SHALE Magazine May/June 2018 by SHALE Oil & Gas Business Magazine

SHALE MAGAZINE

MAY/JUNE 2018

THE NORTH AMERICAN FREE TRADE AGREEMENT – GOOD FOR AMERICAN ENERGY

US TRAVEL DESTINATIONS FOR EVERY PERSON DESK & DERRICK CLUB OF MIDLAND HOSTS 67TH ANNUAL INDUSTRY APPRECIATION DINNER

AND SUN COAST RESOURCES A BUSINESS WORLD EXAMPLE OF THE BUTTERFLY EFFECT

WOMEN’S EDITION

WOMEN IN LEADERSHIP

COMBILIFT: INNOVATION IN THE FORKLIFT INDUSTRY ATTRACTING MORE WOMEN AS THE INDUSTRY POWERS PAST IMPOSSIBLE MAY/JUNE 2018  SHALE MAGAZINE

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MAY/JUNE 2018

CONTENTS SHALE UPDATE

Shale Play Short Takes

FEATURE

Women in Leadership

COVER STORY

As the CEO of Sun Coast Resources, KATHY LEHNE is leading one the largest, most full-service petroleum distribution marketers in the nation. As a top-rated energy service company, customers and employees benefit greatly from Lehne's superb leadership. However, it's the work being done to serve the community through fundraising and disaster relief that shows the true heart of this one-of-a-kind company.

INDUSTRY

STEER Members Help Keep South Texas Roads Clean

POLICY

COVER AND TABLE OF CONTENTS PHOTOS BY MICHAEL GIORDANO

INDUSTRY

44 PESA Diversity Study Identifies

Activities Needed to Advance Women in the Workplace

46 Women and Energy – A Natural Fit 48 Attracting More Women as the Industry Powers Past Impossible

50 Record Natural Gas Production:

The Good News and the Bad News

Louisiana Oil and Natural Gas: Built Our State; Powering Our Nation

BUSINESS 64 Overproduction, Inequality and Ecosystems

LIFESTYLE 66 A New Era of Wellness for Chiva-Som 68 Lose Yourself in Serenity at the Four Seasons Resort in Bora Bora

52 WEN Opens Membership to Men

SOCIAL

POLICY

76 SAPA and WEN Host Pipeline Luncheon 78 WEN Houston Hosts STEM Charity Luncheon

56 The North American Free Trade

Agreement – Good for American Energy

58 About That Trump Tweet Directed at OPEC…

to Benefit Design Connect Create, Inc.

78 STEER and TXOGA Participate in San Antonio’s King William Fair During Fiesta 2018

BUSINESS

Combilift: Innovation in the Forklift Industry

LIFESTYLE

US Travel Destinations for Every Person

SOCIAL

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VOLUME 5 ISSUE 3 • MAY/JUNE 2018

KYM BOLADO

PUBLISHER / CEO CHIEF FINANCIAL OFFICER Deana Acosta CHIEF OPERATING OFFICER & EDITOR-IN-CHIEF Lauren Guerra EDITOR David Blackmon ART DIRECTOR Elisa G Creative COPY EDITOR Audra Gorgiev VICE PRESIDENT OF SALES & MARKETING Joyce Venema ACCOUNT EXECUTIVES John Collins, Ashley Grimes, Michelle Mata, Matt Reed ONLINE CONTENT MANAGER Fernando Guerra SOCIAL MEDIA DIRECTOR Courtney Boedeker CORRESPONDENT WESTERN REGION Raymond Bolado

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CONTRIBUTING PHOTOGRAPHER Michael Giordano CONTRIBUTING WRITERS Leslie Beyer, David Blackmon, Marc Erhardt, Omar Garcia, Lauren Guerra, Karr Ingham, Bill Keffer, Tyra Metoyer, Thomas Tunstall, Ph.D. STAFF PHOTOGRAPHER Malcolm Perez EDITORIAL INTERN LeAnna Castro

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PUBLISHER’S NOTE

OUR MAY/JUNE ISSUE OF SHALE MAGAZINE IS OUR ANNUAL WOMEN'S ISSUE. As a female CEO and Publisher of a nationwide publication and syndicated radio show that works to disseminate information on oil and gas topics as well as the talented people that work in the industry, I feel this issue presents a critical topic for discussion. Each year, I see an increase in women taking an active role in the energy sector. The positions women hold in this industry vary, from support staff to technical field positions to executive leadership. While we have seen significant growth in incorporating more diversity and inclusion within the industry, more education and communication on these topics can only help to continue this trend. Inclusion is just that: including. What we see through research studies is that utilizing men and women works best to benefit from the best talents that each gender has to offer. Production and problem-solving improve as the brightest minds come together. Investing in a talented, diverse workforce has been and will continue to be one of the wisest investments in the energy sector.

Switching gears, in early May we saw crude oil price reach over $70 a barrel — a price point we have not seen since 2014. It's been said the U.S. oil and gas will continue to see increases in demand in 2018. Many geopolitical forces are currently at work affecting the energy industry. It will be interesting to see how the future events will influence our domestic energy market. SHALE Magazine looks forward to continuing to cover these and other energy and business topics. Finally, I would like to take the time to mention our growing radio show, In The Oil Patch. We are proud to share that In the Oil Patch has broadcast more than 150 shows in its history. The show broadcasts throughout most of Texas, and parts of New Mexico, Louisiana and Mexico. If you have not heard the show yet, I encourage you to visit the SHALE Magazine website to find each previous episodes, available as a podcast. To find our past episodes, visit shalemag.com and click "radio." Or, you can simply download the iHeart app to stream the episodes at your convenience. Each episode explores new topics with knowledgeable experts on a range of topics. I look forward to sharing more information and new experts on the show to increase awareness of key energy and business topics. We always welcome feedback and/or questions from our audience. Feel free to send me requests on topics or questions to answer at radio@shalemag.com. Thank you for your continued support of SHALE Magazine and In the Oil Patch radio show. We hope you enjoy our annual women's edition!

KYM BOLADO

CEO/Publisher of SHALE Magazine kym@shalemag.com

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SHALE UPDATE

SHALE PLAY SHORT TAKES By: David Blackmon

Bakken Shale – North Dakota/Montana

Rising oil prices and rapidly advancing hydraulic fracturing and drilling technologies are leading to increased interest in the Bakken region once again. A good example of this growing trend came in late April when Hess Corp. announced it would be ramping up its drilling program in the play over the remainder of 2018. Hess was able to increase its production in the Bakken by 12% during the first quarter of the year. The company now plans to add one additional rig during the third quarter and another rig in the fourth quarter as a part of its Bakken development program. Also in late April, EOG Resources, Inc. announced its own plan to divest its interests in the North Sea and redirect some of that capital to expand its drilling and development program in the Bakken.

Denver/Julesberg (DJ) Basin - Colorado

The overall rig count remained fairly static in the DJ Basin despite the recent run-up in crude prices. Whiting Petroleum Corporation announced on April 25 that its 100,000 acres of leasehold in the Northeastern part of the play are up for sale as a part of the company’s overall plan to become a purely Bakken-focused producer. Bill Barrett Corp. completed its merger with Fifth Creek Energy Company, LLC in late March and emerged as a DJ Basin-focused producer with the new name of HighPoint Resources Corp. The combination of the two companies creates a new exploration and production firm with a 151,100-net-acre position in the DJ Basin that includes an inventory of 2,865 undeveloped drilling locations.

The Permian Basin will overtake the nation of Iran in overall oil production by the end of 2018, according to the U.S. Energy Information Administration (EIA). The EIA also notes that, if the Permian were a part of OPEC, it would rank as the cartel’s fourth-largest producer. The Permian obviously remains the most active shale region in the world, home to 45% of all the active drilling rigs in the country as of the end of April. But some remain concerned that a looming shortage of pipeline takeaway capacity could serve as a limiter to the region’s growth in the coming months and years. With several new pipeline projects already underway, Phillips 66 Company announced on April 25 that it is joining the effort to alleviate that situation, saying it has received sufficient binding commitments on an initial open season to proceed with construction of the Gray Oak Pipeline system. When completed, Gray Oak will be able to carry as much as 700,000 barrels of Permian oil to market every day.

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Eagle Ford Shale – Texas

With the price of crude oil rising into the high $60s per barrel during April, things are starting to heat up in the Eagle Ford region of South and Central Texas. The Eagle Ford remains the second-most active shale play area, with its rig count approaching 80 at the end of April. The higher crude price will make more Eagle Ford projects economic to drill, so we can expect the region’s rig count to continue its upward trajectory. Pioneer Natural Resources Company announced in February that it was planning to sell all of its non–Permian Basin assets, which included about 70,000 acres of Eagle Ford leasehold. As a part of that plan, Pioneer announced on April 25 the sale of 10,200 acres of Eagle Ford leasehold to Sundance Energy, Inc. for $102 million. The acreage is located in Atascosa, LaSalle, Live Oak and McMullen counties.

MAGICINFOTO/BIGSTOCK.COM

Permian Basin – Texas/New Mexico

Marcellus Shale – Pennsylvania/West Virginia/Ohio

The downtrodden and harassed voters of Mahoning County, Pa. will be faced with a ballot initiative that would ban hydraulic fracturing this November. This sad news comes after the Pennsylvania Supreme Court ruled that the County’s Board of Elections had exceeded its authority in refusing to put the measure on the ballot yet again after the voters had rejected the proposal six times since 2013. The Court’s decision reverses its own decision issued just six months previously. It seems these radical anti-fracking activists — and now the state’s Supreme Court — just will not allow the voters of Mahoning County to give them “no” for an answer.

Haynesville Shale – Louisiana/East Texas

Proximity to Cheniere Energy’s, Inc. Sabine Pass LNG export terminal has helped to boost the recent uptick in activity in the Haynesville region over the past year. Now, a new player in the LNG export business promises to provide another boost. Tellurian, Inc. is seeking investors to help fund its planned $12 billion Louisiana-based export terminal, which, if funded fully, would begin development in 2019. The twist to the Tellurian plan is that it would be a fully integrated development that would include ownership of production assets and pipelines dedicated to supplying the terminal. Tellurian says that its plan would dictate that much of the production ownership would involve wells in the Haynesville region. Stay tuned for further updates on this key project.

SCOOP/STACK Play – Oklahoma

The Oklahoma legislature passed a bill raising the state’s oil and gas production tax rate on all wells, new and existing, to a uniform 5% of gross value. Oklahoma Governor Mary Fallin signed the bill into law at the end of March. This represents a very significant increase in the production tax in the Sooner State, one that will eat into producers’ profit margins and likely dampen interest in the SCOOP/STACK play area going forward. In the weeks following the tax increase, the rig count in the SCOOP/STACK declined slightly, while the overall national count rose significantly. Despite the recent loss of rigs, the region remains the third-most active shale play area in the U.S.

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 david.blackmon@shalemag.com.

MAY/JUNE 2018  SHALE MAGAZINE

 FEATURE

N E M O W P I H S R E D A LE in

SHALE MAGAZINE  MAY/JUNE 2018

I ENCOURAGE WOMEN TO CONSIDER EVALUATING THEIR INTERESTS AND APPLYING THEM TO THIS INDUSTRY.

SHANNA KEAVENY

TELL ME ABOUT YOUR COMPANY. Established in 1982, Texakoma remains a family operated company. For the past 36 years, Texakoma has established and grown its oil and gas exploration, operation and production business, while remaining focused on the greatest asset: our people. Made up of respected, veteran engineers, geologists, landmen, professional staff and an executive management team, many of our people have more than 20 years with Texakoma. Together, we have been able to find, explore and develop numerous oil and gas fields in states such as Texas, Oklahoma, New Mexico and Pennsylvania.

WHAT INTERESTED YOU MOST ABOUT YOUR INDUSTRY? I joined the industry in 2005, although some would say that I’ve been involved with it for almost 40 years. As a third-generation member of the Texakoma family, I grew up learning about the industry — answering phones at the front desk, helping with filing or coloring production maps. As a child, oil and gas was just something my dad did, but as an adult, I see the value provided by the Texakoma business. It’s amazing that dozens of products we interact with throughout the day are made possible by oil and gas discoveries and production led by companies large and small. I find that the more I learn about the industry, the more interested I become in the business.

WHAT DOES YOUR TYPICAL DAY AT THE OFFICE LOOK LIKE? The excitement of the oil and gas exploration and production business and being a mom of four young boys ensures no workday is the same! The one constant in my day is knowing I have a group of top-notch industry experts and fabulous support staff to keep each day running smoothly. The best part of my day is interacting with all departments, which consistently reminds me of the tremendous value and talent of all our people.

WHAT DO YOU LIKE MOST ABOUT YOUR POSITION AND/OR INDUSTRY? Working with amazing people. Texakoma’s employees and our network of partners and vendors are an integral asset to the company. I feel fortunate to learn from these coworkers and partners as we collaborate through daily problem solving and strategic planning for the future.

WHAT ABOUT YOUR CAREER MAKES YOU MOST PROUD? I am most proud of my contribution to a legacy — a legacy built on integrity, and with the right people. Being part of a family business gives me the special ability to merge personal knowledge and company experience from the past and use that to guide the business into the future. I hope that my kids and future generations will have the opportunity to build upon this legacy, too.

COMPANY NAME:

TEXAKOMA OPERATING, L.P. TITLE:

VICE PRESIDENT INDUSTRY:

OIL & GAS E&P

WHAT ADVICE WOULD YOU GIVE TO YOUNG WOMEN INTERESTED IN ENTERING YOUR INDUSTRY? The energy industry holds so much more opportunity than what appears on the surface; interesting roles and projects are developing each day that did not previously exist. If you have a passion and drive for something, regardless if it may seem compatible with oil and gas, there is likely a role for you. I encourage women to consider evaluating their interests and applying them to this industry. My background was in communications, which isn’t an obvious choice for this industry, but the oil and gas industry has given me the tremendous opportunity for professional development and success. MAY/JUNE 2018  SHALE MAGAZINE

BARBARA A. F. GREENE MAKE A JOB — DON’T TAKE A JOB.

TELL ME ABOUT YOUR COMPANY.

Greene and Associates, Inc. is a company I started and which I have built from the ground up thanks to an outstanding group of client organizations. My initial goal was to partner with their leadership to accelerate their success in an ever-changing economy. The mission of my work is to champion organizational review, rebirth and resilience. Simply put, I apply myself by engaging with clients, and challenge their currently held notions while starting conversations about new possibilities moving forward. Greene and Associates, Inc. is a trusted resource that provides human capital services to include: executive coaching and onboarding, leadership development, career management and career transition (offboarding). Our customized approach is a differentiator. My company helps me to realize my life’s passion: to help people and organizations recognize where they are today and, through collaboration, create a literal road map to get them to where they desire to go. I, along with my local and global Career Partners International (CPI) team, have facilitated transformations of leaders from several business and corporate entities, and nonprofit organizations.

WHAT INTERESTED YOU MOST ABOUT YOUR INDUSTRY?

COMPANY NAME:

GREENE AND ASSOCIATES, INC., A CAREER PARTNERS INTERNATIONAL FIRM TITLE:

FOUNDER & CEO INDUSTRY:

HUMAN CAPITAL TRANSFORMATION

I was initially drawn to the human resources consulting industry after realizing early on that the key to a successful business almost always depends on the people who work there. As I explored the client services industry, it became apparent that too many organizational practitioners employed a one-size-fits-all approach to all of their clients. In response to this, I developed and applied a new method — an entrepreneurial-based approach, which encourages our clients to participate as equal partners in the transformation process. To that end, I customize my services to the client’s goals utilizing flexibility to address today’s challenges, while facilitating opportunities at an accelerated pace to improve impacts on the enterprise for the future.

WHAT DOES YOUR TYPICAL DAY AT THE OFFICE LOOK LIKE? Quite frankly, there’s never a “typical” day in my line of business. Every morning brings new challenges and possibilities and requires a nimble, flexible approach. My clients often tell me that they appreciate my accessibility and flexibility. That said, my typical workday includes reviewing and researching materials on new and innovative approaches to organizational transformation. I attend various seminars as a participant or speaker. These opportunities fuel my awareness of the current vital discussions occurring within the various industries. Regular visits with colleagues’ spur vigorous discussion regarding industry trends and patterns, and afford me the opportunity to consider insights that question the “common wisdom.” Whether I am with clients or in-between, I am in learning and listening mode — engaged and willing to place myself in momentary discomfort for the sake of questioning any of my own long-held beliefs. This openness to evolve and engage improves my professional temperament — which, in turn, benefits my clients with whom I work.

WHAT DO YOU LIKE MOST ABOUT YOUR POSITION AND/OR INDUSTRY? Today, more than ever, the business community is coming around to embrace the maxim of the importance of human capital — the people who build products and provide services. As a result, our industry is being called upon to bring our best ideas and practices

SHALE MAGAZINE  MAY/JUNE 2018

into play and engage in extraordinary transformation. For example, in the realm of executive coaching, the practice of developing leaders to their full potential has differentiated themselves from the competition and shown a standard for excellence. Executive onboarding is another approach growing in popularity, mainly because it quickly ramps up an employee’s productivity from the moment that they arrive at work. These approaches represent some of the best that our profession can claim. For me, significant collaborative efforts with my clients are the key to the ultimate success of a transformation. Collaborations support the involvement of the entirety of a client organization and impact it positively — with every employee being tested and challenged, and stretched to their potential. Having a client gift me with the awesome responsibility of leader and organizational transformation is not taken lightly. In fact, it is the most satisfying and gratifying aspect of my work.

WHAT ABOUT YOUR CAREER MAKES YOU MOST PROUD? Integrating the world of business with my family, even when there have been struggles, makes me proud. In addition, the great people that we work with who soar beyond their own perceived possibilities provides me with a tremendous degree of positive energy. I’m fortunate to have been a part of their leadership journey and organizational resilience. Through collaboration and trust, I can help employees understand how their productivity improvements can lead to successes outside of work. As for myself, I leverage and share my success by serving on boards and commissions, bringing my work expertise to take on the problems facing foster youth, for example, or mentoring and guiding young leaders. These activities address my desire to improve my community by bringing my talents and resources to be used where they are most needed. Giving of one’s self can be a most satisfying activity — something that I recommend to everyone.

WHAT ADVICE WOULD YOU GIVE TO YOUNG WOMEN INTERESTED IN ENTERING YOUR INDUSTRY? Generally speaking: Make a job — don’t take a job. Know that you are the CEO of your company, Me, Inc. By owning who you are and what you want to do, you will be a contributor to the world. Remember that you define yourself through your actions and words. Realize there is a reason for every person you encounter, though you might not understand it at the time. Therefore, build relationships genuinely and not only when you need people. Obtain the right education. Undertake studies that provide for qualitative insights into the human condition, but make sure to acquire the quantitative skills to run a business also. Learn to observe and listen well in the situations that are available to you — whether it be in the classroom or the boardroom, conference room, work room, plant floor, work field area — wherever you find yourself. You must always continue to learn, even after acquiring your diploma. Remember to be bold in your choices — fight for what you believe. Finally, volunteer for a variety of civic causes and offer to serve on boards and commissions. Volunteering is another great way to gain insights into organizational behavior. Take on leadership roles and significant projects to gain real-world experience. By leading, you exercise the art of influencing people while gaining their cooperation, trust, respect and support. As an effective leader, you will find yourself “coaching” people to improve their performance. If you enjoy the experience of coaching others, then a career in dynamic organizational and leader transformation could be for you.

connect. share ideas. discuss. SHALE Oil & Gas Business Magazine is an industry publication that showcases the significance of the South Texas petroleum and energy markets. SHALE’s mission is to promote economic growth and business opportunity that connect regional businesses with oil and gas companies. It supports market growth through promoting industry education and policy, and it’s content includes particular insight into the Eagle Ford Shale development and the businesses involved. Shale’s distribution includes industry leaders and businesses, services workers and entrepreneurs.

http://www.linkedin.com/company/ shale-oil-&-gas-business-magazine MAY/JUNE 2018  SHALE MAGAZINE

MELANIE SUKOLICS TELL ME ABOUT YOUR COMPANY.

STAY DETERMINED, STAY FOCUSED AND KEEP YOUR HEAD UP.

Katy Plantations Handcrafted Shutters was established when owners Rick and Melanie Sukolics were on vacation in Burton, Georgia. Rick admired the shutters he saw in the cabin he was staying in but felt he could build a better product. Once home, Rick spent six months creating his first handcrafted panel. The final product was so well-liked, Rick began building the handcrafted shutters out of his garage for family and friends. Over time, the products produced by Katy Plantations gained a reputation for having quality products and excellent customer service. After a period of growth, the operation needed to be moved to a larger space. Melanie spends her time selling the shutters and operating the business. Together, they make a good team. Family-owned and operated, Katy Plantations now produces its products out of a 5,000 square foot warehouse in Katy, Texas, of which 3,000 square feet is dedicated to manufacturing and painting of the handcrafted shutters. All of our shutters are handcrafted on site and built to last for years to come.

WHAT INTERESTED YOU MOST ABOUT YOUR INDUSTRY? The most interesting thing about our industry is the homes you get to see and the people you get to know. I have seen some of the most beautiful interiors of homes and take great joy in helping others beautify their homes even further. Home improvement and interior design have always been a passion for me. Katy Plantations has allowed me to share my passion with the community.

COMPANY NAME:

KATY PLANTATIONS HANDCRAFTED SHUTTERS TITLE:

OWNER INDUSTRY:

MANUFACTURED WINDOW TREATMENTS

WHAT DOES YOUR TYPICAL DAY AT THE OFFICE LOOK LIKE? I have a very busy day normally. I typically arrive at the warehouse early in the morning. After some time there to complete business-related tasks, I leave the warehouse to visit with current and prospective clients to give quotes and take measurements. My day usually ends anywhere from 5 to 7 pm.

WHAT DO YOU LIKE MOST ABOUT YOUR POSITION AND/OR INDUSTRY? I probably like the flexibility the most. Being a business owner allows me to have family time when I need it. Being a successful mother and business owner are my greatest goals, and I love that I have the opportunity to do both.

WHAT ABOUT YOUR CAREER MAKES YOU MOST PROUD? I am most proud when clients get to see the finished product. To see smiles on their faces because of my shutters makes my day. I take great joy in knowing my passion for design and decorating helps other's to enjoy their home to the fullest extent. As a business owner, it's important that your product or service brings joy to others. That's what makes my time and dedication worth it.

WHAT ADVICE WOULD YOU GIVE TO YOUNG WOMEN INTERESTED IN ENTERING YOUR INDUSTRY? Stay determined, stay focused and keep your head up. The manufacturing and home improvement industry are male-dominated industries, and more women are needed in this field to add to the creative talent available.

SHALE MAGAZINE ď &#x201C; MAY/JUNE 2018

MAY/JUNE 2018  SHALE MAGAZINE

SHALE MAGAZINE  MAY/JUNE 2018

MAY/JUNE 2018  SHALE MAGAZINE

PHOTO BY MICHAEL GIORDANO

cover story

KATHY LEHNE AND

SUN COAST RESOURCES A BUSINESS WORLD EXAMPLE OF THE BUTTERFLY EFFECT By: DAVID BLACKMON

MAY/JUNE 2018  SHALE MAGAZINE

W 30

SHALE MAGAZINE  MAY/JUNE 2018

A Company With No Glass Ceiling A lack of female voices running the company is not an issue at Sun Coast Resources, Inc., and never has been, for the simple fact that Kathy Lehne, the company’s CEO, is also the company’s founder. The CEO position at Sun Coast is not a job Lehne was hired into — it’s a job she created, and at a very young age. “When I was a senior in high school, we had a really good office vocation program — we’d go to school for half a day and then work for half a day,” she reflects. “One of my first jobs was for a fuel distribution company. I worked there my senior year and then continued on after high school, and that basically led to my decision to start Sun Coast. I was there about five years — started out answering the phones, doing inventory, issuing invoices — all the office and administrative duties.” After moving to Houston and working in the company’s marketing arm there, Lehn was able to make an arrangement with her employer to go into business for herself. Thus it was then, at the age of 23, Kathy Lehne founded Sun Coast Resources, investing her entire life’s savings of $2,000 in the process. It was

PHOTOS COURTESY OF SUN COAST RESOURCES

Sun Coast, in fact, offers a broad array of services to its customers, making it, “a one-stop energy shop”

hen Sully Sullenberger landed his US Airways Flight 1549 on the surface of the Hudson River on January 15, 2009, saving more than 100 souls in the process, no one in the news media or anywhere else referred to him as a “male pilot.” Instead, he was just called a “pilot,” as he should have been. But in April, when Tammie Jo Schults safely landed her injured Southwest Airlines Flight 1380, also saving more than 100 souls in the process, pretty much every story filed in every media outlet made certain to mention the fact that she was a “female pilot.” Despite the fact that women have been piloting airliners for 45 years now, and becoming more and more numerous in their profession over time, Schults, in the year 2018, was still treated as something of a novelty. Someday, the airline industry will reach the point at which its pilots, male or female, will come to be identified simply by their roles, and not their gender. By the same token, we know that the same will be true for women who happen to be senior executives in the oil and gas industry. Unfortunately, the reality is that this industry lags behind most others in terms of having women in the top executive positions. Whether in the C-suite or the board room, the female voices guiding oil and gas companies remain few and far between.

The CEO position at Sun Coast Resources is not a job Lehne was hired into — it’s a job she created, and at a very young age

a decision made by a woman who readily describes herself as “a risk-taker” — a decision that would, in the intervening 33 years, prove to be extremely beneficial to millions of people. The most obvious beneficiaries of Lehne’s decision to go into business for herself are the company’s employees. Sun Coast has gone from its startup as a single dedicated woman working the phones to a major employer in the nation’s fourth-largest city, now boasting a workforce of more than 1,000 employees. Hundreds of Sun Coast customers have also benefitted from the outstanding service Lehne and her team have provided for more than 33 years now. But those who benefit from Sun Coast’s stellar service and its payroll and benefits package are a drop in the bucket compared to those who

have reaped the rewards from Lehne’s visionary dedication to serving communities that have been impacted by hurricanes and other major natural disasters.

Ready to Respond Immediately When Disaster Strikes During and in the wake of Hurricane Harvey, one of the most devastating storms to ever impact the Texas Gulf Coast, millions of Texans were left without electricity, in some cases for

weeks afterward. In times such as these, individuals and businesses must rely on on-site generators to provide the energy that makes modern life possible, with most of those generators fueled by diesel or gasoline. Sun Coast Resources has established a strong reputation for stepping into the breach during such emergencies, moving its trucks and drivers into all parts of the country in order to meet the needs of a region that has been struck by disaster. Sun Coast’s drivers and trucks were quickly in New Orleans, Mississippi and Alabama in the wake of Hurricane Katrina in 2005; the company was in New York within hours of the passage of Hurricane Sandy in 2012; in 2017, not only did Sun Coast meet the needs of the Texans impacted by Harvey, they also quickly moved its people and equipMAY/JUNE 2018  SHALE MAGAZINE

PHOTO BY MICHAEL GIORDANO

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Sun Coast boasts a fleet of more than 700 fuel, lubricant and crude oil delivery trucks which range in size from 1,000 gallons of capacity to over 8,000 gallons

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from the grid has been interrupted. “Over the decades, Sun Coast has developed extensive capabilities and expertise when dealing with natural disasters. The biggest challenge during any storm events — like Hurricanes Harvey, Irma, and Maria — is access to the impacted areas, which have been cut off because of impassable, flooded roadways. However, we have equipment that can handle high water.” Those challenges were only amplified by the hurdles inherent in responding to the devastation of Puerto Rico, the island U.S. territory in the Caribbean Sea, located more than 1,000 miles southeast of Miami. For starters, the company had to not only obtain the permits necessary to operate within the territory; it had to figure out a way to transport its trucks and other equipment out over open seas for the first time. The answer to that logistical challenge came in the form of the U.S. military.

“With respect to Puerto Rico, we sent our fuel trucks to the island utilizing military transport planes and ships. Sun Coast also has strong alliances with all of the refiners and terminal operators throughout the country, so we can source fuel supply from unaffected areas for resupply to the impact zones.” Sun Coast still has equipment and company personnel in Puerto Rico, committed to fueling hundreds of generators and other equipment until power to the grid is fully restored. Sun Coast has been widely recognized by grateful communities for its myriad emergency response efforts over the years, and it has become a point of great pride within the organization. “We have been doing this for so many years,” Lehne says, “and it’s

PHOTOS COURTESY OF SUN COAST RESOURCES

ment into Florida after Hurricane Irma had knocked out power up and down the length of the peninsula, and the company also rapidly responded to the grave emergency in Puerto Rico after that island had been devastated by hurricanes Irma and, just days later, Hurricane Maria. There have been many others — Houston alone has also suffered major impacts from Hurricanes Rita and Ike in addition to Harvey since 2005 — but 2017 was the busiest and most intense time the company’s emergency response operations had ever experienced. During these crisis events, it is “all hands on deck” time at Sun Coast, and “all hands” include those of the company’s CEO. “It can be a very chaotic situation,” Lehne says. “During the 2017 storm season, I and several others spent 60 straight days at the office — didn’t go home, slept here overnight, working to coordinate our efforts from the storm center.” Indeed, no one should underestimate the challenges present in coordinating a company’s response to crisis events like these. It’s not just a matter of getting your truck tanks filled up with fuel and putting them on the road to the destination in question — the company’s actions must be coordinated with public officials at the local, state and federal levels, all of which play major roles in these major response events. One of the first steps, in fact, is to ensure that the company has the government-issued permits necessary to even operate in the impacted state and local jurisdictions. The response to Hurricane Sandy required the securing of new permits in several states along the Eastern seaboard before Sun Coast could even move its trucks into the region. The effort also requires coordination with and supplying the needs of a vast array of private entities, and to that end, Sun Coast has established an entire team of people to ensure it all gets done right. Lehne describes it this way: “We have developed a team of professionals with vast expertise, bolstered by an unmatched array of emergency response assets, to be able to respond at a moment’s notice to the needs of government agencies, companies of every sort, first responders, rescue and recovery units, police, fire departments, office complexes, frozen food lockers, grocers, hospitals, hotels, big-box retailers, fuel stations, telecommunications operations, personal residences and any other entity when power is interrupted by storms or other natural disasters.” Sun Coast maintains a permanent storm coordination center to help minimize any delays in initiating its response to emergencies. Though dormant during the calm times, the center is maintained in a constantly ready state and can be activated immediately when needed. As previously noted, 2017 was a terrible year for major storms in the U.S. Sun Coast’s home city of Houston was devastated by Harvey, and then, within just a few weeks, major hurricanes struck Florida and Puerto Rico as well. We asked Lehne to tell us about the kinds of logistical challenges responding to such an unprecedented sequence of events presents, even for a company as large and diverse as Sun Coast. “There are logistical challenges with every storm, but we are fully equipped to deal with whatever Mother Nature throws our way during these times,” she says. “There are always unique logistical challenges associated with responding to those whose power

Sun Coast’s drivers and trucks were quickly in New Orleans, Mississippi and Alabama in the wake of Hurricane Katrina in 2005; the company was in New York within hours of the passage of Hurricane Sandy in 2012; in 2017, not only did Sun Coast meet the needs of the Texans impacted by Harvey, they also quickly moved its people and equipment into Florida after Hurricane Irma had knocked out power up and down the length of the peninsula, and the company also rapidly responded to the grave emergency in Puerto Rico after that island had been devastated by Hurricanes Irma and, just days later, Hurricane Maria

something that our employees are very proud of. It gives our drivers a chance to do something outside of the ordinary day-to-day assignments that they wouldn’t get at some other companies. Many of our drivers also tell me what a gratifying experience it is to be able to provide help to some of these devastated areas.” So, hundreds of Sun Coast customers, thousands of Sun Coast employees and millions of residents and business owners in impacted communities have benefitted from Lehne’s entrepreneurial vision over the years. If you’re looking for another class of people who have benefitted, you can start with children.

A Strong Focus on Providing Service to Children When asked to discuss her company’s charitable efforts, Lehne’s voice glows. “Kids are a soft spot for me — they are our future, and anything that we can do to help them helps all of us in the long run.” A perusal of the company’s web page detailing its charitable giving efforts reveals a very

thoughtful and well-rounded program. Sun Coast is active with groups such as the Susan G. Komen Breast Cancer Foundation, The Rose (which provides breast cancer screenings and other services to less-privileged communities) and Texas EquuSearch, a group that returns missing persons to their families, to name a few. But what the page reveals more than anything else is a heavy focus on providing service to children. The company is active with Rodeo Austin, which provides scholarships and other awards to young people. Also listed are the Junior Achievement organization, assisting youth in MAY/JUNE 2018  SHALE MAGAZINE

A One-Stop Energy Shop You’ve seen accounts of many of the many people who have benefitted from the business that began with Kathy Lehne’s $2,000 of life savings — now, let’s explore the business itself. You’ve probably already deduced from what you’ve read thus far that Sun Coast is a transportation company, one that transports petroleum fuels from one place to another. That is all true. Sun Coast is, in fact, one of the most diversified, wholesale petroleum distribution marketers in the nation. The company boasts a fleet of more than 700 fuel, lubricant and crude oil delivery trucks, which range in size from 1,000 gallons of capacity to over 8,000 gallons. Manning those trucks are more than 900 employee hazmat (hazardous materials) certified professional drivers, who operate 24 hours per day, 365 days each year, out of 18 office, warehouse and bulk plant facilities located near key demand centers.

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In addition to its company headquarters in Houston, Sun Coast has 17 offices and bulk plant facilities in Texas, along with facilities in Broussard and Baton Rouge, Louisiana, and in Enid, Oklahoma. The company also recently purchased land to house a new facility just outside of Pecos, Texas, to help Sun Coast service the booming oil fields of the West Texas Permian Basin. But the company’s operations are not limited to the three states in which it has permanent facilities. Due in large part to its emergency response operations, Sun Coast is licensed to operate in 39 states, as well as in Puerto Rico. It is, in other words, a big and growing business, and it is about much more than simply transportation of fuels. Sun Coast offers a broad array of services to its customers, making it “a one-stop energy shop.” Included in these additional services are a robust tank loan program, automated tank monitoring, used oil pickup services, fuel and oil testing, filtration and purification services, a fully automated fuel management system and spill response. Lehne is especially proud of the Sun Coast tank loan program. “It’s the most generous tank loan program in the industry,” she says. “We have around 7,000 of what we call skid tanks — portable tanks that we loan out to customers — and they range from 100 gallons to 20,000 gallons. We have a whole tank department that, when an

PHOTOS COURTESY OF SUN COAST RESOURCES

practical education including work readiness and financial literacy; and the Trinity Oaks organization, which provides all-expense-paid “dream trips” for terminally ill children. Lehne becomes especially enthusiastic when talking about the DePelchin Children’s Center. Based in Houston, but with offices across the state of Texas, DePelchin is an accredited foster care and adoption agency that also provides a wide variety of services and programs for challenged and underprivileged kids, with an overarching goal of breaking the cycles of abuse and neglect. “We have been very active in support of the DePelchin Children’s Center because it is the leading center in Texas for children’s well-being, with a focus on mental health, foster care and adoption services. One thing the DePelchin Center does is to go into schools in less privileged areas and help teach the kids things about entrepreneurship, the basics of business and how things work,” Lehne says, “I have personally taught the classes, and to see the kids eyes light up on something like that is very gratifying.” Sun Coast also strongly supports the March of Dimes, a national charitable organization whose primary focus is preventing birth defects and infant mortality. This group plays a leading role in searching for genetic causes of birth defects, promoting newborn screening, and educating medical professionals and the public about best practices for a healthy pregnancy. The March of Dimes also supports research for surfactant therapy to treat respiratory distress and help initiate the system of regional neonatal intensive care for premature and sick babies. So you can add kids — lots of kids — to the long list of people who have benefitted from Lehne’s decision to go into business for herself.

order comes in, we coordinate the delivery and setting up of the tank for the customer’s use. “Construction sites, rig sites, school districts and other industrial applications use these tanks during normal times. During emergencies, lots of people must have power supplied from portable generators, so they need a tank there to supply the fuel for those.” Add another category to our list of people and businesses who have benefitted from the Kathy Lehne vision.

A Key Partnership is Formed During its first 16 years as a company, Sun Coast had experienced steady growth, and by the end of 2000 had a staff of about 100 employees managing a fleet of around 50 trucks. A major milestone in Sun Coast’s growth path came in 2001 when it became an official distributor for Chevron’s line of lubricants. From that point forward, the company’s growth path rapidly accelerated. By 2003, the company’s revenues, which first reached $300 million in 2001, had topped the $500 million mark. By 2005, Sun Coast’s truck fleet had doubled to more than 100. Revenues topped the $1 billion mark in 2007, MAY/JUNE 2018  SHALE MAGAZINE

A Focus on Oil and Gas Services If you’ve ever witnessed a large-scale hydraulic fracturing job in the oil field, you know that it is a very loud operation and that most of the noise comes from dozens of engines on trucks and pumps that are forcing the frac fluid down the hole under high pressure. In a typical situation, each and every one of those truck and pump engines requires diesel fuel, and lots of it. Providing diesel, gasoline and lubricants to oilfield equipment and installations is a heavy area of focus for Sun Coast, and it is getting busier all the time. This is especially true in Texas, where the rising price for crude oil has created a genuine boom in the Permian Basin of West Texas,

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as well as a growing number of active rigs and frac jobs all over the state. Oklahoma, with the attractive economics in the SCOOP/STACK play, has also seen a rising level of activity over the last year. All of this activity in the oil patch has kept Sun Coast very busy and provided Lehne with an opportunity to further expand her workforce and operations. “We’ve had to hire more employees this year thanks to the growing oil boom,” she says. “We have been hiring drivers very steadily for more than a year now — it’s been especially hectic over the last six months. We’re also in the process of opening our new Pecos facility to serve the growth of the oil field out in West Texas.”

PHOTOS COURTESY OF SUN COAST RESOURCES

and the fleet had grown to more than 500 by the end of 2010. Sun Coast first topped the 1,000-employee level in 2011. “We’ve enjoyed an outstanding business relationship with Chevron’s Lubricant Division,” Lehne says. “Our company has grown year after year with Chevron and is now one of their largest Signature, Elite Class Lubrication Marketers in the nation. Chevron’s commercial line of DELO lubricants is known for their unparalleled high-quality performance under the most severe operating conditions; and when coupled with the service provided by Sun Coast’s on-staff chemical engineers and certified lubricant specialists, customers can expect reliable equipment performance around the clock.”

means adding new facilities, new employees and new services to meet the needs of the company’s expanding customer base.

A Company Known for Treating its People Well Everyone who wants to do business in and with the oil and gas industry ultimately experiences the ups and downs that come with the industry’s boom-and-bust cycles. In the last decade alone, the U.S. industry has experienced a bust in natural gas prices that has lingered for years, a massive boom in oil drilling fed by $100 oil prices, a huge bust in 2014 that saw the price for crude fall to as low as $26 a barrel, and now a new oil boom that has been largely focused in the Permian Basin but is now beginning to spread into other regions of the country. Lehne founded her company in 1985, right in the midst of the terrible bust in oil prices that lasted throughout the rest of that decade. In its

33-year history, the company has persevered and steadily grown through at least five additional busts in either oil or gas prices. It’s enough to make most people’s heads swim. But Lehne seemed unperturbed by it all. “You are correct about the boom and bust cycles we have experienced over the course of the past 33 years since I started Sun Coast,” she says, adding, “Quite simply, we make whatever changes are necessary during each period to best maintain profitable operations, while never compromising on customer service. Right-sizing a business is essential during any business cycle.” For the time being, “right-sizing” Sun Coast

It’s probably not surprising at this point to learn that Sun Coast is known as a first-rate employer. In fact, the company has received so many honors and awards over the years that space limitations would prevent their listing here. In fact, the company and Lehne as an individual have received 13 such awards during 2017 alone. In addition to awards recognizing Sun Coast’s charitable giving programs and its emergency response contributions, Lehne is especially proud of having been named one of the Best and Brightest Companies to Work For in Houston multiple times, which she says “is a very significant thing.” When we asked her to give us her thoughts MAY/JUNE 2018  SHALE MAGAZINE

on some of the reasons why Sun Coast continues to win that honor year after year, she did not hesitate: “We offer great benefits, flexible working hours, a variety of different positions within the company. We do a lot of promoting from within, and also a lot of cross-training. We have employees who started here as secretaries who are now in executive positions. That’s something we really focus on. I think our overall offering is very inviting to a lot of prospective employees. “We have a heavy focus on service. We sell a commodity, and a lot of people can sell gasoline, diesel and lubricants, but it’s how you service your customers that makes the difference. “It starts with our employees. We train our employees that the number one thing that we offer is customer service. This is a very competitive industry. So, we do whatever we can to ensure that the customer’s experience with Sun Coast is a great one. “We’re a 24/7 company. We have drivers and dispatchers running around the clock. We cover a wide service area, and are licensed to do business in many states, so if a customer is buying from us here in Houston and says, �Hey, we’re going to Arkansas tomorrow�, we can go with them.”

“What doesn’t kill you makes you stronger.” One might think that a young woman risking her whole life's savings to start up her own business in the male-dominated world of oil and gas would have all sorts of stories to tell about intimidation, discrimination and a unique set of challenges that her male counterparts in the industry

weren’t forced to overcome. But Lehne doesn’t remember things that way. Oh, there were challenges, all right ― but she remembers facing mainly the kinds of tests faced by anyone engaged in a new business startup in a highly competitive industry. “Where should I start? I faced countless challenges starting Sun Coast back in 1985 at the age of 23,” she begins. “I had so much to learn about every phase of jumping into the very competitive and shark-infested waters of wholesale fuel marketing and transportation. The old adage: ‘What doesn’t kill you, makes you stronger really is true. “Some of the challenges I faced included securing adequate working capital financing, developing vendor relationships, hiring the right people for the right positions, working around the clock, obtaining enough credit from fuel suppliers for purchases, prospecting for new business, developing a marketing plan and setting sales goals, obtaining proper insurance coverage, leasing office space, setting up controls and back-office accounting systems, making sure Sun Coast was legally compliant with all Department of Transportation regulations and safety standards and making weekly payroll; the list goes on and on. “Well, the experience did not kill me. It did, though, make me much stronger and better prepared for whatever came along, and provided me with the experience and tenacity I needed to be successful.” Along the same lines, as Lehne has grown Sun Coast into one of the largest woman-owned businesses in Texas over the last 33 years, we wondered about the flip side of that coin — has she had any experiences in which being a woman in this industry has been an advantage to her? Again, the answer to the question is, for the most part, “not really”. “Being a woman-owned business occasionally has had its advantages; however, for the most part, over 95 percent of our customer base deals with Sun Coast simply because we are a reputable marketer of high-quality petroleum products and services, and a supplier they can

DON’T EV ER WASTE A CHAN CE TO

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rely on, no matter what. I would say that there are a few organizations outside the petroleum distribution business who are curious about our success, and marvel about the amazing company Sun Coast has become with our vast asset base and diversified offering of products, programs and services.” In other words, Lehne’s experience in the male-dominated world of oil and gas has been that she and her company have been judged, hired and competed with mainly on the basis of the quality of the products and services she has provided. Interestingly, when we asked Lehne if she had any mentors who helped to guide her early on in her career, she credited a man she had worked with shortly after graduating from high school. “Yes, early on I had a mentor who I had formerly worked for who was a great teacher and gave me a lot of confidence to be able to do the things we’re doing today,” she says. “My mentor inside the company was doing marketing at the time over in Houston, and I moved there to work with him. That was where I got into the telemarketing side of things and began to build up relationships and a customer base.” It was that experience that led her to venture into business for herself. Having had a mentor of her own, we asked Lehne to tell us about the kinds of things she’s

done to encourage opportunities for the next generation of young women to create their own careers in this challenging business. Not surprisingly, she’s had a wealth of such experience to share. “I have always encouraged women to pursue their dreams. I’ve had the opportunity to meet with many of them who have asked for advice. Anyone who has the entrepreneurial urge to be their own boss, above and beyond anything else, should pursue their dreams. I advise them that they will have to work harder and longer than they think is humanly possible if they choose to start their own business or try to move up the corporate ladder; but with ironclad determination and passion, success can be realized. “One thing I caution them about is not to listen to naysayers or negative thinkers. If those around us who have become successful had listened to them, we would not have the inventions we rely on today for our better way of life. The greater the reward, the greater the risk. That is what makes the free enterprise system work so well.” Bottom line, Kathy Lehne is not a “female CEO.” She’s a CEO, a boss, a leader who deserves to be judged based on the things she’s accomplished, the business she’s built and the services she has provided to so many others. In the final analysis, Kathy Lehne’s career might best be described as a business-world

example of what is known as the “Butterfly Effect.” The Butterfly Effect is a chaos theory– related phenomenon in which a minute localized change in a complex system — such as the flapping of a butterfly’s wings — can have vast effects elsewhere. In Lehne’s case, the “minute change” was her decision to use her life’s savings of $2,000 and take the risk of starting her own business in the “complex system” of the oil and gas industry. Over the last 33 years, the large effects are exemplified by the millions of lives that have been positively impacted thanks to that flapping of the butterfly’s wings.

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INDUSTRY

STEER Members Help Keep South Texas Roads Clean By: Omar Garcia

MEMBERS OF THE SOUTH TEXAS ENERGY AND ECONOMIC ROUNDTABLE (STEER) ARE WORKING TO HELP KEEP THE ROADS OF KARNES AND DEWITT COUNTIES CLEAN.

TOTAL TRASH COLLECTED IN POUNDS PER YEAR Year

Total Pounds

2017

80,165.37

2016

69,014.00

2015

72,641.00

2014

69,061.00

2013

(includes 4 months only)

20,871.00

ABOUT STEER The South Texas Energy and Economic Roundtable (STEER) is the leading Eagle Ford Shale resource in the region, and is the primary coordinator for communication and public advocacy surrounding the oil and natural gas industry in South Texas. STEER serves as the bridge connecting the industry with legislature, educational institutions and the communities throughout South Texas to ensure positive collaboration and communication surrounding the activities associated with the Eagle Ford Shale.

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For more information about STEER, visit STEER.com.

PHOTO COURTESY OF STEER, ELNUR/BIGSTOCK.COM

STEER members ConocoPhillips, EOG Resources, Marathon Oil and Pioneer Natural Resources have partnered on an initiative to remove trash from state highways and county roads throughout Karnes and DeWitt counties. STEER is committed to keeping South Texas clean, and I commend our members that have stepped up to pick up litter on our state highways and county roads. While I am proud of the effort that we have made, it’s vital for all South Texans to refrain from placing garbage in the bed of our trucks and throwing thrash out of car windows. Much of the garbage collected by the crew includes tires, fast-food bags, and cups, drink cans and bottles. To date, the trash collection program has collected more than 310,000 pounds of garbage since its inception in 2013. Sadly, the total trash collected in 2017 includes the busiest month since the program’s inception. In September 2017, the crew gathered more than 20,000 pounds due to debris left behind as a result of Hurricane Harvey.

MAY/JUNE 2018  SHALE MAGAZINE

INDUSTRY

PESA Diversity Study Identifies Activities Needed to Advance Women in the Workplace By: Leslie Beyer, President, PESA

he Petroleum Equipment & Services Association (PESA) has performed a gender diversity study across the oil and gas industry’s service and equipment sector to analyze the current state of inflow and outflow of female talent, and has identified actions organizations can take to advance women into greater leadership positions within the sector. Why should PESA and its member companies care about diversity? Inclusion and diversity is not only a good business practice, but it brings results. Numerous studies show companies that promote diversity perform better than their industry peers — select examples: 1. Margin: Companies with at least 30 percent female leaders end up raking in six percent higher net margins. ―Peterson Institute for International Economics 2. Market Share: Forty-eight percent of companies in the U.S. with more diversity at senior management level improved their market share the previous year, while only 33 percent of companies with less diverse management reported similar growth. ―Center for Talent Innovation 3. Decision Making: Six hundred business decisions made by 200 different teams over a two-year span found that more gender-diverse teams made better decisions up to 73 percent of the time. ―Forbes The oil and gas industry has historically struggled with attraction and retention of female talent. In the U.S., women comprise 47 percent of the workforce (14.5 percent within the energy sector overall). PESA has discovered that women comprise 16 percent of the services and equipment sector of the energy industry workforce. Currently, only 38 percent of U.S.-based technical operational roles within the sector are filled by women, and only eight percent of top leaders in technical operational roles are women. Alternatively, the percentage of women in U.S.-based top leadership positions in support function roles is significantly higher at 27 percent. When looking at 2017 inflow of female talent into the sector, of the total 2017 U.S. entry-level sector hires, 16 percent are women as compared to 18 percent of experienced female hires. Increases in inflow are an important step toward companies achieving equality; however, there has historically been a discrepancy between the number of women entering the sector industry versus their overall percentage in the workforce over time. A lack of flexible work programs is the most cited reason for why women exit the sector workforce, seconded by better career prospects. Unfortunately, 50 percent of companies do not currently track why women are exiting.

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Through our research with Accenture, we have outlined three steps the sector can take toward creating a diverse workforce, while creating an environment where women are significantly more likely to excel and advance: • Bold Leadership: Be open about your targets and plans to make diversity a way of operating. • Comprehensive Action: Supporting everyone ―not only women ― is the best way to create an inclusive environment where everyone can succeed. • Empowering Environment: A place where people can feel free to be their authentic selves and inspired to do their best work. Retention and advancement programming with C-suite endorsement and visibility can make substantial impacts to individual women’s experiences as well as on overall gender diversity in the industry. By working to understand unmanaged attrition and implementing solutions in response, the service and equipment sector of the energy industry can reduce the outflow of women and become an increasingly diverse place to work.

METHODOLOGY

PESA surveyed more than 35 companies, covering over 250,000 working men and women, to understand what it will take to create a workplace in which women and men have equal opportunities for advancement. PESA also analyzed published data related to a range of workforce issues, including labor force, progression, talent gaps, company culture, sexual harassment, company gender by level and company best practices.

For more information regarding the PESA Diversity Benchmarking Study, please visit pesa.org.

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INDUSTRY

Women and Energy – A Natural Fit By: Bill Keffer

SHALE MAGAZINE  MAY/JUNE 2018

bers. Their current president, Kara Byrne, is with Baker Hughes; and SHALE Magazine’s Publisher and CEO, Kym Bolado, is on their board of directors. The North Texas chapter (Dallas) was the first chapter formed outside of Houston in 2009 and has over 275 members. Their current president, Carly Hewett, is an attorney with the Dallas law firm of Freeman, Mills. The South Texas chapter (San Antonio) was formed in 2013 and has over 200 members. Their current president, Alex Moczygemba, is with Valero; and SHALE Magazine’s Chief Operating Officer, Lauren Guerra, is on their board of directors. The Permian Basin chapter (Midland) was formed in 2015 and has over 250 members. Their current president, Brook Riley, is with Concho Resources. Other regional chapters include the Colorado chapter (Denver), established in 2016, with almost 500 members, led by their current

Women now are well represented in every segment of the industry, and their presence and influence continue to spread

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he focus of this issue is on women in the energy industry, so I thought I would do my part in this column. In one sense, it is natural, if not automatic, to associate women with the common definition of “energy.” We all have stories we can tell about our mothers, grandmothers, wives, aunts, sisters, teachers and friends who demonstrated seemingly inexplicable, boundless energy — most of the time because that’s what they needed to do to get the job done. These women are inspirational and are usually the reason that men achieve any success in life. So, it is only logical that women would be, and increasingly are, succeeding in the energy industry today. It is the case, of course, that the oil and gas industry, historically, has been dominated by men, since Colonel Drake officially kicked it off near Titusville, Pennsylvania, in 1859. Unsurprisingly, especially because the business revolves around intensive manual labor and harsh conditions, the industry has remained maledominated for longer than other industries and professions, as more women have entered the workforce over the past several decades. During my career, I have been privy to more than a few conversations in which old, crusty field foremen, pumpers — and even executives in the office — resisted the idea of women being able to play a meaningful role in this business. As is usually the case, the cause of this resistance was an unwillingness to contemplate change as a possibility. In other words, it’s not that women were incapable of playing meaningful roles in the oil and gas business; it’s just that they never had. Change eventually dips its toe in the water and then spreads like the ripples it produces. Women now are well represented in every segment of the industry, and their presence and influence continue to spread. One organization, in particular, is a noticeable contributor to helping women succeed in their effort to excel in the energy industry — the Women’s Energy Network (WEN). Founded in Houston in 1994 by Karyl McCurdy Lawson, WEN is an organization whose mission is to foster the development and advancement of their members’ careers in energy by developing a strong network and enhancing their leadership skills. White, at the time, was Assistant General Counsel at MidCon (the predecessor to Kinder Morgan) and noticed that she was typically the only woman involved in energy transactions for the company. She believed other women were in similar positions in other companies, so she decided to start an organization that would create the opportunity for similarly situated women to connect and further develop their careers. White went on to be General Counsel at Freeport LNG, followed by time in private practice before retiring. Little did she know that her idea to start a networking organization for female professionals in the energy industry would grow to what it is today. WEN currently has 16 chapters with over 4,000 members. Those chapters are in Colorado, Oklahoma, Louisiana, Washington, D.C., Georgia, Massachusetts, Illinois, West Virginia, New York, two in Pennsylvania and four in Texas — as well as in Mexico. The founding chapter in Houston proudly boasts over 2,200 mem-

president, Chantell Taylor, who is with Anadarko. The Greater Oklahoma chapter (Oklahoma City) was formed in 2015, has over 900 members and is led by their current president, Cathy Lebsack, who is with Devon. The South Louisiana chapter (New Orleans) was founded in 2009, has over 100 members, and is led by their current president, Michele DeShazo, who is an attorney with the Kuchler, Polk law firm. The officers and members of the respective boards of directors for these chapters are with prominent oil and gas companies, law firms, engineering firms, accounting firms and banks. These women are accomplished lawyers, accountants, engineers, landmen and bankers. As you can tell, the Houston chapter and the more recently formed chapters outside Houston have impressive membership numbers, bringing together female professionals from all across the energy industry. In fact, over 76 companies and firms in the energy industry are represented by WEN members. WEN seeks to attract more women into the energy industry through outreach programs; retain and develop women in the energy industry by fostering relationships; and develop leadership competencies and industry insights through strategic partnerships. Individual chapters pursue these objectives through happy hours, lunch programs, leadership seminars, webinars and mentoring groups. The Greater Oklahoma chapter alone has over 200 participants in their mentoring program. WEN chapters also form partnerships with other organizations, such as the Girl Scouts, YWCA and area STEM programs, to encourage young girls to seek careers in the energy industry. In a nutshell, WEN focuses on networking, education and community. I have had the privilege of speaking to the Permian Basin chapter at a past lunch meeting and can personally attest to how impressive the chapter and its members are. The chapter’s current president, Brook Riley, is a Geoscience Technology Supervisor with Concho Resources and has been a developmental geologist for Exxon and other companies, working in the Middle East, West Africa and the Gulf of Mexico. The next chapter president will be Laci Stretcher, who is a proud Texas Tech School of Law alumna and currently handles land operations in New Mexico for Apache. WEN is just one of the impressive and dynamic examples of how women are increasing their presence in the energy industry in a meaningful way. Resistance to change relies heavily on unfamiliarity and a small-minded view that tradition is preferable for its own sake, and not because it actually produces a better result. When it gets right down to it, oil and gas people are very practical and bottom-line oriented. As more and more women demonstrate their ability to deliver superior results, past resistance to change will give way to a common pursuit of excellence and ultimate success.

About the author: Bill Keffer is a contributing columnist to SHALE Oil & 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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INDUSTRY

Attracting More Women As the Industry Powers Past Impossible

opefully, by now you have seen the American Petroleum Institute’s (API�s) Power Past Impossible commercials that have been running for just over a year. Why Power Past Impossible? Because for the natural gas, oil and refining industry where some see impossible as a barrier, we see it as an opportunity to achieve. For example, a decade ago the idea of America as a global energy leader was thought impossible. It is a reality today. America’s rise to global energy leadership continues to create economic opportunities and well-paying jobs across the country. Employment in our industry has increased by 500,000 in the last few years to a total of 10.3 million. And the industry’s total impact on gross domestic product (GDP) was $1.3 trillion in 2015, which is larger than the GDP of Spain. According to an IHS Markit study, through 2035 nearly 1.9 million direct job opportunities will be available in the oil and natural gas and petrochemical industries; close to 707,000 of those job opportunities are projected to be filled by blacks and Hispanics, and more than 290,000 by women. These numbers are conservative, based on current participation. However, we expect them to grow more significantly through outreach and education. Part of our challenge is a lack of awareness among women about the opportunities and making sure that women know that today’s natural gas and oil industry is technologically advanced and forward-looking. As an industry, we are applying artificial intelligence (AI) and robotics throughout the energy value chain for hydrocarbon exploration and production, to improve productivity and cost-effectiveness

while reducing worker risk. Digitization and robotics technologies are expected to strengthen monitoring and safety throughout our operations. A few months ago, two API member companies launched the world’s first digital drilling vessel, targeted to achieve 20 percent operational expenditure reduction across the targeted equipment and improve drilling efficiency. These steps toward unlocking the immense potential of digital solutions throughout the industry are just a few examples of what we all know to be true ― the fourth industrial revolution will be transformative. This technological revolution that has already begun will alter the way we live and work. It will also provide immense opportunities to attract a much more diverse workforce and welcome even more women. Another significant attraction is that women are continuing to advance in our industry. Recently, Royal Dutch Shell announced that Gretchen Watkins will become President of its North American operations, and BP America named Susan Dio as Chairwoman and President. They join Julie

Robertson, President and CEO of Noble Corporation, and Vicki Hollub, President and CEO of Occidental Petroleum. Women such as Melody Meyer, a retired Chevron executive, who now sits on the boards of BP and National Oilwell Varco, are paving the way for even more women to not just join the ranks but see clear pathways to the upper echelons of leadership in our industry. While we know there is much more work to do, we are proud of these glass-shattering examples and believe that having larger numbers of women serving as presidents and vice presidents in critical operations and business units demonstrates that we are moving in the right direction. Today, nearly half of all women employed in the industry work in management and professional jobs. As our commercials proclaim, “This isn’t your daddy’s oil.” Yes, there’s more progress to be made ― and it will be made ― yet, it’s clear that at all levels, we are moving in the right direction. In the years ahead, API will continue to use our Power Past Impossible advocacy campaign to spark the imagination and the interest of the next generation of workers in the oil, natural gas and refining industry; because if our country is to remain a world energy leader, we will require the tremendous ingenuity, creativity and entrepreneurial spirit of the entire workforce. It may be the challenge of our lives to attract and retain the talent, especially the women, who will make us second-to-none in energy production, security, economic prosperity and environmental protection so that we can power past what we consider impossible today.

About the Author: Tyra Metoyer, Manager of External Mobilization for the American Petroleum Institute, serves as the national lead for workforce of the future, STEM and education initiatives, outreach to nontraditional allies, and the Energy Nation program, which is an education and mobilization program for employees of the natural gas and oil industry. Her workforce of the future, STEM and education initiatives are focused internally on helping the industry develop tools and outreach programs to attract and retain a more diverse workforce; and externally, on helping a broad base of nontraditional allies and strategic partners (such as African Americans, Latinos, women, veterans, Native Americans, Millennials, etc.) understand and prepare to take advantage of the range of career opportunities in the oil and natural gas and petrochemical industries.

SHALE MAGAZINE  MAY/JUNE 2018

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By: Tyra Metoyer

MAY/JUNE 2018  SHALE MAGAZINE

INDUSTRY

Record Natural Gas Production: The Good News and the Bad News By: David Blackmon

n its Short-Term Energy Outlook for March, The U.S. Energy Information Administration (EIA) announced that the domestic oil and gas industry in the United States had set a new record for overall natural gas production during 2017, and would set another new record in the same category this year. This bit of information presents stakeholders in U.S. natural gas — which includes pretty much all of us who live in America, as well as hundreds of millions of people in other countries who now benefit from imports of U.S. liquefied natural gas (LNG) — with both good news and bad news. The good news is that the oil and gas industry will set a new record for natural gas production in 2018. The bad news is that the oil and gas industry will set a new record for natural gas production in 2018. Wait, what? Yes, really. First, the good news: • The fact that domestic natural gas supplies remain abundant and cheap is terrific news for consumers because it is the main fuel used for home heating across the country, and also provides a very large and growing share of electric power generation. • When natural gas is abundant and cheap, utility bills are lower in most areas. The most notable exception is the New England area, where politically motivated pipeline constraints have led the absurd outcome of residents of the states north of New York paying much higher prices than the rest of the country, and having to actually import LNG from Russia in order to meet the region’s natural gas demand. Yes, really — that is not a typo. Tankers filled with Russia-produced LNG landed in Boston Harbor over the winter thanks to the acts of politicians who deny their citizens access to natural gas produced just a hundred miles away. Dogs and cats living together, mass hysteria. • But back to the good news. The EIA report is also good news for the state of Texas, where

SHALE MAGAZINE  MAY/JUNE 2018

Saudi Aramco announced in early April its plans to invest as much as $10 billion in new capital in its Beaumont-based Motiva refining and petrochemical operations to take advantage of low U.S. natural gas prices.

Shale remains a shadow of its former self despite a recent uptick in the area’s rig count. The loss of revenues from the oil and gas industry has played a large part in creating a chronic budget shortfall situation for the state government there.

• Obviously, the report is great news for the petrochemical industry as a whole, and for the myriad other industries that use natural gas as a feedstock. The low natural gas prices have already resulted in a massive manufacturing boom in the U.S. over the last half-decade, and the prospect of ongoing record production levels promises to keep that boom going.

• The same holds true in Oklahoma, where lower revenues from the industry helped to create a similar intractable budget shortfall over the past few years.

The good news is that the oil and gas industry will set a new record for natural gas production in 2018. The bad news is that the oil and gas industry will set a new record for natural gas production in 2018 So, what’s the bad news, you ask? Here you go: • The ongoing low natural gas prices as a result of record production levels in recent years is bad news for the State of Louisiana, where the once-bustling state tax cash cow Haynesville

• It’s bad news for the Oklahoma oil and gas industry in general, because the Oklahoma state government just enacted a major increase in the state’s oil and gas production tax rate as part of an effort to try to close that budget gap. • It’s bad for mineral owners in the dry gas third of the Eagle Ford Shale region, who have been hoping for stronger natural gas prices so that they might be able to have their minerals leased and produced. For those folks (I’m one of them), the prospect of monetizing their mineral interests anytime in the near future remains a distant, seemingly unattainable dream. • And, of course, the EIA report represents bad news for upstream companies whose asset bases are heavily weighted toward natural gas. In the same report, the EIA also projected a very significant increase in natural gas exports and domestic consumption for 2018 and 2019. The problem is that the projected increases in the commodity’s production are larger than both demand generators combined in 2018, and almost as large in 2019. This favorable supply/demand equation for natural gas has been made possible only thanks to the development of the much-demonized hydraulic fracturing — “Fracing” — and horizontal drilling technologies that make it possible to extract the gas from shale formations. Without the marrying together of those technologies to produce natural gas from shale, the U.S. would be in a dramatically different situation. We’d be living in a world with very high natural gas prices — with no truly scalable, cleaner al-

ternative to coal-fired power generation and the need to rely on massive imports of LNG from places such as Russia and Qatar. Also, there would have been no recent boom in manufacturing or any of the thousands of high-paying jobs the boom has produced. As a matter of fact, those were pretty much the projections contained in an official study conducted by the National Petroleum Council (NPC) on the potential for U.S. natural gas in 2003. The NPC is a federal advisory council that produces studies such as this at the request of the Secretary of Energy. To conduct such studies, the NPC brings together the best and brightest from industry, government and other stakeholder groups. The 2003 natural gas study was led by ExxonMobil, but many other companies in the related industries assigned subject matter experts to work on it. I personally chaired one of the subcommittees on behalf of my employer at the time, Burlington Resources. You have to remember that in 2003, the industry was still in the early stages of developing the first big shale play, the Barnett Shale in North Texas. Other massive natural gas resource plays, such as the Haynesville Shale in Louisiana and the Marcellus in Pennsylvania, had yet to be discovered. During 2002, when the bulk of the study was conducted, the best minds in the U.S., oil and gas industry really had little idea of the massive, almost inexhaustible volumes of natural gas locked in shale formations across the country. Now, 15 years later, we do. Whereas the 2003 outlook for natural gas in the U.S was one of limited supply and high prices as far as our imaginations could take us, the outlook in 2018 is for massive abundance and comparatively low prices as far as the eye can see. So, bottom line, while the EIA report represents some bad news in isolated situations, the alternative would be far worse news for everybody. On balance, record domestic natural gas production is a very good thing indeed.

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INDUSTRY

WEN Opens Membership to Men

WITH THE WELCOME ADDITION OF MALE MEMBERS, WEN HOPES TO INCREASE AWARENESS OF THE ORGANIZATION IN THE WOMEN’S ENERGY COMMUNITY AND ENCOURAGE DIALOGUE TO END GENDER BIAS

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SHALE MAGAZINE  MAY/JUNE 2018

n November 2017, the Women’s Energy Network (WEN) opened its membership to men. WEN determined that allowing men to join the organization would not conflict with its mission of promoting, supporting and advocating for women in the energy industry. In fact, WEN hopes to encourage men who believe in its mission to feel comfortable participating in and contributing to the organization. Men should be part of the conversation to gain a greater understanding of the issues that women can face in the workplace, so they will be comfortable advocating, mentoring and developing women. The business case is clear, and the statistics have been shared many times. The Peterson Institute for International Economics released a study in 2016 which posited that diversity, in general, leads to higher company performance. The study found that a single female CEO doesn’t necessarily equate to increased company performance, but a higher rate of diversity throughout the organization has a positive impact. Women are painfully aware of the gender gap in leadership roles and differences in compensation that continue to exist. You may wonder, “What’s the point of discussing these points solely with other female colleagues?” We agree! Men need to be part

For more information about WEN, visit www.womensenergynetwork.org.

of the conversation as well. Some studies have attributed the gender pay gap to traditions and stereotypes, a balance of work-life responsibilities, and the value of women’s work is less than men’s. Education and awareness will help break down these unconscious biases and stereotypes that still exist. By working with men to increase a collective understanding, men and women can work together to close the gap. Starting early to break barriers, providing more opportunities for boys and girls to work together in STEM-related activities can alleviate some of these biases. WEN encourages co-ed STEM events, recognizing the importance of boys and girls integrating early, so it is more natural when they enter higher/technical education and then the workforce. Let’s minimize, or better yet, eliminate, the bias before it starts! Allowing men to join WEN has sparked conversation throughout the organization. With the welcome addition of male members, WEN hopes to increase awareness of the organization in the women’s energy community and encourage dialogue to end gender bias. WEN hopes having men openly participate in the organization will not only educate them on issues of women in energy but it will also expose them to a vibrant, talented community of female leaders across the value chain.

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POLICY

Louisiana Oil and Natural Gas: Built Our State; Powering Our Nation

nyone who lives and works in Louisiana is in Louisiana oil and natural gas. Someone close by, a relative or friend in any of the 64 parishes in the state, earns a living or enjoys retirement because of the opportunities offered by the industry. Decade after decade, billions in earnings for workers and taxes are produced by upstream and downstream production. Between 2006 and 2016, Louisiana’s oil and natural gas industry paid approximately $14 billion for the opportunity to do business in the state, according to the Louisiana Department of Natural Resources. These are monies above what regular businesses in the state pay. All the while, too, tens of thousands of Louisiana businesses in oil and natural gas and hundreds of thousands of Louisianians each year pay sales, corporate franchise and income taxes.

SHALE MAGAZINE  MAY/JUNE 2018

Each year, the Louisiana oil and natural gas industry pays $2 billion in taxes and fees to the state. Each day, the oil and natural gas industry pays $3.3 million to parishes and cities in Louisiana, totaling more than $1.2 billion annually. To some, this massive investment made by the industry in Louisiana is not enough. Beginning in 2013, outside influences — specifically trial lawyers for hire and environmental activists — have led efforts to disparage the oil and natural gas industry. They say Louisiana does not need energy exploration, the jobs it creates and the taxes it pays anymore. These interests have convinced six south Louisiana parishes to run to a courtroom to single out energy exploration for fault, following decades of state-permitted exploration and production activity. In 2016, Louisiana Governor John Bel

Edwards even sent letters to parishes, informing them that if they did not file lawsuits against Louisiana’s oil and natural gas industry, then he would direct the Louisiana Department of Natural Resources to file them on the parish’s behalf — whether that parish wanted to sue the largest investor and employer in their parish or not. This has not come to pass … yet. Today, the lawsuits filed in the six parishes are mired in various procedural steps in the courtroom. The first trial is expected to begin in March 2019 in Plaquemines Parish. Arguably the most significant victory in this lawsuit saga, the U.S. Supreme Court finally defeated a lawsuit by a regional flood authority against 97 oil and natural gas companies. Filed in 2013, these lawsuits attempted to blame these companies for coastal issues centuries in the making. Achieving that victory meant seeing these contingency fee-based trial lawyers try to move through various courts and being defeated four times over four years. It is becoming clearer, however, that lawsuits negatively affect Louisiana’s competitive position, especially for new projects. As the overall marketplace grows today, applications for coastal use permits by businesses looking to invest in Louisiana dropped by a third since 2013, the year of the first lawsuit filed against the industry. Interests moving against the industry in Louisiana want the public to ignore the industry’s more than 100-year partnership with the communities of the state. They ignore decisions made by the country, states and parishes to meet the nation’s demand for energy, to encourage the growth of communities and to prioritize the use of billions and billions of tax dollars to build roads, bridges, schools and hospitals, along with more recent projects to protect our coast. Louisiana literally powers a nation that is truly independent when you examine the exploration and production that occurs in the state and off its shores. Throughout history, leaders in their home parishes, in Baton Rouge and in Congress made the decision to explore for energy to meet the priorities of the time — whether it was to win World War II, fulfill the energy needs of a post-war baby boom or fuel the creation of groundbreaking products and medicines in recent decades. The oil and natural gas industry — along with the maritime, shipbuilding, lumber and commercial fishing industries, among others — grew in Louisiana because of her vast resources, rivers and ports, and unique people. As the industry was embraced and grew, new businesses were created and more families moved to south Louisiana. Communities expanded in New Orleans, Houma, Lafayette and Terrebonne. The state and parishes used revenues generated by energy exploration to construct new roads, schools, hospitals and neighborhoods on once vacant land.

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By: Marc Erhardt

In southwest Louisiana, Calcasieu Parish’s population alone increased five times between 1920 and 2015. Iberia, Lafourche and Vermilion parishes tripled in size, and Plaquemines and St. Mary parishes doubled during this time. Louisiana accomplished these things with the encouragement of its leaders, and as a result of the decisions everyone made as a country, state and parish. What’s most important is that all of these efforts to safely explore for resources occurred in a permitted environment. In 2014, the Executive Counsel of the Louisiana Department of Natural Resources told the Louisiana Legislature, “We do not have any evidence of coastal permits being violated.” There are dozens of factors that contribute to the state of Louisiana’s coastline. Most experts agree that the Army Corps of Engineers’ leveeing of the Mississippi and other major rivers far exceeds any other reason. Throughout the years, parish governments made hundreds of decisions that had both positive and negative effects on the coast. Misguided efforts have targeted the energy industry with lawsuits — arbitrarily declaring that oil and natural gas needs to do more and singling the industry out to pay for the coast. These declarations by special legal and environmental interests fail to recognize that the people and businesses of Louisiana’s oil and

natural gas industry bear the enormous responsibility of paying taxes as good corporate citizens and for making contributions to the coast. Louisiana’s oil and natural gas industry is the only entity — beyond the federal government — contributing anything toward the coast of Louisiana. Currently, revenues generated by Louisiana’s oil and natural gas industry account for 58 percent of the monies earmarked for Louisiana’s Coastal Master Plan projects. As it stands now, the percentage of funds generated by the industry for the state’s Coastal Master Plan rises to above 70 percent in the coming years. Louisiana’s oil and natural gas industry is addressing coastal issues now. ConocoPhillips is piloting a program to seed mangroves along coastal Louisiana. Apache Corporation received Louisiana’s top conservation award for donating four million trees since 2005. A partnership among the New Orleans Geological Society and three Louisiana universities is using $200 million in industry data to conduct research of seismic faults along the Louisiana coast. Other companies are partnering to create miles of oyster reefs along southeast Louisiana. This situation questions whether the challenges of the coast are rooted in finding more funds in any way possible or whether Louisiana is prioritizing the issues of its coast appropriately as a state. The solution to Louisiana’s coastal issues

is to use the best science available, which the industry has, and invest financial resources, which the industry has contributed for decades, into projects that can ensure both a protected coast and a working coast. The best way to preserve Louisiana’s economic and coastal future is working with the oil and natural gas industry, not against it. When you grow Louisiana’s oil and natural gas industry, you grow Louisiana.

About the author: Marc Ehrhardt has served as Executive Director since the Grow Louisiana Coalition’s inception in January 2014. He represents the Coalition in developing and executing a plan to enhance the value of Louisiana’s oil and gas industry and affiliated industries. As a public relations professional, he manages public affairs, corporate image, national media relations, issues management and crisis management programs in the economic development, financial and manufacturing industries.

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POLICY

The North American Free Trade Agreement – Good for American Energy By: Karr Ingham

SHALE MAGAZINE  MAY/JUNE 2018

ever, simply consider the size of the Canadian economy relative to the U.S. economy — more crude oil is produced in Canada than can be consumed domestically, and the surplus is going to go somewhere. Canada is the largest single-country source of crude oil imports into the U.S., and the net negative trade balance in crude oil has widened in recent years.

However, higher import volumes from Canada, along with rising U.S. production, have displaced crude oil imports into the U.S. from suppliers in more geopolitically volatile non-North American regions. Further, not all crude oil is the same, of course. The heavier grade of Canadian crude oil is necessary to supply refineries on the gulf coast and

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he North American Free Trade Agreement (NAFTA) was negotiated in the early 1990s and came into effect on Jan. 1, 1994. NAFTA created one of the world’s largest and most successful free-trade zones in the world, broadly reducing or eliminating tariffs, duties and other restrictions on cross-border trade and investment between the United States, Canada and Mexico. By virtually any measure, NAFTA has been an unqualified success — raising trade, investment, economic activity and prosperity in the three countries. NAFTA became an issue in the 2016 presidential elections, however, with Donald Trump calling it the “single worst trade deal ever approved” in the U.S. True to his leanings, after Trump was elected he announced his plans to rework the agreement, and those discussions commenced with Mexico and Canada in 2017. Though many of the benefits of unfettered energy trade between the three countries could not have been foreseen in 1994 (simply because the U.S. “energy renaissance” and the explosion of U.S. onshore domestic oil and gas production could not have been predicted), NAFTA has proven to be an enormous success in terms of energy trade flows in North America. And the energy-related free trade success is, in many ways, in its infancy with dramatic increases in export volumes beginning only about eight years ago. Just since 2010, natural gas exports to Mexico have increased by well over five times (445 percent), creating a sizable positive natural gas trade balance between the U.S. and Mexico that is only expected to continue to grow in the coming years. Canada produces a substantial amount of natural gas — more than enough to meet its domestic needs — and much of it is exported to the United States, though the net natural gas trade deficit with Canada has declined since the U.S. began to grow in natural gas production in 2003. Thanks to the lower Canadian natural gas trade deficit and burgeoning natural gas exports to Mexico, the U.S. became a net exporter of natural gas in North America at year-end 2017. That newly created positive natural gas trade balance will do nothing but widen going forward, providing a critical market outlet for U.S.-and Texas-produced natural gas. If not for NAFTA, exports of the gas itself would be hindered, and the investment necessary to establish the cross-border infrastructure as well as the Mexican in-country infrastructure needed to transport and process that gas, would be greatly diminished. While little in the way of raw crude oil is exported to Mexico from the United States, exports of petroleum products from the U.S. to Mexico have increased by some 320 percent since 2010. The positive result on markets is the same, of course, as the rising demand and movement of petroleum products across the border raise the demand for the U.S.-and Texas-produced crude oil from which those products are processed and refined. At first glance, the Canadian crude oil trade imbalance with the United States may appear to be a problem that needs to be corrected. Again, how-

elsewhere that are tooled to handle that particular brand of crude. Any NAFTA rework that slows or interrupts that process will be costly and harmful to the U.S. domestic refining industry and the American consumers they supply. Thanks to these developments — rising North American production (from the U.S. and Canada, primarily) and the ability to trade freely within the North American zone — the region is on the verge of something once thought impossible: market-achieved North American energy self-sufficiency. The results are positive all the way around: greater supplies at lower prices to U.S. household and business consumers, as well as growth in the domestic oil and gas production industry, producing tens of thousands of high-paying jobs along the way. The other direct benefit of NAFTA to U.S. oil and gas companies is the lower cost of inputs as a direct result of the low/zero-tariff trade environment. For example, a sizable portion of oilfield steel comes into the U.S. from Canada and Mexico, and tossing out the agreement or altering it to raise barriers to trade oilfield goods and services will raise the cost of doing business for Texas and U.S. oil and gas companies. That cost increase comes straight off the bottom line, directly impacting future development investment, reducing activity and costing jobs. The 40-year-old crude oil export ban in the United States was done away

with in late 2015. Since then, crude oil exports have been growing impressively. Meanwhile, the pace of oil exports quickened in 2017. While altering or eliminating NAFTA would at present have little direct effect on energy trade within North

By virtually any measure, NAFTA has been an unqualified success — raising trade, investment, economic activity and prosperity in the three countries

America (again, very little raw crude oil is exported to Mexico, and some exports of crude oil to Canada were permitted under the ban), any heightened protectionist stance on the part of the United States with regard to NAFTA or other trade-related actions could easily threaten rapidly growing crude oil exports due to retaliation by other countries in a growing protectionist environment. The threat to the Texas and U.S. oil and gas industry resulting from the elimination of NAFTA or a renegotiation that diminishes its effectiveness as a North American free trade vehicle is clear — the loss of critical markets for domestic oil and gas, higher costs of doing business for domestic oil and gas producers and the corresponding job loss, and pinched supplies to domestic refiners. If NAFTA were to be done away with tomorrow, the effects would be immediate — lower prices for domestically produced natural gas and crude oil; natural gas in particular (and natural gas prices are anything but spectacular as it is). Recognizing this threat, the Texas Alliance of Energy Producers Board of Directors adopted a resolution on Feb. 1,

2018, to communicate to the administration and its office of the United States Trade Representative the importance of NAFTA to the recent and continued success of the domestic oil and gas industry. The resolution highlighted the positive outcomes under NAFTA and acknowledged that there are aspects of the nearly 25-year old agreement that may need to be modernized and updated. The central message of that resolution is as follows: (1) a renegotiated NAFTA should maintain the low/zero-tariff trilateral trade environment, (2) the agreement should be reenacted with no “sunset provision” (the administration has suggested that a reworked NAFTA should have to be renegotiated every five years, which does nothing but hang an ever-present cloud of uncertainty over these matters), and (3) if an agreement cannot be reached on revamping NAFTA as a result of the current negotiations, then NAFTA should be maintained in its current form. With regard to energy, NAFTA is not broken and does not need to be fixed. “Fixing” it will cost American energy jobs and unnecessarily raise costs to American energy consumers.

About the author: Karr Ingham Is an Amarillo, Texas, economist, and is the owner and President of InghamEcon, LLC, an economic analysis and research firm specializing in statewide, regional and metro area economics, and oil and gas/energy economics.

MAY/JUNE 2018  SHALE MAGAZINE

POLICY

About That Trump Tweet Directed at OPEC… By: David Blackmon Some things to note about all of this: • While it is true that the export limitation deal between OPEC, Russia and a few other non-OPEC nations has played a large role in strengthening the price for crude over the last 16 months, it has certainly not been the only factor at play. • A level of global demand growth for crude that has consistently out-paced projections by the U.S. Energy Information Administration (EIA) and the International Energy Agency (IEA) has also played a major role in drying up what had been a multimillion-barrel-per-day global surplus.

SHALE MAGAZINE  MAY/JUNE 2018

“Looks like OPEC is at it again. With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!” ― President Donald Trump, Twitter

• But, it’s also important to remember that Trump views everything as a negotiation, and that the United States has very complex relationships with Russia, Saudi Arabia and other OPEC nations related to a wide variety of international matters. Given all of that, what, if anything, could the president do to influence the global price of crude oil? The answer, quite simply, is not much. Federal law and the U.S. Constitution simply do not offer any sitting president any policy levers that would allow him to quickly influence the price for a commodity that is traded on a global market. In order to

D.LINCHEVSKIY/BIGSTOCK.COM

resident Donald Trump took to his Twitter account in late April to criticize the Organization of the Petroleum Exporting Countries (OPEC) for creating oil prices that he calls “artificially very high”: “Looks like OPEC is at it again. With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!” So, is the president really worried about escalating crude oil prices (the price for West Texas Intermediate, the key marker for U.S. domestic oil, had reached a four-year high on the day he issued his tweet)? And is he prepared to take some public policy action to do something about it? These are both good questions, especially given the fact that President Trump’s tweets are often designed to influence the target to take some action on a completely unrelated issue.

• Trump’s tweet came just a day after Saudi Arabia and Russia agreed in principle to extend the current agreement through at least to the end of 2018, and as the price of gasoline in the U.S. is moving to five-year highs just as the summer driving season is coming around. So, it’s possible the president was simply responding to those related realities.

lower the price of crude, Trump would have to find a means of either significantly raising global production or lowering global consumption of the product. The reality is that Trump has already done pretty much all he can do to encourage increased oil production in the United States. Over his first 16 months in office, he and his administration have implemented a long series of policy changes designed to stimulate the domestic oil and gas industry. Those policies have accomplished their intended impact, given that the industry sets new records for production of both oil and natural gas on a seemingly a daily basis. Past presidents and the U.S. Congress have attempted to temporarily increase crude supply during national emergencies by selling off some of the nation’s Strategic Petroleum Reserve (SPR). The SPR currently contains something in excess of 700 million barrels of oil, which represents roughly 35-40 days of U.S. oil consumption. Truthfully, Trump could put on a fire sale of the entire SPR and it would have just a momentary — and fairly minor — impact on global crude prices. So, there really is not much he could do to quickly increase U.S. oil production, assuming that is even his goal. That leaves him only two other potential avenues of approach: Reduce global demand for oil or convince the parties to the OPEC/Russia deal to work against their own economic interests by increasing their own production and lowering the crude price as a result. There is no quick way to negatively impact demand for oil, short of engaging in a fullfledged trade war that would tank the global economy. Of course, no one should think Trump is worried enough about the price of gasoline to engage in that action. No president can simply tell people to avoid driving their cars or going on vacations. So, that’s a non starter. Thus, the president would be left to try to influence OPEC or Russia to increase their own supply. Here, the array of possible choices is at least potentially fruitful. It could be that the president is setting the stage for trying to influence Saudi Arabia to retreat from its recently expressed desire to raise the Brent crude price into the $80 a barrel range or even higher. Given the complexity of arms, trade and other relations between the

U.S. and Saudi Arabia, Trump would have several levers of influence to pull there, if he so desires. The president would have similar leverage with Russia — he could even conceivably offer some form of reduced sanctions to Vladimir Putin’s government in exchange for increased oil output. Again, this is all only relevant if the president’s goal here truly is lowering the price of crude. He could be throwing this threat out there in an attempt to gain a concession from one of these countries on some entirely unrelated matter. We have seen him engage in this sort of “Twitter diplomacy” before. One thing we know for sure: If Trump really is interested in lowering the price of crude oil for longer than a few minutes, he’s going to have to do more than tweet about it, and the policy tools he has available to him are really pretty limited. The president might also want to keep in mind that, other than California and Colorado, every major oil-producing state in the country voted for him in 2016, and those “red” states are enjoying the higher state tax revenues these higher crude prices are generating. Take Texas as a prime example. Texas taxes the oil industry at several different levels. It is one of just two states in the country that allows local taxing districts to assess property taxes on the value of crude and natural gas reserves that are still in the ground. Obviously, the higher the price of oil (and natural gas), the higher the tax collections for those local taxing entities. Texas also levies a value-based severance tax on oil and gas when they are produced. Again, higher prices mean higher tax collections for the state. And, by the way, the Texas Rainy Day Fund, which currently boasts a balance in excess of $10 billion, is funded almost exclusively by those severance taxes. Texans voted very strongly for Donald Trump in the 2016 election. So did voters in oil states such as Oklahoma, North Dakota, Alaska, Louisiana, Wyoming and Michigan, to name a few. All of which leads to the conclusion that, in issuing that tweet on April 19, Trump was, in fact, trying to influence Saudi Arabia or even Russia to make a concession on some seemingly unrelated matter. This is just one of the facts of life in the Trump era.

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BUSINESS

Combilift: Innovation in the Forklift Industry By: Lauren Guerra

company has more than doubled and now has over 40,000 unit in operation in over 85 countries, including the U.S. “As a company, Combilift has always focused on a number of niche market segments and has a proven track record of launching one to two new products annually,” says McVicar. “In the first 10 years, Combilift revolutionized the handling of long materials, as it allowed customers to handle long products in less space more safely.” The company has come a far way in its 20 years. Now offering a variety of forklift products and equipment for various lifting needs, the utilities of the products are vast. Impressively, the company’s key focuses are on providing products that improve safety, promote efficiency and maximize space.

Destined to Innovate

Forklifts are used for a variety of purposes. Some companies may use forklifts to move product indoors, such as palettes in warehouses, or outdoors, including timber or steel around work yards. Forklifts can also be used to transport or lift people — to pick a product from a high warehouse shelf, for instance. I’ve mentioned only a few uses; the utility of these products is actually quite diverse. Most forklift companies, design products with a general use in mind. One of Combilift’s most unique and useful attributes is its ability and propensity to customize as needed to meet the needs of their customers. Customization allows Combilift to produce products that have specialized uses, designed to accommodate the customer’s specific needs. McVicar explains, “Combilift has set the benchmark for the mass production of customized, innovative products. Mass customization is the new frontier for both the customer and the manufacturer, as customers are increasingly expecting products to be tailored to their requirements.

Combilift was started in 1998 by Martin McVicar, Managing Director, and Robert Moffett, Technical Director. The name Moffett may be familiar, as the name is synonymous with the well-known and highly utilized “Moffett Mounty” truck-mounted forklifts designed by the Moffett family company. McVicar, a young prodigy, became the Moffett Engineering Chief Engineer even before turning 20 years old. After the sale of Moffett Engineering, McVicar and Moffett, two brilliant and accomplished engineers, joined forces to create the world’s first internal combustion engine-powered, allwheel drive, multidirectional forklift — the Combilift C4000. Within the first year of operation, the Irish company produced 18 units, 17 of which were shipped to other countries. In the years that followed, Combilift grew in popularity around the world. In fact, 98 percent of the products produced by Combilift are exported to other nations. In the last five years, the

SHALE MAGAZINE  MAY/JUNE 2018

Products for Unique Uses

PHOTO COURTESY OF COMBILIFT

oving product can be a difficult feat. Large, long or awkward loads can present further challenges for companies. For many reasons, the safety and efficiency of transporting products should be of major concern for companies in a variety of industries. I had the pleasure of learning about a company offering innovative, customizable forklift and lifting products unlike any others. Combilift, a specialized forklift company based out of Monaghan, Ireland, recently celebrated 20 years of providing revolutionary product transportation equipment with the grand opening of its brand new, 50 million euro global headquarters and production facility. The 500,000-square-foot facility sits on an over 100-acre site, providing the vast opportunity to grow in the future.

We listen to and take feedback on board from our customers and dealers to identify solutions that best match their individual specific needs. “There are over 200 manufacturers of forklift trucks worldwide. And for Combilift, when myself and Robert established the business 20 years ago, we knew we could never make a business trade in Ireland to compete with the big brand names. Our intention is not to get into the high-volume production of forklift trucks. Our business is very much geared on developing innovative forklift trucks that are focused on a niche market. And with focus on the niche market, we want to become the number one player in whatever market segment we enter.” If a company comes to Combilift with a specific problem in mind, the engineering team will take a look at its products to see if one can be modified to meet the customer’s needs. However, at times the company will have an opportunity to use the customer’s problem to design an entirely new product with usefulness for other/future customers. In fact, many of the new products offered by

Combilift are a direct result of a design tailored to fix one customer’s problem. “Traditional forklift manufacturers focus on high volume, mass production of the same products,” McVicar shares. “We evolve with our clients, producing new products each year.” Having the agility to customize and modify products to meet the needs of their niche customers is one of the company’s greatest assets. Safety in Design Forklifts can present a variety of safety concerns, depending on the load, the operating technique and the location, among others. Say, for instance, the operator is transporting a long load (think steel, pipe, timber, etc.) with stacks of other materials, buildings, trucks, equipment and so forth around him as well. To transport the long product and avoid the surrounding obstructions, the operator must carry the load high to avoid hitting the objects. Carrying a high load, especially if long, can result in instability of the

machine and the load. Pedestrians now have to stop their work to clear a space to avoid potential pedestrian injuries. With this concern in mind, the company designed multidirectional forklifts, including their popular C-Series. The multidirectional forklift can go sideways as well as forward, allowing the operator to transport the product without needing to raise the load in more narrow areas. Additionally, platforms built at the base of the vehicle offer a stable location to place the load while transporting to avoid wobbling (which can occur on unstable, traditional forks) during transportation. In addition to steered vehicles, the company offers a unique take on pedestrian forklifts. A very serious concern with this type of forklift is the possibility of an operator being pinned behind the moving forklift. The Combi-WR and CombiWR4 both feature a multiposition tiller arm that can be moved to the side of the forklift, allowing the operator to stand in the safest position while operating the equipment. Making visibility a focus, the company designed

MAY/JUNE 2018  SHALE MAGAZINE

their Straddle Carriers (Combi-SC) and Mobile Gantry (Combi-MG) with cabins low to provide 360-degree visibility when a load is lifted (many competitors place the cabin up high). These units can also be fitted with remote-control ability to allow for a more flexible operating experience, multiple camera location options to increase visibility further, and telescopic height movement in the frame to accommodate entrance/exit clearance limitations as well as lift the load higher if needed. The Straddle Carrier is ideal for containers and oversized loads and has a capacity of roughly 44,000 to 220,000 pounds. The Mobile Gantry is best used for long and out-of-gauge loads and has a capacity of over 88,000 pounds. Focus on Efficiency By nature, a safer product is more efficient. By allowing the load to be moved lower and safer, the job gets done faster. But more goes into efficiency, right? Correct. Having a product customized to the specifications of the customer’s warehouse or facility can maximize the forklift abilities to the product and space requirements. Once again, the customization comes into play here. Complimentary, Combilift offers logistic and warehouse design features that enable companies to see the benefit that the product will bring to their business specifically. “Our engineers proactively design, plan and produce solutions in collaboration with our customers by offering material flow analysis and 3D animations. We work with customers to produce warehouse designs to visualize the capacity potential as well as the optimum flow of materials on their site,” says McVicar.

Combi-CSS

An Eye of Space

New Facility Marks Growth By incorporating the latest manufacturing processes, the new factory will enable Combilift to double its output in a single shift across all production lines. Four moving assembly lines produce a finished vehicle every 15 minutes. There are 60 welding bays, two plasma cutting machines, three paint lines (which use

SHALE MAGAZINE  MAY/JUNE 2018

Combi-SC

sustainable water-based paints) and three automatic shot blasters to cater to different sized products. Additionally, 12,000 pallet locations ensure ample storage space for parts and components. Each component of the new facility was designed with increased production and efficiency in mind. “The new factory enables us to double production and remain focused on the needs of our customers and dealers,” McVicar explains. However, even in a growth stage, Combilift has stayed true to their commitment to safety in the design

PHOTOS COURTESY OF LAUREN GUERRA

In almost every case, optimizing space can have a positive effect on the efficiency, safety and profitability of a company. Using forklifts with space saving in mind is a game changer. Take for instance the side tiller arm of the CombiWR. The ability to operate the forklift from the side is not only safer for the operator but also allows aisles to be placed closer together. To help with guiding in small spaces, Combilift offers the ability to add guide rollers. The guide rollers remove the guesswork for the operator to know where to position the forklift in tight spaces. The rollers will place and keep the forklift in the right location, leaving him or her to focus on the load rather than the direction. Using the free logistic and warehouse design function, the engineers at Combilift are often capable of making recommendations, which, coupled with their space-saving products, can increase storage and workspace enormously. This, in turn, allows companies to maximize their square footage to utilize the space most effectively.

of the new global headquarters and manufacturing facility. The facility was certified for international quality and safety management standards and was awarded the ISO 9001, the international standard for Quality Management System (QMS); ISO 14001, the international standard for Environmental Management System (EMS); and OHSAS 18001, the international applied British standard of Occupational Health and Safety Assessment Series. Innovation at the Forefront The company ensures innovation is always at the forefront of its goals. Amazingly, seven percent of its annual turnover is invested in research and development (R&D) to enhance its customization capability and to maximize return on investment (ROI). At the opening, the company displayed many brand new products, including the Combi-OP or order picker. This equipment lifts a person or people on a long platform to allow them to pick items from a top shelf, making it easier to gather products without taking down a whole pallet, removing the product and then putting the pallet back. The Combi-PPT, or high-capacity powered pallet truck, was also revealed. The highcapacity powered truck has lift capacities of 6,600 pounds and 13,000 pounds, with models capable of even higher weight capacities of 15,000 pounds and 35,000 pounds available on request. This equipment features an optional operator’s platform using stand-on or walk-behind operation, with the patented multiposition tiller arm for increased safety. Finally, the Combilift Container Slip Sheet (Combi-CSS) device may be the most unique of the new products displayed at the grand opening. Similar to a conveyor belt, the Slip Sheet is capable of sliding heavy, long product into containment units or truck beds without the use of a crane. A long object, such as a pipe or wind turbine, for example, can be laid on the Slip Sheet and, using a gate enclosure, the product can be slid onto the floor of the transportation unit and held there as the Slip Sheet is removed from the flooring. The brilliance of this equipment is in its simplicity and broad utility. With these new launches and other products currently being designed, Combilift is steadfast in innovating and revolutionizing the forklift industry with products that promote safety and efficiency, while understanding the limitations and importance of valuable space.

About the Author: Lauren Guerra is the Chief Operating Officer and Editor-in-Chief of SHALE Oil & Gas Business Magazine Magazine. For editorial inquiries, please email lauren@shalemag.com.

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MAY/JUNE 2018  SHALE MAGAZINE

BUSINESS

Overproduction, Inequality and Ecosystems By: Thomas Tunstall, Ph.D.

elieve it or not, recessions in the developed world are rarely caused by shortages. By definition then, it follows that relative overproduction is the key culprit. Perhaps ironically, this problem is not limited to capitalist economies. Industrial economies of many forms have tended to overproduce — whether they be capitalist, communist, socialist, social democratic or capitalist communist. It seems counterintuitive — getting too much of a good thing. However, that is exactly the problem modern economies often face. For proof, we can draw on numerous cases from recent history. A particularly interesting example comes from Alan Greenspan, former Chair of the Federal Reserve System. In the wake of the 2008 housing crisis, he proffered that a possible remedy for the situation would be to burn the existing housing inventory to decrease excess supply. Although Greenspan readily admitted that such a solution was politically untenable, even the possibility suggests that we might want to reevaluate the economic theories under which the world operates. Let’s continue with the problems inherent in Greenspan’s “solution” from a more global standpoint, not least of which is the burden it puts on ecosystems in multiple ways (and traditionally ignored by economists). To build new houses, we may be contributing to deforestation, which, in turn, reduces naturally occurring carbon-capture mechanisms. Deforestation also decreases watershed capacity, which provides benefits such as flood control, water filtration and increased biodiversity. If we were to take Greenspan’s analogy to its logical extreme, burning the houses would re-release carbon into the atmosphere as well.

So much for neoclassical economics, which is the theoretical basis for Greenspan’s solution and most global central bank policies. What’s happening is constant mismatches of supply and demand, which have only grown more pronounced as the developed world has become increasingly industrialized. Too much supply encounters too little demand, and the markets react negatively. What should we be doing with the surplus? Presumably building houses in developing countries or here at home where they are needed. The reason that doesn’t happen is due to a persistent disconnect between supply and demand — driven by extreme inequality. From a global perspective, inequality causes investments to be less than optimal. Bill Gates, for example, has legitimately questioned why more resources are expended on curing male pattern baldness than diseases such as malaria. We might also ask why large quantities of food are destroyed each year in the developed world because the poor cannot afford to buy it. Despite these obvious discrepancies, central banks in the advanced nations still try to address recessions by further stimulating demand indiscriminately. These measures have taken several forms over time. In the 1920s, prospective lack of demand for their increased manufacturing output worried companies so much, they poured money

into advertising as a way to increase consumption. More recently, in the aftermath of 9/11, President George W. Bush encouraged consumers to buy more SUVs. After the Great Recession, Federal Reserve Board Chairman Ben Bernanke and Chair Janet Yellen kept interest rates at historically low levels (where they remain today) to encourage purchases. Oil prices plummeted in 2015 due to oversupply relative to demand, and may yet do so again next year. The propensity for industrialized economies to overproduce is partly a function of ever more efficient automation. It also stems from the ability of firms to utilize “free” ecosystem services and natural capital that are underpriced relative to the long-term value. Current price mechanisms for ecosystem services simply do not reflect full replacement costs. The best prospect for global growth and productiv-

ity — as well as greater global equality — now appears to lie with key infrastructure projects in developing economies. This focus is consistent with the UN’s Millennium Project goals and would go a long way toward tempering the developed world’s export of environmental degradation to countries that have little to offer world markets beyond agriculture, fisheries and forest products. Because more impoverished and less welleducated societal groups tend to be less sensitive to the environmental impact of economic activities, by providing the basic standards of living, societies could ease the pressure on ecosystem services where it is most critical. In a world with so much genuine need, it hard to believe that economies plunge into recession because of too much stuff. And yet, due to widespread inequality, that is precisely what is happening now.

The best prospect for global growth and productivity — as well as greater global equality — now appears to lie with key infrastructure projects in developing economies

About the author: Thomas Tunstall, Ph.D., is the Senior Research Director at the University of Texas at San Antonio’s Institute for Economic Development, and was a principal investigator for numerous economic and community development studies. He has published peer-reviewed articles on shale oil and gas, and has written op-ed articles on the topic for the Wall Street Journal. Dr. Tunstall holds a doctorate degree in political economy, a master’s in business administration from the University of Texas at Dallas and a bachelor of business administration from the University of Texas at Austin.

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LIFESTYLE

A New Era of Wellness for Chiva-Som Special to SHALE

SHALE MAGAZINE  MAY/JUNE 2018

aesthetic of the Thai Pavilion Suite is light and serene, creating a calming effect and reflecting the tranquility of the resort. The enlarged space makes the surrounding greenery much more relevant to the guest’s experience. The Thai Pavilion Suite comprises a bedroom and en-suite bathroom encompassing approximately 818 square feet. Space has been maximized to give guests an expanded bedroom and living area, including a larger bathroom (now with two vanity counters, a new makeup counter and more connecting space for the shower and bathtub) and a larger dressing room with floor-to-ceiling wall mirrors to reflect even more light. For more relaxation and well-being, the ceiling has been raised to give an airy feel. The Thai Pavilion Suite is approximately 1,151 square feet and includes an outdoor pantry and

Chiva-Som International Health Resort, which enjoys a reputation as a pioneer in global wellness, is proud to unveil the first MOCK-UP IMAGES of the renovated Thai Pavilion room and the brand new Thai Pavilion Suite, which will open in November 2018

PHOTOS COURTESY OF CHIVA-SOM

hiva-Som Hua Hin is Asia’s first comprehensive wellness resort, providing proven transformations toward optimal wellness. Nestled in seven acres of tranquil grounds, Chiva-Som is a beachfront resort dedicated to revitalizing the mind, body and spirit (represented by its tri-part logo). Western practices and Eastern philosophies are brought together in a wellness resort that provides services for guests to develop healthy habits and find a lifestyle transformation. The resort has been given recognition by readers and industry experts alike as one of the most outstanding wellness resorts in the world since its launch 22 years ago. The beachfront resort is located in the town of Hua Hin, which lies about 115 miles south of the capital, Bangkok. It can be reached by car in under three hours, by private plane in 25 minutes from Bangkok or by chartered helicopter in 40 minutes from Bangkok. Chiva-Som International Health Resort, which enjoys a reputation as a pioneer in global wellness, is proud to unveil the first mock-up images of the renovated Thai Pavilion room and the brand new Thai Pavilion Suite which will open in November 2018. Along with the updates to the accommodations, the resort plans to unveil renovations to the Fitness area, the Emerald Room, and the Orchid Lounge, also in November of this year. These enhancements to the resort’s offering follow the launch of the new Ocean Rooms and Suites in January 2017 and is part of the resort-wide renovation plan. After short periods of closure from May 1 to Oct. 31, 2018 (and the same period in 2019), guests will see the resort relaunched into a new era of wellness. The style of the new interior is contemporary Thai, utilizing materials such as local teak, silk and bamboo. With an outdoor terrace, the

its own outdoor private sala, its most unique feature. The glasswalled private space is set amidst tranquil gardens and is suitable for private breakfast, lunch and dinner, meditation, or for simply relaxing. Glass doors, automatic blinds and insect screens in the sala can be kept open or closed — in either case offering beautiful views of the surrounding lake and gardens. The wellness resort’s multifaceted renovation will be implemented under the direction of Krip Rojanastien, Chairman and CEO of Chiva-Som International Health Resort, together with Designrealization Siam Co., Ltd., a distinguished design company, allowing for innovations in Chiva-Som’s unique wellness experience for guests throughout their stay. Chiva-Som is Asia’s first comprehensive wellness retreat and destination spa, providing an integrated and personalized approach to transformations of mind, body and spirit for optimal well-being.

For more information on Chiva-Som or to book your stay, visit chivasom.com or www.facebook.com/chivasomresort, email reservation@chivasom.com or call the resort at +66 (0) 3253-6536.

MAY/JUNE 2018  SHALE MAGAZINE

LIFESTYLE

Lose Yourself in Serenity at the Four Seasons Resort in Bora Bora

our Seasons Resort Bora Bora is a cultural paradise, a resort that blends the romance, relaxation and tranquility of the South Pacific with the invigorating Polynesian arts of dance, song, cuisine, textiles, seafaring and sport. The Resort combines the highest standards of service with the natural ease and gracious hospitality of Polynesian culture. Guests can lose themselves in the deep serenity of the location, immerse themselves in the customs and traditions of local culture, or set off on one the island’s many adventures, from outrig-

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ger canoeing to scuba and snorkel excursions among rays and reef sharks, to deepsea fishing and inland safaris — creating truly unforgettable experiences. Set upon Bora Bora’s surrounding coral atoll, away from the bustle of its mainland, the Resort is a vast tropical grove, replete with coconut palms and pandanus trees. Meandering channels of pure turquoise lead to the property’s main beach or to smaller lagoons, creating secluded private beaches waiting to be discovered. Every vista is breathtaking, and all have been incorporated into the design of the

Resort: views of the open water and its vast sky contrast with the lush green of the island’s mainland, capped by the towering monolithic peak of Mount Otemanu and the domed summit of Mount Pahia. The Resort offers 100 spacious overwater bungalow suites and seven sprawling beachfront villa estates, all designed with thatched roofs and decorated with indigenous artwork. Four distinct restaurants offer a vast selection of creative culinary experiences, from Polynesian to French to traditional favorites, and are complemented by special open-air dining, from private oceanside dinners to Tahitian beach parties with musicians and fire dancers. An infinityedged pool with private cabanas faces the white sand beach, as the lagoon sets the perfect backdrop for a leisurely afternoon under the tropical sun. A full-service spa, perfectly balanced by the powerful rhythms of the Pacific Ocean and the secluded tranquility of the island’s lagoon — and featuring open-air treatment decks amid the kahaia trees — offers a combination of relaxation and exhilaration that only Bora Bora’s unique location can provide. The pièce de résistance here is the overwater couples’ spa suite, where local ingredients such as monoi oil, vanilla and black pearl powder are highlighted in pampering and therapeutic treatments. Set upon a sprawling 22 hectares (54 acres), the Resort meets a

PHOTOS COURTESY OF FOUR SEASONS RESORT

Special to SHALE

The Resort combines the highest standards of service with the natural ease and gracious hospitality of Polynesian culture

vast array of needs and accommodates a wide variety of guest experiences. Known as the most romantic destination in the world, weddings, honeymoons, anniversaries and vow renewals are perfectly suited to take place at the Resort. Facilities for families are unrivaled in the region: a Kids for All Seasons clubhouse with splash pad for children ages five to 12, cultural activities, volleyball and watersports. The connection Four Seasons has with the island community provides a truly authentic Polynesian experience. Local guides are available for many excursions, as are the Resort’s own marine biologist and black pearl expert, providing a wealth of learning opportunities, whether scientific or cultural. Guests can enjoy learning of local cul-

ture through specially arranged cooking and local craft-making classes. Nestled within the grounds of the Resort is an inner lagoon, teeming with exotic marine life. The Ruahatu (God of the Ocean) Lagoon Sanctuary at Four Seasons Resort Bora Bora is more than just a spectacular snorkeling location, it is also a research facility and a place where the marine environment not only thrives but grows, furthering the delicate and wondrous ecosystem. The Lagoon Sanctuary, home to over 100 colorful species of marine life, offers activities for guests of all ages, including snorkeling, coral grafting discovery, discussions on Polynesian ecology, fish and octopus feeding and more. The architecture of Four Seasons Resort Bora Bora is the fruit of a unique collaboration that

brings together the cosmopolitan flair of Parisbased architect Didier Lefort and the modern elegance of San Francisco design firm BAMO, with the Polynesian authenticity of renowned South Pacific architect Pierre-Jean Picart. Accommodations are designed to capture the gentle breeze in order to minimize the need for air conditioning, while taking care to conserve the beautiful natural landscape of the Island. No matter the occasion, Four Seasons Resort Bora Bora provides the ultimate South Pacific experience, all complemented by the warm smiles of the locals and the renowned Four Seasons experience.

For more information: For reservations, visit www.fourseasons.com, call (800) 819-5053 or contact your travel professional (chain code FS).

MAY/JUNE 2018  SHALE MAGAZINE

US TRAVEL DESTINATIONS FOR EVERY PERSON By: Lauren Guerra

Eiffel Tower in Las Vegas

SHALE MAGAZINE  MAY/JUNE 2018

he U.S. has diverse and exciting travel opportunities! Whether you love the great outdoors, delectable foods and beverages, music and nightlife or thrilling adventures, vacations can provide entertainment and the opportunity to make lifelong memories. Let’s take a look at some travel destinations to match differing interests, all in the U.S.

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LIFESTYLE

FOR THE PARTY ANIMAL:

LAS VEGAS, NEVADA

This should come as a surprise to no one. Las Vegas is known around the world for the gambling, clubs, shows, exotic and unique excursions, and allnight parties. No matter what kind of party you like, you’re bound to find something enjoyable in Vegas. Some examples of a great trip include: • Have delectable French cuisine at the Eiffel Tower at the Paris Las Vegas Hotel and Casino. At 110 feet over the Las Vegas Strip, patrons will enjoy spectacular views, including a frontrow seat to the world-famous Bellagio water show. • Drive the supercar of your dreams at Dream Racing. Take your pick of unbelievably fast, rare supercars and choose the number of laps you want to make, then put the pedal to the metal

Experiences for a memorable trip: • Be original! Make your own blend of wine at the Conn Creek Winery. Take a guided barrel tour at the winery and taste blends from various regions in the Napa Valley area. With the help of a wine educator, you’ll make your own blend and even take a bottle home to savor! • Take a walking tour of local food and wine with the Rooted Fork Foodie Tours company. With various tour options, you’ll be sure to find a tour that suits your taste! • Visit the African wildlife on a safari in the wine country with Safari West (not wine-related but still very cool). This attraction offers the opportunity to visit for a few hours or stay overnight for the full Safari experience.

The excursion Wine Train

for the thrill of a lifetime. Or, hop in the passenger seat and let a professional take you on a real-life drifting course to get the full experience! • Take a gamble! Shoot craps or place a roulette bet at the Palazzo Hotel and Casino. Known for its captivating architecture and art, you’ll be in the best setting to win big! • Tear up the dance floor at Hakkasan Nightclub in the MGM Grand Hotel and Casino. Plan ahead and get tickets or even a private table with bottle service at a performance by a famous musical performer or DJ. • Take a dip and have a blast the Encore Beach Club in the Wynn Hotel and Casino. The hot Las Vegas sun is no match for a day in the cool water with live DJ performances, lively cocktails and bikinis galore.

FOR THE WINE ENTHUSIAST:

NAPA VALLEY, CALIFORNIA You don’t have to leave the U.S. to enjoy rolling hills of wine vineyards. Napa Valley is home to hundreds of wine creators and grape growers. Whether you want to tour a wine facility, enjoy an afternoon tasting or making your own wine, Napa Valley has something to do for every wine lover.

Napa Valley winery

• Take a trip on the Wine Train. Enjoy winery tours and Napa Valleyinspired multi course meals — with packages to suit anyone’s desire. As an added bonus, you’ll get the opportunity to behold the beauty of the Napa Valley scenery.

MAY/JUNE 2018  SHALE MAGAZINE

SEATTLE, WASHINGTON The first Starbucks Coffee Company store

A 2017 survey by WalletHub named Seattle as the number one city for coffee lovers in America. The survey analyzed a ton of data and found that Seattle offers highly rated coffee blends at affordable prices, and is home to the most coffee and tea manufacturers in the nation. So, are you a coffee lover? Perhaps your next destination should be the Emerald City!

different coffee shop locations, and the caffeinated city tour combines coffee and history as you visit landmarks while enjoying a cup of java.

Things to do while visiting Seattle:

• Arguably one of the most famous restaurants in Seattle, stop by The Pink Door for an exquisite dinner. Though we could not confirm any coffee options from the menu, you can always grab an espresso from one of the many coffee shops on your way home.

• As a coffee lover, start your day with a delicious “cup of joe.” The Milstead and Co. coffee house has unanimously high recommendations. • Take a tour with Seattle by Foot! The coffee crawl tour takes you to six

• Visit the very first Starbucks on Pike St., and while you’re there, look around Pike Place Market. This original Starbucks opened in 1971 and is a vital part of the history of the Pike Place Market and Seattle in general.

FOR THE NATURE LOVER:

SALT LAKE CITY, UTAH Who doesn’t love a natural setting with endless sights, attractions and activities to explore? The nature lover has many U.S. travel options for an ideal vacation, but with 11 nearby state parks, five nearby beaches, and more than two dozen local hiking trails, the opportunities are endless in this quiet destination. Enjoy hiking, biking, skiing, river rafting and fishing in and around Salt Lake City for ample outdoor possibilities. Also, not being one of the most highly visited places in the U.S., you can enjoy the sights without hoards of tourists at your side. Enjoyable nature-friendly activities to behold:

• Visit a state park to take in nature’s beauty. East Canyon State Park, Jordanelle State Park and Rockport State Park all lie on the outskirts of Salt Lake City and offer a variety of activities, from fishing to recreational water sports to hiking and sightseeing. • Hit the powder! The Snowbird Resort is one of the largest resorts in the area, providing slopes for beginner and advanced skiers and snowboarders. With winter and summer activities, including mountain coasters and sledding, this location offers year-round fun for people of all ages and interests. SHALE MAGAZINE  MAY/JUNE 2018

• Ease away the stress and ache of tired legs with a dip in the Fifth Water Hot Springs. South of Salt Lake City, this is a popular destination for tourists and locals. Take a 2.5-mile hike (it’s worth it) to the naturally heated pools and enjoy the relaxation of a natural spa (for free) with a view. • Step inside for some outdoor education at the Red Butte Garden and Arboretum and the Tracy Aviary. The Butte Garden and Arboretum offers a five-mile footpath spanning over 21 acres of developed gardens which, in the spring, features over 450,000 blooming bulbs for a sea of natural beauty and color. The Tracy Aviary is home to over 400 individual birds of more than 135 species. This bird sanctuary is the largest and oldest of only two free-standing aviaries in the nation, and hosts over 60,000 children per year for environmental education programs and conservation efforts.

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FOR THE COFFEE FANATIC:

FOR THE HISTORY BUFF:

FOR THE BEACH BUM:

WASHINGTON, D.C.

HONOLULU, HAWAII

This is a no-brainer. Washington, D.C., hosts some of the most recognizable and impressive historical monuments, facilities, documents and artifacts in the nation. Visitors of our nation’s capital have an array of destinations to visit, many with free admission! Attractions for a (historical) good time: • Book your stay at the Mayflower Hotel. This historical site has a rich history of hosting government officials, including presidents Franklin D. Roosevelt, Dwight Eisenhower, and Harry Truman, as well as FBI Director J. Edgar Hoover.

Waikiki Beach

• Stop by Gadsby’s Tavern for a tasty and unique lunch. The building, adorned with colonial-period art and table settings, was built in 1792 and hosted none other than George Washington himself for lunch and a few birthday celebrations. Other notable guests of the establishment include Thomas Jefferson, John Adams, James Madison and James Monroe.

Not in the continental U.S., Hawaii is a bit further to travel. However, the beaches of this oasis will not disappoint. With a variety to choose from, and various activities to take part in, Honolulu is a popular travel destination. There are plenty of hidden gems to visit, far away from the popular tourist locations, if you seek solitude in the beachy waves. A visit to Hawaii is going to be a pricier option for U.S. travel, but the gorgeous scenery, authentic food and unique excursions will be well worth the money spent.

• What would a trip to Washington be without seeing the most well-known and recognizable establishment in the nation? To take a tour of the White House, you must submit a public tour request through your elected member of Congress. Make sure to give the White House website a look before taking your tour to avoid any potential rule-breaking that would prohibit your visit.

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• Visit the largest library in the world! The Library of Congress was built in 1800, making it the oldest cultural institution in the U.S. There are many one-of-a-kind and rare items housed within the walls of the library, including a perfect copy of the Gutenberg Bible on vellum, one of only three left in the world, and one of the oldest examples of printing in the world, a passage from a Buddhist sutra, which was printed in 770 A.D.

USS Arizona Memorial

Some ideas to perfect your beach getaway: • Visit the resort-filled Waikiki Beach. This well-known beach is a popular tourist attraction and therefore may be crowded, but it has the added benefit of nearby restaurants and shops to visit. • For stunning views, take a hike at the Diamond Head State Monument. From there you’ll get a panoramic view of the Pacific Ocean and Honolulu. The distance is not too far, but the ascent is steep. Make sure to bring water on your trip to stay hydrated!

• Take a moment to visit the USS Arizona Memorial. This free attraction is a sobering experience as you witness the destruction left behind after that fateful attack on Oahu on Dec. 7, 1941. Guests have the opportunity to watch a 23-minute documentary on the attack followed by a ride on the U.S. Navy-operated boat to the USS Arizona Memorial. • Visit some of the lesser-known and tourist-packed beaches, including Hanauma Bay Nature Reserve (ideal for snorkeling but can be a bit packed with tourists for that reason), Kailua Beach Park, Ehukai Beach Park or the gorgeous Lanikai Beach Park.

MAY/JUNE 2018  SHALE MAGAZINE

FOR THE FAMILIES:

SOUTHERN CALIFORNIA There is not one specific city in Southern California that I can say is the absolute best place for families. However, there are many attractions near the southern region of The Golden State. From beaches to theme parks to resorts, southern California has long been a favorite travel destination for young and old. Places to take the kids for some family fun: • No shock here; go to Disneyland! It’s a memory you’ll cherish forever as the children’s eyes light up with excitement over meeting their favorite characters. • Take a drive to Carlsbad, California, and visit the three theme parks of Legoland, including the main theme park, Legoland Water Park, and Sea Life Aquarium. Specifically designed for kids aged two to 12, this attraction can be a wonderful destination for families with little ones to explore and enjoy. • For an immersive Hollywood experience, visit Universal Studios in Los Angeles, California. Great for all age groups, visit Diagon Alley from the Wizarding World of Harry Potter, stroll the streets of downtown Springfield from the Simpsons, or prepare for a thrill with the largest 3D experience as you come face to face with King Kong. • Take the family on a short drive to enjoy the California sun and scenery on your way to the beach! Long Beach, Newport Beach and Huntington Beach are each about an hour away from Anaheim, with Santa Monica Bay, Laguna Beach and Dana Beach not too much farther.

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Laguna Beach

About the Author: Lauren Guerra is the Chief Operating Officer and Editor-in-Chief of SHALE Oil & Gas Business Magazine. For editorial inquiries, please email lauren@shalemag.com.

SHALE MAGAZINE  MAY/JUNE 2018

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For booking email: party@turntupvegas.com turntupvegas.com | 210.240.718877 MAY/JUNE 2018  SHALE MAGAZINE

The Desk and Derrick Club of Midland hosted its 67th annual Industry Appreciation Dinner on Friday, April 12, 2018, at the Richland Hills Golf Club in Midland, Texas. The dinner hosted club members, industry members and friends to celebrate the organization and the industry it supports. Featured as the guest speaker, President and COO Michael Hollis of Diamondback Energy addressed guests on the current oil and gas market and Diamondback Energy’s journey through the ups and downs of the energy industry. SHALE Magazine’s Lauren Guerra presented a certificate to the organization on their award as the Premier Organization in Midland.

SAPA and WEN Host Pipeline Luncheon San Antonio Pipeliners Association (SAPA) and Women’s Energy Network (WEN) South Texas hosted an April luncheon to discuss “Pipeline Permitting in a Post Dakota Access Climate” on April 17 in San Antonio. Featured speakers included Partners Alan Glen and Brook Wahlberg and Associate Sarah Wells of Nossaman LLP. SHALE CEO and Publisher Kym Bolado acted as moderator for this event.

SHALE MAGAZINE  MAY/JUNE 2018

PHOTOS COURTESY OF SHALE

Desk & Derrick Club of Midland Hosts 67th Annual Industry Appreciation Dinner

PHOTOS COURTESY OF SHALE

SOCIAL

MAY/JUNE 2018  SHALE MAGAZINE

Every two years, the Women’s Energy Network (WEN) Houston chapter hosts a charity luncheon focused on supporting STEM organizations in the Greater Houston area. WEN Houston selected Design Connect Create, Inc. (DCC) as the beneficiary of the WEN Houston’s 2018 STEM Charity Luncheon, held on Thursday, April 12, 2018, at the Omni Westside. The organization hosts the event biannually to foster innovation and creativity in STEMrelated fields and support Houston organizations that empower females to pursue STEM disciplines and career paths, with a special focus on the energy industry.

The South Texas Energy & Economic Roundtable (STEER) and the Texas Oil & Gas Association (TXOGA) teamed up to share oil and gas information with San Antonians at the 2018 King William Fair in the King William Historic District. On Saturday, April 28, the organizations handed out sunblock, fans, cooling towels and coloring books with crayons to fair attendees in hopes of raising awareness of the importance of oil and gas in South Texas. As the sponsor of the Mission San Jose art installment by Momo and Pompa, the organizations were happy to join in on the fun and culture of the event.

SHALE MAGAZINE  MAY/JUNE 2018

STEER and TXOGA Participate in San Antonio’s King William Fair During Fiesta 2018

PHOTOS COURTESY OF SHALE

WEN Houston Hosts STEM Charity Luncheon to Benefit Design Connect Create, Inc.

PHOTOS BY LENARD SMITH

SOCIAL

Delivering insight into the development of the Eagle Ford Shale and Permian Basin plays and the businesses affected

SHALE SHALE SHALE SHALE SHALE SHALE OIL & GAS BUSINESS MAGAZINE

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AN ENTREPRENEUR IN THE BUSINESS OF GIVING STATE OF ENERGY SAN ANTONIO FEATURES GREAT SPEAKERS

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THE INFLUENTIAL LEADER:

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2016 FUTURE OF THE REGION SOUTH TEXAS BALANCE AND DIFFUSION OF POWER: THE 10TH AMENDMENT

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CONFIDENT, COMPETENT AND CREDIBLE

OSHA

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THE HUMANIST: ALEX EPSTEIN | DISPUTE RESOLUTION IN LATIN AMERICA

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OTHER SERVICES OFFERED BY SHALE MAGAZINE Branding / Web Production / Search Engine Optimization / Ad Design / Social Media Video Production / Public Relations / Email Marketing / Campaign Strategy / Direct Mail SHALE Magazine is a statewide industry publication that showcases the significance of the South Texas petroleum and energy market. SHALE’s mission is to promote economic growth and business opportunities that connect regional businesses with oil and gas companies. The publication supports market growth through promoting industry education JANUARY/FEBRUARY 2018 affected.  SHALE MAGAZINE and policy, and its content includes particular insight into the development of the Eagle Ford Shale and Permian Basin plays and the businesses

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