demand situation, I don’t foresee much of a change in prices for 2021. In fact, while natural gas prices during 2021 may have an increase of 20 or 30% (the low starting point makes this level of increase a fairly minor positive), oil prices will likely meander around in the 40-to-50-dollar range. If things get much worse on the supply side and demand doesn’t recover from COVID-19, I could see a drop into the twenties for a short period of time. I want to give you a caveat about my price predictions; the following statement has been attributed to both Mark Twain and Yogi Berra — It’s difficult to make predictions, especially about the future. As we close, I want to briefly touch on the macroeconomic facts of supply and demand, showing why I don’t think oil prices will move substantially in 2021. Let’s look briefly at the supply side. OPEC+ is currently withholding 7.7 million bpd from the market. Starting in January of 2021, that will be adjusted to 7.2 million bpd. This overhang will function as a lid on prices since every time prices start to move up, economic realities will cause the members of OPEC+ to increase production and sell more oil. This action will tend to stop the rise in oil prices. Libya and Venezuela are starting to return to normal production levels. The new Biden/Harris regime may reduce or end the embargo on Iran. These factors all have the potential to add more oil supply, dampening oil prices. Examining the demand side of the equation shows no real positive news, either. As we noticed earlier, even if the COVID-19 vaccinations work and the economy and oil demand come back strong, it will be at least the middle of the year before that happens. The market is also dealing with numerous government mandates that reduce demand for petroleum products by mandating a certain percentage of zero-emission vehicles, a high percentage of electricity production by renewable resources and forbidding pipelines being built to discourage the use of natural gas.

The long-term danger that a Biden/Harris administration represents to the national economy and the oil and natural gas industry can not be overstated

About the author: David Porter has served as a Railroad Commissioner (2011–17) and Chairman (2015–16), as well as Vice Chairman of the Interstate Oil and Gas Compact Commission (2016). Prior to service on the Commission, Porter spent 30 years in Midland, Texas, as a CPA working with oil and gas producers, service companies and royalty owners. Since leaving the Commission, Porter works as a consultant for oil and gas companies. He also serves as Chairman of the 98th Meridian Foundation, a nonprofit concerned with water, energy and land issues.

Support Texas energy with the nation's first and fastest-growing energy chamber! MEMBERSHIP BENEFITS Member Directory invite-Only Events Status as an Energy Advocate

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POLICY

Some Reasons for Optimism at the End of a Troubling Year By: Jack Belcher

SHALE MAGAZINE  JANUARY/FEBRUARY 2021

tration in Washington that is seen to be less supportive of, or even hostile to, the domestic oil and gas industry. As easy as it may be to be pessimistic about the future of the U.S. oil and gas industry, there are some reasons for guarded optimism in 2021 and beyond. First, as 2020 closes, the industry continues to add drilling rigs, with its biggest rig count gain of the year occurring the week ending Dec. 11. As vaccinations begin worldwide, prospects for global economic recovery and a return to more typical levels of energy demand have improved, with light at the end of the tunnel finally seeming within reach. In short, while further corporate rationalization, consolidation, and belt-tightening should be expected, the worst is likely to soon be behind us, with the industry’s competitiveness as a lower cost, more efficient producer primed to fuel its return to strength and profitability during the coming recovery. As the industry seeks opportunities to capitalize on its newfound efficiencies, it must also continue to work to significantly improve its greenhouse gas emissions (GHG) and environmental, social, governance (ESG) performance. In that regard, U.S. producers are increasingly announcing programs to address methane emissions and flaring, with many improvements stemming from the implementation of ESG programs. In December, ExxonMobil announced that it would significantly reduce its greenhouse gas emissions, by as much as 20%, by 2025. This is a significant development that will serve to help lead the industry to increase its performance on the sustainability front, which cannot come soon enough, as underscored by French gas distribution entity Engie’s

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ne would have to dig deep to find a year that has been more difficult for the U.S. oil and gas industry than 2020, an effort likely to end up being futile. As dark as this year has been, however, a quick look back at recent history shows that it is way too soon to sound the death knell for the sector. In the early 2000s, the U.S. appeared to be on track to become even more reliant on petroleum imports, with the situation worsening as the U.S. began running short of needed domestic natural gas supplies as coal-fired plants were retired. Conventional wisdom was that new resources in areas like the Rockies and the Arctic would be insufficient to meet demand and that significant LNG imports would be needed to make up the difference. During this period in the mid-2000s, I became part of a private study of North America’s offshore, onshore, conventional and unconventional oil and gas resource potential. The results were staggering; North America could be energy self-sufficient and also a net exporter if the right technologies were deployed under the right regulatory climate, fiscal terms and economic conditions. To most at the time, the study findings seemed widely aspirational, and to some, almost naïve. I can still hear a chorus of members of Congress, in both parties, shouting in unison, “We can’t drill our way out of this.” Then, quietly, in the late 2000s, unconventional resources killed conventional wisdom. The shale boom occurred, driven by a revolution in technology and innovation and George Mitchell’s willingness to put resources behind his belief that techniques could be developed to cost-effectively develop shale oil and gas resources. It changed the world. Fast forward to 2020 and everything is again turned on its head. As the year began, the U.S. achieved energy sufficiency and was breaking records for production and exports alike. Then, a global pandemic and a price war devastated the industry, impacting prices and supply. The result is a round of bankruptcies, layoffs, restructurings, mergers and acquisitions, falling rig counts and shelving of new exploration projects. An acceleration in divestitures by investment institutions in oil and gas companies and activities exacerbated the downturn, which was capped off with a new layer of uncertainty in the form of a new adminis-

There are real reasons to be optimistic about the future and hopeful that the same kind of innovation that opened up the shale plays will help meet these challenging times

recent decision to not buy U.S. gas from LNG producer NextDecade over concerns about the release of methane. In sum, while the bars continue to tighten, we can expect the U.S. industry to rise to the occasion, with technological advances leading the way. Without a doubt, 2020 was a tough year for the industry, maybe the toughest ever. However, the year is ending with some positive indications for the future. U.S. LNG exports reached a new record in November. The U.S. Department of Energy extended seven U.S. LNG export authorizations to 2040. Bank of America announced that it believes that Asian LNG demand will remain strong enough in 2021 to prevent major U.S. cargo cancellations. Wood Mackenzie has predicted that global LNG demand will grow through 2030 at a rate of 4% per year, with a potential shortfall of 12.8 billion cubic feet per day (Bcf/d) of gas by the end of the decade. Finally, many FIDs for LNG export projects and expansions that were postponed in 2020 are likely to occur in 2021. In fact, eight

projects with a combined volume of 17.3 Bcf/d are expected to have FIDs announced in the coming year. Crude oil exports, which fell drastically in 2020 and have been slow to recover, are recovering as well. To be sure, many wildcards will impact the U.S. oil and gas industry. Continued uncertainty over OPEC+ quotas and its ability to hold down production will continue to keep us guessing. U.S. foreign policy is expected to move away from its recent pro-Saudi Arabia and anti-Iran posture, with implications for future production in the Gulf region. Global investment will likely continue to view oil and gas investments unfavorably, making capital harder to raise. Regulation of U.S. oil and gas is going to become more difficult. All that being said, there are real reasons to be optimistic about the future and hopeful that the same kind of innovation that opened up the shale plays will help meet these challenging times. With history as our guide, it would be a foolâ&#x20AC;&#x2122;s errand to bet against this industry.

About the author: Jack Belcher joins Cornerstone in 2019 with over 25 years of experience in energy and energy policy. As senior vice president of Cornerstone Energy Solutions, he provides strategic and tactical advice to energy and transportation companies and financial institutions, focusing on government relations, regulatory affairs, public policy, strategical communications, situational risk management, and Environmental, Social, and Governance (ESG) performance. Jack also serves as managing director of the National Ocean Policy Coalition.

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POLICY

Instead of a Prediction, Here’s a Plan By: Bill Keffer

he theme for this issue is the outlook for the oil-and-gas industry in 2021. That is an impossible task, even under the best of circumstances. But when you add a little pandemic and a lot of political uncertainty, given the express animosity towards the new industry from the new Biden administration, I am not sure how anyone can offer a serious prediction with a straight face. I realize that companies, lenders and pundits all feel obligated to read the (black) tea leaves and demonstrate some level of competence when it comes to petroleum prognostication. But no one knows what tomorrow will bring — especially when it comes to the price of a barrel of West Texas Intermediate. I decided a long time ago that the only prediction I would ever be comfortable making is the one that stated at what price oil or natural gas closed that day — and, even then, I would be a little nervous. Of course, the major recurring theme regarding the future is the great energy “transition” that will now be turbo-charged by the change from Trump to Biden. Local and state governments, the media, academia and, increasingly, the private sector are all doing their part to force and accelerate the change from oil and gas and the internal-combustion engine to renewable energy and battery power. I have been collecting various articles documenting this movement. It is both fascinating and disconcerting how so many strive so hard to square the circle and swim against the current of economic realities. San Francisco voted unanimously to ban natural gas in new commercial and residential buildings. At least thirty-one other cities

in California have done likewise. The French government is objecting to a $7 million deal by Engie to buy liquefied natural gas from NextDecade’s plant in Brownsville over the next twenty years because France is concerned that natural gas produced from shale in the Permian Basin emits too much methane. Members of the Rockefeller family (you know, the ones that are wealthy exclusively because of oil and gas) are leading an organization called Bank FWD, whose mission is to convince wealthy individuals to pressure their banks to phase out their investments in fossil fuels. Banks that have already pledged not to finance any development in Alaska’s Arctic National Wildlife Refuge (ANWR) include Wells Fargo, Citigroup, Goldman Sachs, Morgan Stanley and JP Morgan Chase. Lee Wasserman, Director of the Rockefeller Family Fund, wondered in his 2019 New York Times op-ed why we are even still looking for oil and gas and held up New York Governor Andrew Cuomo as his model public servant because he banned hydraulic fracturing in New York and continues to kill or delay new natural-gas pipelines in his state. U. N. Secretary-General Antonio Guterres called on Japan to stop relying on fossil fuels for its energy. The city of Arlington, Texas, is now resisting new natural-gas development on the grounds of racial justice since the wells would be in Black and Latino neighborhoods. Bernie Sanders called the oil-and-gas industry a “criminal activity.” Various Democratic candidates for President in 2020 made a big to-do over refusing to accept any campaign contributions from the oil-and-gas industry. Organizations such as

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350.org are also pushing for divestment from fossil fuels. The University of California’s $13.4 billion endowment sold $150 million in assets to rid themselves of fossil fuel-related investments. Law students from Yale Law School were handing out grades to major law firms and failed twenty-six of them because they disproportionately support clients and agendas that make the

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climate worse. Even some folks outside the fossilfuels bullseye are being hit by collateral damage. An op-ed in The New York Times called for cattle ranchers to be required to feed their cattle seaweed to reduce their methane emissions. Not everyone engaged in the energy debate holds such positions; some actually encourage a rational discussion without the politics and histrionics of climate catastrophe in our lifetime. Scott Tinker is the Director of the Bureau of Economic Geology at the University of Texas and is the state geologist. More important, he has taken on the mission of energy education and is quite effective at it. He has produced two excellent documentaries on energy access and energy poverty called “Switch” and “Switch On.” He is apolitical and is simply trying to sift through all of the over-the-top rhetoric and reach a reasonable conclusion regarding the world’s need for energy. His working premise is that we should strive to increase the size of the “rational middle,” that place where the priority circles of energy, economy and environment overlap. In other words, each priority is essential in its own right, but it is not prudent for us to focus on only one to the exclusion of the other two. He reminds us of that unavoidable fact that the world still gets 85% of its energy from fossil fuels (it is 80% in the U.S.). In fact, 50% of the world still gets 50% of its energy from coal. To insist on prohibiting access to energy in the poor parts of the world, where they might just now have the possibility of getting electricity and fuel because of oil, natural gas and coal, is cruel. As Tinker notes, energy by itself does not necessarily end poverty, but you cannot end poverty without it. Tinker shines the light on those aspects of reality that the agenda-driven zealots are so intent on ignoring. Billions of people still live in energy poverty. They deserve access to energy — whether it is through fossil fuels or not. The world’s population will only continue to grow, and so will the need for more energy. There has been a 365% increase in global energy consumption since 1965. China and the U.S. are first and second in electricity use by country. But third place belongs to the technology sector — that industry alone consumes more electricity than every other country in the world; and, of course, that number will only grow. Tinker’s plan has five simple components: 1) Encourage Asia to move from coal to natural gas; 2) expand the use of nuclear energy; 3) improve efficiency and conservation efforts; 4) expand the use of geothermal and hydroelectric sources; and 5) use distributed renewables (i.e., solar panels and wind turbines on a smaller scale, where other sources to generate electricity are not feasible). I do not have the ability to offer a prediction for the oil-and-gas industry in the coming year. But I do feel confident in suggesting that a rational discussion regarding our energy future can make it one we need not fear.

The major recurring theme regarding the future is the great energy “transition” that will now be turbocharged by the change from Trump to Biden

About the author: Bill Keffer is a contributing columnist to SHALE Oil &amp; Gas Business Magazine. He teaches at the Texas Tech University School of Law and continues to consult. He also served in the Texas Legislature from 2003 to 2007.

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Yes, the Blue Wave Hit a Red Brick Wall, but Now What? By: Tom Pyle

ith all elections, we must recognize there are a multitude of factors that determine the results. Despite the consistent success delivered by the Trump administration in energy and environmental policy, Joe Biden has secured the necessary votes in the Electoral College to officially seal President Trump’s fate as a one-term president. Now that the dust has finally settled, the question is, how will the oil and gas industry be impacted? Lessons Learned from the 2020 Election For starters, what did we learn from the electorate? The record turnout must be acknowledged. More than 156 million ballots were cast. Turnout was more than 6% higher than in 2018 and more than 8% higher than in 2016. The turnout rate is estimated to be 66.5% of eligible voters, the highest since 1900, according to the United States Elections Project. In addition to higher turnout, all fundraising records were shattered this cycle. The total cost of the 2020 election will reach a mind-blowing $14 billion, making it the most expensive election in history and twice as expensive as the previous presidential election cycle. Democrats outspent Republicans 65:35. The base of both parties shifted. Trump over performed with Hispanics and African-American men, while Biden clawed back pockets of white men with no college degree, especially in the rust belt. There was no blue wave like the Democrats had hoped (and predicted). Republicans made gains in down-ballot races and captured or retained power in many state legislatures. To the extent there were issues that drove the electorate, it was COVID and the economy. For many, however, the focus was at the top of the ticket where the true passion was either being for or against Donald Trump. Both parties, it appears, are in the midst of a civil war over their identities and leadership. At 78 years old, Biden is a caretaker for the Democrats and will have a tough time keeping everyone together, especially with the progressives tugging at him so hard to the far left. And the populism awakened by Trump is hardly going

SHALE MAGAZINE  JANUARY/FEBRUARY 2021

anywhere. Further, Mr. Trump has no intention of relinquishing the spotlight in the Republican Party, so expect tensions within the GOP to remain high as well. But by far, the biggest losers in this cycle were socialism, the polling industry and the media, particularly the cable news networks. What’s Next? Until the pandemic, the United States had become the world’s preeminent energy superpower. Over the full course of 2019, the U.S. exported oil to more than 40 countries, fully eliminating the long-held concern about foreign oil dependency. In January 2020, the U.S. produced 13 million barrels per day of oil — an alltime record. The U.S. was producing more oil and gas than any other country, ran an energy export surplus, and has reserves that can fuel us for generations. Unfortunately, a Biden administration will now start its dismantling of the gains made during the last four years. As goes the adage in Washington, personnel is policy. When I served as President Trump’s Department of Energy transition team leader following the 2016 election, I saw first-hand how much power is held in the hands of a few appointees. Despite all the obfuscations, Joe Biden has shown how he will use his position through his selection of his vice president and his team of energy and climate advisors. The names that stand out politically are John Kerry, who gave away our energy sovereignty at the Paris climate meetings, and Gina McCarthy, the head of one of the most powerful environmentalactivist groups in the country — the Natural Resources Defense Council (NRDC) — and one who reached a new political low by abusing the COVID-19 pandemic by implying changes in air-quality regulations would force tens of thousands of Americans to die unnecessarily. Biden recently named Jennifer Granholm, the former governor of Michigan and a champion for electric vehicles and renewable subsidies, as his Energy Secretary. Biden has also named North Carolina regulator Michael Reagan as his pick for EPA Administrator, Rep. Deb Haaland (D-NM) as Interior Secretary, and Brenda Mallory, a lawyer for the

hard-left Southern Environmental Law Center as his Council on Environmental Quality (CEQ) Chair. Though lesser-known, these picks are expected to toe the green line. Remember, the household names aren’t necessarily the ones who will do the most damage. Biden will have the proverbial pen and phone at his disposal, a tool clearly against the letter and spirit of the Constitution, and is likely to engage in executive overreach, even going so far as to join the “Great Reset” movement aimed at dismantling free markets. January 20, 2021: Biden on Day One First up, Biden will recommit the U.S. to the Paris Climate Agreement. Under Biden’s plan, the U.S. will unwisely restrict our own industrial output while China, the largest polluter in the world, will continue to expand its own. Biden proudly touts that he worked with the Chinese government during his stint as vice president to get the Paris Agreement to the finish line. Jumping back into the Paris Agreement means handing the reins of global industry to China. Here in the U.S, Joe Biden will look to block or slow to a crawl oil and gas development on federal lands and in federal waters. Several states will be impacted immediately — New Mexico, Colorado, Utah, and Wyoming. Governor Mark Gordon of Wyoming was wise to get ahead of this issue, along with approval and funding from the legislature, requesting the University of Wyoming study the state impact if Biden makes good on his promise to end or restrict oil and gas production on federal lands. Overall, the western U.S. could lose $670 billion over 20 years. It would be devastating, to say the least. By his own account, Biden will sign a series of new executive orders with an unprecedented reach that goes well beyond the Obama-Biden administration’s platform on squeezing out oil and gas. His overarching goal is the complete elimination of oil and gas from our economy by 2050 and will likely draw from some of the awful ideas we’ve seen come from California, like banning the internal combustion engine. Just as we saw in the latter Obama years, the Biden administration will restore the horrible practice of “sue and settle” lawsuits. In these

lawsuits, organizations that support the administration’s green agenda to reduce the availability of affordable, reliable domestic energy sue-friendly agencies in order to achieve out-of-court settlements that meet both groups’ goals, without the usual scrutiny of the judicial system or regulatory transparency. This phenomenon changes regulation and administration of law and is particularly pernicious in that it undermines basic due process by disregarding administrative procedure and avoiding judicial review. Much damage can be done to the Rule of Law and economic liberty as a consequence of these suits. And, of course, under the guise of environmental justice, expect Biden policies across all federal agencies that claim to be aiding the poor and minorities, while in reality, harming them the most. A House of Cards As expected, the House of Representatives remains under Democratic Party control, but not by much. What was predicted to be a multi-seat gain for the Democrats has resulted in a 12-seat loss. And it is here that we will see the battle for the soul of the Democratic party play out. Will the celebrity socialists win the day, or will voices of moderation rise to the occasion and temper the worst instincts of the left? Even if Speaker Nancy Pelosi keeps her powerful position, she will do so with the narrowest of majorities in modern politics. That’s not to say there aren’t some reasonable members in the House. In particular, Democrats in energy-producing districts will likely be the oil and gas industry’s most useful allies. It’s a perfect example of why we created the American Energy Scorecard, the first and only free-market congressional energy accountability dashboard. It educates lawmakers about the most important energy votes of the year and empowers the American people to hold their elected officials accountable for the decisions they make in Washington. In 2020, all 74 House Energy Champions and 12 Senate Energy Champions up for re-election appear to be returning to Washington. And we highlighted some members from energy districts with abysmal scores, like Representatives Kenda Horn (D-OK), T.J. Cox (D-CA), Xochitl Torres Small (D-NM), and helped send them home with election defeats. Not to mention, the clock is already ticking for the 2022 midterm elections. If the oil and gas industry doesn’t publicize bad votes cast by representatives from energy-producing districts, then they only have themselves to blame.

All Eyes on Georgia Despite Joe Biden’s election to the White House, it appears the Senate Republicans have managed to hold onto the upper chamber of Congress. We’ll know officially after the special election taking place in Georgia on January 5th, 2021. Should Republicans hold control, this result validates Majority Leader McConnell’s decision to move forward with the confirmation of Supreme Court nominee Judge Amy Coney Barrett and proves that the people of the United States want to build upon our strengths of limited government and free enterprise, despite the president having been voted from office. It also means that Biden will be the first newly elected Democratic President without a Democrat-led Senate since Grover Cleveland in 1884. The Republican majority in the Senate will be in a very important role, serving as the stronghold and last line of defense against the tide of regulatory and legislative shenanigans that will emanate from the House of Representatives and the Executive Branch. And they’ll determine the pace in which President-elect Biden’s appointees are confirmed or denied. Musical Chairs in the Senate Because Republicans place six-year limits on committee chairmanships, we’ll see some important changes in the Senate. Sen. Lisa Murkowski (R-AK), chair of the Energy and Natural Resources Committee, will hand the gavel off to Sen. John Barrasso (R-WY). Barrasso, currently the chair of the Senate Environment and Public Works Committees, will then likely hand his gavel over to Sen. Shelly Moore Capito (R-WV). Again, this is all predicated on the expectation that Senators David Perdue or Kelly Loeffler of Georgia win their special election and are returned to Washington. If either one wins, that will prevent Sen. Chuck Schumer (D-NY) from becoming the new Senate Majority Leader and giving the Democrat party control of the administration and Congress, just as they did in 2009. Regardless of the Senate outcome, Biden will be limited by time, and he will have detractors like us to contend with. If we’ve learned anything in the last ten or so years since Obama and Biden controlled the executive branch and extreme environmental activism started to take hold, it’s that the green left can be stopped. It all comes down to this: doing the necessary and unloved work of telling the truth about energy rather than following the media and politician-driven myths and doomsday talk.

It all comes down to this: doing the necessary and unloved work of telling the truth about energy rather than following the media and politician-driven myths and doomsday talk

Biden will have the proverbial pen and phone at his disposal, a tool clearly against the letter and spirit of the Constitution, and is likely to engage in executive overreach, even going so far as to join the “Great Reset” movement aimed at dismantling free markets

About the author: Thomas J. Pyle is the president of the Institute for Energy Research (IER), an energy think tank and the American Energy Alliance (AEA), a not-forprofit that engages in grassroots public policy advocacy and debate concerning energy and environmental policies at both the state and national level. He served as head of transition for energy under President Donald J. Trump.

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The U.S. Oil and Gas Industry Sighs With Relief as 2020 Comes to a Close By: David Blackmon

SHALE MAGAZINE  JANUARY/FEBRUARY 2021

dustry. Our news media has focused so much on the impacts of COVID restrictions this year that the Saudi price war with Russia that began on March 4, when Russia temporarily pulled out of the OPEC+ deal to limit crude exports, has been largely forgotten. The Saudis responded to Russia’s refusal to sign onto heavier export limits by flooding the market with their own crude to intentionally deflate oil prices, thus encouraging the Russians, whose economy is heavily reliant on oil revenues, to concede to the new deal. That strategy worked after about six weeks, but not before the U.S. had invoked its “15 days to flatten the curve” approach to COVID, shutting down vast swaths of the economy in a vain effort to slow the spread of the virus. As nearly as I can tell, we will be in about day 260 of that “15 days to flatten the curve” strategy when this issue of the magazine goes to publication. But even 1985 pales in some ways in comparison to 2020. While the price for U.S. crude officially fell to as low as $6 per barrel (I knew some producers in that year who actually sold oil for less than $2 a barrel), who will ever forget the day in April 2020 when the price for West (continued next page)

As nearly as I can tell, we will be in about day 260 of that “15 days to flatten the curve” strategy when this issue of the magazine goes to publication

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he year 2020 has come to a merciful end, and praise the Lord and pass the pancakes for that bit of good news. When the publisher of SHALE Magazine and host of In the Oil Patch radio show, Kym Bolado, asked me during one of our December shows if the oil and gas industry has ever seen a more challenging year than 2020, I was almost at a loss for words. But not quite — because I am really never at a loss for words. But this was close. What year, after all, has ever been worse for this great industry than the one just past? From the collapse of the OPEC+ deal on March 4 to the beginning of the draconian COVID restrictions that crushed demand for crude across the globe, to the ongoing assault on the industry’s reputation and license to operate by a vast array of well-funded leftwing environmental groups, 2020 came at oil and gas companies like a rolling ball of knives. Honestly, the only year I could think of that could even compete with 2020 for damage to the U.S. oil and gas business was 1985, the year that crude prices dropped from $40 per barrel down to below $10 in a span of a few weeks and stayed at extremely low levels for several years. Of course, I have a bias towards that period of time since I was laid off the following year and was out of work for about two months, the only time in my adult life that I was out of work for more than a day. Tens of thousands of others lost their jobs in 1985 and 1986, and not just those in the oil business. The collapse of the Texas oil industry led, in turn, to the collapse of the savings and loan business in the state, and our economy lagged behind the national economy for over a decade. Those were very tough times for the industry and for Texas. Interestingly, the collapse of 1985 was caused by the very same dynamic that led to the initial collapse in 2020: The flooding of the market by Saudi Arabia and other OPEC countries in a vain effort to recapture global market share that was being lost to a booming U.S. in-

Texas Intermediate fell into negative territory? And not just a little bit negative, mind you: A lot negative, like $-37.63 per barrel for West Texas Intermediate negative. Talk about a shock to the system. That was all directly related to the Saudi effort to flood the market. The price went negative largely over fears by traders that U.S. crude oil storage levels would be maxed out completely during May, amid media reports of a flotilla of oil tankers carrying more than 50 million barrels of Saudi crude heading straight to American refineries. As has so often been the case in recent years, those reports about the Saudi flotilla turned out to be not exactly accurate, much of that crude was, in fact, headed to refineries in Europe and South America, and massive actions by U.S. producers to stop drilling and shut-in existing wells prevented the feared overwhelming of crude storage facilities. Of course, the downside of all of that halting of drilling and shutting-in of production was that many U.S. producers were no longer generating enough cash flow to be profitable. In turn, it has resulted in a flood of Chapter 11 bankruptcy filings. According to Haynes and Boone, more than 50 U.S. oil and gas companies filed for Chapter 11 protections during the first nine months of 2020, most of them taking place in Texas. Included among those companiesâ&#x20AC;&#x2122; names were former industry leaders such as Chesapeake Energy, Whiting Petroleum, Denbury Resources and Ultra Petroleum. Haynes and Boone also released a list of 54 oilfield services companies who had declared Chapter 11 during those nine months. That list includes the likes of Diamond Offshore Drilling, McDermott International and Noble Corporation. That drop in profitability has inevitably led to an increased pace of industry consolidation during the last half of 2020, especially in the upstream part of the business and with a particular focus on the prolific Permian Basin that spans West Texas and Southeastern New Mexico. Cash-rich companies had a field day snapping up cash-poor Permian producers at bargain-basement prices. In July, Chevron snatched up Noble Energy (unrelated to Noble Corporation) in a $13 billion buyout that would have cost north of $30 billion just a year earlier. In September, Devon Energy acquired WPX Energy for $5.6 billion. October saw two huge deals, with ConocoPhillips executing a $9.7 billion takeover of Permian giant Concho Resources and the $7.6 billion merger between Permian producers Pioneer Natural Resources and Parsley Energy. All of these and the other big merger and acquisition transactions that took place during 2020 will provide a higher degree of financial stability related to the assets being acquired. But the downside, of course, is that each and every one of those transactions also involved thousands of headcount reductions, given that a major goal of any such merger or acquisition is to create cost savings and economies of scale. Bottom line, 2020 was a year of carnage for the domestic oil business, especially the months of March through August, when the worst of the fallout took place. The positive news is that both the price of oil and the domestic rig count embarked on a slow but steady rise to more healthy levels. Given that, it is certainly reasonable to hope that 2021 will present the industry with better times than 2020 did. After all, a quick look back at history tells us it could hardly be any worse.

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What Rocky Mountain Producers Can Expect Under a Biden Administration

yoming’s October 2020 Revenue Forecast shows exactly how hard the COVID-19 economic downturn has hit oil and gas producers in the nation’s Rocky Mountain West. While the state’s revenues were not as bad as predicted in May, the state still is expected to fall short of more than $450 million in lost revenue, largely as a result of lost oil and gas production which, at times, has all but shut down during the pandemic. Like producers in other parts of the country, the significant drop in demand and the resulting plummet in the market has forced Wyoming producers to make hard choices about how to keep doing business. “They have been doing whatever they can to survive,” Petroleum Association of Wyoming President Pete Obermueller said. “They have been pulling in as much as they can to weather the storm.” This includes shutting in wells, allowing less productive leases to expire, and laying off employees. And then, in July, the state’s drill-rig count dropped to zero, a thing that had never happened since production began in 1884, an activity predating statehood. The rigs, however, soon started up again, and the industry’s will to survive has been demonstrated as both oil and gas continue to flow, but state and local communities are left with compelling questions about how much longer the bust is going to last. Depending on who you talk to, the rebound could take anywhere from one to two years to get the industry back to firing on all cylinders. A Biden/Harris administration, however, changes all calculations. “Data shows demand for liquid fuels, etc., has looked like a ‘V,’” Obermueller said. “Production, on the other hand, has looked like a reverse checkmark, where it ticked back up part-way and then leveled off. Even though the recovery has come partway up, it still has to work its way up the chain to get to us. When I talked to my board a few weeks before the

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election, we thought we could get there in the second to third quarter of 2021, but a Biden administration may change all that.” During the 2020 election cycle, both President-Elect Joe Biden and Vice-President Elect Kamala Harris raised concerns about future oil and gas policy and about whether or not they would be willing to regulate the industry out

nearly 75% of all minerals in Wyoming are owned by the federal government, a ban on federal leasing and development would decimate the natural gas and oil industry and Wyoming’s economy along with it. It is going to be rough sailing with a Biden Interior. There is no doubt about it.” The Biden administration is expected to use

of existence. Both are on record denouncing the “evils” of hydraulic fracturing and, although Biden says he was for fracking before he was against it, he also indicated a willingness to ban federal leasing on public lands, a policy that would hit the Rocky Mountain West particularly hard given the significant amount of land owned by the federal government. “All we have to go on now is what he said publicly, which is that he wants to halt leasing on public lands. That would be catastrophic to Wyoming,” Obermueller said. “Given that

executive orders and reinterpretation of federal regulations to reinstate Obama-era controls and possibly go even further to limit industry. According to Obermueller, that means states like Colorado, New Mexico and Wyoming will be hit the hardest by limitations on federal lands. “You have heard that some companies have signaled they are not concerned about the Biden administration, but those companies primarily produce in states whose oil and gas is produced on privately-owned land,” Obermueller said. “Banning fracking and leasing in

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Wyoming does nothing to reduce U.S. emissions. Production will simply shift to private lands states like North Dakota and Texas. If the former Obama/Biden administration is any indication of what a Biden/Harris administration will look like, Obermueller’s concerns have a solid foundation. “I would say a return to the Obama administration is a best-case scenario,” Obermueller said. Lynn Granger, Executive Director, API Colorado, offers additional insight. “In September, API released a new analysis assessing the impacts of a proposed ban on federal leasing on natural gas and oil development on public lands and waters,” she said. “The results were chilling; in Colorado alone, the study suggested that 18,000 jobs would be lost by 2022, with $108 million in state revenue put at risk. The picture is even gloomier in a state like New Mexico, which would lose an estimated 62,000 jobs. Ultimately, the decision on a federal leas-

ing ban is a choice between American-made energy and foreign energy, and similarly, a choice between American jobs and foreign jobs. We remain hopeful that the Biden administration will choose a different path, as over a million American jobs would be on the nearimmediate chopping block.” In Wyoming, the same report said a federal leasing ban would result in a 31% decrease in the state’s oil production, a 36% decrease in its natural gas production, and would result in a 5.5% increase in CO2 emissions nationally by 2030. Even before being sworn into office, President-Elect Biden has taken steps that signal potential disquiet within the industry. In November, he announced he would resurrect the position of Climate Czar and would appoint former U.S. Secretary of State John Kerry to fill the position. At the same time, he proposed a “Plan to Build a Modern, Sustainable Infrastructure and Equitable Clean Energy Future.”

A plan that hinges on doubling down on the Obama administration’s green-jobs proposal and promises to “hold polluters accountable” up to and including an effort to “seek additional legislation as needed to hold corporate executives personally accountable — including jail time where merited.” This appears to be a signal he will make a run at reversing recent court decisions to hold oil and gas producers responsible for potential climate change impacts. And what will the Biden administration do about all those executive orders that the Trump administration issued to automatically undo all the executive orders implemented by the Obama administration four years earlier? If the Biden administration follows the lead of states like Washington, Oregon, California, New Mexico and Colorado, where Democrats recently found themselves in complete control of state government, it is highly probable to expect the Biden administration to push the envelope as far as they can on some of

The Biden administration is expected to use executive orders and reinterpretation of federal regulations to reinstate Obama-era controls and possibly go even further to limit industry (continued next page)

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the Democrat party’s most extreme policies. For example, one of the first things Colorado Governor Jared Polis did after taking office was push the Colorado Assembly to pass SB-181, a bill that made significant changes in the way Colorado regulates the oil and gas industry. Just a few months earlier, voters had rejected a ballot initiative, Proposition 112, that would have imposed aggressive setbacks that would have placed more than 80% of the state’s available land off-limits to oil and gas development. “The 2019 passage of Senate Bill 181 represented the most significant legislation targeting our industry in memory, and perhaps in Colorado history,” Granger said. “Its passage has already led to a number of rulemakings and a bevy of new regulations on our industry, some practical, but others arduous and, we worry, potentially subjective in application. When we began the now-completed Mission Change rulemaking, in which the Colorado Oil and Gas Conservation Commission’s stated mission changed from one of ‘fostering’ natural gas and oil production to one of ‘regulating’ it, my overarching hope was that the changes, however dramatic they might be, would lead to certainty for our industry. Though we have achieved greater clarity in certain areas, we remain concerned that the rules and regulations still to be implemented lack the certainty that our operators need to assuredly go about their work. We remain closely engaged with the COGCC, AQCC and their respective staffs in an effort to achieve this certainty, such that operators and the public can enjoy clearly defined and fully functional standards.” The industry, however, has demonstrated it is willing to put in the work to make sure it can continue to do business. “We have worked closely with the Polis administration, as well as with state regulators, to ensure that Colorado’s natural gas and oil industry can operate amid what is admittedly a sea change in the state’s regulatory framework,” Granger said. “This has been a tough year for our entire industry, as a global pandemic and a needless Saudi-Russia trade war sent energy prices plummeting in the spring. We have had to be nimble, navigating those externalities while simultaneously facing tough new regulations at the state level, but we remain optimistic looking to 2021 and beyond. For his part, Governor Polis announced this summer that he would oppose biased and punitive ballot measures aimed at our industry through the 2022 election cycle, and we welcome his partnership, as numerous such initiatives have already been filed by environmental activists.” Granger also pointed out that the oil and gas industry has weathered storms and significant downturns before. “Ours is hardly the only industry that has faced economic hardship in 2020,” she said, “but we are optimistic that we will see signifi-

SHALE MAGAZINE  JANUARY/FEBRUARY 2021

cant improvement in 2021, with further growth extending into 2022. The natural gas and oil industry is among the most resilient industries in the world. We’ve been through plenty of tough times, but every time, we have recovered and ultimately grown. We expect the same in the wake of the challenges brought forth by the pandemic and other externalities this year.” In other words, don’t be too quick to count out oil and gas in the Rocky Mountains. “The oil and gas industry does so much more than just provide energy,” Obermueller said. “Oil and gas delivers the chemical building block for just about everything we use in modern society.” That means food, medicine, clothing, vehicles, and every phone, video game, computer, or other useful gadgets on the market today has oil and gas to thank for either the way it is transported and delivered to the consumer or for its very existence. This list includes, by the way, renewable energy. Increased use of renewables won’t stop consumers from increasing their personal use of oil and gas as an energy source or as a way to support the energy they ultimately consume. A November 5, 2020, report by the U.S. Energy Information Administration detailed that California, a state which already had installed more than 20 gigawatts of solar capacity as of January 2020, still has an increased call for natural-gas fired generation to fill peak demand. “Solar-powered generation is typically highest in the late morning and early afternoon hours, requiring a combination of other generation fuels, electricity storage, or imports to serve peak demand in the early evening. Because of this requirement, natural gas remains a primary fuel to meet state electricity demand as load and resource availability shifts during the day,” the report said. “Natural gas and oil will remain a critical component of the American and global energy landscape for decades to come,” Granger said. “The Paris Agreement-aligned International Energy Agency Sustainable Development Scenario projects that natural gas and oil will still account for 46% of the global energy mix by 2040, even as renewable usage grows dramatically. We will continue to lead, not follow, on reducing emissions and increasing efficiencies, but there is no question that America’s energy future will be powered in large part by natural gas and oil.” After all, when you work in an industry that runs on boom-and-bust cycles, companies have no choice but to be constantly looking ahead. “The natural gas and oil industry — in the Mountain West and across the nation — is among the most resilient industries in America,” Granger said. “We have weathered many storms in Colorado, and while they feel more frequent these days, we remain focused on safely and responsibly developing affordable, reliable energy, both for Coloradans and the nation. We are proud of the work we do and will continue to do for decades to come.”

In Wyoming, the same report said a federal leasing ban would result in a 31% decrease in the state’s oil production, a 36% decrease in its natural gas production, and would result in a 5.5% increase in CO2 emissions nationally by 2030

About the author: Dallas Scholes is an experienced legislative attorney, lobbyist and energy policy professional. He earned his law degree from The George Washington University Law School and spent ten years working on Capitol Hill in Washington, DC. For the past 15 years, he has specialized in energy policy issues in the Rocky Mountain West. He and his wife are the proud grandparents of three grandchildren. They currently live in Draper, Utah, with two of their five children.

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POLICY

Why Natural Gas is the “Greenest” Energy of Them All By: Tom Shepstone

“Green energy comes from natural sources such as sunlight, wind, rain, tides, plants, algae and geothermal heat. These energy resources are renewable, meaning they’re naturally replenished.” Alternative-Energies.net offers a different definition: “Green energy represents all the clean sources of power that are generated using the natural source of energy available on the planet, which are friendly with environment releasing zero emissions and are also renewable.” Significantly, the latter site is one offering “news about renewable energy and electric cars.” Therefore, let us think about electric cars for a moment. Are they an example of green energy? Well, it depends on several factors, the first of which involves the question of how the electricity is made. It doesn’t grow on trees, after all; it can come from any number of sources. Some 23.4% of that electricity is generated by coal, in fact, according to Energy Information Administration data for 2019. Is a coal car green? A natural-gas car (it accounts for 38.4% of the electricity used by electric cars) would be a whole lot greener than a coal car, of course, but it would still involve some emissions. The two fuel sources, taken together, represent 61.8% of all electricity. Therefore, a typical electric car is, for the most part, a fossil-fuel vehicle. Zero emissions fuel sources (nuclear, hydro, solar and other renewables) account for just 37.2% of electricity. But what does zero emissions mean? Nuclear power requires power plants that use an incredible amount of concrete, about 190,000 cubic meters for a 1,000-megawatt power plant. Concrete production accounts for as much as 4-8% of all CO2 produced by man, and just supplying the concrete to build a nuclear plant of this size would produce nearly 50,000 tons of CO2. And, these calculations do not include the energy required to get the concrete to a site. Nuclear energy isn’t zero-emission at all. Rather, it is emissions front-ended. Likewise, electric cars require batteries made from lithium, which is typically mined somewhere else in the world using vast amounts of carbon-producing energy that must be extracted, processed, shipped to battery manufacturing sites, used in manufacturing and then shipped in

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the form of batteries to electric-vehicle manufacturing sites. Mark Mills of the Manhattan Institute tells us, “A single electric-car battery weighs about 1,000 pounds. Fabricating one requires digging up, moving and processing more than 500,000 pounds of raw materials somewhere on the planet.” That’s anything but zero emissions. Rare earth minerals are also used to produce solar panels and wind turbines, along with lots more concrete and steel in the latter case. Is anyone calculating those emissions? They are very real. Once again, consider what Mark Mills has to say: “Building one wind turbine requires 900 tons of steel, 2,500 tons of concrete and 45 tons of plastic.” There is, in other words, a lot more going on with green energy that isn’t necessarily as green as green-energy advocates would have us believe. Electric cars, solar panels and wind turbines result in lots of emissions, and even hydro involves massive land disturbance and stupendous amounts of concrete that yield emissions. Natural gas involves emissions, too, but a lot less than coal. Because it enjoys high energy density and the shale revolution has made it spectacularly affordable, it is able to have an enormous green effect. Consider these two powerful facts from the Energy Information Administration: • U.S. electric power sector emissions have fallen 33% from their peak in 2007 because less electricity has been generated from coal and more electricity has been generated from natural gas (which emits less CO2 when combusted) and non-carbon sources. U.S. total energy-related CO2 emissions have fallen 15% since their 2007 peak. • Changes in the composition of electricity generation and improvements in energy efficiency have led to a decrease in the total carbon intensity of electricity, which has fallen from 619 metric tons per megawatt-hour (mt/MWh) in 2005 to 408 mt/MWh in 2019. Even more important are the other emissions that have been reduced due to shale gas’s high energy density combined with affordability. A few years ago, I researched what happened when a small power plant in Hunlock Creek, Pennsylvania, converted from coal to gas, and here is what I found using data from the Pennsylvania Department of Environmental Protection: • The 44 MW coal-fired power plant was retooled as 125 MW capacity natural-gas-fired facility, from producing power for up to 9,750 homes with coal to as many as 27,075 homes with natural gas. • Along the way, carbon monoxide emissions, linked with increased risk of heart disease, decreased by 66.4% through conversion to natural gas. • Volatile organic compounds (VOCs), which contribute to asthma and COPD, dropped some 72.1%.

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hat exactly does “green energy” mean? Is it the amount of emissions involved? If so, are we talking about emissions connected with energy generation, energy distribution or energy equipment manufacturing? Or, is it about the amount of land consumed and the degree of disturbance? If so, are we including the land connected with the extraction of the materials needed to make the energy and equipment involved? These sorts of questions are intricately involved in defining what green energy really is and how green it really is. TreeHugger.com defines it thusly:

It’s just that gas is the big, green gorilla of green energy when you get right down to what is achieving the most reductions

• Particulate matter under 10 microns (PM<10), which gets in the lungs and can cause acute and chronic bronchitis, declined by 92.8%. • Nitrogen oxides, which create smog and exacerbate responses to allergens, fell by an incredible 95.7%. • Sulfur oxides, which may be the worst of the lot and a major contributor to emphysema, all but disappeared, being down literally 99.9%. Those are some pretty astounding greening numbers. Our fractivist friends will be quick to say we ought to also account for methane emissions, of course. EPA data regarding onshore U.S. oil and natural gas production, though, indicates they fell 24% from 2011 to 2017. Meanwhile, oil and natural gas production jumped 65% and 19%, respectively, according to data from the U.S. Environmental Protection Agency and the Energy Information Administration. Moreover, biofuels, considered green energy by most advocates, generate an estimated 11 million tons of methane emissions, according to the International Energy Agency, or about 8.2% of all energy-related methane emissions, so there is no free ride. Every source of energy involves emissions somewhere along the line. It’s just that gas is the big, green gorilla of green energy when you get right down to what is achieving the most reductions.

About the author: Tom Shepstone is the owner of Shepstone Management Company Inc., a planning and research consulting firm located in northeastern Pennsylvania. He has advised many counties in both New York state and Pennsylvania, as well as other states, on economic development strategies, especially as they relate to rural and agricultural areas. He is also the publisher of NaturalGasNOW.org; a blog focused on the same objective.

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POLICY

The Future of OPEC+ By: Neil Quilliam

Saudi Arabia is confident that even though a decisive shift away from hydrocarbons is underway and the world has now entered peak demand, it will continue to play a leading role in global energy affairs as the dominant producer in the twilight of the oil age maining market, as higher cost producers are left stranded. It also sees its competitive advantage given the lower average carbon intensity of oil produced by Saudi Aramco in comparison to high carbon-intensity crudes from competitors, which resort to flaring associated natural gas (Russia, United States, Nigeria, Iraq), or require energy-intensive recovery techniques (Canada, Venezuela, Oman, Indonesia) or complex refining (Canada, Venezuela, Nigeria). In other words, Saudi Arabia is confident that even though a decisive shift away from hydrocarbons is underway and the world has now entered peak demand, it will continue to play a leading role in global energy affairs as the dominant producer in the twilight of the oil age. Saudi Aramco has developed a number of strategies aimed at protecting oil’s role in the world economy and increasing Saudi Arabia’s share of that global oil market. First, it has actively pursued vertical integration, and that involves combining its mature upstream sector with its growing downstream sector, especially in Asia, which is configured specifically for Saudi crudes. The vertical integration strategy is driven, in part, by climate risk. Saudi Aramco has begun investing in markets, particularly in developing Asian countries, where policymaking prioritizes advances in development over concerns about environmental damage. It is in these countries where oil demand is most likely to grow strongest in coming decades, even as it falls away elsewhere. Aramco’s downstream investments, therefore, are aimed at ensuring that (continued next page)

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About the author: Neil Quilliam leads the strategic advisory practice at Azure Strategy and is responsible for driving the company’s mission and objectives. He is a foreign affairs specialist with extensive experience consulting to governments and corporate clients on geopolitics and energy in the Middle East. An Associate Fellow at Chatham House, his previous positions have included CEO of Castlereagh Associates and senior Energy Adviser to the UK’s Foreign and Commonwealth Office. Neil has lived in Saudi Arabia, Jordan and the UAE and is a fluent Arabic speaker. He is a regular marathon runner and is often in running shoes during meetings. nquilliam@azure-strategy.com

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he UAE’s decision to play hardball at the most recent OPEC ministerial and OPEC+ meetings in early December was based on three factors. First, it believes that amongst the winners and losers of the OPEC+ deal first agreed in April, it belongs firmly in the latter category, given that its reference point production figure does not reflect its true production capacity. Second, there is an underlying resentment amongst its leadership that Saudi Arabia and Russia have “bullied” the alliance into accepting cuts that are — in the case of Abu Dhabi — inimical to its national interests, and third, it does not want to see its hydrocarbon resources stranded as the pace of the energy transition picks up and, therefore, would rather monetize them now. It is not surprising then, that the main bone of contention between the UAE and Saudi Arabia — giving rise to Abu Dhabi’s hint that it will contemplate leaving OPEC altogether — is based on how they view their hydrocarbon futures. The UAE sees it as a race against the clock; it needs to produce as many barrels as possible before the oil market itself shrinks, and alternatives compete on price. Saudi Arabia, on the other hand, has the advantage of being the world’s lowest-cost producer ($3 a barrel) and feels comforted that it will eventually soak up the re-

Saudi oil has preferential access and captive ownership and configuration of refining capacity for Saudi oil grades. It is little wonder that Saudi Arabia and the UAE’s approach to managing future oil markets differs so greatly. Where their interests may have once converged and, indeed, it was difficult to see daylight between Saudi, UAE and Kuwaiti oil policies, they have now diverged in accordance with distinctive national interests. They see different pathways to the future, with the UAE focused more on the short to medium-term and Saudi Arabia on the long-term. However, there is still some way to go, and Saudi Aramco, which has enjoyed a favorable reputation amongst international and national oil companies (NOCs) over the years, has come under pressure recently, mostly political, which may well come to affect negatively its strategy, efficiency and ultimately its profitability. The politics behind the current oil price crash — exacerbated by COVID-19 — have hurt Saudi Aramco’s profitability this year — Q3 profit was down 45%. Its net income in Q2 2020 fell 73% year-on-year (y-o-y) to $6.6 billion. Total income for the first half of the year totaled $23.2 billion, down around 50% compared to the same period in 2019. However, the company still paid out a Q2 dividend to shareholders of nearly $18.8 billion, up from $13.4 billion in Q2 2019, despite a 70% drop in cash flow y-o-y in Q2 to just $6.1 billion. It intends to pay Q3 dividends of $18.75 billion in Q4. The price crash has forced the company to cut spending, put some costly downstream projects on hold, and raise debt to meet its dividend obligations. For example, plans to build or finance refinery projects in China, India and even the U.S. could face delays or suspension under Saudi Aramco’s recently announced ‘portfolio optimization’ strategy. Many of these projects will take years to turn a profit, leading the company to reassess its priorities, as low prices and muted demand weigh on revenues — more significantly for the government than for Saudi Aramco, as it is dependent on the NOC for almost threequarters of annual revenue. Its $8 billion bond issue in November was well-received by investors, but the sale was under very different market conditions to its debut issue in 2019, when order books hit $100 billion, and the bond was able to price inside the sovereign curve, meaning it could borrow more cheaply than the government. In the absence of a significant pickup in oil prices over the coming months, as well as restrictions on domestic oil production due to OPEC+ commitments, delivering on its $75 billion dividend promise will remain Saudi Aramco’s toughest challenge. While cash flow remains significantly hampered, debt will be a significant proportion of dividend payments — a route Saudi Aramco will be wary of treading. In the short-to-medium term, the company will likely take other measures to address finances, including asset sales and further restructuring of its operations to cut costs. Recent reports indicate that Moelis has been hired to develop a plan to raise funds by selling stakes in some of Aramco’s subsidiaries, including pipelines, which is estimated to bring in around $10 billion alone. Whilst the UAE is thinking ahead about its exit strategy from global oil markets — before it is left with stranded assets on its hands — Saudi Arabia looks set to stay the course, with a few bumps in the road, and inherit an even bigger market share and look on as its high-cost producer rivals fall by the wayside. As such, the OPEC+ plus caravan will likely roll on, but slowly. The wagons will become unhitched, and the UAE may be the first to break free.

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BUSINESS

Protecting Against Overtime Lawsuits During the COVID-19 Pandemic By: Annette A. Idalski and James Fielding

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eighteen minutes to apply and remove the protective equipment. (Id. at 1039.) The time it took employees to put on and remove protective gear was ultimately deemed compensable. The employer’s failure to pay employees for the time spent on PPE led to a $2.9 million jury verdict. See id. at 1044. While every situation is different, cases like Tyson Foods show that time spent applying protective equipment might be considered compensable. In the past, the Supreme Court of the United States required compensating workers for time spent on hygienic measures necessary to protect themselves from “compounds [that] are toxic to human beings” because those measures were integral to the completion of principal activities. Steiner v. Mitchell, 350 U.S. 247, 249-53 (1956). So, it is plausible that courts could deem time spent by workers on hygienic measures necessary to protect themselves from a virus to be compensable under the FLSA as well. What measures can companies take to avoid serious wage and hour complications while adhering to COVID-19 safety requirements? These measures are worksite specific. The starting point is to determine whether the COVID-19 precautions in use at any given worksite are causing delays that might require workers to arrive earlier or leave later than they normally would. For instance, field workers may have to stay late to sanitize tools, or office workers might need to arrive early to get their temperature checked. In either scenario, it might be possible to revise the precautions to minimize FLSA exposure while providing legally sufficient COVID-19 precautions. Extensive delays might warrant revisiting clock-in procedures to provide compensation instead of risking litigation. The COVID-19 pandemic has brought a great deal of uncertainty. The oil industry is particularly sensitive to its impact because it relies upon concentrated worksites featuring a great deal of interdependence between office and field workers. Proactively partnering with legal counsel can help clarify some of the wage and hour issues that will likely result from the COVID-19 pandemic. Experienced legal counsel can help develop strategies to mitigate the wage and hour exposure created by this workplace interruption.

Proactively partnering with legal counsel can help clarify some of the wage and hour issues that will likely result from the COVID-19 pandemic

About the authors: Annette A. Idalski is a shareholder and the National Chair of Chamberlain Hrdlicka’s Labor & Employment Practice. She may be reached at annette.idalski@chamberlainlaw. com. James Fielding is an associate in the practice.

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OVID-19 has the potential to create a variety of wage and hour complications and may put employers at risk for violations under the Fair Labor Standards Act (FLSA). This is especially true for oil and gas companies, given the industry’s unique reliance upon both skilled field workers and knowledgeable office staff. Oil extraction cannot be done remotely. It is a very complex operation requiring considerable determination and sophistication to be combined in very specific locations. Yet, the precautions taken to prevent COVID-19 outbreaks in these complicated environments may have consequences under the FLSA and other wage and hour laws. Understanding these complications is the first step towards developing strategies for avoiding costly wage and hour litigation. Many of the precautions used to protect workers are commonly cited by the Center for Disease Control (CDC). These mitigation risks include: limiting the number of people in a given area, accommodating frequent hand sanitation and providing personal protective equipment (PPE) to ensure a sanitary work environment. While these precautions have obvious impacts on office workers, field workers, too, are impacted, but differently. For instance, limiting building capacity might mean fewer workers accessing dressing or staging facilities — which leads to a line of workers waiting outside. Prohibiting workers from sharing tools might mean that every worker has to wait in line to be fully outfitted before each shift. Requiring everyone to wear PPE means each worker has to stop and apply or replace their mask and gloves each time they anticipate coming into contact with another. These examples of what appear to be small delays can add up over the course of a full workweek. But, understanding the potential wage and hour ramifications of those delays is important because minor errors can lead to catastrophic liability under the FLSA. For instance, in Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036, 1044 (2016), the employer had a policy requiring workers to apply company-issued equipment that was meant to protect workers from cutting themselves while processing hog carcasses. It only took workers approximately

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BUSINESS

Biting the Hand that Feeds You: Virtue Signaling Against Oil and Gas By: Jason Modglin

The North Face is inviting scorn and maybe a little coal into their petroleum-based stockings this Christmas.

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It is not just high-end camping equipment that wants to shut down oil and gas. Institutional investors from BlackRock to the Bank of the West have made big pronouncements about no longer investing in oil and gas, despite ignoring the growing reality of a planet that is desperate for reliable, affordable energy to move countries out of poverty. In practice, these policies are rarely enforced in their entirety because these institutions and their consumers recognize petroleum products are critical to modern life. Annually, oil and gas producers pay billions in taxes to fund state and local governments, which in turn pay their employees, make deposits and hire these same finance organizations who demonize those who provide the money coming into their portfolios. Like The North Face, these institutions are actively encouraging their customers to look elsewhere despite the overwhelming evidence that their statements taken to full effect would be a disaster. This year, the world health community has used petroleum to control COVID-19, providing the building blocks to mass-produce personal protective equipment, medical devices and the necessary temperatures needed to store and transport the vaccines being shipped worldwide. Without oil and gas resources, the costs and timeline to fight and recover from this virus would have tracked with the initial projections of a multi-year fight with untold millions of dead. The oil and gas industry embraces competition with renewable energy sources. More transparency and reporting and informed emission reduction targets are good things. Men and women in this industry are proud of their record of environmental stewardship, and, more importantly to the world, they are not complacent with simply making platitudes and resting on the progress made. Virtue signaling does not make anyone’s life better, but it does undermine the facts. Some corporate entities just want to demonize the good.

Virtue signaling does not make anyone’s life better, but it does undermine the facts. Some corporate entities just want to demonize the good

About the author: Jason Modglin is President of the Texas Alliance of Energy Producers and an avid camper.

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Why does a performance nylon apparel brand want to cut off their nose to spite their face? The North Face, a high-end outdoor brand, made the latest move in the never-ending quest to virtue signal: They denied an oil and gas company the holiday gifts executives hoped to purchase for their customers. This is strange given that their products are made from materials such as nylon, polyester and acrylic, all of which are derived from petroleum. The North Face should celebrate the men and women who work in the oil and gas industry for making their business possible, not disparage them. We must end these bizarre and insincere efforts to boycott, divest and sanction the companies that are meeting the world’s needs with abundant, reliable and affordable energy. Here’s what happened: This past week, The North Face informed Houston-based Innovex Downhole Solutions that their order of personalized jackets did not meet the brand’s image standards. The North Face actually equates the industry with other types of businesses it doesn’t want to touch with a 1,000-foot pole: porn, tobacco and alcohol. In an open letter posted to LinkedIn, Innovex CEO Adam Anderson noted the hypocrisy. He asked Steve Rendle, the CEO of The North Face parent company VF Corporation, to reconsider his stance, writing, “We should be celebrating the benefits of what oil and gas do to enable the outdoors lifestyle your brands embrace. Without Oil and Gas, there would be no market for nor ability to create the products your company sells.” It is true the list of available customers and suppliers for The North Face narrows considerably — in fact to zero — if their stance is applied to their own business. Kudos to Anderson for striving for education on the benefits oil and gas provide to human life and development. The industry provides the advances in material science and fuels that make getting outside in the elements possible, enabling more people to appreciate the bounty of the outdoors — without wearing sealskin and mink fur.

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BUSINESS

Oil and Gas and the Economy in 2021 By: Thomas Tunstall, Ph.D.

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The key reason global oil markets did not collapse altogether was due to the agreement by OPEC and Russia to curb production through most of 2020. Similarly, low prices forced independent and major U.S. producers to cut back output. Although WTI inched up above $45 a barrel late last year, there is no guarantee the benchmark will continue to rise, or worse, that it won’t go into freefall once again. The upshot of these events portends a sea change in supply chain theory taught in business schools. The nature of supply chains — previously focused on cost and efficiency to the exclusion of nearly everything else — will instead emphasize resilience, with organizations seeking out local and regional sources of product. Community stakeholders such as city managers, mayors, county judges, economic development directors and regional planners will demand greater visibility into the critical supply chains serving their constituents. Due to the accumulated complexity evolved from management theory over the past few decades, no single entity has a clear picture of all the moving parts across varied product supply chains. Though 2021 appears poised for improvement, it’s not clear that things will ever go back to normal as we knew it. Instead, as the global population reaches eight billion and keeps climbing, future pandemics likely lie ahead. Hence, notions of living space and personal distance, as well as the value of critical resources such as energy, food and water will figure more prominently in the minds of policymakers and other leaders at all levels for the remainder of the 21st century.

The brake on economic activity resulting from the COVID-19 pandemic sapped more out of GDP than any other event since the Great Depression in the 1920s and 30s, and far more than the Great Recession in the mid-2000s

About the author: Thomas Tunstall, Ph.D., is the senior research director at the Institute for Economic Development at the University of Texas at San Antonio. He is the principal investigator for numerous economic and community development studies and has published extensively. Dr. Tunstall recently completed a novel entitled “The Entropy Model.”

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hat began last March as a brief relocation from the office to a work-at-home setting eventually transitioned into something much more. The weeks bled into months, ultimately extending over the course of the year for many folks. The brake on economic activity resulting from the COVID-19 pandemic sapped more out of GDP than any other event since the Great Depression in the 1920s and 30s, and far more than the Great Recession in the mid-2000s. While the vaccine research, production and distribution response occurred in record time, it was not enough to rescue a large number of small businesses, many of which will not return with the same ownership or business models. Large traditional retailers were hard hit as well. Sporting events, concerts and other indoor venues weathered anemic attendance. So far, the surprises have been numerous and pervasive, to say the least. Federal relief was disbursed unevenly and somewhat haphazardly, with many large businesses receiving payouts not intended for them. Further, despite government relief efforts to stem the carnage, new weekly unemployment claims remained stubbornly high through the year’s end. Many workers never returned to offices, a feature of the pandemic that will continue to burden the commercial sector. At the same time, the need for home offices caused housing prices to spike unexpectedly. Non-perishable goods — typically exhibiting predictable demand patterns — became nearly impossible to keep in stock. Hand sanitizer, canned goods and toilet paper flew off store shelves. Hospitals failed to maintain sufficient quantities of personal protective equipment, not to mention ventilators — difficult to produce machines that are expensive to hold in large numbers if left idle. The decrease in both economic and noneconomic activity took its toll on the oil and gas industry as well. In March and April, regular automobile commutes and air travel came to a near standstill. For the first time ever, oil prices even went negative as a result of excess U.S. inventory and lack of storage capacity. By summer, prices rebounded somewhat. Though energy demand will almost certainly pick up further later this year, only modest improvement seems likely for 2021 overall. Hopefully, by autumn, the bulk of the pandemic’s effects will be a thing of the past for energy and other industries.

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LIFESTYLE

FROM FEELING GREAT

“FEELING GREAT IN 15 MINUTES – THE CLIFFSNOTES VERSION” By: Dr. David Burns

What Are Cognitive Distortions Anyway?

The following are ten of the most common cognitive distortions:

What are cognitive distortions and why might you be interested in them? The term cognitive may sound pretty intimidating or overly intellectual, but it has a simple meaning. Cognition is just a fancy word for a thought. It’s the way you think about what’s happening. Right now, you’re probably having some thoughts about me and what you’re reading, and possibly some thoughts about yourself as well. Your thoughts create your feelings every minute of every day.

1. All-or-Nothing Thinking. You look at things in absolute, blackor-white categories, as if shades of gray do not exist, and you think of yourself as either a complete success or total failure. This dichotomous way of thinking can make life pretty miserable and make you feel like a zero, or nothing, most of the time. In addition, you can’t accurately describe yourself or the world in black-or-white categories. Things are rarely totally horrible or absolutely perfect.

For example, right now you could be thinking that I’m a con artist or that this will be just another superficial self-help book. If so, you probably feel skeptical, suspicious, or even annoyed. Or you may be thinking that nothing could possibly help you because your problems are so severe. If so, you probably feel hopeless, discouraged or demoralized. Or this may all sound really interesting and exciting to you, and you may be thinking that this book could actually help you. If so, you’re probably excited and hopeful. Do you see what I mean? Everyone reading this book is reading the exact same words, but how they feel about this book can differ greatly. Your feelings result entirely from how you’re thinking right now. It is your thoughts, and not the circumstances of your life, that create all of your feelings. You FEEL the way you THINK. Sometimes, though, we think about ourselves and our lives in ways that are pretty illogical and even unfair to ourselves. We make interpretations about what’s happening that are twisted and misleading, but we don’t realize it. That is what cognitive distortions are: a highly misleading way of thinking about yourself and the world. It’s a way of fooling yourself. And when you feel depressed and anxious, you will nearly always be fooling yourself. This means that your negative thoughts do not reflect reality. Depression and anxiety are the world’s oldest cons.

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2. Overgeneralization. You generalize from some specific flaw, failure, or mistake to your entire self. Or you may generalize the way you feel right now, or some negative experience you’ve just had, to the future. You should suspect overgeneralization whenever your negative thoughts contain global labels (like bad mom) or words like always or never. For example, if you were ever rejected by someone you loved, then you may have told yourself that you were “unlovable” and that you’d be alone forever. In this case, you’d be overgeneralizing the breakup of one relationship to your entire self. You’d also be overgeneralizing from the present to your entire future. Of course, this distortion isn’t limited to matters of the heart. If you’ve ever failed at something you were trying to accomplish, then you may have thought of yourself as a failure and felt like you’d never be successful. Once again, you’re overgeneralizing from some specific failure to your entire self and from this moment to your entire future. The next two cognitive distortions typically go hand in hand: 3.

Mental Filtering. You filter out or ignore the positives and focus entirely on the negatives. It’s like a drop of ink that discolors the entire beaker of water.

Discounting the Positive. This is an even more spectacular mental error. You tell yourself that your positive qualities or successes don’t count. You convince yourself that you’re completely bad, inferior, or worthless.

tives. I call this the “binocular trick” since magnifying is like looking through a pair of binoculars (which makes everything much bigger) and minimizing is like looking through the opposite end (which makes everything much smaller).

For example, if someone compliments you, you may tell yourself, “Oh, she’s just saying that to be nice. She doesn’t really mean it.” Or you may notice what’s great about other people—how successful or attractive they are—and overlook their flaws. You may also dwell on your own flaws, thinking you’re “too short” or “too tall,” and obsess about your appearance, all while insisting your own positive qualities are just “average.”

Magnification plays a huge role in anxiety because it causes you to greatly exaggerate danger. Consider the fear of flying. As you know, there’s an extraordinarily small probability that you’ll die in a commercial air flight. I think you’d have to fly all day every day for about 600 years to be in significant danger. However, people who are afraid of flying massively magnify the actual danger and wrongly believe it’s incredibly risky to fly.

Even I find myself slipping into these two distortions from time to time. For example, if I’m feeling vulnerable or insecure, and I get a negative or critical comment or email, I’ll tend to dwell on it while ignoring a whole host of positive comments from fans filled with praise. It sometimes feels like the criticisms are valid and the positive comments don’t really count. Feelings of inferiority nearly always result from mental filtering and discounting the positive.

Similarly, panic attacks always result from magnification in combination with fortune-telling. During a panic attack, you misinterpret normal bodily sensations, like dizziness or tightness in the chest, and become irrationally convinced that something catastrophic is about to happen, such as a massive heart attack, when you’re actually magnifying the significance of fairly common and innocuous physical sensations.

Jumping to Conclusions. This is where you jump to painful and upsetting conclusions that aren’t really supported by the facts. There are two common versions of this distortion: a.

Fortune Telling. You make arbitrary and disturbing predictions about the future. It’s as if you had a crystal ball that only gives you bad news!

Mind Reading. You jump to conclusions about how others are thinking and feeling without any clear evidence.

Fortune telling can trigger feelings of hopelessness. For example, if you’re depressed, then you may tell yourself that things will never change, that your problems can never be solved, and that you’ll be depressed forever. These thoughts cause feelings of hopelessness and can sometimes even lead to suicidal urges. Fortune telling can also trigger feelings of anxiety. For example, if you have anxiety about public speaking, then you might worry that your mind will go blank, that you’ll blow it, and that you’ll make a total fool of yourself when you get up in front of the audience. Mind reading also causes social anxiety, especially shyness. For example, when you’re at a social gathering, you may tell yourself that other people will see how nervous you are, judge you, and be uninterested in what you have to say. You may also tell yourself that everyone else is confident and relaxed and that no one else ever struggles with insecurities. 6.

Magnification and Minimization. You exaggerate the negativity in a situation and minimize the posi-

Minimization, of course, is the opposite. You tell yourself that something isn’t very important—when it is. For example, I just did my “slogging” today, which is my word for super slow jogging. And I only went two miles. I could tell myself that my super slow two-mile “slog” doesn’t count because so many other people run a lot farther and faster. But my slogging does count, and I’m darn proud of myself for getting out and paying my dues. I’ve never enjoyed running, but at least I’m getting some fairly decent exercise almost every day. 7.

Emotional Reasoning. This involves reasoning from the way you feel, such as: “I feel like an idiot, so I must be one” or “I feel hopeless, so things are never going to get better.” Or in the case of panic attacks, “I feel like I’m on the verge of a nervous breakdown, so I must be in a lot of danger.”

About the author: David D. Burns, MD, is a renowned psychiatrist, awardwinning researcher, and author of the phenomenally successful “Feeling Good” and “Feeling Good Handbook,” which have sold 5 million copies worldwide. More than 50,000 American and Canadian mental health professionals have attended his popular training programs, and his weekly Feeling Good podcasts are approaching 3 million downloads. “Feeling Great” is available on Amazon and in bookstores.

For decades, mental health professionals have urged patients to get in touch with their feelings. But your feelings are not always a reliable guide to reality and can sometimes be incredibly misleading, especially when you feel depressed, anxious, or angry. That’s because feelings result from thoughts, and as you’re learning, negative thoughts are often distorted. When this is the case, your feelings do not reflect reality any better than the curved mirrors you see in amusement parks that create distorted images of how you look. 8.

Should Statements. You criticize yourself or other people with shoulds, shouldn’ts, musts, ought tos, and have tos. There are several types of should statements: a.

Self-Directed Shoulds lead to feelings of guilt and inferiority when we don’t live up to our self-imposed standards (“I shouldn’t have screwed up!”). (continued next page) SHALEMAG.COM

Other-Directed Shoulds lead to feelings of anger and frustration when others don’t meet our expectations (“He shouldn’t feel that way” or “She shouldn’t have said that!”). Other-directed shoulds cause conflicts with others, such as marital problems, arguments, and even violence and war.

World-Directed Shoulds lead to frustration and anger when the world doesn’t meet our expectations. For example, I sometimes tell myself that this or that software program shouldn’t be so dang complicated and hard to learn!

Hidden Shoulds are not expressed explicitly with terms like should, ought, or must, but they’re implied by your negative thoughts and feelings. For example, if you berate yourself whenever you make a mistake, you’re essentially telling yourself that you should be perfect and should never goof up.

When you see this distortion in someone else who feels upset, you can probably see how unrealistic it is and how hard that person is being on him- or herself. But when you tell yourself that you shouldn’t feel the way you do, that you shouldn’t have made that mistake, or that you should be better than you are, it’s much harder to see that you’re fooling yourself. 9.

Labeling. Labeling is an extreme form of overgeneralization in which you try to capture the “essence” of yourself or another person with a one-word label. For example, when you make a mistake, you call yourself a “jerk” or “loser” instead of saying, “I made a mistake.”

Labeling is very common in political and religious battles. For example, we may label people who disagree with us politically as “lefties” or “righties.” Hitler used this type of labeling to achieve power in Germany when he described Jewish people (and others) as “rats” and identified Aryan people as being part of the “superior” race.

Like. Follow. Connect.

Labeling tends to fire up strong negative emotions, like severe depression and intense rage. In addition, it’s mean. When you label yourself or another person, it’s like taking a jab at someone. It also distracts you from what’s important because you use all your energy ruminating about how bad you are instead of pinpointing your error—assuming you’ve actually made an error—so you can learn from it and grow. Labeling is also highly irrational. Humans are not objects that can be captured with a single positive or negative label. There’s really no such thing as a “jerk” or a “loser”—although plenty of jerky behavior exists. I know that I often do “jerky” things no matter how hard I try to be “good.” And if I told you about all the losses I’ve experienced and things at which I’ve failed (including just recently), we’d have a pretty long conversation. Does that mean I’m a “loser”? 10. Self-Blame and Other-Blame. You find fault in others or yourself instead of solving the problem or identifying the true causes of the problem. a.

Self-Blame. You blame yourself for something you weren’t entirely responsible for, or you beat up on yourself because of some mistake you made.

For example, an attorney blamed himself for losing a case in court, but the evidence against the man he was trying to defend was overwhelming. b.

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Other-Blame. You blame others and overlook ways you might have contributed to the conflict.

For example, a wife complained that her husband was constantly critical of her and said things like “You never listen!” She wanted to know why men were like that. I asked her how she typically responded, and she said, “Oh, I just ignore him and say nothing!” When you feel depressed or anxious, there’s a good chance you’re blaming yourself and telling yourself you’re no good because of some flaw or failure. When you’re angry or not getting along with someone else, the odds are high that you’re blaming the other person for the conflict. You don’t need to be diagnosed with depression or anxiety to experience these cognitive distortions. We all fall into black holes of insecurity and depression from time to time, including me…

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LIFESTYLE

EATING WELL IN THE NEW YEAR By: Kenneth M. Horwitz

At this time of the year, many become diet conscious and look for healthier foods. Of course, part of a better approach is moderation in quantity. And Julia Child’s advice to keep moderation in moderation is classic. I offer two recipes that are moderately caloric yet delicious and, as with my stated goal in award-winning “Deep Flavors,” are made with nonprocessed and healthy ingredients: Dill French Toast and Indian-Style Grilled Chicken.

Dill French Toast There are many French toast recipes, including various recipes for stuffed French toast with sweet toppings and with various sweet combinations of spices and sugar, all flavorful but laden with calories. Rarely do you see a recipe for a savory French toast. This recipe is quick and easy to make using various leftover (but not stale) breads. It is a wonderful, quick weeknight dinner with a salad and, with no added sugars, kind to the waistline. French toast and bread puddings recipes frequently call for stale bread, but with the availability of freezers, why would you let bread stale? And if you did, why would you use it? If you want a dry bread to provide better liquid absorption (which is the stated rationale for recommending stale bread), use the oven at a low heat (225℉ or less) to dry the bread. Ingredients: • bread (see below for tips) • eggs (at least 1 egg per slice of bread — extra is fine) • milk product, 2–3 tablespoons per egg (milk, or if calories are not a concern, heavy cream, whipping cream, or halfand-half) • salt and pepper to taste • dill weed • freshly chopped chives (optional) • unsalted butter for sautéing For this purpose, I normally use whole milk. Dried dill weed should be in your grocer’s spice rack. This dish is excellent and somewhat different with a liberal quantity of fresh, finely minced dill and chives. The type of bread is an important consideration; while an ordinary good-quality bread (including challah or sourdough) can be used, this French toast is even better with a bak-

SHALE MAGAZINE  JANUARY/FEBRUARY 2021

ery (including your grocery’s bakery) flavorful pumpernickel or Jewish rye. A sturdy bread is essential. Ordinary grocery-store, white sandwich bread will disintegrate and does not fill the bill for this purpose or much else. The technique is simple. Add the milk product to the eggs and beat thoroughly with the salt, pepper, dill weed, and chives (optional). The dill weed sometimes is difficult to incorporate into the eggs. Use a liberal quantity of the milk product; this is more like a custard than scrambled eggs. Soak the bread in the egg mixture. I prefer the bread to be thoroughly soaked so that the egg mixture penetrates through to the middle of the bread — ergo, the reason for using a sturdy bread. I generally use a generous amount of egg (more than 1 egg per slice of bread). After the bread is soaked, heat a pan with butter. I cannot imagine for this purpose using any oil product other than unsalted butter; this is all about flavor, and butter is no more caloric than any other fat. Sauté the bread to the desired degree of doneness. I do not like my French toast overcooked, so I cook it just to a point where the egg is cooked, but the bread is still moist on the inside. My wife, on the other hand, likes her French toast cooked longer. It is a matter of taste. After the bread is mostly cooked, pour the remaining egg mixture over the bread in the skillet. This is comfort food, not haute cuisine. Finish cooking the bread with the egg. Since this is a savory dish, serve as is without any syrup or other sweetener. Note: Bread stales at refrigerator temperatures. Either use bread right away or freeze it. Thawed bread tastes perfectly fresh. Thaw at room temperature; microwaving does something unpleasant to the bread’s texture and toughens it. Note: Whipping cream has a lower fat content than heavy cream. Even heavy creams have varying fat contents depending on the

brand — read labels. Purchase the one with the greatest fat content available.

Indian-Style Grilled Chicken While “Deep Flavors” is a kosher-style cookbook, the recipes are eclectic, Tex/Mex to Cajun to Jewish soul food, to French, etc. This recipe is just one example. It is not truly Indian, in the sense that I suspect no Indian chef has actually made anything exactly like this recipe, just as I suspect no Italian nonna ever made my Texas State Fair Blue Ribbon Mushroom-Spinach Lasagna (see Chapter 12). However, it adheres to my goal of wonderful flavor; the Indian flavors are accessible to the home cook while meeting the laws of kashruth relating to mixing milk and meat. It is a riff on tandoori chicken commonly served in Indian restaurants, but I think better. As with other variants in “Deep Flavors” (for example, Bouillabaisse à La Juive, see Chapter 6), this recipe is intended to be includable in a kosher kitchen but equally attractive to the nonJewish cook. It certainly meets the standard of “Deep Flavors.” Therefore, unlike a traditional tandoori chicken, which is marinated in regular milk yogurt, this chicken is marinated in a delicious coconut- or almond-based non-dairy yogurt. It can be roasted skin-side up in a 350°F oven for 30 to 40 minutes if a grill is not available. As with most grilled items, this recipe is very simple to execute. Note that the chicken, while somewhat different, is still yummy, even if the yogurt is not available (or you want to avoid the calories). The tandoori and garam masalas, as well as other Indian spice mixtures or masalas, are available for purchase at many ethnic Indian food stores, Penzeys’s website, and, increasingly, at your local grocery store or online from American spice companies that are certified kosher. There are a number of recipes just for garam masala that are regional variants based on the source in India, and I have included the recipe I use in “Deep Flavors” in Chapter 2.

Ingredients: This recipe is easily multiplied • 8 chicken thighs (bone-in and skin on — these add flavor and protect the meat during grilling) • about 1 cup of coconut or almond yogurt (preferably unsweetened and containing no milk products) • 1 tablespoon or more tandoori masala (or another masala as desired) • 1 tablespoon or more Garam Masala (Chapter 2) • 2 tablespoons or more fresh ginger, finely minced or mashed to a paste • 3 or more cloves garlic, finely minced or mashed to a paste • 1 teaspoon ground peppercorns • salt to taste • ½ cup or so cilantro, finely chopped or ground Using a mortar and pestle (or, if you do not have a mortar and pestle, use a blender or food processor), make a paste of all of the ingredients except the chicken and yogurt. Use kosher salt to facilitate the grinding. Then add the spice mixture to the yogurt. Spread the yogurt-spice paste liberally over the chicken, and let it sit for up to ½ an hour, covered. When moving to the preheated grill, it is best to have

a section of the grill that you turn off as you start to put the chicken on the grill so that you will have an area where you can cook the chicken over indirect heat to avoid flare-ups and burning. Start the chicken skin side down, flipping as necessary and moving to cooler sections until the chicken is thoroughly cooked to at least 165°F internal temperature next to the bone. Move to indirect cooking as needed. I find that a Thermapen or similar instant-read thermometer is essential to obtain a perfectly cooked grilled product. I serve this chicken with Lemon Coconut Rice (see Chapter 9), or if I am serving Indian-Style Lentils (see Chapter 14), I frequently just serve with plain white basmati rice. Leftover chicken makes a great snack or lunch. For a vegetable, I suggest Pan-Roasted Cauliflower (see Chapter 14); you may want the variation before roasting, when rubbing on olive oil and garlic powder, of adding a sprinkle of Garam Masala and/or sweet curry powder over the cauliflower. (Sweet curry powder is the very yellow curry powder mixture we are all familiar with. I think the mixture sold at Penzeys is superior to what is available in regular groceries, but it is not kosher.) Squeeze on lemon juice about 5 minutes before removing it from the oven and serving. An easy alternative is simple grilled vegetables: zuc-

AT THIS TIME OF THE YEAR, MANY BECOME DIET CONSCIOUS AND LOOK FOR HEALTHIER FOODS

chini, eggplants, carrots, peppers, etc., with a mustard mayonnaise side (see Chapter 14) either warm or room temperature, easily made a day in advance. For dessert, if you are tired of watching calories, Lemon-Coconut Custard Cherry Pie or ChocolateOrange-Almond-Coconut Biscotti (both recipes in Chapter 15) is delicious; or perhaps you would prefer a small serving of Poached Fruit (also in Chapter 15), with or without vanilla ice cream. “Deep Flavors” includes many sensational and detailed recipes such as the familiar but reimagined favorite, Deconstructed Turkey, designed to produce a perfectly cooked bird with bountiful sauce and stuffing every time, to unique and delectable desserts like German’s Sweet Chocolate Cake, to advice on how to enhance ingredients (from asparagus and mushrooms to nuts), plus the many other eclectic recipes and ideas. These all combine to make award-winning “Deep Flavors” a valued gift for your loved ones or friends who love to cook. (“Deep Flavors” is available in Kindle and hardcopy from Amazon or hardcopy from www. deepflavorscookbook.com).

About the author: Kenneth M. Horwitz, JD, LLM (Tax), CPA, practices as a lawyer in a general tax, estate planning, and transaction practice. Mr. Horwitz developed a creative and focused approach in finding and fixing problems, a skill that translates well to his passion for developing recipes based on traditional family favorites, tailored to personal taste and dietary needs. His desire to preserve and communicate that work led to “DEEP FLAVORS.”

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LIFESTYLE

STAYING FIT FROM HOME By: Danielle Francy

Due to COVID-19, everyone is challenged to figure out their own way to stay fit without having access to a gym. The best tip for staying consistent with no gym access is having a set time each day to get your workout done. This keeps you on schedule and provides a “habit” or new normal even if everything else seems chaotic these days. Here is a sample workout you can do at home with no equipment: 1.

Squats — This is a staple exercise that helps burn fat and build muscle. Keep your feet shoulder-width apart, and sit back as you would in a chair, making sure your femur (thigh bone) is parallel to the floor.

Elbow Planks — This is a great fullbody exercise that will help keep your core toned and lean, leading to a strong, slim stomach. Make sure to align your elbows under your shoulders, back nice and flat, bring your belly-button to your spine (aka “bracing”).

Modified Push-Ups — The benefit of this exercise is to strengthen your upper body. They're great if you need to lift small children or groceries! These are just like a typical push-up; only your knees are bent. Make sure to keep your core tight, wrists stacked in-line with chest, keeping elbows close to your body (to stabilize shoulder).

Not only can you complete these simple yet effective strength exercises, but you can also incorporate a HIIT workout into your routine. HIIT is defined as High-Intensity Interval Training — basically just a fancy acronym for a circuit to get your heart rate up. Here is a sample HIIT circuit workout you can do in your own home; try three rounds of each: 1.

Running up a flight of stairs — This is sure to get your heart pumping and get you warm! Whether you run up your apartment steps or up some steps at the park, you'll be working your leg muscles while also getting some cardio mixed in.

Jumping Jacks — Works the outsides of your legs to help tone-up your hips while also slimming them down.

Shoulder Taps — This exercise not only strengthens your core but also sculpts your shoulders. With these, you want

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to begin in plank position, keeping hips parallel to the ground, lift your right arm to “tap” your left shoulder. You'll do this on the other side as well, lifting your left arm to tap your right shoulder. Do this until you reach your desired amount of reps and see those results! Generally, gaining any excess poundage is most likely due to nutrition. Not only does exercise impact a huge part of your physique, but your nutrition is also just as important! If you notice yourself snacking here, there and everywhere, try eating more nutritious snacks that are high in protein, like a stick of cheese or hummus. This will satisfy your hunger while also providing fuel to your muscles. Another huge factor that we tend to face with weight gain is eating out (or, in this case, eating-in with the easy click of a button on UberEats). Try making meals at home by planning them out in advance. This will help when you don't have the energy or brain-power to think of what you want to make for dinner after a long day at work. Not only will you just be able to throw your meals into the microwave, but you're also saving a ton by eating at home! Not having to tip your driver, no overpaying for meals, just convenience at your fingertips and ready in minutes after work. Finally, don't forget to hydrate! Water is a great source to keep your muscles working properly and keep your body feeling amazing. Instead of drinking a soda (super high in sugar), alcoholic beverages or sugary drinks, try drinking only water for a full day and feel the difference it makes! Males are recommended to intake about 15 cups of water, while females are recommended to intake about 11. These are just a few tips and tricks to help everyone fight off some of those COVID pounds. Keep consistent; once you start seeing results, you'll be so proud of what you can achieve if you put your mind to it!

If you need any athome exercises, you can check out my fitness Instagram page, @francypantsfit. There, you'll have access to easy and effective bodyweight exercises that can help you get out of any “exercise funk” you may be in, or just give you new exercise ideas!

THE BEST TIP FOR STAYING CONSISTENT WITH NO GYM ACCESS IS HAVING A SET TIME EACH DAY TO GET YOUR WORKOUT DONE

About the author: Danielle Francy is a CPT (certified personal trainer) through NASM with a Bachelor’s Degree in Exercise Science. She has previously worked as a Sports Performance Coach as well as interned as a Strength and Conditioning Coach at Towson University. She is also certified as a USAWLevel 1 Coach. Danielle Francy 410-782-5612 danielle@fit2gopt.com

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SOCIAL

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