SHALE Magazine May/June 2019 by SHALE Oil & Gas Business Magazine

SHALE MAGAZINE

MAY/JUNE 2019

WOMEN’S EDITION

THE 21ST ANNUAL JESSE H. JONES AWARD LUNCHEON HOSTED BY THE WORLD AFFAIRS COUNCIL OF GREATER HOUSTON

INSPIRING BUSINESS WOMEN

DELOITTE’S

AMY CHRONIS:

TEXAS HOTELS YOU MUST VISIT

DOING THE RIGHT THING FOR OTHERS

THE U.S. IS ON THE VERGE OF A SECOND ERA OF ENERGY DOMINANCE

HOW SHALE IS REVIVING RURAL AMERICA

BIG TRENDS IN CYBERSECURITY AND DATA PRIVACY FOR 2019 MAY/JUNE 2019  SHALE MAGAZINE

O I L & G A S P L AY E R S

BUSINESS

TECHNOLOGY

POLICY

HOUSTON  MIDLAND ODESSA  AUSTIN DALLAS  SAN ANTONIO CORPUS CHRISTI  HOBBS, NM LOUISIANA  MEXICO

In the Oil Patch

Where industry comes to speak

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MAY/JUNE 2019

CONTENTS SHALE UPDATE

Shale Play Short Takes

FEATURE

Inspiring Business Women

COVER STORY

COVER AND TABLE CONTENTS PHOTOS BY MICHAEL GIORDANO

INDUSTRY

BUSINESS

38 Squeezing Energy-Policy Sanity From ‘Juice:

58 Rural Texas Transitions

40 My Last “Women’s Issues” Article 42 The Shifting Landscape in Texas Oil and

LIFESTYLE

The Movie’

Gas Production

44 How Shale is Reviving Rural America

62 “Check In” on the Evolving Hotel Industry

SOCIAL 64 SAPA & WEN South Texas Co-Host

POLICY 50 An Unexpected Problem: Texas Has Too Much Water 52 The U.S. is on the Verge of a Second Era of Energy Dominance. Are Industry Participants Ready?

54 The Industry’s True Existential Threat is in Local Communities, Not in Washington, DC

Leadership Luncheon

64 Women’s Energy Network National Conference 65 The 21st Annual Jesse H. Jones Award Luncheon Hosted by The World Affairs Council of Greater Houston

65 STEER and TXOGA at Fiesta 66 SAPA’s Midstream Open Golf Tournament 66 WEN South Texas and TEAC Host Energy Mixer

Throughout her life, Amy Chronis has had opportunities to help others. From her childhood family farm, to community involvement, to working with clients and co-workers, Chronis has gained personal satisfaction and growth in the lessons learned through these experiences. And, as Managing Partner at Deloitte’s Houston office, that background has helped her to “lead by example” in her focus as a servant-leader.

INDUSTRY

Women are Making the Most of Opportunities in the Bakken

POLICY

Colorado Adopts Law Altering Oil & Gas Regulatory Landscape

BUSINESS

Big Trends in Cybersecurity and Data Privacy for 2019

LIFESTYLE

A Hidden Hill Country Gem MAY/JUNE 2019  SHALE MAGAZINE

17-0663 SHALE ad-3Q_FINAL.pdf

6/13/17

1:29 PM

VOLUME 6 ISSUE 3 • MAY/JUNE 2019

KYM BOLADO

PUBLISHER / CEO CHIEF FINANCIAL OFFICER Deana Andrews CHIEF OPERATING OFFICER & EDITOR-IN-CHIEF Lauren Guerra

Providing energy for the world while staying committed to our values. Finding and producing the oil and natural gas the world needs is what we do. And our commitment to our SPIRIT Values—Safety, People, Integrity, Responsibility, Innovation and Teamwork— is how we do it. That includes caring about the environment and the communities where we live and work – now and into the future. © ConocoPhillips Company. 2017. All rights reserved.

EDITOR David Blackmon ASSOCIATE EDITOR David Porter DESIGN Elisa G Creative COPY EDITOR Melanie Rodriguez VICE PRESIDENT OF SALES & MARKETING Joyce Venema ACCOUNT EXECUTIVES John Collins, Ashley Grimes, Doug Humphreys, Matt Reed

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ONLINE CONTENT MANAGER Fernando Guerra SOCIAL MEDIA DIRECTOR Courtney Boedeker CORRESPONDENT WESTERN REGION Raymond Bolado CONTRIBUTING WRITERS Jack Belcher, Leslie Beyer, David Blackmon, Erik Dullea, Bette Grande, Bill Keffer, Karr Ingham, Richard Murphy, David Porter, Thomas Shepstone, Thomas Tunstall, Ph.D. STAFF WRITER Amanda Villarreal CONTRIBUTING PHOTOGRAPHER Michael Giordano STAFF PHOTOGRAPHER Malcolm Perez EDITORIAL INTERN LeAnna Castro

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For editorial comments and suggestions, please email lauren@shalemag.com. SHALE MAGAZINE OFFICE: 5150 Broadway St., Suite 493, San Antonio, Texas 78209 For general inquiries, call 210.240.7188. Copyright © 2019 Shale Magazine. All rights reserved. Reproduction without the expressed written permission of the publisher is prohibited.

MAY/JUNE 2019  SHALE MAGAZINE

PUBLISHER’S NOTE

HELLO SUMMER! As we move further into 2019 we are seeing a lot of discussion and change where energy is concerned on a global level, especially where demand and trade are involved. It’s important that we stay up-to-date as community members, consumers and citizens, as we are all affected by the decisions made nationally and internationally. In this issue of SHALE — our annual women’s edition — you’ll meet an array of inspiring women and learn about topics affecting the energy industry from a woman’s perspective. We are seeing a growth in the employment rate of females in the energy industry — from administrative roles to technical careers and in leadership positions. As a female and the leader of the SHALE brand, I make it a personal mission to share the importance of diversity and inclusion to encompass a variety of ideas, expertise and perspective in business operations. I am very excited to announce the next State of Energy luncheon hosted by SHALE Magazine and In the Oil Patch radio show will be held in Houston, Texas on July 18 at the Omni Houston Hotel Westside. At the time of publication, we have announced our keynote address will be provided by former United States Secretary of the Interior Ryan Zinke. Further announcements on speakers and panelists will be made in the near future. If you’re interested in receiving updates on this event and other news from SHALE Magazine, I encourage you to visit shalemag.com and sign up for our e-newsletter. Ticket and sponsorship information is also available on shalemag.com.

KYM BOLADO

CEO/Publisher of SHALE Magazine kym@shalemag.com

SHALE MAGAZINE  MAY/JUNE 2019

PHOTO BY MICHAEL GIORDANO

Stay tuned for information on the State of Energy luncheon in Corpus Christi, Texas taking place later in 2019. Until then, enjoy this new issue of SHALE Magazine!

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MAY/JUNE 2019  SHALE MAGAZINE

SHALE UPDATE

SHALE PLAY SHORT TAKES By: David Blackmon

Bakken Shale – North Dakota/Montana

Houston-based pipeline operator Targa Resources closed a deal in early April to sell a minority stake in its Bakken-region pipeline operations to New York-based GSO Capital Partners and Blackstone Tactical Opportunities. The purchasers obtained a 45 percent stake in Targa Badlands LLC for $1.6 billion. Targa Badlands’ assets include 480 miles of crude oil gathering pipelines, 260 miles of natural gas gathering pipelines, crude oil storage terminals and a natural gas processing plant. Early Bakken pioneer Bud Brigham, founder of Brigham Exploration, announced an IPO for stock in his Brigham Minerals acquisition company in mid-April. Brigham Minerals plans to offer 13.5 million shares on the New York Stock Exchange at an initial price of $14 to $18 per share.

Denver/Julesburg (DJ) Basin - Colorado

The DJ Basin now has a new largest producer, thanks to Chevron’s buyout of Anadarko Petroleum. Chevron’s agreement to move forward with such a major deal means that it has decided internally that it will still be able to get its business done in Colorado despite the recent passage of Senate Bill 19-181, a bill signed into law by Governor Jared Polis that passed through the Colorado legislature without receiving a single Republican vote. The new law will reduce industry representation on the Colorado Oil and Gas Conservation Commission, and change the Commission’s mission from one of ensuring efficient development of the state’s mineral resources to one of environmental regulation. The new law is designed to make permits much more costly and more difficult to obtain, and will allow cities and counties to now enact their own sets of oil and gas regulations.

The acquisition of Anadarko Petroleum by Chevron was the biggest news to hit the Permian so far in 2019 — a deal that will serve to heat up the already-fierce competition among the major integrated companies to establish themselves as the region’s dominant players. The deal expands Chevron’s already-large holdings in the prolific Delaware Basin part of the Permian region, and the company’s 1.4 million acres of leasehold across the play will rank second behind only the 1.8 million acres owned by ExxonMobil. Writing at Forbes.com, Robert Rapier notes that, thanks to production cutbacks by Saudi Aramco in its own prolific Ghawar field and surging production in the Permian region, the Permian Basin most likely now ranks as the largest producing field — not just in the U.S., but across the globe.

SHALE MAGAZINE  MAY/JUNE 2019

Eagle Ford Shale – Texas

In a deal designed to allow it to focus more of its capital on projects in the Eagle Ford Shale, Murphy Oil announced in late March that it was selling its Malaysia assets for $2 billion. Murphy said it expects to realize a net gain of between $900 million to $1 billion on the deal, and plans to earmark $750 million of the proceeds for investment in its Eagle Ford and Gulf of Mexico assets. Bloomberg reported on March 26 that “two South Korean refiners — SK Innovation Co. and Hyundai Oilbank Co. — turned away their purchased shipments of Eagle Ford crude that were due to arrive in January and February due to quality issues, according to people with knowledge of the matter, who asked not to be identified because the information is private.” The two refiners claim that some shipments of crude produced from the Eagle Ford and various other U.S. formations contain contaminants, such as “oxygenates, metals and cleaning agents,” which can make the refining of the crude more costly and difficult.

ARUNAS/BIGSTOCK.COM

Permian Basin – Texas/New Mexico

Marcellus/Utica Shale – Pennsylvania/West Virginia/Ohio

A new study from IHS Markit concludes that the Marcellus/Utica Shale region now represents the largest natural gas resource play on earth, and will supply more than 40 percent of all U.S. natural gas demand by 2040. The study says the region “will play a key role in satisfying America’s increasing reliance on natural gas, as well as keeping energy costs moderate. Favorable production economics place the Marcellus and Utica shale plays amongst the most cost competitive in the nation.” According to IHS Markit, 41 percent of the natural gas produced in the U.S. will come from this tri-state area by 2040, up from 31 percent this year. Other profitable natural gas liquids, such as ethane, propane and butane are expected to nearly double in production over this same period. By 2040, production of those liquids in Ohio, Pennsylvania and West Virginia will account for 19 percent of the nation’s total by 2040, up from 14 percent in 2018.

Haynesville/Bossier Play – Louisiana/East Texas

A new report from the EIA says that the Haynesville produced natural gas at a new record pace in April, surpassing its previous high from 2011. The EIA projected that the play produced 10.75 bcf per day during the month, largely attributable to slightly higher natural gas prices and continued high demand from Gulf Coast LNG facilities. Moody’s Investor Service said production from the Haynesville has become more efficient over the past decade, and well economics have improved with the introduction of longer laterals and advanced technologies. "Capital investment in the Haynesville is likely to continue over the near term as producers benefit from increasing Gulf Coast demand," Moody's concluded.

SCOOP/STACK Play – Oklahoma

The SCOOP/STACK region has surpassed the Eagle Ford Shale as the nation’s second most-active drilling province, with a recent rig count consistently hovering in the mid-80s. This improved outlook can in part be attributed to this year’s very quiet, non-controversial session of the state’s legislature, which has raised taxes on the oil and gas industry in each of the previous three years. A new study from the Oklahoma Chamber of Commerce notes that, after years of ranking among the states with lower oil and gas production tax rates, the state’s effective rate of 5.1 percent now ranks it as the fifth highest rate among the 16 largest oil and gas producing states. The study also estimates that “Oklahoma’s gross domestic production grew an average of 2.41 percent annually between 2003 and 2017 and that the state’s oil and gas industry was responsible for 40 percent of that gain.”

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 2019  SHALE MAGAZINE

 FEATURE

INSPIRING BUSINESS WOMEN STEPHANIE SIRT

BE OPEN TO COACHES AND MENTORS BUT IGNORE THE CRITICS

WHAT DOES YOUR COMPANY OR ORGANIZATION DO? Emerson provides equipment and solutions to enable customers to automate and optimize processes.

WHAT IS THE PRIMARY FUNCTION OF YOUR ROLE? I develop and drive the strategy across EPC partner customer accounts and manage the executive-level relationships.

WHAT DO YOU ENJOY MOST ABOUT YOUR POSITION AND/OR INDUSTRY? I enjoy making a difference and helping people be more successful. I enjoy the camaraderie of the oil and gas/energy industry.

COMPANY NAME:

EMERSON AUTOMATION SOLUTIONS TITLE:

GLOBAL SENIOR DIRECTOR, EPC BUSINESS 20

SHALE MAGAZINE  MAY/JUNE 2019

WHAT IS YOUR GREATEST ACHIEVEMENT? My greatest achievement is beating the odds and learning to balance career, home, volunteer, ministry and personal objectives. It is possible to have it all, in measured amounts.

DO YOU HAVE ADVICE FOR WOMEN INTERESTED IN A SIMILAR ROLE OR INDUSTRY? WHAT CAN PREPARE THEM TO BE SUCCESSFUL? Stay focused on your vision and goals — don’t be distracted by things that won’t matter and just take you off track. Be open to coaches and mentors but ignore the critics. Know the difference between the two categories. Never take the haters personally.

ANNA TALLENT DO NOT BE AFRAID OF TAKING A LEAP OF FAITH

WHAT DOES YOUR COMPANY OR ORGANIZATION DO?

EY is a professional services company. The company provides assurance, auditing, technology and security risk, enterprise risk management, transaction support, merger and acquisition, actuarial, and real estate advisory services. It also offers employee benefit plan, taxation, and entrepreneurial services. The firm serves clients in the automotive, energy, chemicals, financial, health, real estate, retail, consumer products, and entertainment industries. EY was founded in 1894 and is based in New York, New York with additional offices in the United States, Middle East, Australia, Europe and Asia.

WHAT IS THE PRIMARY FUNCTION OF YOUR ROLE?

COMPANY NAME:

ERNST & YOUNG LLP (EY) TITLE:

ASSURANCE PARTNER

I am an assurance partner at the EY San Antonio office and have more than 17 years of professional experience in public accounting with a “Big four” firm, providing audit and advisory services to various multinational public and private companies with a business mindset focused on client service and quality.

WHAT DO YOU ENJOY MOST ABOUT YOUR POSITION AND/OR INDUSTRY? In my role, I get the opportunity to work with driven individuals that strive toward disrupting the market with innovative ideas. It has been fascinating to experience the technological advancements within the energy industry while serving my clients. Opportunities for continuance learning is an aspect of being part of EY that motivates me every day.

WHAT IS YOUR GREATEST ACHIEVEMENT? There are a number of achievements that have contributed to who I am today: • Earning a track & field scholarship at a university in the U.S., ultimately leading me, as a foreign student, to start a career in public accounting in Texas. • Getting an opportunity to work in London, United Kingdom, on a global rotation for two years opening my horizons further to diverse ideas. • Being accepted into the EY partnership to further grow. • Raising two girls to, what I hope to be, resilient and confident women.

DO YOU HAVE ADVICE FOR WOMEN INTERESTED IN A SIMILAR ROLE OR INDUSTRY? WHAT CAN PREPARE THEM TO BE SUCCESSFUL? I encourage women to continually communicate their long-term goals to counselors and mentors to ensure, that as opportunities arise, they are considered for those projects or roles. In addition, I would empower women to not be reluctant to take on projects or roles that might stretch them beyond their previous experiences. A motivation to learn and strive through collaboration will assist in bridging that gap. Do not be afraid of taking a leap of faith.

MAY/JUNE 2019  SHALE MAGAZINE

HEIDI GILL NO MATTER WHAT IT IS, IF YOU WANT IT, YOU ARE GOING TO HAVE TO FIGHT FOR IT — EVERY DAY

WHAT DOES YOUR COMPANY OR ORGANIZATION DO?

Urban Solution Group provides comprehensive mitigation plans and products for oil and gas development in urban areas. Our flagship product is our patent-pending sound walls. At Urban, we pride ourselves on making technical decisions through a social lens. Every operation and community is different, and we partner with operators to understand the nuances of the surrounding community and proactively mitigate with innovative products to ensure operational success for our customers.

WHAT IS THE PRIMARY FUNCTION OF YOUR ROLE? As the CEO of a startup, my primary function is everything! We are all hands on deck. I have an amazing team — my job is to support them and provide an environment they can thrive in. Currently, I oversee our teams for field operations, manufacturing, sales and engineering while I actively secure funding and plan for company growth and market expansion. I also support our mitigation consulting and strategy work for our customers.

WHAT DO YOU ENJOY MOST ABOUT YOUR POSITION AND/OR INDUSTRY? COMPANY NAME:

URBAN SOLUTION GROUP TITLE:

CEO

I have a huge passion for sustainable oil and gas development in the United States. I believe in the resource we provide and access to affordable energy — for everyone. I also believe we can have socially compatible oil and gas development in Urban areas — the tools and the technologies exist. What I enjoy the most is helping operators be successful in social compatibility while we resource oil and natural gas in urban areas.

WHAT IS YOUR GREATEST ACHIEVEMENT? Founding Urban! From designing our patent-pending sound walls to raising capital to manufacture those walls and building our team, I am extremely proud of how far we have come in such a short time. I founded Urban in 2017. We are fully funded and currently have our walls on 14 locations in the DJ Basin and are getting ready to expand into other basins. We are no longer a concept; we are recognized as a leader in our space with the safest product on the market.

DO YOU HAVE ADVICE FOR WOMEN INTERESTED IN A SIMILAR ROLE OR INDUSTRY? WHAT CAN PREPARE THEM TO BE SUCCESSFUL? No matter what it is, if you want it, you are going to have to fight for it — every day. If you are not willing to advocate for yourself, no one is going to do it for you. It takes grit and determination, but if you believe in it enough — never let anyone stop you.

SHALE MAGAZINE  MAY/JUNE 2019

ALEX MOCZYGEMBA MY ADVICE IS TO SET CLEAR, YET DYNAMIC, GOALS

WHAT DOES YOUR COMPANY OR ORGANIZATION DO? Valero is the premier manufacturer, distributor, and marketer of quality transportation fuels and petrochemical feedstocks.

WHAT IS THE PRIMARY FUNCTION OF YOUR ROLE? I am responsible for oversight of the accounting for all crude and feedstocks into the refineries as well as the costs to move products. Simply put, I oversee the cost of goods sold line item on the income statement.

WHAT DO YOU ENJOY MOST ABOUT YOUR POSITION AND/OR INDUSTRY? I have been in oil and gas my entire career. The industry is dynamic, technologicallyadvanced, and crucial to the well-being of our society — not just in the sense of fuels for transportation, but inclusive of all petrochemical products ranging from asphalt to plastics to cosmetics. I enjoy my position for the team environment, intellectual challenge, and professional development that it provides..

WHAT IS YOUR GREATEST ACHIEVEMENT? COMPANY NAME:

VALERO ENERGY CORPORATION TITLE:

DIRECTOR, FEEDSTOCK AND SECONDARY COST ACCOUNTING

My greatest achievement is being a “working mom.” Those two simple words mean something different to everyone. To me, it means I am a Christian woman dedicated to my family, my husband, myself, and a career that I believe in. My health, welfare, and personal and professional development are dependent on my attitude when I wake up every single morning and the choices I make throughout the day. I choose happiness, and I constantly ask myself, “Who do I have to be and what do I have to do in order to have the things that are most important to me?”

DO YOU HAVE ADVICE FOR WOMEN INTERESTED IN A SIMILAR ROLE OR INDUSTRY? WHAT CAN PREPARE THEM TO BE SUCCESSFUL? My advice is to set clear, yet dynamic, goals. The goals you have in the first phase of your career will be very different from those in the next phase. It is okay for them to change! Take the time to set them, review them, achieve them and change them according to what phase you are experiencing in life. Also, don’t doubt yourself. Often times women don’t challenge themselves to level up. My advice is to accept the challenges that will push you to LEVEL UP!

MAY/JUNE 2019  SHALE MAGAZINE

JANE GIMLER BE TRUE TO YOURSELF AND DON’T LET ANYONE TELL YOU “YOU CAN’T”

WHAT DOES YOUR COMPANY OR ORGANIZATION DO? The Ingleside Chamber of Commerces provides opportunities to build relationships in order to help our local businesses and the community prosper.

WHAT IS THE PRIMARY FUNCTION OF YOUR ROLE? I’m a key representative and advocate for business owners and employers in our community.

WHAT DO YOU ENJOY MOST ABOUT YOUR POSITION AND/OR INDUSTRY? The diversity of our Chamber from big industry to local shop owners makes our community unique. Being able to be in the middle of the growth in Ingleside and San Patricio County is really remarkable and special.

WHAT IS YOUR GREATEST ACHIEVEMENT? COMPANY NAME:

INGLESIDE CHAMBER OF COMMERCE TITLE:

PRESIDENT/CEO

SHALE MAGAZINE  MAY/JUNE 2019

In my role, I’ve had the opportunity to bring together the Chamber and its members and the community of Ingleside to the forefront in discussions across the region. Having the opportunity to be transparent in our efforts to benefit and grow our business community has given me great personal fullfillment.

DO YOU HAVE ADVICE FOR WOMEN INTERESTED IN A SIMILAR ROLE OR INDUSTRY? WHAT CAN PREPARE THEM TO BE SUCCESSFUL? Be true to yourself and don’t let anyone tell you “you can’t.”

GLYNIS HOLM STRAUSE LISTEN, TAKE NOTES, ACT, FOLLOW UP

WHAT DOES YOUR COMPANY OR ORGANIZATION DO? ConocoPhillips is the world’s largest independent exploration and production company based on production and proved reserves. The company embraces its role in responsibly accessing, developing and producing oil and natural gas to help meet the world’s energy needs.

WHAT IS THE PRIMARY FUNCTION OF YOUR ROLE? As stakeholder relations advisor in the Eagle Ford, I am the “face of ConocoPhillips” in South Texas. I serve as a liaison between local stakeholders and the company, primarily in four counties — Bee, DeWitt, Karnes and Live Oak. Stakeholders include anyone impacted by our work including elected and appointed officials, local and regional government entities and organizations, Chambers of Commerce, land and mineral owners, and educational institutions.

WHAT DO YOU ENJOY MOST ABOUT YOUR POSITION AND/OR INDUSTRY? What I enjoy most about my position is: • Representing ConocoPhillips during interactions with stakeholders, • Learning about how we can help address issues in the community, • Coordinating with subject-matter experts to answer stakeholder questions, • Enhancing the ConocoPhillips brand within the Eagle Ford by making sure the communities know that we care about them, local issues, the environment and the future of the region.

COMPANY NAME:

CONOCOPHILLIPS TITLE:

STAKEHOLDER RELATIONS ADVISOR – EAGLE FORD

WHAT IS YOUR GREATEST ACHIEVEMENT? In 2016, I was the proud recipient of the Individual Lifetime Achievement SPIRIT award, a prestigious internal award recognizing my work in education, the community and across the company. ConocoPhillips CEO Ryan Lance hosted a luncheon and I was able to take my son as my guest. I was very honored by this award and after 35 years working in higher education, I’m pleased to have spent the past seven years at ConocoPhillips.

DO YOU HAVE ADVICE FOR WOMEN INTERESTED IN A SIMILAR ROLE OR INDUSTRY? WHAT CAN PREPARE THEM TO BE SUCCESSFUL? Listen, take notes, act, follow up — that is my job in a nutshell. Listen to the stakeholders, take notes and confirm you’ve understood their comments or concerns. Take action to answer any questions or resolve any concerns as quickly as possible. Follow up with others who are involved in the response to ensure everything has been addressed. Finally, and this is a step people often miss, go back to the initial requestor and confirm they’re satisfied with the response. Coming full cycle to close the loop is critical to effective stakeholder relations management.

MAY/JUNE 2019  SHALE MAGAZINE

PHOTO BY MICHAEL GIORDANO

cover story

SHALE MAGAZINE  MAY/JUNE 2019

Amy Chronis: Doing The Right Thing For Others By: David Blackmon

MAY/JUNE 2019  SHALE MAGAZINE

MANAGING A BUSINESS FILLED WITH RISK

SHALE MAGAZINE  MAY/JUNE 2019

Houston during the early ‘80s, when the oil and gas industry was in full boom and decided that this was an exciting place where she could be successful. As her career progressed, she managed Deloitte offices in San Antonio and Austin before coming to Houston in 2012 in a leadership role and becoming the Managing Partner of the Houston office on Feb. 1, 2018. While Deloitte’s client base is diverse — including clients from all segments of the business community — energy-related businesses including oil and gas companies are a major focus area for the office in Houston, commonly referred to as the “energy capital” of the world. We caught up with Chronis in early April to talk about life, family, where she sees the business going in the future, and what it’s like to be responsible for a key division in a large, global organization like Deloitte.

GOOD ADVICE AND OPPORTUNITIES You come from a large farming family — can you talk about how these and other childhood experiences have helped you in your professional career? I would say it’s foundational. It’s that focus on work ethic — needing to get work done before you go to school, doing chores. That’s healthy and it gave me a really outstanding foundation, one where I always rely on faith, family and friends to help get through adversity and accomplish great things. I feel very fortunate for the upbringing I had with the focus on these foundational values. Early in my teenage years, we moved from the farm to a family distribution business. Working in that family business environment also taught me a great deal and led me to think favorably about going into business in general. It also made me feel real responsibility and ownership around any task I ever took My parents always

PHOTO COURTESY OF DELOITTE

Today’s oil and gas industry is one of the most high-tech businesses on the planet, an industry that consists of thousands of highly-competitive companies that adopt a growing array of new digital solutions every day of the week. Big business deals aren’t done based simply on a handshake — but rather take months, sometimes years, to negotiate, analyze and close. Before such deals can be completed, “due diligence” activities are undertaken by dozens, if not hundreds, of professionals within both companies, and often scores of outside firms whose job it is to provide expert advice on every aspect of the business. From production to human resources, to reservoir engineering, to geology, to legal, to accounting, the job of these advisors is two-fold: to provide expert analysis and insight, and to control risk. Risk is a big word in the oil business, which has always been and remains one of the most high-risk business sectors, and not just around major transactions. The day-to-day operations of any drilling, producing, pipeline, processing or refining company are filled with risk, all of which must be carefully managed, mitigated and accounted for. While companies possess their own internal expertise, that expertise must often be supplemented by external advisors who bring fresh eyes, different perspectives and added manpower to any given problem or project. These consulting firms come in all shapes and sizes, with varying service offerings, but none can bring more people or a broader array of knowledge and services than Deloitte. Founded in London by William Welch Deloitte in 1845, Deloitte is as old as the oil and gas industry itself. William Deloitte was the first person to be appointed as an independent auditor for a public company, England’s Great Western Railway, and the provision of auditing and other accounting-related services has long been the foundation of the organization’s service offerings. But as the needs of the business community at-large have shifted in the modern, digital era, Deloitte’s fields of service and expertise have evolved and expanded. Today, Deloitte stands as the world’s largest professional services organization, with a workforce of more than 245,000 individuals delivering services in 150 nations around the globe. It’s not just a big workforce — it’s a highly diverse one as well, one made up of four generations of employees, each of which comes with its own unique preferences regarding what an optimal workplace should look and feel like. It’s a challenge also being faced by the oil and gas industry, as the Baby Boom generation that has made up the preponderance of its workforce for the last 30 years moves into retirement, and is now being replaced by younger generations. One of Deloitte’s larger and most-active offices is its Houston location, where Managing Partner Amy Chronis oversees more than 2,500 employees. The seventh of eight children who grew up on a family-owned farm in Delaware, Ohio, Chronis developed an interest in the accounting field early in her college career at Ohio State University, where she was a distance runner on the varsity track and cross-country teams. She spent time interning in

focused on doing your best — if something was worth doing, it was worth doing with excellence and to the best of your ability. That’s stuck with me and influences my leadership style. Tell us about the factors that went into your decision to choose accounting as a profession. I started out with a desire to explore the world and travel, so I started college as an international studies major. Two factors influenced my ending up in accounting: At the end of my first year, a wise counselor asked, “What are you going to do with that international studies degree?” I said, “Well, I’m sure someone would like to hire me to travel around the world,” which was very naïve on my part (laughing). And she said, “Um, that’s nice, but in order to really have a career, you should go into international business. And in order to get into international business, you need to take introductory accounting.” So, I found myself extending from the honors liberal arts program into the honors accounting class. It was the hardest class I’d ever had up to that point in my life. Around the same time, my grandfather — who gave me great advice — told me that accounting was the language of business and that if I had the accounting skills and was a CPA, I would have a certain amount of security and skills for the rest of my life. So, I have both of their good advice to thank for that. I use very little of my actual accounting and bookkeeping skills today, versus all the communications skills and critical thinking, reading

and writing that was part of that curriculum. It has been a wonderful profession in terms of being foundational. After growing up in rural Ohio, you obtained your degree at the Ohio State University. Tell us how you ended up at OSU and your experience there. Ohio State was the largest university nearby. I ran in the Ohio Track Club — I was a competitive distance runner — and I had options to be a “big fish in a little pond” so to speak, with scholarship offers at smaller schools. But I wanted to run with the very best. The other schools I was interested in — Notre Dame and Georgetown — didn’t work out as one didn’t have a women’s varsity program, and I was wait-listed at the other. Ultimately, I ended up with the most scholarship money and the opportunity to walk-on to the cross-country and indoor and outdoor track teams at Ohio State. So that’s where I ended up, and it’s also where I met my husband. I’m now a very proud alumnus and sit on the Audit and Compliance Committee for the Board of Trustees. You’re an accomplished cross-country runner, a very demanding sport that requires a tremendous degree of mental toughness. Do you think that has influenced the direction your career has taken? Oh, absolutely. I think it’s been highly influential in my life. I actually wish I had been better — I was a walk-on and no star. As a result of that, I had to give my best at every practice

in order to make the traveling varsity squad each week — I had to actually race my best every Monday afternoon (laughs). I dreaded Mondays at 3:30 as a result —and to this day, every Monday at 3:30 I am grateful that life has been so much easier ever since (laughs again). But that experience made me much tougher, not just physically, but also in terms of mental strength. Running and exercise remain my method of meditation and gaining perspective. Running is when I have my best contemplation. It helps me think through barriers and obstacles and come up with better ways to approach them. My physical well-being positively contributes to my mental well-being. What other forms of exercise do you practice? I still run several days a week, but I now intersperse that with cross-training and other things. Travel permitting, I go to cycling and weight classes at a club. When I can, I also fit in a yoga or pilates class, as well. I’ve been given a lot of advice that you need to get more than one kind of exercise, so the cross-training is very good for me. What about recreation? Are you a golfer? A traveler? A foodie? Tennis? Buckeyesrelated sports enthusiast? I wish I was a much better golfer than I am (laughs). I’m a novice golfer, but my wonderful husband of 32 years loves to golf. He knows I love being outdoors, so I have promised him that in my “next chapter” I will actually train at

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Had you held a long-time interest in the energy industry prior to coming to Houston? Was that a motivating factor when you ultimately came to the city? I think that the fascination with the frontier opportunities in Texas is what drew me. I knew very little about the energy business before coming here. While in college, I thought my next stop might be Chicago — which was the closest major city. But back when my husband and I were coming out of Ohio State in the early 1980s and were offered opportunities it was booming here in Texas. So, I was really attracted to the offers to come to Texas and had the option to pick either Houston or Dallas. Knowing nothing about the state, I asked people about the two cities. What struck me when people spoke about Houston, in particular, was the notion that anybody could make it there. People would tell me, “Amy, if you come here and you work hard you can be as successful as you want to be.” And boy, is it exciting right now with so many opportunities exploding. That really appealed to me then and still appeals to me today. I love that spirit — that attitude here in Texas that you are in control of your own destiny. That is also why I love working with our clients in the shale business in particular because it’s so exciting. Of course, there are the inevitable downturns — I’ve been through at least six of them in my career now. I like to say, “It was booming when I interned, and then it started to bust when I came on full-time in the mid1980s,” (laughs). That downturn was very sobering with major service operations being idled almost overnight and people declaring bankruptcy. But now looking back, it was another lesson in perseverance and that character during adversity is where it’s really at. How about some background on your kids and husband? Sure. I’m very proud of our kids. Both my husband and I come from very family-oriented households. He has been an amazingly supportive husband and father. I owe him a great deal in terms of helping to raise our children and being a very involved father. My three children are 29, 26 and 22. Two girls and a boy. They are recent grads of various institutions.

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I love that spirit — that attitude here in Texas that you are in control of your own destiny My husband and I both came from backgrounds where family, faith and a strong focus on education to raise your opportunities and to be the best you can be were important to our families. That family focus is still very much with us. I come from a family with eight children, so I have a huge family. He is a part of a large, extended Greek family. So, between my halfItalian heritage and his Greek heritage, our Sunday night dinners are big, fat Greek/Italian extravaganzas (laughs). Lots of noise, lots of strong opinions, and never dull.

BEING INVOLVED IN A TRULY GREAT CITY Your list of civic involvement activities reads like a full-time job for most people. Talk about the reasons why you’ve taken on some of those roles, and how in the world you find time to do it all? It’s an ongoing balancing act. I make time for these board roles because they’re so important to me. For instance, the two leadership positions that I’m really focused on right now are with the Greater Houston Partnership (GHP) and the United Way.

But that list changes. Early in my career, my passion was literacy and tutoring those for whom English is a second language. And of course, whenever someone finds out I’m a CPA I’m asked to serve on the organization’s finance committee (laughs), which leads to other leadership roles. So that led to a whole career, I guess you could call it, over the last 30 years of being involved in civic activities that meant something to me. I am fortunate that Deloitte is supportive of employee efforts to give back to the community. I do so much of that on “company time,” so to speak, and I’m proud to be part of an organization where we are not only encouraged to give back, but also highly supported in those roles. Tell me about your role with the Greater Houston Partnership. One of my new board roles is on the Greater Houston Partnership — I was asked to chair the Sustainability Committee. Over the last year, I have learned a lot about Houston. In terms of how the city’s perceived, we are seen in such a positive light outside of the United States, especially because of being the energy capital of the world and being on this exciting frontier of the shale business and the Permian. Speaking to people outside of the U.S., they look at that like it’s a new gold rush. It wasn’t that long ago when the new gold rush was thought to be in Shanghai and other cities in Asia. The fact that there are entrepreneurs from all over the world coming to Houston is exciting. I just recently met with a CEO from Switzerland who is bringing his business from Israel to Houston because of the busi-

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golf and work harder at it. At least in my case, golf is one sport that is impossible to be good at unless you really work at it for many hours. But, in the meantime, I love to hike and get outdoors in general. Anything I can do with my kids and family outdoors is great for me.

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ness climate, and because of our positions with the Port of Houston and the airports here being such great distribution hubs. And it’s not only with shale but with other business sectors, like biotech, coming here as well.

THE WORK OF A “SERVANT LEADER” You were quoted in one media piece as saying, “I’m a servant leader.” Expand on what that means to you in your professional life and how you project that ethic to others in the workplace. To me, being a servant leader means that one of your primary focus areas is the growth and well-being of those around you, and that includes your clients, colleagues and the larger community. So, for me, servant-leadership is different from traditional, hierarchical leadership because power is shared. I wish I was one of those charismatic, ultra-dynamic inspirational speakers like Winston Churchill, but I’m not (laughs). I’m a person who rolls up her sleeves and who leads by example, and my actions have always spoken louder than my words. Trying to role-model behaviors has been my main way of helping to develop others. I try to value diverse opinions and points of view, I place importance on helping develop other leaders at all levels of our organization, and I work very hard at cultivating a culture of trust and an environment in which our leaders can thrive. These are all integral values to Deloitte anyway, so I feel really blessed to be a part of this organization. Let’s talk about Deloitte’s core values since they serve as guideposts for everything you and your employees do on a daily basis. I’ve already touched upon Deloitte’s encouragement of active stewardship in our communities where we live and work. So that’s certainly one of the key ones. Others include: Integrity. Creating outstanding value to markets and our clients. Commitment to each other. Strength from cultural diversity.

Back to the community: We are particularly focused on education and empowering young people in under-served parts of our communities. The challenges facing many young people today are significant, especially in lowincome communities. They are far less likely to graduate from high school and college, and that can hold them back for the rest of their lives. So, across the United States and here in Houston, it’s a passion of mine to work positively toward better workforce development and helping folks in these communities progress out of high school and into programs that can help them get meaningful careers. Another thing we do is our annual Impact Day, which gathers thousands of Deloitte employees from offices across the country to engage in a wide variety of volunteer projects. That is a special day where we tell our clients that we’re going out to serve our communities. It is heart-warming for our people to be out in the community to work and demonstrate our shared values.

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“ALL WE ARE IS PEOPLE.” Let’s talk about the things your company offers to attract and retain top people, starting with retaining young employees with new and growing families. We understand that Deloitte has an industry-leading program that has been very successful in this regard. Unlike energy companies, all we are is people. We don’t have the “black gold” assets, so to speak. We are only as good as our people, so we have to stay ahead of the curve by offering really industryleading benefits. Our family leave program is a great example: We offer a 16-week gender neutral paid family leave program for eligible employees, and

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• • • •

this time can be used for a range of events impacting our people and their families, from the arrival of a child to caring for a sick loved one. We were the first in the industry to do that, and it’s been very well-received. We think that’s wonderful for our people to be able to care for their families in a time of need without any perception that it would be damaging to their work life. We also realized that we were losing many top female employees who wanted to come back after taking a few years off, but their skills were no longer relevant. So, we offer a program in which we allow these employees to stay in touch in various ways, such as participation in online learning classes and other

programs, to keep their skills relevant. Whether they ultimately come back to us or go somewhere else, they avoid having a workforce gap. Another thing we do is to give our people choices about where they work, when possible. Obviously, we serve clients so sometimes there isn’t a choice. But subject to client demands, we give our people a lot of flexibility, whether it’s working from home or flying at times that don’t take away from their personal time with family and children; we try hard. We still have people who work lots of overtime and travel inconveniently, but we make every effort in this area to be as work/family balanced as possible. We also offer reduced work schedules and sabbaticals. We have really challenging work programs, which allow people to opt out of what they’re currently doing to go try a different program — work in a different service line, a different industry sector, a different country. We actively try to help grow all of our global networks by moving professionals between offices. All of that is an expensive investment, but our people love it. These and our other outstanding benefits are our way of meeting our employees’ needs and ensuring we can hire and retain top people. And this is all very positive for our bottom line. Much has been written about the struggles many businesses are going through in adapting to shifting employee priorities as their workforce transitions from the retiring baby boom generation to the incoming millennial generation. What has your experience been in this regard, and how is Deloitte managing this generational transition? This is a big area of focus for us because our workforce is more diverse from a generational

perspective than ever before. We now have four generations working side-by-side, which creates both opportunities and challenges. Each year we conduct what we call the Global Millennial Survey. We interview about 12,000 millennials across more than 35 countries, to gauge their perceptions of the business environment so that our clients — and we as well — can better understand the key motivators for this generation. Of the four generations of currently-active employees, millennials make up the majority of our workforce at Deloitte today. In our most recent survey in 2018, we found that millennial and Generation Z employees feel unprepared for “Industry 4.0” [Industry 4.0 is a name given to the current trend of automation and data exchange in manufacturing technologies] changes. I think we will see businesses continuing to help younger employees develop the skills they will need to succeed, especially skills requiring creativity and judgment. They are expecting us to help prepare them for the future. Skills are changing quickly, and the skills we are using today won’t necessarily be what’s in greatest demand five years from now. That’s part of the reason why Deloitte is so heavily-invested in developing our professionals and encouraging leadership at all levels of the organization. We’ve also heard our people’s feedback that an open, flexible workspace is important because it makes teaming easier, so we recently began renovating our Houston office, and I’m involved with that. We are housed in Heritage Plaza in downtown Houston. Once renovated, the office will provide a variety of positive workspace options such as team rooms, touchdown stations, cafes, etc. to accommodate the various working styles of our people.

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A DIVERSE ORGANIZATION WITH A BROAD ARRAY OF EXPERTISE Please describe for our readers the array of services Deloitte’s Houston practice provides for its clients generally, and to the oil and gas business specifically. We are the largest professional services organization in Houston. We have over 2,500 employees now, who work in one of four business lines: tax, audit, consulting, and risk and financial advisory. We serve across a wide range of industries and solutions. Those industries include everything from healthcare and life sciences, to information technology, to retail. But of course, we have many practitioners who focus on all segments of oil, gas and chemicals. Oilfield services, upstream, midstream, downstream, mining and metals, are all part of what we call our “Oil, Gas and Chemicals” practice. One of your firm’s key service areas is in the mergers and acquisitions space. That is a kind of “up and down” part of the oil business. Talk about the challenges of managing that aspect of Deloitte’s practice during the recent rush by companies to gain or expand footholds in the Permian Basin. As I’ve previously said, there are always ups and downs in this business, and there will be continued volatility. The recent downturn in oil prices has created a need for financial prudence and discipline in capital spending. As a result of these pressures, oil and gas companies want to do three things: • • •

Return value back to the shareholders vs. more M&A activities. Focus on internal measures to strengthen their financial situation. Focus on their strategic growth value proposition.

We take pride in being able to offer those solutions. If you look at the full year of global

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M&A activity in 2018, we would say the deal value was flat and there was a low count in that area of activity as compared to 2015, but the bright spot in those numbers was that the U.S. accounted for two thirds of those deals, which was a record high. Consolidation and optimization were the key drivers in M&A activity, particularly in shale regions. If you look at the Permian Basin, it had record deals in 2018 worth $25.7 billion and dominated the M&A space. The Permian deals we saw were two to five times higher than in other basins. The southeast Oklahoma/Anadarko Basin continues to develop rapidly. Most of the investment there is from small, privatelyowned producers backed by seed capital and private equity players. M&A activity in the Marcellus/Utica Basin in 2018 was slower than in 2017. Companies in that basin are focused on drilling more wells to meet the demand in the growing natural gas market. What about the midstream and downstream business? Has that been an active area in the M&A space? How do you foresee that developing in the future with all this midstream buildout happening in Texas and other parts of the country? As a result of the activity we are seeing across the oil, gas and chemicals portfolio, we decided two years ago to merge our oil, gas and chemicals practice. Instead of being in two separate groups, we decided to merge them together because of some of the things you mention here. We keep a pulse on market conditions and the business environment and we realized we could help our clients enjoy more-immediate synergies because we saw the super-majors re-establishing their chemicals business; we saw existing petrochemical companies seeing an increase in demand due to their feedstock positions; and we saw traditional chemical companies growing at a much faster pace as they focused their business models on meeting unmet needs. Innovation and pressures around capital investment and cost controls are driving more M&A activity. We haven’t seen the same kind of recovery with the service companies that the super-majors have enjoyed yet. In the oil and gas industry, Deloitte obviously provides services for the majors and large independents — what about smaller independent producers? Do they also make up a significant portion of your client base? Oh, absolutely. A huge portion of our business is what we call “middle-market,” which is the majority of our portfolio. This

Oilfield services, upstream, midstream, downstream, mining and metals, are all part of what we call our “Oil, Gas and Chemicals” practice

includes a lot of players, and we have seen a lot of consolidation in that space. When the Master Limited Partnerships (MLPs) first took off, we were dominant in that space and we will continue to be innovative and bring planning ideas, especially around tax structuring and planning and preparation for deals on the table. As part of all that, especially with the middle-market, we have what we call our “total M&A solution” that helps clients at key stages of the transaction life cycle, no matter their size. So, to your point, some of the smaller players need outside resources to help them leverage advanced digital capabilities that are quickly advancing, help with alliances, help with deep executive advice to deliver increased value throughout not just the M&A life cycle but throughout their entire value cycle. So, we have functions all across Deloitte engaged in those solutions and helping companies of all sizes. The management of risk is another of your firm’s key offerings. The area of “cyber-risk” gets a lot of media attention these days. As the oil industry adopts an expanding array of new technologies, does that, in turn, lead to increased cyber-risk? And tell us how Deloitte helps companies manage that risk. There is no doubt that it definitely does lead to increased cyber-risk. As the oil and gas industry continues to introduce more digital innovations, it must continuously adopt new cybersecurity measures commensurate with the growing threats they’re facing. These advanced threats aren’t going away; they’re just going to keep coming and it becomes almost a matter of not if, but when. Companies must focus on what we call “persistent resilience.” It’s not a one-time thing; it has turned into a perpetual need. We don’t see that changing. What we do see is that we and others are getting far more sophisticated in taking an enterprise-wide approach to help organizations across all industries manage cyber-risk. Most of the technologies and solutions that we bring help across all industries. We try to bring a real understanding of business complexities that create roadmaps to help our clients navigate the uncharted cyber landscape ahead. Our goal is to help to ensure that our clients’ connected environments are safe, secure and resilient in the face of these threats. One application in particular in shale is the growing ‘internet of things’ in terms of

the sensors that are becoming prevalent on so much of the equipment. Everything from cameras on trucks out in the basin, to the drilling equipment, to the monitors. All of those things, every time you add one of those embedded sensors, creates a cyber-risk. Another huge part of Deloitte’s business is helping companies manage financial risk — talk about the kinds of things you offer in this key area. Clearly, risk comes in all forms, and financial risk is foundational to the reason why we exist. That is our mission and our calling as a noble profession to help underpin the world’s financial markets. If we are not targeting and continuing to audit risk, then we are not doing our jobs. We have to invest quite a bit in innovative and new technologies, and we are doing that. I almost wish I could start over in my career now because it’s a lot more fun now than when I started (laughs). Back then I’d be on an audit and a client would have 1,000 contracts. So, we would pick 100 as an audit sample and examine those. But today, clients have thousands of contracts, and we can look at all of them using advanced analytic tools that we have, extrapolate all of the data and find things that really weren’t easily visible to the human eye before. That transformation is going to help us to perform far better-quality work and bring more value to our clients. And this goes through all of our client service areas in terms of risk. In tax, we work to ensure our clients are in compliance with the rules and regulations, and thoughtfully plan for the future. Our consulting practice, and risk and financial advisory practices also help address risk. Since you mention it, let’s move to taxes, another of your firm’s key offerings: What significant impacts have the Trump Tax Cuts had on the oil and gas industry? How does Deloitte help companies manage and take advantage of those impacts, both positive and negative? Of course, I have to preface this with a reminder that I am not a practicing tax professional (laughs). But tax reform was a game-changer for many of our clients. Almost all of our clients were impacted in some fashion; how they were impacted varies and has a lot to do with each client’s business operations. The IRS is still developing the administrative guidance and rules around the new tax law. But we believe it provides a lot of opportuni-

As the oil and gas industry continues to introduce more digital innovations, it must continuously adopt new cybersecurity measures commensurate with the growing threats they’re facing

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That theme of “people doing the right thing for one another” keeps coming up throughout Amy Chronis’s personal and professional life story

ties — while at the same time creating a great deal of uncertainty. We have teams focused around each of these areas to make sure we are helping our clients understand the new rules and can navigate them in as proactive a way as possible. Clients with global oil and gas operations, in particular, are most impacted by the new rules. The new rules resulted in new tax concepts that didn’t exist before — some are impacted in a positive manner, others in a less beneficial manner. Our domestic clients are impacted by the new rules limiting the deductibility of certain interest expense. Similarly, our private company clients that operate their businesses in a non-corporate context are keenly-focused on the new rules that call for a lower tax rate on their qualifying operations. In summary, I’d say that there are big impacts. It impacts everyone a little bit differently, that it’s a personal journey for each company. It’s been almost two years now, but pretty much everyone in Houston was impacted by Hurricane Harvey and has stories to tell about their experiences in the wake of that terrible storm. Are there any stories you would like to relate here about the experiences of Deloitte and its employees during and after that historic storm?

DON’T EV ER WASTE A CHAN CE TO

WANDER.

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It’s interesting— we did a town hall with our people about a year ago and I asked everyone if they wanted to offer up what the most meaningful moments had been for them at Deloitte over the previous year. Almost to a person, they mentioned how life-affirming it was to see how not just Deloitte, but the entire Houston community responded to that storm. I think it’s amazingly heartwarming how we came together as a community, in the business sector and Deloitte specifically, to help each other through that terrible time. We mobilized in a helpful and collaborative way to do everything we could to help our employees and their families. Over 80 families here at Deloitte were displaced by Harvey. One thing we did was to take part of our office space to create what we called the “Deloitte Store,” where we brought in items that were hard for people to find — things like generators, clothing, basic home improvement tools for the immediate cleanup tasks, and people just dove in to help as needed. In the immediate aftermath of the storm, we had people, especially out in the Memorial area, in their canoes, kayaks and whatever they had, helping their neighbors get out of their homes to safety. People took in animals, took in other families. Deloitte’s security office was amazing at helping us find all of our people and make

sure they were safe — we had several people who actually needed to be rescued. So I couldn’t have been more proud to be a Deloitte partner during that time. It’s hard to point to just one story, but it was just heartwarming how many instances we saw of people doing the right thing for one another.

her community, or working to help the company’s clients control their business risk and reach their financial goals, her entire life story is one of working with others to do the right thing. Interestingly, that theme is also reflective Deloitte’s core values as an organization which helps to explain how and why Chronis has ended up in a leadership position there, and also why it has become the world’s largest professional services organization.

WORKING WITH OTHERS That theme of “people doing the right thing for one another” keeps coming up throughout Amy Chronis’s personal and professional life story. Whether it was working with her siblings to get their chores done on the family farm, working hard to help ensure the success of the Ohio State track and field team, working with her husband to raise a family of their own, working to ensure her employees have a rewarding work experience at Deloitte, taking on a variety of public service roles to help improve

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INDUSTRY

Women are Making the Most of Opportunities in the Bakken By: Bette Grande

ow did a woman, born and raised in Florida, with a degree from prestigious Smith College in Massachusetts find her way to the Bakken oil patch and fall in love with western North Dakota? As I found out, it’s an interesting story. Job opportunities in the Bakken are numerous and growing by the day. As the communities in western North Dakota have grown, you see the usual job openings that you see everywhere in the country — retail, restaurant, clerical — and more specialized opportunities in industries such as engineering, medical and skilled trades. Jobs in the energy industry are plentiful as well. Drilling and production jobs are filled predominantly by men, but as the Bakken oil play matures we are seeing are more and more women moving into “non-traditional” roles of the energy industry. Judging by the women I have spoken to, there are no limits to the opportunities if you are willing to work hard, take responsibility and learn. I have had the opportunity to know and visit with many women in the energy field ranging from executives in government relations to those touring the Gulf Coast to meet the people affected by the BP spill and spending time at the Canadian oil sands learning about mining, refining and transporting. The Bakken is home to many women and families in the energy field. Watching the growing communities, the sprawling opportunity and the ongoing prosperity is heartwarming. Some say that Bakken 2.0 is more family friendly, and the pace is still fast — but nothing like before. Drilling activity will continue for another generation, however slowly the jobs picture is switching to high paying, permanent and more family-friendly positions. Women are filling critical roles and most have a story to go along with it. Monica Bleess, born in Florida, now calls North Dakota home and loves the beauty of the Badlands and enjoys the four distinct seasons.

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In fact, she says, “You couldn’t get me to move back to Florida.” Monica attended Smith College, a prestigious all-women college on the east coast, and earned a degree in geoscience. She spent a short time working in a park in South Dakota when she heard about jobs in the Bakken.

Monica Bleess With her background in geoscience, Bleess has enjoyed learning on the job as she has moved through various job opportunities. Working as a mud logger she learned all she could about the drilling process and the geology of the Bakken. She became interested in the field inspection role while visiting with a female field inspector on drilling rigs. Feeling it could be a good fit, she applied and found out it was. Monica’s job has enough challenge and variety to keep her on her toes. The inspections vary from drilling to completion to abandonment and reclamation. With the inspection of drilling rigs, saltwater disposal and injection wells, and pipeline integrity she finds each day is new and interesting. The oil and gas process is recorded from start to finish by the inspectors assuring that state regulations are followed. Lisa Tonneson The Bakken is now also the home of a New Yorker, a retired Navy (welder, firefighter, ship-

Drilling and production jobs are filled predominantly by men, but as the Bakken oil play matures we are seeing are more and more women moving into “nontraditional” roles of the energy industry

About the author: Bette Grande is a Research Fellow for energy and environment issues at The Heartland Institute. She served as a North Dakota state Representative from 1996–2014. Grande was a member of the House Appropriations Committee, Education and Environment Division. She was born and raised in Williston, North Dakota.

board damage control) mother of two, grandma to one, who married a Navy man who is from North Dakota and are living back on his homestead. Lisa Tonneson has worked many jobs in the oil field from dispatcher, bookkeeper, production welder, and pumper to lead trainer of new pumpers. Lisa’s current job with the oil and gas division of North Dakota is a field inspector. Her background and knowledge made it a perfect fit for her. Always wanting to better herself, she says that she wishes she had more education in the ever-changing world of the oil field. Caitlin Olsen Then there is Production and Measurement Supervisor for the North Dakota Industrial Commission, Caitlin Olsen. She comes to the Bakken from southeast Minnesota with a geology background. She says, “Pick up a rock and it can tell you about history. Geology is a little bit like detective work, figuring out what the earth looks like miles below the surface.” Her job has a broad spectrum of duties requiring problemsolving skills. Her responsibilities require her to follow up with operators on how they are doing with the oil conditioning policy, the statewide gas capture goals, and metering practices. At the height of the Bakken production, Catlin came to North Dakota to be a field inspector. She faced a steep learning curve including the slang terms used in the oilfield — it was like learning a second language — but with experience, she now has a strong understanding all the facets of the process. Tammy Madsche Tammy Madche comes to North Dakota from Wisconsin. She has a geology degree from the University of Wisconsin and has moved through various jobs in the oil and gas industry from field inspector to a reclamation specialist to, most recently, supervisor of the pipeline program. This position oversees the enforcement of the underground gathering pipeline regulations. In the Bakken there are three field inspection offices with locations in Williston, Minot and Dickinson. Tammy’s job requires (in part) managing the pipeline and inspection data from new gathering lines, repair and abandonment, and responding to gathering pipeline releases and landowner concerns. Growing up Madche says, “I knew I wanted to become a geologist, wanting a job that gave me opportunities for field work in an environmental firm or mining company. The Bakken offered an opportunity when the market for geologists was tight, so I gave it a try.” But adds, “I wish someone had told me it is okay to not know everything right away.” The technology is ever evolving and makes it hard to be an expert in the ever-cyclical nature of the industry. All these women are enthusiastic about their jobs and say that they would absolutely recommend the energy industry to young women and would encourage them to peruse jobs in the Bakken. Olsen adds, “Working in the Bakken has been a delightful surprise — there is a huge sisterhood for STEM women.” She continues, “I have met some of the smartest, strongest women in my life — we lift each other up”. They all agree that the jobs are not easy, often working long hours. Madche adds, “Like many careers, you get what you put into it and if you are not driven to succeed, you likely won’t.” Tonneson says, “I have met so many individuals from various backgrounds, experience and education levels while working in the oil field… they are all valuable. Do your research and having an education will reveal many more jobs and opportunities.” For me, a great takeaway from writing this article came from a conversation with Bleess in which she said she did not miss Florida. She shared that she loves the gorgeous land of North Dakota and the Badlands which, for her, makes it a perfect place to work. The work she does allows her to, “help manage and develop the resources carefully, responsibly and respectfully.” Hearing this about the place I was born and raised in is stirring. As a native North Dakotan, I am glad we have these — and so many other — great women working in the Bakken and adding to the history of this state.

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MAY/JUNE 2019  SHALE MAGAZINE

INDUSTRY

Squeezing Energy-Policy Sanity From ‘Juice: The Movie’ By: Bill Keffer

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a menu of available energy sources: oil, natural gas, nuclear, hydropower, geothermal, wind, solar, ethanol. More than three billion people around the world would consider it heaven to have access to even one of those sources. Bryce posits that there are three imperatives for any country to be able to provide electricity to its citizens: integrity, capital and fuel. Where the government (and any form of electric grid it operates) lacks integrity, the ability of its citizens to have access to a dependable source of electricity can’t even get out of the starting gate. If too much of the electricity is lost through theft, illegal connections, and non-payment, a functioning grid is impossible. It can result in conditions like in India, where every electric line is full of illegal hooks; or in Beirut, Lebanon, where there is a “generator mafia” that controls specific neighborhoods by providing generators — that come with a price. If you can establish a system with integrity, you still need capital (money) to pay for the fuel that will generate the electricity — and you need that fuel. Proposing that framework then prompts the next question — which energy source should a country pursue to generate its electricity? Bryce responds with the initially frustrating answer that sounds like he has been hanging out with too many lawyers — “It depends.” But he then explains that there is no one energy source that will necessarily be the correct option in every situation. Iceland provides all of its electricity from geothermal and hydropower sources. But Iceland has a population of only 330,000 and sits on top of prolific geothermal formations — a pretty easy call. India depends on coal for most of its electricity because there’s a lot of coal in India, and it’s affordable. Texas generates, far and away, more wind-powered electricity than any state in the U.S. because there’s a lot of open land — and wind — in west Texas. Of course, in the U.S. (and at the United Nations), there continues to be an almost-exclusive

Bryce posits that there are three imperatives for any country to be able to provide electricity to its citizens: integrity, capital and fuel

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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ne of the benefits of being in charge of the Energy Law program at the law school at Texas Tech is being able to invite energy superstars to speak in our Energy Law Lecture Series. I recently hosted noted author and lecturer Robert Bryce, who is one of the preeminent commentators on energy policy. For the past four years, he has been working on his next book and a movie to go along with it, which will be released later this year. Both the book and movie are entitled “Juice: How Electricity Explains the World.” The title alone is thought-provoking. During his visit, I was able to get a sneak preview of the movie — and I can assure you that it will make you think. Bryce takes you on a world tour to India, Lebanon, Ghana, Iceland, Puerto Rico, and even Denver and New York state. The theme of the movie is that electricity explains whether a country is developed or undeveloped; whether its citizens live in abject poverty or have the opportunity to improve their situation; whether women have to spend their days pumping and carrying water, washing clothes on washboards or rocks, cooking meals over wood chips or cow dung, and inhaling the harmful fumes from those fires inside their homes — or if they have the opportunity to be freed from those labor-intensive chores to become educated or pursue smallbusiness endeavors that can add income to their households. It also depicts whether citizens of undeveloped nations are more concerned about climate-change predictions that are premised on computer models that peer into the misty future, decades from now — or about improving the current living conditions for their children. It becomes immediately irrefutable that access to dependable electricity makes or breaks the future of a country, a region, a home and an individual. Of course, that prompts the next question — what energy source can provide that electricity? In the U.S., we have developed quite

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focus on wind and solar energy as the direction in which all nations of the world should be “encouraged” to move, regardless of their current condition and position along the “economicdevelopment continuum.” There continues to be an emphasis on these two renewables, as if they are completely interchangeable with other forms of energy. But Bryce points out that there are also four imperatives on this point: power density, energy density, cost and scale. In other words, not all forms of energy are equal — by a long shot. And, believe it or not, people (and countries that are sufficiently developed and organized to be able to make a collective decision) typically make decisions based on the relative economics associated with each option. How much energy exists in equivalent volumes of different energy sources (energy density)? How much power can be generated by equivalent volumes of different energy sources (power density)? How easily can each energy source be scaled up to meet greater populations (scale)? And the inescapable bottom line — how much will each energy source cost? Each of these four imperatives is critical in making the most prudent policy choice, but the one that most frequently goes unmentioned is power density — and it makes a huge difference. For example, the Indian Point nuclear facility just north of New York City provides 25 percent of New York City’s electricity and occupies a footprint that would require 1,300 times the land needed for wind turbines to have the capacity to generate the same amount of energy — but, of course, that assumes that the wind would blow 24 hours each day and seven days each week. None of the assumptions posited for the wind energy equivalent would ever be tolerated by any American consumer, let alone any New York City resident. Bryce suggests that the big showdown between renewable energy and hydrocarbons and/or nuclear energy will be the massive land use required by renewables. Counties in California and upstate New York, the states of New Hampshire and Iowa, and communities in Virginia, Massachusetts, and even in west Texas are already enacting bans against large wind and solar farms because they don’t want to be exploited as “energy plantations” for the benefit of progressive, urban residents. Maybe “Juice” will bring much-needed sanity to our national discussion on energy policy.

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INDUSTRY

My Last “Women’s Issues” Article By: Leslie Beyer

’m often invited to speak at various conferences and contribute to publications on the topic of gender diversity and inclusion in the oil and gas industry. It’s a huge honor to be asked to share my opinion on this critical issue, and I always want to make valuable contributions to my industry. But these invitations would be even more welcome if I were asked to contribute on issues around the oilfield equipment and services sector — my area of expertise. This is indicative of a larger issue within oil and gas culture, and while we are working to address the gender gap, we could, unintentionally, be going about it the wrong way. Many times, the request is to discuss “Women’s Issues” at an industry conference. Or share a personal testimony of how I have persevered through the challenges of being a woman in this industry and arrived in a prominent position. I know that many of my female colleagues receive the same requests. While we all strive to contribute in positive ways to the industry and there is value in sharing these experiences, we also have a great deal more to offer — our expertise, knowledge and experience. Want to understand how BP is making unprecedented discoveries in the Gulf of Mexico — while simultaneously announcing significant commitments to sustainable emissions reductions? Ask Susan Dio, Chairman and President of BP America, and Starlee Sykes, President, Gulf of Mexico & Canada, BP. Want to understand how Occidental is thinking long-term for their shareholders with plans to be carbon neutral, capturing greenhouse gases equivalent to all the emissions arising from its operations, its supply chain and the use of the oil and gas it produces? Ask Vicki Hollub, CEO, Occidental Petroleum. Want to understand how Chevron is working to reduce offshore drilling and development costs, utilizing the existence of neighboring producing facilities to reduce the time between discovery and production, making the investment in new discoveries more competitive? Ask Liz Schwarze, Vice President of Global Exploration, Chevron Upstream. While we are in a constant state of working to

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increase the numbers of women in our industry, there are many female leaders and subject matter experts who have contributions to make above and beyond the discussion of “women’s issues.” Because they aren’t “women’s issues,” they are “culture issues.” We’ve done the studies. We have the data. We know that a significant percentage of women — including but not limited to those in STEM fields — leave the workforce due in large part to a lack of flexibility in their work environment, missing mentorship programs and a desire to make meaningful contributions. You know who else says this? Millennials. All of them.Today’s workforce is laser-focused on choosing a workplace with strong culture, flexibility and meaningful contributions to society. These environments include those with parental leave (not maternity leave) policies, flex and work from home time, advocacy and sponsorship programs.These aspects are inclusive to women and men who are equally engaged in professional development while maintaining a personal life, whatever that life looks like. These are the culture issues we need to address. How are we as an industry going to recruit top talent to meet the constantly transitioning and dynamic challenge of powering the world? Only as an industry with a culture that recognizes our female leaders as subject matter experts, and not masters at navigating work-life balance, will we lead through the energy transition. Without this, we will continue to miss out on top talent from the approximately 47 percent of the U.S. workforce that is female.The global community is moving forward in breaking cultural norms and biases, and our industry needs to do the same. We could never adequately recognize the women who spent their entire professional careers working to be recognized on the same level as their peers based on their expertise and accomplishments. Thanks to those women, we now have an opportunity to drive a stronger culture. We are experts in our field. And we’ll work side by side with our male colleagues to create a culture that will continue to bring top talent to the oilfield. Just don’t ask us to talk about “women’s issues.”

Only as an industry with a culture that recognizes our female leaders as subject matter experts, and not masters at navigating work-life balance, will we lead through the energy transition

About the author: Leslie Shockley Beyer is President of the Petroleum Equipment & Services Association (PESA) in Houston. In this role, Beyer leads strategic and operational development of PESA’s programs, expansion, and execution of its mission in support of oilfield services and equipment organizations. Highlights of Beyer’s career include 15 years in Washington, D.C. serving in the U.S. Senate, multiple presidential campaigns, the White House – Executive Office of the President, U.S. State Department and U.S. Department of Housing and Urban Development. Beyer holds a BA in Latin American Studies and Spanish from the University of Texas at Austin. She serves on the World Affairs Council of Greater Houston, IPAA/PESA Education Advisory Board and the World Petroleum Congress 2020 Committee.

MAY/JUNE 2019  SHALE MAGAZINE

INDUSTRY

The Shifting Landscape in Texas Oil and Gas Production

or most of the nation’s oil and gas production history, the state of Texas has been the epicenter of activity, providing a far greater share of total US production than any other state. Over the entire decade of the 2000s, Texas crude oil production comprised about 21 percent of US production and stood at about 20.5 percent just 10 short years ago in 2009. In 2010, those numbers began to change dramatically. In 2018, the state of Texas contributed a whopping 40 percent of total US crude oil production. Daily and monthly crude oil production in Texas moved into all-time record territory early in 2018. When all was said and done annual production in the state exceeded 1.6 billion barrels in 2018, shattering the previous record of 1.26 billion barrels in 1972. In December 2018, monthly production in Texas exceeded 150 million barrels for the first time, and the numbers continue to increase with first quarter 2019 crude oil production up by over 25 percent compared to the first three months of 2018. For the first time ever, Texas daily crude oil production surpassed five million barrels in the first quarter of this year. Under virtually any price scenario over the balance of the year, Texas production will increase by a sizable amount once again in 2019. With generally favorable crude oil pricing — and current pricing falls into that category — Texas production stands a chance of surpassing 2 billion barrels in 2019, which would be a 25 percent increase over the 2018 annual total (which in turn was up by 27 percent compared to 2017). The Eagle Ford was the original game changer as the Texas share of total US crude oil production began to increase. Scarcely a barrel of crude oil was produced in this South Texas region until 2008; by early 2015, Eagle Ford crude oil production swelled to some 1.7 million barrels per day before beginning to decline in response to the collapse in crude oil prices that began in July 2014. Even though Eagle Ford production fell significantly as a result of the 80 percent decline in crude oil prices, Texas still boasts the largest two production regions in the country in the Permian and the Eagle Ford, with the Bakken a close third. While Permian production increased steadily from 2010-2014, it was in the post-downturn period in 2016 that the Permian really began to flex its muscle, once again reasserting itself as the nation’s premier production region in terms of production volumes and growth rates. According to the US Energy Information Administration, Permian Basin crude oil production, already deep in record territory, surpassed 4 million barrels per day in March 2019. The March Permian monthly estimate of 4.137 million barrels per day makes up an incredible 34 percent of the US crude oil production total — which also achieved a new milestone in March, surpassing 12 million barrels per day for the first time. A significant part of Permian production is in New Mexico, of course, but the lion’s share is in the state of Texas. The Texas Alliance of Energy

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Producers’ Texas Permian Basin Petroleum Index tracks crude oil production in Railroad Commission districts 7C, 8, and 8A, the three districts in which the Texas Permian is principally located. Total crude oil production in those three districts surpassed 3 million barrels per day for the first time in Feb. 2019, and current production from that region makes up about 26 percent of total US production (and about 62 percent of Texas statewide production). While production declined in the US, in Texas, and in most producing regions of the country including the Eagle Ford in response to the sharp price drop from July 2014 to Feb. 2016, production in the Permian was barely affected at all. In fact, incredibly, production continued to climb sharply even in the face of a 75 percent decline in the rig count and a 70 percent decline in drilling permits wrought by the 80 percent decline in crude oil prices. Notably, crude oil production in those three RRC districts continued to increase, seemingly unabated, posting a 33 percent year-over-year gain even as the now notorious pipeline shortages pinched crude oil takeaway capacity, resulting in deep discounts of Permian crude pricing compared to the posted West Texas Intermediate benchmark prices. Curious trends are afoot in the Texas upstream oil and gas industry, however. Actually, that has been the case in some respects for some time now, but these trends in 2019 have, in true Carrollian fashion, become “curioser and curioser.” Even though Permian crude oil production continued to grow during the 2014-2016 industry downturn, statewide crude oil production ultimately declined by about 14 percent and then began to climb yet again, achieving the aforementioned milestones in 2018 and early 2019. While crude oil production itself is now at record levels by far, other measures of upstream activity in Texas are nowhere near the pre-downturn high marks achieved in 2014. Posted crude oil prices (which are typically $3-4 below futures prices) averaged over $104 in June 2014 but have only reached a monthly average of just over $67 a barrel since hitting bottom in Feb. 2016. The statewide rig count, which averaged 904 in Nov. 2014, has reached a monthly average only as high as 534 in June 2018. The number of drilling permits issued in Texas on balance is down by about 50 percent compared to the 2014 high point, and well completions are off by well over 60 percent compared to 2014 numbers. The March 2019 direct upstream employment estimates (operating/ producing companies, drilling companies, and service companies) is off by about 78,000 jobs (25 percent) compared to the Dec. 2014 peak employment level. The Texas Alliance of Energy Producers’ Texas Petro Index itself, at 212.4 in March 2019 is down by some 32 percent compared to the TPI all-time record of 313.9 in Nov. 2014.

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By: Karr Ingham

Moreover, most of these indicators have declined in the first quarter of 2019, even though crude oil prices have been increasing. The odd events of the fourth quarter of 2018 could easily be a factor in the lack of direction in some of these metrics. Crude oil prices had steadily recovered since 2016 and the Texas Petro Index posted solid monthly increases for 23 straight months until Nov. 2018. That is because crude oil prices began to decline in October, dipping to a monthly average of $45.31 in December compared to the October monthly average of $67.19. Daily prices fell by over 45 percent from a high of $73 a barrel to $39.25 on Christmas Eve 2018. In response, the rig count began to decline in November and has continued to do so. The Texas Petro Index declined in November and December before recovering modestly in January, marking the first time in its history that even a one-month decline in the Petro Index did not signal the onset of a sustained contraction of significant magnitude. Crude oil prices have recovered quite nicely since then, averaging over $55 in March and pushing above $60 in April (WTI daily posted). Curiously, though, the rig count has continued to fall, along with drilling permits and industry employment, which dropped by over 6,000 jobs in the first quarter. The Texas Petro Index posted another mild decline in March as well. Price increases typically bring increases in other measures of activity, even if at a slower pace than has been the case historically. The general expectation would be that recovering crude oil prices would stimulate growth in the rig count to some degree, an increase in the number of drilling permits issued, and more jobs added to upstream industry payrolls. Whether the events of the first quarter (rising

prices but declines in other metrics) are temporary as a result of one or more short-term (hopefully) phenomena — the price events of the fourth quarter, pipeline backlogs, and so on — or represent a momentum increase in the trend of greater production with fewer resources deployed, it is unquestionably the case that 300,000 employees and 900 rigs at work in Texas are no longer needed to produce record (and climbing) volumes of crude oil. The implied efficiencies and cost declines achieved in Texas oil and gas production are beyond impressive, and a couple of numbers help tell that story. In early 2009, about 166 barrels of crude oil were produced for every direct upstream oil and gas job in Texas. In March 2019, that number climbed to over 700 barrels per industry employee. In 2008, the number of barrels of oil produced per working rig averaged about 39,000; in March of this year, that number exceeded 300,000 barrels produced for each working rig in the state. The upstream oil and gas industry has always been able to boast of the extraordinary economic impact that comes with higher prices for crude oil and natural gas in the form of rising rig counts, and the addition of tens of thousands of high paying jobs. That may no longer be the case, at least not to the extent that it once was. But now the industry can boast of something even more important — the immeasurable contribution to the consumer economy and the resulting increase in the standard of living here and abroad. The innovative and entrepreneurial women and men in the US oil and gas production industry have done what the country has long professed to desire, and that is a long term, abundant, affordable supply of energy for literally decades to come.

Under virtually any price scenario over the balance of the year, Texas production will increase by a sizable amount once again in 2019

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 & gas/energy economics.

MAY/JUNE 2019  SHALE MAGAZINE

INDUSTRY

How Shale is Reviving Rural America By: Thomas Shepstone

became a fan of shale when I leased my property in rural Pennsylvania to a gas drilling company over a decade ago. I became an advocate when I saw how much shale was doing for counties unlike my own where the Delaware River Basin Commission has yet to approve hydraulic fracturing. What I saw immediately, as a planning and economic development guy, was the greatest opportunity ever to simultaneously preserve what we love about rural America — its open spaces — while reviving its too often moribund economies. The shale revolution has turned North Dakota, which I once cited as the example of a disappearing rural America, into an economic miracle of sorts. That much is fairly well known in a generic sense, but it’s up close that you really see how shale is reviving life in the rural outposts of our nation. And, up close to me is rural eastern Pennsylvania, where I live in the shadow of the Big Apple. Residents of the New York metro area like our community, but mostly as a vacation land they’d like not to be changed so much. For them, it’s all about rural character. We really like rural character too, but we need an economy that doesn’t depend solely on

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serving city folks food at $10 per hour when they stop in for a meal on the road. Shale has provided that. Shale development, in fact, has changed everything in much of rural Pennsylvania. It has provided farmers with royalty money to reinvest in farms. It has created openings for a multitude of new businesses. It has created thousands of jobs, brought new revenue to municipalities, reinvigorated and reinvented community institutions and stimulated economic development in a myriad of ways. Consider, first of all, the upfront lease payments and royalties. It was almost two years ago that Cabot Oil & Gas, for example, announced it had paid out to date some $1 billion in royalties and nearly $500 million in lease payments to Susquehanna County farmers and landowners. That’s $34,500 for every man, woman and child living in the county from one gas drilling company. The money has shown up in new farm buildings, new houses, new equipment and new bank deposits. It has also preserved land in open space; no other form of economic development producing so much return from the land had so little land disturbance. And that’s just the beginning. This same company has

invested $4.6 billion in developing its wells. Along with that, it put $2.5 million into helping Lackawanna College expand into the county with a petroleum and natural gas branch campus and another $2.2 million into building a brand new hospital to replace the county’s old decrepit facility. Bradford and Susquehanna Counties together also received some $11 million in impact fees (Pennsylvania severance tax version) in 2017 alone from gas companies. Springville Township (population of 1,641 people) received an additional $765,000 to add to its tiny budget. That money has gone into such things as public infrastructure, emergency preparedness, stormwater management, environmental programs, social services, information technology and, especially, capital reserves. Moreover, this is on top of the money paid for road improvements to well sites. Wages paid are part of that investment and they’re astounding. Average annual wages for Pennsylvanians with jobs in oil and gas extraction are 114.9 percent above the average for all industries, according to the U.S. Bureau of Labor Statistics. Jobs directly involved in drilling wells were 66.1 percent higher, support activity jobs were 43.5

The shale revolution has turned North Dakota, which I once cited as the example of a disappearing rural America, into an economic miracle of sorts

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

percent and pipeline jobs were ranged between 64.9 percent and 66.4 percent higher. Those higher wages resulted in Susquehanna County growing its average weekly wage from 75 percent of adjoining Broome County, New York in 2004 (pre-shale) to 101 percent a decade later (post-shale). Border counties provide very good comparisons on other scales as well. Between 2010 and 2017, manufacturing GDP in Pennsylvania’s Northern Tier grew 24 percent; while the New York Southern Tier’s grew but 1.5 percent. New manufacturing also includes new power plants and LNG facilities taking advantage of inexpensive shale gas in the vicinity. The availability of that gas has also prompted the development of new gas distribution operations in small towns such as Montrose and Tunkhannock. This has stimulated still other activity, such as the brand new $11 million Tiffany Pines affordable/senior housing project in Montrose. The farming sector in Bradford County, Pennsylvania shows similar trends. Agricultural Census statistics show that between 2005 and 2012 the number of farms increased 12 percent,

the number of acres increased 15 percent, and the real estate values went up 25 percent. Lodging opportunities have also increased as the industry moved into the area and company representatives needed places to stay when visiting field operations. New hotels have been built and these have provided new accommodations for other visitors such that tourism has grown at a faster pace than other traditionally recognized resort areas nearby. Pipelines to move all this gas to urban and export markets have also created numerous jobs for rural and union workers, especially welders. The Pennsylvania College of Technology, Penn College for short, is training some of the workforce the shale gas industry needs. You can, in fact, get a 4-year degree in welding there. One of its graduates immediately started his own businesses and grossed $240,000 in its first year. Many others earn $150,000 per year. Pipeline development also generates a lot of business for lodging and eating places as pipeline workers relocate to the area for extended periods. Shale opponents occasionally mock that aspect of construction employment but, as one pipeline union executive told a Marcellus

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Shale rally in Harrisburg a couple of years ago, he’d fed and sheltered his family for 40 years with such temporary work. It’s the nature of construction and it’s a major economic sector for any region, especially those in rural America. Shale has, too, solved many environmental problems and improved rural environments in innumerable ways. As noted above, impact fees have gone to many environmental programs. Pipeline developers have worked with local environmental leaders to revegetate and maintain pipelines in ways that support wildlife living off browse or, like the Golden-Winged Warbler, depend on such a habitat to prosper. As another example, Range Resources is planting habitat for the Monarch Butterfly. Finally, there is the fact gas wells developed on public property have produced new found revenue for schools in Susquehanna County, the Cross Creek County Park in Washington County, Pennsylvania State Parks and the Pittsburgh International Airport. Such is the revival shale is bringing to rural Pennsylvania, rural Ohio, rural Texas, rural West Virginia, North Dakota and all of rural America; wherever shale is found and can be developed.

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POLICY

Colorado Adopts Law Altering Oil & Gas Regulatory Landscape By: Jack Belcher

COGCC Mission and Authority Perhaps the most impactful result of SB 19-181 is that it alters the mission of the Colorado Oil and Gas Conservation Commission (COGCC). Traditionally, the Oil and Gas Conservation Act’s mandate has been to “foster the responsible, balanced production, and utilization of the natural resources,” declaring that such development is “in the public interest” so long as it is done “in a manner consistent with protection of public health and safety” in a way that avoids “waste” of the state’s natural resources. The statute is now amended to direct COGCC to “regulate” oil and gas development “in a manner that protects” public health and safety, and redefines “waste” to establish that non-production of oil and gas does not constitute “waste.” It also eliminates cost-efficiency and technical feasibility as considerations in its directive to “minimize adverse impacts.” SB 19-181 also changes the membership

SHALE MAGAZINE  MAY/JUNE 2019

qualifications of the nine-member COGCC by reducing the minimum number of oil and gas industry members from three to one and removing the requirement that at least two members have engineering and geology backgrounds. At the same time, it increases the membership qualifications for public health and environmental protection experience. In total, these provisions constitute a substantial change in the mission and direction of COGCC away from being a body that fosters the responsible development of Colorado’s oil and gas resources. Expansion of Local Control The issue of local control has been very contentious in Colorado for several years, culminating in last year’s Proposition 112, which proposed a statewide 2,500-foot mandatory setback on drilling and completions from homes, schools, and other buildings. While Proposition 112 was defeated in the 2018 election (with its opponents including Polis), support for local control and greater regulation of oil and gas activities has been growing. Traditionally, Colorado’s courts recognized that existing state law does not thwart local governments’ ability to pass local land use regulations impacting oil and gas operations, provided the regulations are not inconsistent with state law or do not hamper Colorado’s interest

in efficient production and development of oil and gas resources. SB 19-181 changes that by giving local governments vastly more authority to regulate oil and gas activities in a manner that is more stringent than state regulations. In increasing the ability of local governments to regulate oil and gas activities, SB 19-181 specifically allows for local government regulation of noise from oil and gas operations, local government regulation of land use and surface impacts, and local government assessment of taxes or fees for inspections and monitoring. In addition, the bill allows local governments to impose regulations on oil and gas activities that are more protective or stricter than state regulations, and requires that oil and gas operators demonstrate that local governments have authorized their operations or do not regulate siting as a condition to receiving permits from COGCC. Public Health, Safety, & Environment One of the primary objectives of SB 19-181 was to increase state and local regulation of health, safety and environmental issues in oil and gas operations following the 2017 Firestone flow line explosion and the failure of Proposition 112. Specific goals include: overhauling the makeup and mission of the COGCC, shifting the focus of the Oil and Gas Conservation Act, establishing new health, safety, and environmental rules, and clarifying the roles and

In increasing the ability of local governments to regulate oil and gas activities, SB 19-181 specifically allows for local government regulation of noise from oil and gas operations, local government regulation of land use and surface impacts, and local government assessment of taxes or fees for inspections and monitoring

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n April 16, Colorado Governor Jared Polis signed SB 19-181 into law, initiating a sweeping overhaul of the state’s regulation of the oil and gas industry in the latest move of political activism aimed at oil and gas activities in the state. The new law creates a dangerous precedent impacting future oil and gas activity in Colorado and potentially beyond its borders. SB 19-181 impacts Colorado’s oil and gas industry in several ways. Among other things, it alters the mission and focus of the state’s primary oil and gas regulatory authority and introduces significant uncertainty and potential for roadblocks by increasing local control of oil and gas activities, placing more emphasis on public health, safety and environmental concerns, and revising forced pooling, drilling and operating requirements.

emphasizing the powers of various government entities to regulate the industry. In placing greater focus on the protection of public health, safety, welfare, the environment, and wildlife resources, as well as the prevention of waste, SB 19-181 specifically reiterates that Colorado bodies beyond COGCC have jurisdiction to regulate air and water pollution, oil and gas-related waste disposal, and siting. It also removes cost-effectiveness and technical feasibility as considerations when addressing wildlife mitigation measures; expands COGCC’s authority to focus on health, safety and environmental impacts beyond those that are “significant”; and requires certain oil and gas workers to receive safety certifications to work under certain conditions relevant to public health and safety. In addition, the bill directs COGCC to establish rules “to ensure proper wellhead integrity” of production wells and revisit existing rules for flowlines and shut-in or abandoned wells. It instructs the Colorado Department of Public Health and Environment’s (DPHE) Air Quality Control Commission to issue rules to lower methane, hydrocarbon, and NOx emissions from oil and gas operations and hydrocarbon transport and usage. It also mandates that COGCC and DPHE analyze alternative locations for proposed oil and gas facilities and evaluate cumulative impacts. Pooling, Drilling, and Operational Requirements SB 19-181 made a number of substantial changes to Colorado’s forced pooling requirements and to other oil and gas regulations. Changes to the pooling requirements seek to continue to allow forced pooling, but make it harder to impose forced pooling on unwilling parties. In order for oil and gas operators to force a shared pool, they will now need 45 percent of the mineral rights owners to provide consent, as opposed to one. Prior to obtaining a pooling order, mineral rights owners will need to get local government sign-off or demonstrate that the appropriate local government is not regulating siting. It increases the non-consenting royalty owner’s rates during the payback periods to 13 percent for natural gas wells and 15 percent for oil wells. Operators are also now required to obtain consent from non-consenting owners prior to utilizing the surface. As mentioned above, operators in Colorado must now demonstrate local authority authorization (or show that local governments do not regulate siting) prior to receiving permits from COGCC. There are also new financial assurances required to cover abandoned wells and meet current and future requirements.

There is much debate over what the impact of SB 19-181 will be to the $30 billion oil and gas industry in Colorado Impacts There is much debate over what the impact of SB 19-181 will be to the $30 billion oil and gas industry in Colorado. While some concessions were made to the oil and gas industry late in the process, the overall impact is going to be significant with delays to permitting and the changed mission and role of the COGCC among the greatest concerns to industry. In terms of the Colorado economy, the REMI Partnership, an organization involving several Colorado interest groups across a variety of sectors, published a report using their own economic modeling program on the potential consequences if the bill passed. The conclusions stated that the legislation has the potential to significantly restrict a critical sector of the Colorado economy and eliminate up to $13.5 billion in tax revenue in just ten years between 2020 and 2030. REMI produced models which found that with a 50 percent reduction in oil and gas production by 2030, there would be 120,000 fewer jobs across all sectors, as well as $8 billion lost in state and local tax revenue and a $158 billion loss in gross domestic product (GDP). The 100 percent scenario found that there would be 185,000 fewer jobs, $13.5 billion lost in state and local tax revenue, and a $257 billion loss in GDP. While factors like the state’s development of new regulations, current efforts to reverse the law through a ballot initiative, and likely eventual litigation all add further uncertainty to the ultimate impact of the new law, there is real fear that the momentum created by the passage of SB 19-181 could bleed into other states such as New Mexico. While the political makeup of Colorado is uniquely suited to allow the passage of this sweeping legislation, opponents of oil and gas production will undoubtedly look to Colorado as a way to thwart the oil and gas industry in other states.

For more information: Cornerstone Energy Solutions, a business line within Cornerstone Government Affairs, provides strategic and business advisory services to a wide range of organizations of all sizes. These services include government relations, regulatory affairs, strategic communications, issues management, non-technical risk management, Environmental Social Governance (ESG), sustainability, and financial advisory services. To learn more, visit www.cgagroup.com.

MAY/JUNE 2019  SHALE MAGAZINE

POLICY

An Unexpected Problem: Texas Has Too Much Water By: David Porter

here are few things — if any — that are more important to our lives than water. Without water, human life ceases to exist. Texas is all too familiar with frequent periods of drought and increasing demand on our water supply; when we think about challenges with water it’s usually in regard to water scarcity. So it’s difficult to imagine that we might have too much water and that having too much would present a problem. However, that is the conundrum that we, the Texas oil and gas industry, find ourselves facing today. With the advent of hydraulic fracturing and horizontal drilling, the industry is using more water to produce oil and gas, while simultaneously producing more water alongside the oil and gas than ever before. As the amount of produced water from oil and gas operations increases — and as our state’s overall need for water continues to climb with population growth and an uptick in manufacturing and other industrial uses — so does the need to find a solution to the question of how to best utilize all this produced water. Indeed, produced water management is one of the biggest issues confronting the oil and gas industry today, with disposal through injection being the most utilized method currently. While this is a safe and economic choice, for the most part, I do not believe it is the best long-term answer for managing produced water for many reasons. I recently issued a paper through my new nonprofit, the 98th Meridian Foundation, regarding regulations on disposal wells in Texas. As a former regulator, I wanted to start a serious dialogue around the regulations and permitting process for these wells to greater account for risk profiles of each.

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To do so, I propose bifurcating rules to create two different levels of well categorization: high-volume/high-pressure wells and low-volume/low-pressure wells — with all high-volume disposal wells (HVDWs) subject to heightened standards from a permitting and regulatory perspective. Specifically, recommendations include expanding the area of review from quarter-mile radius to half-mile radius; increasing the fees for HVDW permits; and prohibiting the conversion of a producing well to a HVDW. Other recommendations involve increased beneficial reuse of produced water in lieu of disposing the fluid and removing it from the hydraulic cycle. Beneficial reuses of produced water include but are not limited to: use in hydraulic fracturing fluid and other wellbore uses; mining; power generation, such as cooling ponds; irrigation of nonedible crops and large-scale watering operations; irrigation of consumable crops; and potentially even drinking water. I know some of the recommendations will be controversial, and I welcome productive discussions around these ideas. In fact, that is one of my main goals in forming the foundation: to ignite productive, at times provocative, discussions around issues pertaining to water, energy and land — providing thoughtful, science-based solutions to problems that take into account the big picture and attempt to preserve and improve what makes Texas great. Over the coming months, I plan to take these discussions on the road, hosting workshops and forums around the state that focus on the recommendations contained in the 98th Meridian Foundation white paper, as well as other issues that fall within the water, energy and land nexus.

With the advent of hydraulic fracturing and horizontal drilling, the industry is using more water to produce oil and gas, while simultaneously producing more water alongside the oil and gas than ever before

For more information: To learn more about the 98th Meridian Foundation, to download the white paper or to get involved at an upcoming event, please visit 98thmeridianfoundation.org.

MAY/JUNE 2019  SHALE MAGAZINE

POLICY

The U.S. is on the Verge of a Second Era of Energy Dominance Are Industry Participants Ready? By: Richard Murphy

ince lifting its 40-year-old ban on exporting crude oil, the U.S. has opened hungry world markets to U.S. shale oil and created a new boom. Throughout the summer of 2018, U.S. crude oil exports consistently exceeded 2.0 million barrels per day, doubling the amount of exports in just one year; and industry experts expect the number to double again in the next few years. When the ban lifted, the U.S. found a ready market for its crude oil. Much of the U.S. shale oil supply is light sweet crude, which is too light for U.S. refineries but sells for a premium on the world market, particularly in Asia. By late 2017, shipments to the Asia-Pacific region accounted for one-third of U.S. oil exports. Global energy market demand, on the whole, is increasing at a rapid pace. It looks as though the U.S. will not only achieve the “energy independence” politicians have craved for decades, but the country is also on track to becoming one of the world’s largest net exporters. Oversupply Leads to More Export Opportunities In July and Aug. 2018, the U.S. became the world’s largest oil producer for the first time since the 1960s, surpassing Saudi Arabia and Russia’s production levels at 10.8 and 11.0 million bpd in production. With production expected to rise as high as 16.0 million bpd in the next few years, the U.S. is well positioned to be the top oil producer in the world. Shale leads the way, thanks to technological advancements and the huge numbers of wells being drilled which has lowered costs dramatically in the last five years. Furthermore, the production profile of a shale oil well also means that the drilling investment can often be paid off in one or two years instead of 10 or more years — required for major

SHALE MAGAZINE  MAY/JUNE 2019

Any period of significant growth comes with its fair share of growing pains, and U.S. energy businesses must be prepared to mitigate risk — both on domestic and global scales

offshore developments. This combination of lower costs and quick returns is leading to significant investment in the U.S. shale oil industry that will ensure production continues to grow. This is not the first time the U.S. has been a top producer and exporter. In the late 1950s and early 1960s, the U.S. was considered a net energy exporter, producing and shipping more than it imported. Industry experts believe the U.S. could attain this position again as soon as 2022 — ushering in a “Second Era of Energy Dominance.” If current trends continue, by 2025 the U.S. will be in the top five for crude oil exports, top two for LNG exports, and the largest exporter of refined products and NGLs. This will place the U.S. in the unique position of being both the world’s largest consumer, producer, and exporter or energy. Market Risks Rise as the U.S. Energy Market Continues to Grow Any period of significant growth comes with its fair share of growing pains, and U.S. energy businesses must be prepared to mitigate risk

— both on domestic and global scales. Exporting these new production volumes of crude can generate better returns for producers and marketers. But those returns require a higher degree of portfolio management. Exporters now must consider multiple delivery locations, currency fluctuations, and new logistical options in conjunction with geopolitical risks. In the early 2000s, producers were only concerned with gathering systems, pipelines and limited truck movements for a well-understood and stable domestic market. Now, logistical concerns are much broader and far more complex with thousands of truck and rail movements, greater pipeline optionality and blending prior to delivery. With exports, vessels need to be considered with the possibility of multiple product deliveries in different ports and even countries. Additionally, one may need to use different assets to deliver to say, the Port of Corpus Christi, then a refinery in Corpus Christi, TX. Even producers that keep operations onshore will see more volatility in pricing as U.S. oil is more closely tied to global markets, which

impacts risk and hedging strategies. Adding to this complexity are the transportation and storage constraints that come with increased production. Investments are being made in transportation infrastructure which brings increased efficiency and optionality. However, investment dollars are flowing in at a rate is below the production growth so, for the next several years, constrained logistics assets will be the norm. Geopolitics also play a major role in managing a number of risks, especially pricing. Because small percentage changes in supply or demand can greatly impact prices, even a single major consumer or producer of energy can impact market volatility. For example, some Chinese consumers have turned to other markets, such as Libya, for light, sweet crude imports in the wake of evolving U.S.-China trade tensions. This is driving a significant amount of trading and hedging associated with securing supplies and selling products for impacted companies. Finding the optimal strategies to deal with these tensions and uncertainties can have a significant impact upon profitability. Preparing for the Unknown Energy companies must be prepared for the only thing that is certain in the market — uncertainty. Because many U.S.-based energy businesses designed their commodity management processes prior to the shale boom, they are having to make big changes in order to keep pace with the evolving global market. To be truly successful in both domestic and global energy markets, U.S. businesses must have the tools and capabilities that enable them to combat additional complexity and risk. Real-time insight into global market data, asset optimization tools to handle vessel-borne transportation and risk management capabilities for foreign currencies are critical. Today, forward-looking energy organizations are turning to enterprise commodity trading and risk management (CTRM) software with advanced analytics, such as Allegro Horizon, to harness all the challenges and opportunities that accompany global energy market changes. Allegro’s flexible and extensible CTRM software brings transparency to complex portfolios that consist of physical and financial positions across a variety of commodities. As a result, businesses experience greater trader productivity, enhanced risk management capabilities, improved accounting and settlement, and simplified compliance. Allegro also handles pipeline, vessel, barge, rail, and truck-based logistics in any combination, as well as the inventory present throughout the supply chain, thus giving one the tools to handle today’s increasing complex logistics. Just as advances in hydraulic fracturing paved the way for shale oil’s dominance, the right CTRM software can establish U.S. net export global preeminence by helping companies seize the opportunities of the new energy reality and prepare for the risks inherent with these opportunities.

About the author: Richard Murphy is Product Manager for Crude Oil with Allegro Development Corp., a provider of commodity management software for companies that buy, sell, produce, or consume commodities.

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MAY/JUNE 2019  SHALE MAGAZINE

POLICY

The Industry’s True Existential Threat is in Local Communities, Not in Washington, DC

he essence of your problem is not in Washington, D.C. or in the various state capitals: It is in the local communities in and around which you operate. The local communities are also where the potential solutions to your problem must originate. That is the lesson America’s oil and gas industry should derive from the advancement of two very damaging pieces of legislation in the increasingly oil and gas-unfriendly state of Colorado, and the very oil and gasfriendly state of Texas. Whether it will or not is another question entirely. Colorado SB 19-181, the 2,000 page document designed by the legislature’s Democrat majority that will essentially kill the oil and gas business in their state, passed both the Senate and the House with zero Republican votes after a withering political fight and was signed into law by Governor Jared Polis, a longtime opponent of oil and gas development. If fully implemented, the bill would: •

Fundamentally change the mission of the Colorado Oil and Gas Conservation Commission (COGCC) from one of preventing waste and conserving the state’s mineral resources to one of environmental protection from a Sierra Club point of view;

•

Lower industry representation on the COGCC;

•

Give cities and counties the right to control surface and downhole operations within their boundaries, thus creating a patchwork of industry regulations that would become very costly and difficult to navigate; and

•

Place new restrictions on the permitting and construction of upstream and midstream infrastructure.

The bill does much more, but those are the high points. The obvious goal of the legislation is to make it far more difficult and costly for oil and gas producers to do business in Colorado than it is already is. The DJ Basin is already one of the less-competitive shale resources in the country — this new law would make it even less so. Meanwhile, in Texas in early April, State Sen. Lois Kolkhorst, a Republican from Brenham in Central Texas, saw her Eminent Domain reform bill (SB 421) passed on the floor of the Senate by a vote of 28-3. The vote came after Kolkhorst incorrectly represented her bill as being a compromise bill that had been signed off on by all stakeholders, including the oil and gas industry trade associations that have been involved in negotiations surrounding it. The industry had not signaled its approval of the bill in its current form, given its concerns that its provisions could make it harder to get much-needed midstream infrastructure built in the state.

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The industry lobby was caught off-guard by the vote, but no matter: That lopsided result in a chamber in which normally industry-friendly Republicans control a supermajority shows how many members of the Texas Senate have received significant complaints from constituents on this issue. Those members are anxious to pass legislation that would placate those constituents, a motivation behind most bills that ultimately end up being passed into law. It is not as if the Texas industry hasn’t had ample warning: As Kolkhorst pointed out, this is the third consecutive biennial session in which she has introduced this kind of eminent domain-related bill. The same dynamic of members responding to constituent complaints was at work with the Colorado legislation. Many want to attribute its passage to admittedly shifting voter demographics that have over the last decade helped to shift the state from a slightly “red” state to a pretty firmly “blue” one. But that analysis, while certainly relevant, is overly simplistic. The reality is that there would have been no basis for such a bill were it not for years of failure to address the very real impacts from its operations in an industry-wide, organized and transparent fashion. Politicians, regardless of party affiliation, tend to be responsive to constituent complaints, and they are generally able to distinguish between artificial complaints from individuals who are just reciting talking points handed to them

Left unaddressed in any visible, comprehensive way, these issues tend to fester until they ultimately show up as the type of negative legislation the industry is facing this year in Colorado and Texas

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By: David Blackmon

by activists and real complaints from those who truly believe they have been unfairly impacted by oil and gas operations in their communities. One of the great strengths of the U.S. oil and gas business is that, unlike most other big producing countries, it is not a state-owned and run industry. Instead, the domestic industry is made up of thousands of highly-competitive individual companies, and that competitiveness works to encourage a high degree of efficiency and innovation. However, that same structure, combined with the nation’s anti-trust laws, make it very difficult for the industry as a whole to come together to adopt strategic, industry-wide initiatives designed to address ongoing, chronic issues that give it black eyes from a public relations standpoint. Left unaddressed in any visible, comprehensive way, these issues tend to fester until they ultimately show up as the type of negative legislation the industry is facing this year in Colorado and Texas. All of which is why the establishment of the Permian Strategic Partnership is such an encouraging development in the industry’s progress. Led by new CEO Tracee Bentley, the PSP’s mission is to develop and implement strategic, broad-based approaches to dealing with chronic, local impact issues that, if left unaddressed, can ultimately lead to the introduction of bills like Texas SB 421 and Colorado SB 19-181. That is exactly the approach that is needed — even if it comes fairly late in the game, as the shale boom in the Permian Basin began in earnest eight years ago. Another weakness the U.S. industry has when compared state-run oil businesses is its comparative focus on short-term goals and planning at the expense of any real long-term planning. For far too long, the almost exclusive focus of domestic companies has been on meeting their quarterly and annual financial, cost and production goals

designed to satisfy investors and Wall Street analysts. This hyper-focus on near-term results has had the negative consequence of leaving one of the nation’s key industries without anyone truly looking out for its long-term health. Where is this industry going to be in 10, 15, or 20 years? What are its long-term goals for the future? Finding anyone in a position of leadership for America’s oil and gas business who can offer informed answers to those seemingly basic questions can be quite a challenge. I would certainly have a hard time doing it. Much has been written and said in recent years about the generational change that is taking place in the oil and gas industry — the “Great Shift Change,” as some have called it. This generational shift is not isolated to the oil business; it is, in fact, taking place across our entire society. The great Baby Boom generation, of which I am a part, is in the midst of retiring, growing old and ultimately dying away. Over the past 40 years, this generation has formed the heart and soul of the industry, and also its major base of support within society at-large. Baby Boomers are inexorably being replaced, both within the industry and in society as a whole, by younger generations — so-called Generation X, Generation Y and the Millennial generation. As society is quickly learning, these younger workers and stakeholders hold entirely different sets of beliefs and priorities about energy, the environment and other societal matters than did their parents and grandparents. For the nation’s oil and gas industry, that means that unless someone starts focusing on doing the things necessary to maintain its health over the long haul — by becoming more immediately responsive the priorities of these younger generations — we will be seeing more and more efforts like Colorado SB 19-181 arising in other oil and gas states around the country. If the industry wants to be able to retain its license to operate in the U.S. 20 years from now, the time to start planning to reach that goal is today. That means that we need to start seeing strategic initiatives like the PSP forming in every major play area — and have them created during the first or second year of a boom, rather than the 8th year. By now, we all know what the major impacts in any shale boom will be: The strategic approaches required to address them will vary only slightly on a regional basis. Bentley has a big job ahead in leading the development and implementation of such strategies, but she appears well-equipped to succeed in the role. Where the industry as a whole is concerned, the PSP represents a good start. But a start is all it is. There are many other big play areas all across the country that are crying out for a similar long-sighted approach, and the industry ignores them at its own peril.

For the nation’s oil and gas industry, that means that unless someone starts focusing on doing the things necessary to maintain its health over the long haul — by becoming more immediately responsive the priorities of these younger generations — we will be seeing more and more efforts like Colorado SB 19-181 arising in other oil and gas states around the country

MAY/JUNE 2019  SHALE MAGAZINE

BUSINESS

Big Trends in Cybersecurity and Data Privacy for 2019

s we move further into 2019, we’d like to give an overview of the trends we see developing in the cybersecurity and data privacy area for the year. We’ll be sure to elaborate on these areas with more details as they unfold. State legislation continues to move the data privacy ball down the field. The Super Bowl is over, but the analogies continue. As of 2018, every state legislature had enacted a data breach notification law. This leads us to ask what is next for Justice Brandies’ laboratories of democracy? State governments are now passing laws to protect the personal information of their residents. Following the footsteps of the California Consumer Privacy Act, Washington would be the second state to adopt a comprehensive privacy law, emulating the consumer rights principles found in the European Union’s General Data Protection Regulation (GDPR). What do California’s and Washington’s laws mean for U.S. companies? Without a federal law, businesses may struggle to stay abreast of the compliance requirements for these well-intended but patchwork legislative solutions.

Information governance policies are an effective tool to meet this goal, and they go hand-in-hand with a company’s eDiscovery practices

SHALE MAGAZINE  MAY/JUNE 2019

Cybercrime will find targets that weren’t vulnerable before. It is harder to play defense than offense. Criminal behavior is often described as a function of opportunity and risk, balancing the value a potential victim offers against the criminal’s perception that a victim is an easy or difficult target. However, unlike traditional crimes, cybercrime does not require physical proximity between the attacker and the victim. The virtual nature of cybercrime allows single criminals to perform multiple crimes in several locations in rapid succession. This allows criminals to launch hundreds of ransomware attacks against individuals in multiple states each night, and demand a $100 bounty to unlock the infected computer — clearing thousands of dollars per day. On the other side of the cybercrime spectrum is Ryuk, a “big game hunting” threat, targeting large organizations with high ransoms. In the face of these evolving threats, IT professionals and corporate decision makers must accept that cybersecurity will be a Sisyphean task that we all must shoulder. Data protection liability and cyber insurance coverage are evolving. Judicial recognition of (if not sympathy for) the multitude of data breach threats is expanding. Like our state legislatures, our state and federal courts are evolving in their approaches to liability in the digital age, at what would normally be considered a feverish pace. In the last two years, the D.C. Circuit, Eighth Circuit and a U.S. District Court in northern California have ruled that plaintiffs had standing to bring lawsuits based in part on the risk of future harm of identity theft. Similarly, in the summer of 2018, we saw the Sec-

KRAS99 /STOCK.ADOBE.COM

By: Erik Dullea

ond and Sixth Circuit Courts of Appeals published decisions in two spear-phishing cyber insurance coverage disputes that run counter to earlier decisions by the Fifth and Ninth Circuits. The facts in the cases below are distinguishable, but the divergent rulings are worthy of further discussion. • • • •

Covered claim – Medidata Solutions, Inc. v. Federal Ins. Co., 729 Fed. Appx. 117 (2d. Cir. 2018). Covered claim – Amer.Tooling Ctr. Inc. v. Travelers Cas. & Surety, 895 F.3d 455 (6th Cir. 2018). Not covered – Taylor & Lieberman v. Federal Ins. Co., (9th Cir. 2017). Not covered – Apache Corp. v. Great American Ins. Co., (5th Cir. 2016).

What do these decisions mean for companies? Not only do courts seem more receptive to the harms caused by identity theft, but courts are also delving into the factual details of computer scams and frauds when resolving cyber insurance coverage disputes. Pennsylvania Supreme Court sides with employees In late Nov. 2018, the Pennsylvania Supreme Court held that the University of Pittsburgh Medical Center failed to exercise reasonable care safeguarding employees’ personal information stored on an internet- accessible computer system. The Court also allowed the plaintiffs to obtain economic damages under the state’s economic loss doctrine under a negligence theory. The court acknowledged it was applying an existing common-law duty to a novel factual scenario as opposed to creating a new duty of care. Because the employees had to provide personal information to employers as a condition of employment, employers have a duty to exercise reasonable care in the protection of that data. Illinois Supreme Court protects consumer biometric data Recently, the Illinois Supreme Court unanimously held that individuals do not need to allege or prove actual damages or harm to maintain a private right of action under the Illinois Biometric Information Privacy Act when a private entity fails to comply with the statute’s requirements. The ruling upholds privacy rights of individuals in their unique biological information as defined by the Illinois statute. For a deeper discussion on the Illinois ruling, see Anne Mayette’s and Terry Potter’s article on the Husch Blackwell website regarding the decision.

The effects of GDPR enforcement actions and fines will influence U.S. corporate behavior. The EU has a long-arm of jurisdiction too. In 2018, there was a significant amount of attention (and anxiety) over GDPR’s implementation. The first GDPR enforcement action was brought by the first UK’s Information Commissioner’s Office (ICO) against Canadian-based AggregateIQ (AIQ). Not only did the ICO order AIQ to delete the personal data of UK residents stored on its network — if the company fails to comply with this order, it could be subject to a fine of €20 million Euros. In January 2019 France’s La Commission Nationale de L’Informatique et des Libertes (CNIL) fined Google €50 million Euros. Google’s fine is the largest GDPR penalty issued by a regulator to date. What should a U.S. company expect when it comes to GDPR enforcement? As the penalty against Google shows, GDPR enforcement can be brought against any foreign company that processes personal data of individuals residing in the EU. U.S. companies offering goods and services to the EU, or having an establishment within the EU and are monitoring the electronic behavior of individuals, are subject to GDPR enforcement. Evolving threats and expanding liability will push companies to minimize the data they retain. Companies need to drain their digital swamps. In recent years as data storage capacities rose and the costs fell, companies and individuals fell into the habit of saving everything. Most of us have become digital hoarders either at work or at home. But in the face of data breaches and expanding liability (judicial and regulatory), companies need to reassess their data retention practices — if only to reduce the quantity of data that is vulnerable to attack. Information governance policies are an effective tool to meet this goal, and they go hand-in-hand with a company’s eDiscovery practices. As our eDiscovery team leader Megan Scheiderer advised General Counsels in 2018, company legal departments responding to lawsuits, document subpoenas or government investigations are overseeing the data collection and production processes. Information governance committees and policies can help companies get their digital houses in order to mitigate the risk of future legal and regulatory compliance actions. Food for thought. There is little “good” news in this article, and the tasks and threats can feel overwhelming. We know that cybersecurity and data privacy are difficult challenges, but advice and resources are available to assist companies to navigate through the process and respond to threats as they arise.

In the face of these evolving threats, IT professionals and corporate decision makers must accept that cybersecurity will be a Sisyphean task that we all must shoulder

About the author: A Denverbased partner of Husch Blackwell’s Technology, Manufacturing & Transportation team, Erik Dullea focuses his practice on administrative/ regulatory law, with an emphasis on heavily regulated industries and government contractors. He represents mine operators in MSHA enforcement actions, energy and industrial companies in OSHA enforcement actions, and advises airlines and their pilots challenging FAA and DOT enforcement actions. Erik advises government contractors on transactional matters, bid protests and civil litigation. He holds an active security clearance and has 20 years of experience in the aviation industry as both a Navy pilot and a commercial pilot. Erik is a co-chair of Husch Blackwell’s Unmanned Aircraft Systems practice group.

MAY/JUNE 2019  SHALE MAGAZINE

BUSINESS

Rural Texas Transitions By: Thomas Tunstall, Ph.D

ears ago, Texas was a predominantly rural state. Populations of cities and counties in the late 1800s and early 1900s were much more evenly distributed back then. If we look back to the 1860s, we would note that nearly 60 percent of the U.S. workforce consisted of farmers. In 1900, it was still about 40 percent of all workers. Now, of course, only two percent of the U.S. workforce is employed in agriculture. As a result, fewer people live in rural areas, and the fastest growing geographies in Texas are now the larger cities. This shift in the distribution of the state’s population has implications important to the Eagle Ford Shale area (and West Texas as well) in terms of legislative representation. Let’s take a specific example. In 1890, Gonzales County had around 18,000 people living there. San Antonio had a little over 37,000 and Bexar County had just under 50,000 people. By 2000, San Antonio had over one million residents and Bexar County boasted over 1.3 million — increases of 2,500 percent or more. Yet, in 2000, how many people lived in Gonzales County? About 18,000 — the same number as in 1890. This is indicative of the growth occurring in the larger cities like San Antonio, Houston, Dallas-Fort Worth and Austin. And yet, what often goes unnoticed is that both Texas Senate and House seats are apportioned by population. Unlike the U.S. Senate, where every

SHALE MAGAZINE  MAY/JUNE 2019

geography (state) has retained two votes since statehood, the Texas Senate is population proportional. So as communities in South and West Texas lose ground to the larger cities in terms of population growth, they lose not only House but also Senate seats as well. In 1900, Bexar County, for example only contained 31 percent of the population, which meant that almost 70 percent of people lived in the other parts of the Eagle Ford area. By 2010, however, Bexar County’s share of the 20 county Eagle Ford Shale population had doubled to 61 percent. With that growth, comes a greater political voice in terms of more State Representatives and Senators for cities like San Antonio, and less for rural counties in the Eagle Ford. Some of the most dramatic population shifts have occurred since the end of World War II, when agricultural mechanization began to systematically decrease the number of people employed on farms. From 1950 to 2010, DeWitt, Dimmit, Gonzales, Karnes, La Salle, and McMullen Counties all lost between 6-40 percent of their population. In that same period, San Antonio and Bexar County increased over 200 percent. Many counties in West Texas have seen similar population decreases since the 1950s. The reality of Texas politics is that all parts of the state are in constant competition for the limited highway funding available. Dallas-Fort Worth, Austin and

Houston, for example, have their own issues with regard to roads. While South and West Texas are seeing the impacts in the form of road deterioration from large numbers of 18-wheelers, the big cities struggle with increasing congestion because of rapidly growing populations. Both groups make a good case for increased highway funding, but the more populated cities and counties have a much greater political voice than in the past simply because they have more State Senators and Representatives. Given the shift in political clout to the larger cities in Texas, it will be important for the communities in South and West Texas to work together to make their case to the Texas Legislature. Of course, beyond legislative remedies, rural communities across Texas must seize the opportunity to reinvent themselves. The predominant family farm system that was characteristic of rural Texas in the late 19th and early 20th century has changed because of technological progress that requires fewer people in traditional agriculture. But the population of Texas is growing (nearly 47 million people estimated by 2060 — up from 28 million currently), and this trend presents opportunities for rural areas to grow also if they can establish an infrastructure that attracts new residents, visitors and businesses. So the question remains: How will rural Texas — with the help of the state legislature — transform and thrive in the coming decades?

Unlike the U.S. Senate, where every geography (state) has retained two votes since statehood, the Texas Senate is population proportional

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 Hidden Hill Country Gem

o enter the quaint town of Castroville is to feel like you’ve stepped back in time. With a nod to its French and German ancestry, the town with a population of less than 3,000 is filled with historic sites and homes, Alsatian restaurants, and beautiful pecan and cypress trees. Perched atop 13 acres of hilltop overlooking this historic town, and the Medina River Valley, is the newly renovated, family-owned and -operated Hillside Boutique Hotel (formerly the Hotel Alsace). This 38-room Hill Country modern property provides guests with a place to slow down, connect and step off the grid while enjoying modern amenities and artisan touches that rival the finest destination retreats in Texas. “It’s just a 20-minute drive from downtown San Antonio, but it feels like it’s worlds away,” says owner Joseph Winkler, an architect whose eye for detail and aesthetic is at the heart of the recent renovation. “We wanted to create a safe, family-friendly place where people don’t have to leave the site for what they need.”

SHALE MAGAZINE  MAY/JUNE 2019

The Best Kept Secret Often referred to by guests as, “the best kept secret in Texas,” the Hillside Boutique Hotel has been a labor of love for Winkler, his wife Jana, and their partner Pete Markwardt. Each one brings a background of talent, skill, and a passion for design, craftsmanship and luxury that work together to create a harmonious, organic

relationship between the property, its furnishings, and the landscape surrounding it. “We very much embrace the small-town atmosphere, and hire and train locally,” says Joseph, adding that many employees have been with them for a decade or more and have developed a familiar rapport with guests. “We have people who come here because of Jennye, our front desk/concierge who has been with us for 12 years,” he says. “We value our employees and give them a great work environment. Because we aren’t corporate, we can put our own stamp on things and do things the way we want.” When the Winklers purchased the hotel in 2005, only 80 percent of the rooms were in use and the former restaurant had been shut down. Neither Joseph nor Jana had any experience in owning and operating a hotel or restaurant, but what they did have was a dream. Joseph, who obtained his degree in architecture at the University of Texas, left his job as project coordinator at one of Austin’s most progressive firms, Jana left her position with the Mecca Gym and Spa, and the family relocated to Castroville where they set about the first of four renovations that would result in the Hillside Boutique Hotel. Along the way, they brought in partner Pete Markwardt, owner of the Casa 1810 hotel in San Miguel, Mexico. Markwardt brought his hospitality expertise along with his extensive background in antiques, retail and custom furniture design, and together the three owners worked closely together to create a place they describe as a fresh and modern interpretation of Texas Hill Country charm. The most recent upgrades were completed in spring 2018 and include all new custom furniture, fixtures, shiplap, crown molding and landscaping. The restaurant, bar and patio areas were given facelifts that included the addition of glass and black rod iron walls and bi-fold doors in the tasting room, ballroom and boardrooms. Custom created in Markwardt’s own warehouse, the glass walls and doors were made to mimic the vintage industrial warehouses from the 1880-1920 era, with ran-

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domly seeded glass panes and a clean, modern, long vertical pane design. Floor to ceiling windows were added in the boardroom for unobstructed views of the property. The Rooms Creating a room where guests can feel pampered, yet comfortable, is no easy task. The owners worked with designer Hillary Walker of Courtney and Company to tie everything together. Together they selected paint colors and art pieces for the rooms, with Markwardt handpicking the blankets on each bed from Mexico, and shipping in rugs from Turkey. The hand-woven pillows on the beds were carefully selected by Walker and together with the rustic furnishings, the rooms took on a luxurious, yet comfortable feel that invites guests to kick back and relax. “We never wanted to leave the Texas feel,” describes Markwardt, adding that the Hillside collection of blankets, pillows, rugs, bath products, robes and even all the beds and furniture is available for purchase, the hotel accepts inquiries at the front desk and certain items are available for immediate purchase in the lobby store. The 38 available rooms range from a 375 square foot Classic King, to 425 square foot Classic Queen, Deluxe King, and Superior King styles. For an even more luxurious experience, guests can enjoy a 620 square foot, two-bedroom Premier Suite complete with one king and one queen bed, along with a sleeper sofa and a few little “extras” like robes and slippers. For those who want the feel of “home,” the twobedroom Luxury Suite offers more than 1,100 square feet of Hill Country living with vaulted ceilings, floor to ceiling windows, full kitchen, living area, washer and dryer, and a large private balcony overlooking the Medina River Valley. All rooms are outfitted with 50-65 inch state of the art televisions as well as complimentary Wi-Fi service, and guests may choose from a menu of “enhancements” including welcome drinks, spa services, and more when booking to customize their experience. The Spa and Amenities With a degree and background in theatre which led Jana to a career in cosmetology, creating a destination spa is a dream come true for the mom of three. She oversees the development of the 1,000-square foot facility that offers four treatment rooms in which guests can enjoy customized facials, massages, body treatments, and nail services. A soothing raindrop shower enhances the experience. Jana carefully selected the product lines she uses including Malin + Goetz, a fragrant, unisex line of bath and body products, and Rhonda Allison skincare, another Texas company.

A hilltop swimming pool area complete with private cabanas is perfect for relaxing following spa treatments and unwinding amid the natural Hill Country panoramic views. As part of a complete wellness experience, events including Yoga on the Hill and a Hillside Concert Series with live music, both take place in the outdoor Arbor under the big Texas sky. A Hillside Wellness Retreat package offers guests even more opportunities to live their best lives with a menu of fitness classes and guest lecturers. Eating and Meeting A modern twist on comfort food is what guests will find at the Texas Bistro. With breakfast, lunch, dinner and weekend brunch menus there is something to tempt every taste bud. The 1,100-square foot space is light and airy with Hill Country views from almost every angle. Rustic European-style oversized chandeliers custom made in Turkey offer ambient lighting that enhances the modern aesthetic. For pre-gaming or just unwinding, sink into one of the deep leather chairs or couches in the Barrel Room and enjoy drinks and appetizers. This unique 800-square foot space is a throwback to old Castroville with photos from the town’s early days lining the walls, and shelving made by Joseph himself using reclaimed wood off of the original property. Once an open-air loft, the curated space can accommodate up to 40 people and is ideal for informal meetings or gatherings. For larger events up to 250 guests, the multi-level Texas Bistro offers space for 60 people in the upper-level Tasting Room, while the ballroom can accommodate up to 145 guests, making it perfect for parties, weddings, reunions and more. Additionally, the entire property can be booked for weddings or corporate events. With so much to offer guests, the “best-kept secret in Texas,” won’t stay a secret for long, and that’s just what the owners have planned. “We are trying to build a legacy for our family,” says Joseph. “There is so much more that I want to get into on the other 9 acres of property. In my brain, this is just the beginning.”

“

We’ve combined our passions for architecture, design, and wellness into a unique escape from the hustle and bustle of the city, while offering modern amenities and artisan touches that guests might find at some of the finest destination retreats across Texas.” – OWNER JANA WINKLER

About Hillside Boutique Hotel Hillside Boutique Hotel is located on a 13-acre hillside in Castroville, Texas. Renovated in 2018 by local owners, the 38-room hotel boasts a Hill Country modern design with custom artisan touches and panoramic views. Just 17 miles from SeaWorld and 26 miles from downtown San Antonio, Hillside Boutique Hotel offers visitors a relaxing retreat conveniently close to area attractions. Amenities include a full-service spa with an array of customized services, a hillside swimming pool with panoramic views and poolside cabanas, and the outdoor Arbor - home to the Hillside Concert Series, Yoga on the Hill and more. Guests can enjoy a modern twist on comfort food with indoor and outdoor dining at the 2,600 square-foot Texas Bistro, or relax and enjoy drinks and appetizers in the rustic Barrel Room. Hillside Boutique Hotel offers 4,500 square feet of indoor event space with additional acreage outdoors. A perfect wedding venue, the hotel offers a two-bedroom, two-bath suite with outdoor living and dining areas. With luxury amenities, artisan decor, and event spaces for up to 200, the hotel is ideal for both business and leisure. Visit hillsidetexas.com or call (830) 538-3200 for more information.

MAY/JUNE 2019  SHALE MAGAZINE

LIFESTYLE

“Check In” on the Evolving Hotel Industry By: Kristie Byrd

s the fourth largest city in the country, it was no question Houston would be the next destination for Cambria Hotels. We’re a relatively new but dynamic brand that tailors the hotel experience to the guests themselves—simple yet sophisticated, flexible and tech savvy. In August, we will open the doors to our newest, upscale property in one of Houston’s oldest buildings, the Great Southwest Building, formerly known as the Petroleum Building, located in downtown at 1314 Texas Avenue. The hotel will feature 226 rooms as well as a stateof-the-art fitness center, ballroom and multifunction meeting spaces situated on the 20th floor of the hotel, with incredible views of the city of Houston.

SHALE MAGAZINE  MAY/JUNE 2019

Over the years, we have seen many trends in the hospitality industry that have allowed us to create a unique environment. Most recently, there is a huge uptick in millennials travelling which will continue to grow. According to the Cornell Center for Hospitality Research,

those aged 18-34 are expected to represent 50 percent of all travelers within the United States by 2025. As a result, the brand’s focus is curating a guest experience that prioritizes convenience and technology without sacrificing comfort. Millennials are educated on the latest in technology and they want things done quick and efficiently. Their guest experience begins with a frictionless booking and check in process and seamless interactions with hotel services. Because millennials are tech-savvy and prefer using apps and mobile sites when booking hotels, it is important that our hotels provide user friendly information on digital platforms. We must remain knowledgeable about the latest and greatest technology, which is why our meeting spaces and hotel rooms will be equipped with cutting edge technology as well as unparalleled views of downtown Houston to add to our guests’ overall experience. We have also seen an increased demand for an elevated food and beverage experience. Because a unique, curated guest experience is now so critical, food and beverage offerings have to match that. Years ago, food and beverage at a hotel was a luxury, not a basic amenity. Hotels are no longer relying on revenue solely from room sales, but food and beverage has become a revenue generator as well. It is now a defining feature of lifestyle brands. At Cambria Hotels, we are proud to offer locally-sourced menu, craft beer flights and thoughtful signature cocktails. Additionally, we have seen a rise in the upscale, lifestyle hotels. In the past, there were luxury hotels and economy hotels, and not much in between. These upscale, lifestyle brands are designed to cater to the unique features of the hotel’s community and have a larger emphasis on food and beverage. We look forward to serving the Houston community by

The brand's focus is curating a guest experience that prioritizes convenience and technology without sacrificing comfort bringing a unique, boutique, upscale experience to Downtown Houston through our lifestyle brand, Cambria Hotels. Most Cambria hotels are new construction, but we are extremely proud of our adaptive-reuse hotel, which preserves the history of the building while breathing new life and purpose into this hotel. Dallas-based developer Todd Interests is responsible for adapting this Houston treasure. Previously, he completed a similar project in the historic Petroleum Building of Dallas where the Cambria Hotel Downtown Dallas is located. The Cambria Hotel Chicago Loop – Theatre District is located in a former theater in the heart of the city’s downtown that was well received by the public because of the unique themes that remained focused on theatre but also updated and nods to the community. Through our experience, we recognize the importance of maintaining the integrity and the history of the building while modifying the space to accommodate our brand. With our upcoming Cambria Hotel, Downtown Houston, we will reintroduce the Petroleum Club that Houstonians have always known and loved with a new, modern twist. We plan to commemorate this historic space while also delivering a curated travel experience with boutique accommodations, tech-minded amenities, and creative, locally-sourced bistro fare.

For more information: To learn more about Cambria Hotels and the new Houston location, visit www. cambriahoustondowntown.com or call 713-222-2100. Room reservations available beginning August 1, 2019.

MAY/JUNE 2019  SHALE MAGAZINE

SOCIAL

SAPA & WEN south texas Co-Host Leadership Luncheon

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San Antonio Pipeliners Association teamed up with Women’s Energy Network (WEN) South Texas to co-host a women in leadership luncheon. The event was held on April 16 at the Valero Energy Headquarters. The luncheon featured a panel of talented local leadership including Nora Teixeira of EPIC Pipeline, Paula Waggoner-Aguilar of The Energy CFO, Angela Bedoya of Marathon Oil Corporation and Karen Thompson of Nustar Energy. The panel discussed the current trends and hot topics in the industry with a goal to inspire attendees to excel in the Texas oil and gas industry. Moderating the panel was SHALE Publisher and CEO, Kym Bolado.

Women’s Energy Network National Conference

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Women’s Energy Network (WEN) held its national conference on March 27-29 in Denver, Colorado. WEN members from around the country converged at the Gaylord Rockies Resort & Convention Center to hear from speakers and panels in four tracks: legal/regulatory, technical, financial and leadership. Keynote addresses included Dr. Christine Mann Darden, distinguished retired NASA scientist who was featured in the book Hidden Figures; Alice K. Jackson, President of Xcel Energy – Colorado; and Sandy Asch, founder of the Alliance for Organizational Excellence and bestselling author.

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SOCIAL

PHOTOS COURTESY OF JOHN HUANG PHOTOGRAPHY

The 21st Annual Jesse H. Jones Award Luncheon Hosted by The World Affairs Council of Greater Houston The World Affairs Council of Greater Houston hosted their 21st Annual Jesse H. Jones Award Luncheon on April 17 and the Post Oak Hotel at Uptown Houston. The Council recognized Jeff Shellebarger, President, Chevron North America Exploration and Production Co., as the 2019 International Citizen of the Year. Also featured as a speaker was Ambassador Thomas Pickering, former U.S. Ambassador and Representative to the United Nations in New York and the former U.S. Under Secretary of State for Political Affairs. Moderating the event was Ambassador Chase Untermeyer, Former U.S. Ambassador to Qatar. Houston Mayor Sylvester Turner made a special appearance at the luncheon. Guests enjoyed the opportunity to view a photography exhibit by famed photographer Bob Gomel.

STEER and TXOGA at Fiesta

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South Texas Energy & Economic Roundtable (STEER) and Texas Oil & Gas Association (TXOGA) joined forces to share a positive energy diversity message with San Antonians at the 2019 King Williams Fair, a staple in the annual Fiesta activities. The organizations gave out the essentials: paper fans, sunscreen, hand sanitizer and cooling towels, along with oil and gas inspired Fiesta medals.

SOCIAL

SAPA’s Midstream Open Golf Tournament

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San Antonio Pipeliners Association (SAPA) hosted the Midstream Open Golf Tournament which provided a fun day of golf and networking on March 22 at the Hyatt Hill Country Golf Club. Guests were treated to a golf tournament, after-play buffet, cash bar and door prizes.

WEN South Texas and TEAC Host Energy Mixer

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Women’s Energy Network (WEN) South Texas and Texas Energy Advocates Coalition (TEAC) co-hosted an energy mixer in Corpus Christi, Texas at the Omni Hotel on April 17. Guests were encouraged to join and get involved in the WEN South Texas chapter as the group moves forward with an initiative to grow its presence in the Coastal Bend region. Jan Lee, WEN South Texas President, spoke on the importance of growing the Coastal Bend program and the South Texas chapter’s commitment to seeing the organization more active in the area. Additionally, Omar Garcia, Chief External Affairs Officer at Port Corpus Christi, gave an update on current projects underway at the Port and offered support of the WEN South Texas chapter.

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SHALE MAGAZINE  MAY/JUNE 2019