SHALE Magazine Sept/Oct 2018 by SHALE Oil & Gas Business Magazine

SHALE SEPT/OCT 2018

THE SOCIAL CONTRACT IN OUR TEXAS OIL FIELDS PESA MEMBER COMPANIES INVEST IN STEM EDUCATION BENEFITS OF SOCIAL AND COMMUNITY INVESTING

COLORADO’S UPCOMING ELECTION IS CRUCIAL FOR ENERGY INDUSTRY

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SEPTEMBER/OCTOBER 2018

CONTENTS SHALE UPDATE

Shale Play Roundup

FEATURE

The Social Contract in our Texas Oil Fields

COVER STORY

Texas has seen its fair share of major storms. From these crises, Texans have endured major losses and setbacks while also gaining new knowledge and a sense of community. The energy industry has been at the forefront in helping the communities affected in these trying times — none more so than ConocoPhillips.

INDUSTRY

COVER AND TABLE OF CONTENTS PHOTOS COURTESY OF CONOCOPHILLIPS

INDUSTRY 36 Some Ruminations on Social Responsibility 38 PESA Member Companies Invest in STEM Education 40 Community and Social Investment in the Eagle Ford Shale 42 “Our Oil IS Clean Energy!”

POLICY 46 Colorado’s Upcoming Election Is Crucial for Energy Industry 48 Issues Facing the Texas Legislature in 2019

BUSINESS 54 Benefits of Social and Community Investing 56 The World Is Round — The Economy Should Be Circular

LIFESTYLE 60 What Financial Toxicity Means — and a Novel Solution 62 Workplace Wellness

Wake Up and Smell the Crude

POLICY

How API is Working to "Power Past Politics"

BUSINESS

“It’s So Good to See You Here”

LIFESTYLE

3 Belief Systems that Hurt High Achievers

SOCIAL

SHALE & In the Oil Patch Host Fourth Annual State of Energy Luncheon

SEPTEMBER/OCTOBER 2018  SHALE MAGAZINE

VOLUME 5 ISSUE 5 • SEPTEMBER/OCTOBER 2018

KYM BOLADO

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

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CONTRIBUTING WRITERS Adam Balinksy, Leslie Beyer, David Blackmon, Matt Dempsey, Omar Garcia, Bill Keffer, Merilee Kern, Kelly Warren Moore, Dr. Marissa Pei, David Porter, Joshua Simpson, John Tintera, Thomas Tunstall, Ph.D. STAFF PHOTOGRAPHER Malcolm Perez EDITORIAL INTERN LeAnna Castro

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www.shalemag.com For advertising information, please call 210.240.7188 or email kym@shalemag.com. 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.

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PUBLISHER’S NOTE

THE SEPTEMBER/ OCTOBER ISSUE OF SHALE FOCUSES ON THE IMPORTANCE AND BENEFITS OF COMMUNITY AND SOCIAL INVESTMENT. We recognize that companies across industry lines make supporting their community a top priority and would like to highlight some of those great companies while encouraging others to continue this effort of goodwill. As you will learn from this issue of SHALE Magazine, there are a great number of benefits and beneficiaries impacted by the generosity and support that area businesses can provide. Whether it’s encouraging volunteerism, making charitable donations, supporting positive brands or organizations, the companies that give to their community get back in return a sense of accomplishment and can boost the morale of employees. It’s our hope that sharing the positive impacts of charitable activities will spur new instances of kindness and community involvement.

I’m happy to share we recently held our annual State of Energy luncheon at the Solomon P. Ortiz International Center. The event was an opportunity for attendees to catch up on the outlook of the industry in Texas as well as on a national and global level. Guests had the opportunity to network while learning about upcoming industry trends, legislative issues that may arise and projections on the future of the energy industry. We are honored to have hosted nearly 500 guests at this year’s event. Each year this event grows in size, as does our appreciation for our sponsors and partners that continue to support SHALE in its mission to reach the business and energy community on key issues needing greater awareness. To all of our esteemed speakers, supportive sponsors and partners, and each attendee, thank you for your interest in supporting the energy industry and our goal of promoting its impact and importance to the community. Make sure to take a peek at the social section for photos of this wonderful event that brings so much pride to SHALE team!

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Enjoy a glass of SHALE Wine

! y o TA S T E . S H A L E . nj E CABERNET SAUVIGNON | PINOT GRIGIO A L M O N D S PA R K L I N G W I N E | R A S P B E R RY S PA R K L I N G W I N E SEPTEMBER/OCTOBER 2018  SHALE MAGAZINE

SHALE UPDATE

SHALE PLAY ROUNDUP By: David Blackmon

Bakken Shale — North Dakota/Montana

Spurred by strong production results in the Bakken and Eagle Ford Shale regions, Marathon Oil reported a second-quarter 2018 profit of $96 million. This compares to a $145 million loss for the same period in 2017. Continental Resources, also led by strong Bakken results, reported a 26 percent increase year over year in its oil and gas production levels for the second quarter. The company also reported a quarterly profit of $243 million, a marked rise from the $63.6 million loss it reported for the second quarter of 2017.

Denver/Julesberg (DJ) Basin — Colorado

Despite setting new production records in its Permian Basin operations, Noble Energy announced it would be shifting some drilling capital beginning in the third quarter from the Permian to its assets in the DJ Basin. The company attributed its shift in strategy to the looming pipeline takeaway capacity constraints in the Permian, along with its proven track record in extracting oil and gas from the Niobrara Shale formation. Williams Companies, Inc., one of the nation’s largest midstream companies, announced it was swapping its assets in the San Juan Basin of Northwest New Mexico to fund a new entry into the DJ Basin. Williams sold its San Juan assets to Houston-based Hilcorp for about $1.1 billion, and established a joint venture with private equity firm KKR & Co. to purchase Discovery Midstream from TPG Growth for about $1.2 billion.

Permian Basin — Texas/New Mexico

SHALE MAGAZINE  SEPTEMBER/OCTOBER 2018

Eagle Ford Shale — Texas

The acreage on which the first successful horizontal well was completed in the Eagle Ford Shale in October 2008 changed hands for the second time when BP announced it had acquired most of the U.S. shale assets owned by BHP Billiton for $10.5 billion. In addition to 236,000 highly productive acres of Eagle Ford leasehold, BP acquired large holdings in the Permian Basin and the Haynesville Shale region of Northwest Louisiana/East Texas. BHP, one of the world’s largest mining companies headquartered in Australia, had acquired Petrohawk in August 2011 for $12.1 billion as a part of its initial entry into the U.S. shale oil and gas market. While a relatively small part of its overall global business, the acquisition signals a new area of focus for BP, which is back on a growth path after seven years of working through the ramifications of the 2010 Macondo/Deepwater Horizon tragedy in the Gulf of Mexico.

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Apache Corp. announced it is entering into a deal with investment firm Kayne Anderson to move its Permian Basin midstream assets into a newly-formed joint venture. Apache has invested heavily in its own pipeline and processing facilities to handle production from its major new oil and gas discovery at its Alpine High development and has been looking for partners to help shoulder the costs of the build out. Full field development of the Alpine High will take decades to complete. Midland producer Diamondback Energy announced a deal in early August to purchase the Permian Basin assets of Houston-based Ajax Resources for $1.2 billion. The Ajax acreage is located in Martin and Andrews counties, just north of the Midland/Odessa area. Barely a week after its deal with Ajax Resources, Diamondback announced the acquisition of Permian producer Energen for $9.2 billion. The combined $10.4 billion in new acquisitions leaves Diamondback ranking among the largest producers in the basin.

Marcellus Shale — Pennsylvania/West Virginia/Ohio

The Pennsylvania Department of Environmental Quality released a six-year study on air quality and found little impact or risk to residents from Marcellus Shale operations. More than 60 pollutants were analyzed from air samples in various parts of the state, and none were found to be at dangerous levels. The study found better air quality near the Marcellus sites than at a more urban comparison site in Washington County. It also found similar levels of hazardous air pollutants at a fruit orchard in Adams County, a comparison site outside the drilling area. This study is the fourth major air- and water-quality study issued in the Marcellus region since May — and dozens since Marcellus development began more than a decade ago — to find basically no public threat from oil and gas operations in the area. No word on how many more millions of dollars will be spent before academics and government agencies stop catering to unfounded concerns of anti-oil and gas activists.

Haynesville Shale — Louisiana/East Texas

In its deal with BHP Billiton, BP also acquired 190,000 leasehold acres in the Haynesville region. Kallanish Energy quoted Wood Mackenzie’s senior analyst, Maxim Petrov, as saying he believes “the most valuable part of the package is BHP’s Eagle Ford position given its scale and attractive economics. But the Permian acreage offers the biggest longer-term upside, with some of the best breakevens in the play, well below $50/Bbl Brent." "Similarly, the Haynesville assets have some of the most attractive shale gas economics outside the Marcellus, and nicely complement BP’s existing acreage in the play,” he added.

SCOOP/STACK Play — Oklahoma

Continental Resources has formed a joint venture with Franco-Nevada Corp. to acquire and develop mineral interests in the SCOOP and STACK plays of central Oklahoma. Continental will form a new subsidiary as part of the deal, and Franco-Nevada will pay $220 million into it to offset its share of capital costs already allocated by Continental. On a go-forward basis, the two companies have committed to spend a combined $125 million per year over the next three years to acquire additional mineral interests. Blue Mountain Midstream, LLC, announced the startup of its Chisholm Trail III cryogenic gas plant and gathering system situated in the heart of the SCOOP/STACK region in mid-July. The plant is currently processing about 100 MMcf/d and has a full capacity of 250 MMcf/d.

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.

SEPTEMBER/OCTOBER 2018  SHALE MAGAZINE

 FEATURE

The Social Contract in our Texas Oil Fields By: John Tintera

he world is changing and Texas is changing with it. Social contracts, corporate citizenship and sustainability are common terms in today’s energy boardroom discussions. These are no longer buzzwords; they are principles that help shape the regulatory framework in our State. One readily hears the echo of the social contract theory in Texas today as energy businesses both small and large. These businesses adhere to practices that enhance the quality of life in the communities in which they operate ultimately affecting the world as a whole. It is a social and regulatory contract of corporate citizenship that requires oil companies to be good neighbors as well as environmental stewards while they pursue profit during oil and gas extraction. “When we go into a new country for our major Upstream projects, we conduct research and engage with local stakeholders including

SHALE MAGAZINE  SEPTEMBER/OCTOBER 2018

government, communities and local experts to develop a thorough understanding of current conditions from a safety, social and environmental perspective.” Suzanne McCarron, Vice President of Public and Government Affairs, ExxonMobil Social contract theory is a historical philosophy that originated during the Age of Enlightenment and acknowledges an individual’s or corporations ethical and political obligations to operate in society. In modern-day Texas, these obligations are frequently written in the form of laws or regulations which can be monitored and reported to ensure transparency. “Sustainability is at the core of Marathon Oil’s business strategy. As we pursued profitable and sustainable growth in 2017, we remained committed to responsible, safe and ethical operations. We focused on meeting our obligations to key stakeholders, including addressing workplace safety, protecting the environment, making a difference in our commu-

Oil Field Cleanup Fund: SB 1103 Sept. 1, 1991 The modern era of industry social contract with communities and landowners began in 1991 with the passage of Texas SB 1103 by the 72nd Texas Legislature. This legislation formed the “safety net” of the Oil Field Cleanup Fund, paid for by the oil and gas industry using specially imposed fees to plug orphaned wells, clean up abandoned pollution sites, and remove the oil and gas environmental footprints that may be an impediment to land reuse.The Oil Field Cleanup Fund was replaced by the Oil and Gas Regulation and Cleanup Fund (OGRC) by the 82nd Texas Legislature. What does this mean: First, never has an innocent landowner who did not cause or contribute to oil field pollution been required cleanup oil field pollution or plug wells on their property to get rid of them. Secondly, the Railroad Commission of Texas (RRC) manages these funds that originated from industry to hire the contractors, oversee the plugging or cleanup, and then send the bill to the Texas Attorney General who pursues reimbursement in civil court. To date, more than 36,000 orphaned wells have been plugged at a cost of $272 million and approximately 4,000 abandoned sites cleaned up by the Agency, funded by fees on the industry, not General Revenue which comes from the common taxpayer. While the vast majority of the million or more wells drilled in Texas are plugged by operators as required by law, with a total of 10,325 industry-plugged wells in Fiscal Year (FY) 2017, the State managed program to eliminate the ac-

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nities and delivering returns to shareholders.” Lee Tillman, CEO, Marathon Oil Let’s review the history of some of the most important statues and regulations embraced by the Texas Legislature, implemented by the Texas regulators, and adhered to by our oil and gas industry, all designed to make our world a better place.

cumulated 100-plus years of abandoned wells will continue with the RRC approving a budget that will plug over 3,000 orphaned wells during FY 2018-19. Additionally, Commissioners approved the RRC’s site remediation section’s plan to complete 259 cleanup activities at abandoned oil field sites in FY 18 using approximately $9 million from the OGRC. Statewide Rule 22: Sept. 1, 1991 “Protection of Birds,” was adopted to require operators to screen, net, cover or otherwise render harmless open-top tanks and pits that are likely to collect oil. An amendment effective Nov. 1, 1991 restricted the requirement to open-top tanks eight feet or more in diameter. Pollution Violators Prohibited from Oil Field Operations: SB 639 - 1997 The 75th Texas Legislature passed a statute prohibiting the RRC from issuing a drilling permit, an organization report, or a certificate of compliance in the event an organization has an outstanding violation that became final with the past five years of a provision of this title or an RRC rule, order, license, permit or certificate that relates to safety or other prevention or control of pollution. This effectively makes a pollution violator that has not followed a Commission Order unable to conduct business in Texas oilfields. Voluntary Cleanup Program (VCP): Chapter 91, Subchapter D of the Texas Natural Resource Code, further described in 16 TAC §4.401- 4.450 - 2003 The Voluntary Cleanup Program (RRC-VCP) provides an incentive to remediate oil and gasrelated pollution by participants as long as they did not cause or contribute to the contamination. Applicants to the program receive a release of liability to the State in exchange for a successful cleanup. The RRC’s success in managing this program led to several regulatory innovations. An Operator Cleanup Program was formed, where operators can work under the observation of the RRC, submit all data and analysis for review, and receive a notice when completion has been finished. The mentioned voluntary cleanup program was placed in statute, and a Brownfields program

using federal money to leverage state contribution was put in place. Transition to “universal bonding” completed: HB 380 - 2005 79th Legislature authorizes the Commission to accept well-specific plugging insurance policies as an alternative form of financial assurance. Protection of Pipelines: Sept. 1, 2007 The Commission adopts rules in June 2007 for the protection of pipelines from third-party damage activities and provides penalty provisions for violations of the rule. The new rules in Chapter 18: Underground Pipeline Damage Prevention became effective. Financial Security for Oil and Gas Operators: HB 2259 – 2009 The Texas Legislature, supported by the oil and gas industry, in its collective wisdom, recognized that prevention is just as important as cleanup. In 2010, a bill was passed that implemented strict requirements for operators to manage their assets as they aged so no well would be orphaned. These rules, admittedly complex, require an operator to plug substantial numbers of inactive wells in order to operate an oil and gas business in Texas. Bonding is also required. And operators that violate this regulation are no longer allowed to operate their oil business in Texas. RULE §3.15 Removal of equipment, turnoff of electricity - Sept. 13, 2010 Requires the industry to remove surface equipment for land wells that have been inactive for more than 10 years. Also, it requires turning off power to an inactive lease to help remove fire hazards. Hydraulic Fracturing Disclosure Rule Feb. 1, 2012 On Feb. 1, 2012, the Railroad Commission of Texas implemented the Hydraulic Fracturing Disclosure Rule (Statewide Rule 29, Texas Administrative Code, Title 16, Part 1, §3.29), one of the nation’s most comprehensive rules for disclosure of chemical ingredients used in hydraulic fracturing fluids. The rule requires Texas oil and gas operators to disclose on the

FracFocus website (fracfocus.org), chemical ingredients and water volumes used in hydraulic fracturing treatments. FracFocus is a public internet chemical registry hosted by the Ground Water Protection Council (GWPC) and the Interstate Oil and Gas Compact Commission (IOGCC). The GWPC is a national association of state ground water and underground injection control agencies. The IOGCC is a national commission of state oil and gas regulators. HB 40 - 2015 The 84th Texas Legislature in 2015 authorized local jurisdictions (cities) the right to regulate surface activities in a manner that is commercially reasonable. It established the State’s jurisdiction over oil and gas regulations and below-surface activities. TexNet Seismic Monitoring Program 2015 and 2017 During the 84th and 85th legislative sessions in 2015 and 2017, the Texas Legislature tasked the Texas Bureau of Economic Geology with helping to locate and determine the origins of earthquakes in our state and, where possibly caused by human activity, help to prevent earthquakes from occurring in the future. The TexNet Seismic Monitoring Program was established to accomplish these goals. “The company believes this organizational approach, where employees live and work in the same communities where it has operations, provides a positive and direct benefit for local communities. Employees and contractors directly support regional economies by purchasing local goods and services and paying local taxes. EOG employees also take pride in making a positive difference in the lives of those around them and in their own communities.” EOG Resources The path Texas companies now follow is one with decades of history, demonstrated accountability, corporate leadership, solid legislation and regulatory environmental protection. Adherence to our energy social contract is alive and well, helping our friends, neighbors and fellow countrymen. It is not new; it is not a fresh start. It is a continuum that Texas oil and gas leaders follow — proudly and sincerely.

About the author: John Tintera, Executive Vice President of the Texas Alliance of Energy Producers, is a regulatory expert and licensed geologist (Texas #325) with a thorough knowledge of virtually all facets of upstream oil and gas exploration, production and transportation, including conventional and unconventional reservoirs. As a former Executive Director and 22-year veteran of the Railroad Commission of Texas (considered the premier oilfield regulator in the nation), Tintera oversaw the entire regulatory process, including drilling permits, compliance inspections, oil spill response, pollution remediation and pipeline transportation.

SEPTEMBER/OCTOBER 2018  SHALE MAGAZINE

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Anyone who has lived for any period of time to the east of I-35 in Texas has experienced some impacts from a tropical storm or hurricane. Texas lore is indeed filled with major storms that have decimated the towns, cities and ports along the Texas Gulf Coast. The Great Galveston Hurricane of 1900 remains to this day the deadliest natural disaster in the history of the United States. About 8,000 of Galveston’s population of 30,000 lost their lives in a single day to that storm, whose tidal surge had the entire Island under 8-15 feet of water. Prior to this storm, the City of Galveston was the largest city in Texas and considered by many to hold the promise of becoming the “New York of the Gulf Coast” as one promoter put it at the time. The devastation from this storm ended all hope of that happy circumstance coming about. But it also led to the development of the Houston Ship Channel and spurred Houston to become a major refining and shipping hub. Additionally, much of Galveston Island was raised by 8 to 10 feet and resulted in the building of the city’s famous Sea Wall. Galveston is thriving once again, but the impacts of that storm linger to this day. An even stronger, unnamed storm pounded Houston in 1943 (the National Weather Service did not begin its tradition of assigning names to full-fledged hurricanes until the 1950s), decimating much of that city’s military-building infrastructure and setting back the U.S. war effort as a result. Though packing 132 mph winds, this very compact storm dissipated quickly once it was fully over land. Hurricane Carla in 1961 was a very different story. While it was over water in the Gulf of Mexico, Carla was at one point a Category 5 storm packing 175 mph winds. It made landfall just north of Corpus Christi, near Port O’Connor, causing a tremendous amount of flooding and wind damage up and down the coast of Texas and cities as far as 50 to 100 miles inland. Carla gradually weakened as it tracked right up the Texas Highway 77 corridor, with its eye passing just east of Waco and directly over Dallas. The subtropical remnants of the storm ultimately passed directly over Chicago before entering Canada and finally dissipating over the Labrador Sea. She was a hard one to kill. Hurricane Beulah in 1967 came ashore just south of Brownsville and tracked all the way up north of Victoria before turning southwest and moving back over Laredo into Mexico. In the process, this very rainy storm flooded much of South Texas, dumping more than 30 inches of rain on towns like Refugio and Sinton. Three years later, Hurricane Celia, with observed wind gusts of up to 180 mph, caused extensive damage when it came ashore over Corpus Christi. All told, the storm killed 29 people and caused $930 million in damage, as measured in 1970 dollars. In dollar terms, Celia would remain the costliest storm in Texas history until 1983. That was the year that Hurricane Alicia came ashore directly over Galveston, moved right up the Houston Ship Channel and caused extensive damage in Houston. In 1983 dollars, the tab for that very mean storm exceeded $3 billion. Most of Alicia’s damage in Houston was caused by its very high winds. Eighteen years later, Houston would get a hard taste of the other terrible side of storm damage, when Tropical Storm Allison rapidly developed in the Gulf of Mexico just east of Galveston, quickly moved ashore, and then hovered over Texas’s largest city for the better part of three days, dumping more than 40 inches of rain on the city in the process. The flooding that resulted was the most extensive and costly Texas’s largest city had ever experienced. After moving north into East Texas, the storm then reversed

SHALE MAGAZINE  SEPTEMBER/OCTOBER 2018

course and came right back down over Houston a week later before finally moving off to the east. No one knew it at the time, but Allison’s odd movement pattern and prodigious, flooding rainfalls would prove to be a preview of an even worse storm to come. Galveston and Houston were hit again in 2005. Up until the hour before making landfall, it appeared as if Hurricane Rita — which formed in the Gulf of Mexico barely two weeks after Hurricane Katrina had devastated New Orleans and the eastern Gulf Coast — would land directly over Galveston and travel up the I-45 corridor over downtown Houston. City and county officials were so concerned that a full evacuation of Galveston and other low-lying coastal cities was ordered. Houston and Harris County leaders also ordered a partial evacuation of the county’s and city’s low-lying areas. Unfortunately, about half a million other Houstonians who did not need to evacuate decided to try to get

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A State With a Stormy Histor y

out of town in the 48 hours prior to Rita’s landfall, resulting in the most massive and long-lasting traffic jam in the state’s history. The Texas plan for reverse lane-flow on the state’s Interstate and major state highways came about as a result of this gridlock, which could have become a major human tragedy had Rita remained on its northwestward track with those freeways still filled with cars. But divine providence or just plain luck intervened, and Rita took a jog to the north at the very last possible moment, sparing both Galveston and Houston the worst of its potential impacts and devastating East Texas and Western Louisiana instead. And then, three years later, came Ike. Unlike Rita, Ike did not take a last-minute jog to the north, and did not spare Galveston or Houston from anything. Even though its Sea Wall performed its function, Galveston Island experienced its worst flooding since the 1900 storm, as Ike’s backflow brought in waters from Galveston Bay rather than the Gulf of Mexico. Much of Galveston proper was under as much as 8 feet of water, and travelers to the city today will see markers on many of the downtown buildings noting the water’s height that day.

Ike’s winds knocked down trees all over Houston and East Texas, causing extensive power outages and damaging thousands of homes. This writer lived in the Heights neighborhood of Houston at the time and listened as the 100-year-old house directly behind our home was completely destroyed when Ike uprooted a 60-foot-tall oak tree and rammed it into the house’s living room. Ike killed 113 Americans, caused tens of thousands of Texans to be without power for weeks, and resulted in major damage all the way up to Chicago before it finally played itself out a week after passing through Houston. What all of this long and tragic history tells us is that every storm is its own unique experience. The lessons learned from one or several storms can help to better prepare a city, county or region for the next storm to come — building codes can change, contra-flow lanes established, sea walls and flood control reservoirs built, floodplains redefined and houses in low-lying areas required to be elevated — but every new storm brings more, often unanticipated lessons of its own. No storm since the Great 1900 Storm brought with it more unanticipated consequences than Hurricane Harvey. 

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NO STORM SINCE THE GREAT 1900 STORM BROUGHT WITH IT MORE UNANTICIPATED CONSEQUENCES THAN HURRICANE HARVEY SEPTEMBER/OCTOBER 2018  SHALE MAGAZINE

As so many major hurricanes do, it formed as a tropical wave just off the West coast of Africa, first gaining attention from meteorologists on Aug. 12, 2017. It churned around in the Eastern Atlantic Ocean for five days before it had gained enough steam to become classified as a tropical depression. As it gained circulation the storm’s eastward track began to gain speed, and by Aug. 18, the newly-named Tropical Storm Harvey, now armed with sustained winds of 45 mph, passed over the islands of Barbados and St. Vincent as it entered into the Caribbean Sea. In Texas, leaders of coastal communities began to take notice and begin preliminary preparations as the storm track models used by the National Weather Service began to project an eventual landfall likely somewhere along the eastern half of the Gulf Coast. Otherwise, things were business as usual and the ordinary citizens in these communities continued to go about their daily lives. Yes, a storm was brewing, but it was, at that point, a distant and still unlikely threat. After weakening substantially while passing over the Yucatán Penin-

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sula on Aug. 23, Harvey merged with a tropical low-pressure system in the Gulf of Mexico and once again strengthened into a Tropical Storm. A day later, on Aug. 24, Hurricane Harvey was officially born, and all of the computer models were projecting a landfall within a few days somewhere between Corpus Christi and Houston. Harvey was no longer a threat to residents of the Texas Gulf Coast. The storm was now a reality they would all need to prepare for and survive. Tragically, even some of those who prepared as best they could would not survive. Ultimately, 106 Americans lost their lives to this massive storm, most of them Texans. Harvey made its initial landfall on the afternoon of Aug. 26, entering Texas just to the east of the small resort town of Rockport. The storm slowly moved inland for about 50 miles, and then stalled out for a couple of days, dropping prodigious amounts of rain on the communities in the region between Rockport and Houston. While most of the news coverage focused on a 100-mile wide swath of Texas from El Campo

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Hurricane Harve y

to Port Arthur — over which Harvey dumped an unprecedented 40-55 inches of rain over a five-day period — communities as far inland as Waco received up to 20 inches of rainfall. It was by far the worst flooding disaster in the state’s history. Although on the “dry” side of the storm’s eye, areas as far south as Kingsville and as far west as San Antonio were also majorly impacted by Harvey’s rage. For the oil and gas industry, this meant that the entire 23 county region of South and Central Texas that makes up the Eagle Ford Shale play area was subjected to flooding and wind damage. By Aug. 28, Harvey had, like Hurricane Beulah and Tropical Storm Allison before it, shifted its course and re-emerged into the Gulf of Mexico. Now assuming a northeastward trajectory, it made its second landfall near the refining port city of Port Arthur two days later. It was during this re-emergence phase that the major rainfall fell on the northeastern portion of the Gulf Coast, in the process flooding out more than 80 percent of the refining capacity from the Houston Ship Channel all the way to the Louisiana border. All told, more than a quarter of the nation’s refining capacity was taken offline for weeks. Neither Texas nor the country had ever seen anything quite like it. By the time it was done, Harvey had inflicted upward of $125 billion in property damage, rivaling Hurricane Katrina as the costliest natural disaster in American history. No single industry was more severely impacted by Harvey’s wrath than oil and gas.

Harvey Gives Oil and Gas the Business In addition to being an intense storm, Harvey was a big storm geographically and forced the shutting in of most of the oil and gas platforms operating in the Gulf of Mexico. Fortunately for the offshore industry, though, the strongest parts of the storm passed to the south of the busiest parts of the Gulf, and as

NO SINGLE INDUSTRY WAS MORE SEVERELY IMPACTED BY HARVEY’S WRATH THAN OIL AND GAS a result did not do the same kind of real damage to oil and gas infrastructure that was inflicted by storms like Katrina and Ike. Much of the production from the Eagle Ford Shale was also lost for a time, as operators worked to limit damage and any pollution incidents by shutting in wells and securing other facilities in advance of the storm. While some limited flooding and wind damage did occur in the inland areas of the Eagle Ford region, the main delays in getting production, pipelines and compressor stations back up and running after Harvey’s passage were due to power outages, some of which lingered for days. Taken all together, the production outages in the Gulf of Mexico and onshore Texas meant that about 15 percent of total U.S. production was taken offline for several days. Meanwhile, as noted earlier, the refining industry in Corpus Christi to the southwest and from Houston to Port Arthur to the northeast was hit hard. The Texas Gulf Coast is home to more than 30 percent of the nation’s refining capacity, and the great majority had to be shut down during and after the storm’s passage due to flooding and/or power outages. The refinery shutdowns created a cascading effect of consequences. Pipeline deliveries of crude oil into them had to be curtailed since most of the refineries were unable to accept crude oil inputs until power was restored or the floodwaters had receded. On the output end of the process, the huge Colonial Pipeline that transports gasoline all the way up the East Coast to New England was temporarily shut in for lack of gasoline to fill its line. Other gasoline pipes saw similar impacts throughout September and even into October. Unsurprisingly, all of these impacts resulted in gasoline shortages not just in Texas, but all along the Gulf Coast and throughout the markets served by the Colonial line. But the refining industry quickly began to regain its footing, with facilities coming back online throughout September, and by the middle of October, the gas shortages had pretty much disappeared. In the end, the fact that the damage done by Harvey ended up being so quickly resolved by those in the upstream, midstream and downstream sectors ended up being a real testimonial to the oil and gas industry’s amazing resiliency, the safety of its facilities, and its commitment to customer service. In the meantime, while companies were in the middle of resolving their own operational issues, real people in the communities they serve and reside in needed help, including many of their own employees.

A Humanitarian Disaster of Unimaginable Scope In its wake, Hurricane Harvey left behind a humanitarian disaster of unimaginable scope. America’s fourth largest city was, put simply, underwater. It wasn’t just the low-lying areas hit by Ike in 2008 — neighborhoods that had never flooded before had flooded during the storm’s passage. But that wasn’t the end of the story. Later, several neighborhoods thought to be safe on higher

SEPTEMBER/OCTOBER 2018  SHALE MAGAZINE

ground also flooded, as the U.S. Army Corps of Engineers determined it had to release millions of gallons of water from the city’s Barker and Addicks flood control reservoirs out of fear their dams could collapse. This had simply never happened before. All told, hundreds of thousands of people had been displaced from their homes. The need for items that Americans take for granted in their daily lives — things like ice, water, blankets, a meal and on and on and on — was gargantuan, creating a need up and down the Texas coast that the state had never before witnessed. Into this breach stepped thousands of volunteers and charitable organizations who are so excellent at organizing efforts like this. Texans are a generous people, and the nation’s televisions were over the following days and weeks filled with images of Texans, working with an amazing number of volunteers from other states, doing what they do best: Helping others. But the need was vast, and such a vast need requires a vast amount of money. The oil and gas industry has a long history of stepping up in a big way to help provide relief to those in need after a major natural disaster has taken place. Houston is the nerve center for the nation’s industry, and every company based there had a significant portion of their employee base impacted by Harvey. Any company’s first concern in such a situation is always for the well-being of its employees, but the impacts to the community at large also come into focus in a major way. One of the best and quickest ways to help in major relief efforts is to make contributions to groups like the American Red Cross, the United Way and other organizations that play the lead roles in organizing and conducting massive rescue and relief operations. Most of the larger companies have matching gift programs for donations by employees, and many such companies quickly announced they would step up the matching amounts for Harvey-related contributions. Many companies also offered comp time and time off for employees who were able to go out and physically help with the various relief efforts around the city and region. In addition to all of those efforts, before the Hurricane had even completely made its way through the city, companies throughout the industry were announcing major additional donations to various organizations: Aug. 29: Shell announced it would donate $1 million to the American Red Cross. Aug. 29: ExxonMobil announced contributions of $500 thousand each to the American Red Cross and the United Way. Aug. 29: BP announced contributions totaling $750 thousand to the Red Cross, the Community Foundation of Greater Houston and the United Way of Greater Houston. Aug. 28: Chevron announced it would make a $1 million donation to the American Red Cross. Aug. 29: Anadarko Petroleum announced a $1 million donation to the United Way. Aug. 30: Apache Corporation announced a $250 thousand donation to the American Red Cross. Aug. 30: Cheniere Energy announced a $1 million donation to the American Red Cross The list above is just a small sampling of the hundreds of special donations to Harvey-related relief donations made during that last week of August by companies in the industry. A full listing would consume the space for this entire article and more.

PHOTO COURTESY OF CONOCOPHILLIPS

ConocoPhillips — a Company Invested in the Community In terms of these special corporate contributions, no company stepped up more quickly and in a bigger way than ConocoPhillips. With its corporate headquarters located just off the Katy Freeway in the Energy Corridor area of West Houston, ConocoPhillips employs thousands of Houstonians, a large number of whom were among those impacted by the storm and its aftermath. 

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ON AUG. 30, 2017, CHIEF EXECUTIVE OFFICER RYAN LANCE ANNOUNCED THAT CONOCOPHILLIPS WOULD DONATE $2.5 MILLION TO BOTH THE AMERICAN RED CROSS AND THE UNITED WAY

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April 12, 2016: ConocoPhillips awards $191k in grants to Eagle Ford area organizations April 21, 2011: ConocoPhillips gives $20k to the city of Kenedy Sept. 26, 2012: ConocoPhillips sponsors local DoveFest Nov. 19, 2014: ConocoPhillips presents a donation to Kenedy elementary school March 6, 2014: ConocoPhillips supports Eagle Ford community with $233,000 in grants That’s just a sampling from the first page of search results. There are several more pages after that. This is a company that invests in these communities. This is also a company that is heavily-invested in Houston, and when its leaders saw the city in such great need, it stepped up in a big way. On Aug. 30, 2017, Chief Executive Officer Ryan Lance announced that ConocoPhillips would donate $2.5 million to both the American Red Cross and the United Way. “Our thoughts are with all of those who are dealing with the impact of this unprecedented natural disaster,” Lance said. “Our priority remains ensuring the safety of our employees and our operations. However, as members of a much larger community that needs our help, we stand ready and willing to do our part. We encourage others to follow.” The leaders of the two organizations were overwhelmed by the company’s generosity. “The Red Cross works around the clock in extremely challenging conditions to respond to disasters like Hurricane Harvey,” said Gail McGovern, President and Chief Executive Officer at the American Red Cross. “We couldn’t do it without the generosity of our amazing donors — like ConocoPhillips. With their support, the Red Cross can enable communities to prepare for the unexpected, and when disaster strikes, to respond with shelter, food and the necessary supplies to ensure people are cared for and to help during the recovery process. We are extremely grateful for their support.” “We are deeply touched by the magnitude of caring and generosity of ConocoPhillips and its employees whose support will help United Way provide assistance to the thousands of individuals and families across our region that have been impacted by this unprecedented disaster,” said Anna Babin, President and Chief Executive Officer of United Way of Greater Houston. All of this happened despite the fact that the company’s headquarters had been rendered inaccessible by the floodwaters, a situation that ended up lingering for two full weeks. And it wasn’t just the company’s headquarters that was impacted — many of the company’s employees were also hit hard by the terrible storm.

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“Ensuring the safety of our emplo yees” As Lance said when announcing his company’s massive contributions, ensuring the safety of the employees is one of the highest priorities at his company. After Hurricane Harvey hit Houston, accomplishing this became a very big job. Almost 20 percent of the company’s Houston-based employees were temporarily displaced from their homes by the storm. This is not surprising to anyone who knows the geography of Houston. Both the Barker and Addicks reservoirs straddle the Katy Freeway just west of the Energy Corridor and the neighborhoods that surround it. Those neighborhoods — where many employees choose to live to avoid long commutes to and from work — were among those impacted by the Corps of Engineers’ decision to release the massive amounts of water from those reservoirs. Thus, even while its headquarters was under water, the company found itself with an employee crisis on its hands. Luckily, a big piece of the company’s culture is to encourage its people to take initiative, and even while having to work from remote locations, that’s exactly what many of them did. The company’s website discusses some of the first steps that were taken to facilitate assistance to impacted employees: Human Resources launched an employee hotline so employees could register their storm status and supervisors could get updates on their teams. The Corporate Communications team followed by establishing the Hurricane Harvey Employee Resource Site to provide relevant information and resources. Employees and contractors also received notifications about the event from the Global Alert System. 

PHOTO COURTESY OF CONOCOPHILLIPS

Like so many other oil and gas companies, ConocoPhillips’ management and employees are heavily involved in the community in which they live. The company’s website details its support for local organizations like the United Way, the Houston Livestock Show and Rodeo, the Greater Houston Partnership, Rice University and the Boys and Girls Clubs of Greater Houston. The company’s matching program for employee contributions helps to support myriad other local organizations doing good in the community. But it isn’t just Houston. ConocoPhillips makes sure it gets involved in supporting the needs of every community it serves. An interesting way to illustrate this is to take a look at the websites for the local newspapers in the communities in which the company has operations. One great example is the Karnes Countywide, the newspaper covering Karnes County, which resides in the center of the Eagle Ford Shale region. Enter “ConocoPhillips” into the website’s search function, and you are presented with a seemingly endless list of articles detailing the company’s myriad contributions to local community organizations:

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“I’m just a volunteer.” The story of one ConocoPhillips employee, Geologist Nick Fryer, illustrates the spirit of volunteerism that prevailed throughout Houston

in Harvey’s wake, and how important those efforts would become to so many. Fryer and his wife, Christine, were one of the families who owned a home in one of the neighborhoods near the Energy Corridor. Like so many others in that area, their home escaped the initial flooding caused by the storm’s passage, and by the end of the day on Sunday, Aug. 27, they had thought they would escape the worst. But the next day was the day that the Corps of Engineers made the decision to begin releasing water from the Barker and Addicks reservoirs, and the Fryer home, situated as it was near the confluence of the two reservoir spillways, soon became among the first to be flooded by that event. By 9 a.m. that Monday morning, Nick and Christine were scrambling to protect as much of their possessions and furniture as they could, as the floodwaters had already risen to ankle level. “We thought we could raise things enough to avoid the flooding,” Fryer said. “It quickly became evident that wasn’t going to cut it.” They soon realized it was time to get themselves to safety. As luck would have it, they were able to flag down a man in a red inflatable boat who had been ferrying people out of the neighborhood to safety that morning. When they asked him if he lived in the neighborhood, the man replied “No, I live in the Heights. Since I had a boat, I wanted to help. I’m just a volunteer.” Texans helping Texans. Two weeks later, when the waters had finally subsided from their neighborhood, the Fryers found themselves once again benefiting from this spirit of volunteerism, this time from Nick’s fellow ConocoPhillips employees. A group of them showed up at his home one day to help Nick and Christine in the cleanup efforts and immediately began ripping

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As the disaster unfolded, the company activated its Disaster Assistance Loan Program and Natural Disaster Cash Assistance Program, providing qualified employees with financial support to help them and their families recover from Harvey’s impacts. “We knew employees and retirees had been impacted and were willing to help,” said Heather Sirdashney, the company’s Human Resources General mManager. “The question was, ‘how can we identify the needs, and what’s the best way to get help to those who need it?’” In all, the company provided short-term housing for more than 150 of its employees and facilitated employee loans for more than 80. And the communications tools set up by the corporate communications team played a major role in helping the company’s people coordinate their efforts.

CONOCOPHILLIPS IS BUT ONE COMPANY IN A COMMUNITY OF SO MANY OIL AND GAS COMPANIES WHOSE MANAGEMENT TEAMS AND EMPLOYEES STEPPED UP TO THE PLATE AND CONTRIBUTED SO GREATLY TO THE RELIEF AND RECOVERY EFFORTS IN THE NEIGHBORHOODS AND COMMUNITIES IN WHICH THEY LIVE out soaked sheetrock and carrying furniture and other water-damaged items out onto the front lawn. “I couldn’t believe it,” Fryer said. “They ripped out the floors and took the walls down to the studs, all in one day. Then they started drying out the house with fans and dehumidifiers.” The Fryers’ story is just one of many examples of this kind of “people helping others”

theme that arose in the storm’s wake. And ConocoPhillips is but one company in a community of so many oil and gas companies whose management teams and employees stepped up to the plate and contributed so greatly to the relief and recovery efforts in the neighborhoods and communities in which they live. Oil and gas companies spend a great deal of time and effort training their employees on

things like teamwork, leadership, safety and how best to respond whenever a crisis arises. For ConocoPhillips and its employees, their experience and response during and after Hurricane Harvey demonstrate how all of that training truly paid off in one of the most severe crises Texas has ever seen.

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INDUSTRY

Wake Up and Smell the Crude

he oil and gas industry occupies an awkward position in the modern societal and cultural hierarchy. So much of everything on which our domestic and international economies depend and operate is fueled by and made from oil and natural gas, and yet the industry is simultaneously ignored at best and demonized at worst by those who wouldn’t have a microphone and camera to yell into or a computer keyboard on which to pound their rants without it. How is an industry to respond to such ill-informed outrage? The oil and gas industry’s advertising campaigns have been comically ineffective over the years. Some efforts have been tedious in their factual presentations, failing to recognize the demographics of the target audience. Other efforts have tried the “touchyfeely” approach by demonstrating their love of nature and concern for polar bears. Still, others have embarrassingly confessed their hydrocarbon sins and sworn their allegiance to pursuing more positively-perceived alternative energy sources. For whatever reason, not since the golden age of full-service gas stations, has there been a real, positive and creative advertising campaign telling the profound story of just how essential oil and natural gas has been to the growth and success of our modern world. Can you imagine a thirty- or sixty-second commercial, showing everyday people doing everyday activities with the ubiquitous fuels, electricity and products brought to you by oil and natural gas? Imagine watching yourself in these commercials, driving a car to work, driving (or driving past) an eighteen-wheeler full of food or manufactured products, navigating a busy airport to board a plane to fly somewhere for business or vacation, turning on the

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air-conditioner during the summer in West Texas, turning on the heater during the winter in North Dakota, being wheeled into the operating room for surgery and hoping that the lights and computers don’t suddenly blackout, and using the thousands of manufactured products at work, at home, or on the road that are made from oil and natural gas. Success is always built on solid foundations. We often forget that the modern conveniences and amenities, many of which we would now actually describe as necessities, exist and continue to function because of the solid foundations on which they have been built. Occasionally, when we outrun our skis, we need to be reminded of these fundamentals. When our football team stops playing well, we return to the basics of blocking and tackling. When our companies stop performing well, we jettison

Oil and natural gas are not the enemy; Ignorance is the enemy

those past impulses to diversify and return to the core business practices that made us successful in the first place. When oil and gas were first discovered and produced in commercial amounts, the typical reaction by those involved was elation, jubilation, a sense of sudden wealth where chronic poverty had seemed inescapable. The standard scene was workers, owners, investors, farmers and anyone in the area dancing in the fountain of “black gold” that was coating them and the ground around them. The terminology was even positive and exciting — a gusher. Since those early days of seeking, finding and realizing the practical value and utility of oil and gas, society’s attitude has done a 180 and concluded that oil and gas are quite possibly the explanation for everything that’s wrong in the world. That worldview has grown, as energy literacy among our citizens has diminished. It has become the dominant opinion among our elite, as the comforts and conveniences provided by oil and gas have become expected and given no thought at all. A gusher today would hardly be celebrated; the responsible party instead would be fined, indicted and likely sued.

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By: Bill Keffer

We need to be reminded. We need to return to understanding the fundamentals of what makes our economy run and what makes America strong. We need to acknowlege what life in the United States in 2018 would look like, were we to be without the fuels, electricity and products that oil and natural gas provide. For many, we need to be reminded. For many more, we need to learn for the first time. In my Oil & Gas Law1 class, I teach second- and third-year law students about the fundamental principles of oil and gas law. But I also tell them about the importance of oil and gas in our lives. Even though these are all intelligent, highly-motivated, educated individuals, they almost all are without the slightest hint of knowledge about oil and gas. And what they do “know” is wrong because they have picked it up over the years from educators, politicians and media outlets with agendas and biases. Almost without exception, these students wrongly believe that we are on the verge of running out of oil and gas. Almost without exception, these students have been told to believe that oil and gas are single-handedly causing global warming, and that, if we would only “keep it in the ground,” we would immediately reverse the adverse effects of global warming they have been taught to fear. Almost without exception, these students have been told to believe that renewable energy sources, like wind and solar, are perfectly capable of replacing every role that oil and gas currently play in our lives. Those who know better need to be reminded. Those who have never known need to be taught. Oil and natural gas are not the enemy; Ignorance is the enemy. Fear of reprisal by the elite is the enemy. Forgetting what we once knew to be true is the enemy. God only knows what we would be without crude. We need to be glad we’ve got it in our lives.

We often forget that the modern conveniences and amenities, many of which we would now actually describe as necessities, exist and continue to function because of the solid foundations on which they have been built

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

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

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INDUSTRY

Some Ruminations on Social Responsibility By: David Blackmon

’m an oil and gas guy. That’s what I’ve been for an entire career, which technically began in June 1979, when I went to work as an accountant for Coastal States Oil and Gas Company at Greenway Plaza in Houston. But my history with the oil and gas industry goes back much further than that. I was born and raised in Beeville, the county seat of Bee County, situated about 55 miles inland from Corpus Christi. Beeville is a town whose population fluctuates between 13,000 to 14,000, depending on how the economy is. It sits in the middle of what most would consider to be South Texas, and right on the eastern edge of the dry gas third of the Eagle Ford Shale play. My family owned a little farm in Goliad County, about 20 miles outside of Beeville, for more than a century, and the only time we ever made any money farming was when some independent producer came out and drilled a decent oil or gas well on the property. (We no longer own the surface, but have retained the mineral rights, because in today’s world, they are potentially valuable.) Because of that upbringing, and because the oil and gas industry has been a constant presence throughout South Texas for many decades, I had consistent exposure to the industry and its impacts, both good and bad, from a very early age. On the bad side, we had that time in the late 1960s when one of those aforementioned independent producers, after having drilled a dry hole in one of the farm’s pastures, failed to properly backfill its mud pits. All hell broke loose when one of my uncle’s prize Hereford bulls wandered into it one night, got stuck and died there. On the bright side, my uncle got a nice, tidy settlement out of that deal, and when the same company got on the right side of the

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geologic fault and drilled a decent little oil producer a few hundred yards away the following year, all hard feelings were forgotten. Funny how that works. Then there were the two summers I spent during my college years in the mid-1970s working as a welder’s helper on a pipeline construction crew. Trust me when I tell you that the oil and gas industry of 42 to 43 years ago was vastly different, dirtier and more primitive than the high-tech, environmentally-conscious business we see today. The sum total of my “training” before beginning work in early June that first summer of 1975 consisted of about 30 minutes of the welder I’d be working with showing me how to handle the grinder used to polish the welds without electrocuting myself. That training worked, except for the one day when I did back into the leads and indeed electrocuted myself. That was around 11:00 in the morning. The next thing I remembered was waking up the next morning after a good night’s sleep. My co-workers insist I worked the rest of the day and even went out to the local bar that evening to have a few beers. I remember none of it, but I got up and went to work the next morning and nobody thought twice about it. The crew on which I worked would leave behind a mess wherever we worked on any given day. That doesn’t happen today. Back then there were no safety briefings before work began — my briefing generally consisted of the ill-tempered welder I worked for walking up to me and saying, “Get your butt up in the truck and let’s go.” Nowadays, every pipeline crew, rig crew, transportation crew, offshore platform crew and any other type of crew related to the oil and gas industry undergoes a detailed safety briefing prior to beginning work each and every

Oil and gas companies paying their royalties and taxes is a very important aspect of their “social responsibility,” an aspect that doesn’t get much attention in our state or national news media, but one that’s important to everyone; nowhere more so than in Texas

day of the week. The last time I visited an active drilling site that briefing lasted more than half an hour. Things have definitely changed for the better. There was far more to the good side of the oil and gas industry in those days than the bad side. In Beeville, you could always tell when the industry was doing well because all the tables at El Zarape and The American Café would be filled at lunchtime with brawny men wearing heavy cotton shirts and khaki pants. The local Piggly Wiggly (later HEB) and Bonham’s Food Store would often run out of milk, eggs and other staples by the end of the day. The town’s streets would be filled with new Fords, Chevrolets and Dodges — even the occasional

Cadillac or Chrysler Imperial — purchased from the local car dealers, who during that time only sold American-made automobiles. These kinds of impacts and so many more were why I found it so personally gratifying when, late in my career, I saw the very same things happening in Beeville and other towns all across South Texas as the massive Eagle Ford Shale play began to be developed in earnest. Little towns like Cotulla, which over the years often seemed on the verge of literally drying up and blowing away in the South Texas heat, found themselves home to building booms, with new hotels, man camps and apartment complexes springing up seemingly overnight. There was one millionaire living in Beeville when I was growing up in the 1960s, a rancher named Dudley Dougherty. Predictably, the Dougherty wealth came not from raising cattle or harvesting corn, but from the oil and gas wells sprinkled throughout the family’s pastures. By 2011, Beeville and surrounding towns were full of newly-minted millionaires who had seen Eagle Ford Shale wells drilled on their land, or otherwise benefitted from the new boom. During that time, the bonus checks for signing a lease alone created many new millionaires in the region. Thus, a region that had historically seen little real money or economic development had suddenly become one of the hottest economic development areas in the entire country. County and school district coffers became flush with ad valorem tax receipts thanks to the fact that Texas is one of two states in the nation that allows these taxes to be levied not just on the industry’s capitalized equipment, but also on the value of its reserves of oil and gas while they are still in the ground. (This tax system is a little-publicized source of great wealth to these taxing districts, as the average barrel of oil and cubic foot of natural gas are taxed several times before they come up out of the ground.) As a result of this new revenue stream, new schools and football stadiums, new administrative buildings and hospitals, improved and expanded county roads started popping up all over the 21-county region that was impacted by the Eagle Ford play. Kids found themselves riding to school in brand-new school buses, performing band concerts and one-act plays in new or refurbished auditoriums, and playing basketball in new gymnasiums. The reason I’m telling you about all of this is because the theme of this issue of SHALE Magazine is “social responsibility,” and that tag can mean so many different things. Oil and gas companies paying their royalties and taxes is a very important aspect of their “social responsibility,” an aspect that doesn’t get much attention in our state or national news media, but one that’s important to everyone; nowhere more so than in Texas. I hope you enjoy this issue.

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INDUSTRY

PESA Member Companies Invest in STEM Education By: Leslie Beyer, President, PESA

ccording to the U.S. Department of Commerce, the number of jobs in Science, Technology, Engineering and Math (STEM) industries, including oil and natural gas, is expected to grow 50 percent faster over the next decade than in non-STEM industries according to the U.S. Department of Commerce. Moreover, the Independent Petroleum Association of America (IPAA) estimates 50 percent of America’s petroleum workforce will retire over the next 10 years. Filling these jobs is both an economic imperative and an amazing opportunity for students, but our industry first must empower students with knowledge of the STEM career paths within their reach. To meet this need, the Petroleum Equipment and Services Association (PESA), is devoted to programs that reach children in high school, grades six through nine and grades three through five, where STEM education is critical. PESA Member Companies, which represent the oilfield services and equipment sector, support STEM energy education in the Permian Basin, Houston and Dallas areas. In 2012, PESA partnered with the IPAA to expand PESA’s commitment to educational outreach through the IPAA/ PESA Energy Education Center. The IPAA/PESA Energy Education Center includes five Petroleum Academies — four in Houston and one in Fort Worth. IPAA/ PESA Petroleum Academies provide high school students with an advanced, multidisciplinary learning experience in science, mathematics and the emerging technology concepts needed to

pursue professional training and degrees in engineering, geology, geophysics and global energy management. The IPAA/PESA Petroleum Academies have achieved an unprecedented level of success in preparing the next generation of talented professionals who will lead the oil and gas industry forward. To date, there are: • 2,900 graduates • 1,500 students currently enrolled for the 2018-19 school year • 41 percent female participation • Two-thirds of the student population is economically disadvantaged • Significant impacts on firstgeneration college participation • $900,000 in college scholarships awarded • 642 student oil and gas industry externships awarded The IPAA/PESA Energy Education Center has expanded with the introduction of the IPAA/PESA Middle School STEM Career Exploration Initiative, a digital program designed for middle school students. Grades six through nine are particularly critical years, as research published by Sadler, Sonnert, Hazari, & Tai shows that a key indicator of whether students will graduate high school with an interest in STEM is a demonstrated interest when they enter high school. Through the IPAA/PESA initiative, learners engage with interactive content and familiar environments to show them STEM in their world. Students utilize STEM skills such as critical thinking, data visualization

SHALE MAGAZINE  SEPTEMBER/OCTOBER 2018

and analysis, rapid prototyping and design thinking. Virtual career cards are integrated within the digital learning experience to expose students to STEM roles relevant to their interests. The IPAA/PESA Middle School STEM Career Exploration Initiative will initially launch in the Permian. Phase one includes 10 schools in six school districts and will reach 600-800 middle school students in the 2018-19 school year. PESA supports elementary students through the National Society of Black Engineers’ (NSBE) Summer Engineering Experience for Kids (SEEK) program, a free, three-week engineering immersion program that exposes thirdthrough fifth-grade students in underrepresented communities to STEM education. At SEEK, student teams learn to power a vehicle using chemistry and electricity, design and construct a vehicle that is powered by gravity, and explore the relationship between force and motion and the effects of weight

and lift on gliders. Through initiatives like this one, NSBE is committed to increasing the number of African American engineers who excel academically, succeed professionally and positively impact their communities. Other minority groups, such as women and people of color, are also included in NSBE’s outreach. While 80 percent of jobs this decade will require STEM skills according to the U.S. Bureau of Statistics, a study by EVERFI Endeavor found only 40 percent of middle school students think of themselves as candidates for careers in STEM. Thus, to be on the right track for STEM career paths, children need to be educationally engaged early on so they can be excited about science.

For more information about PESA, please visit pesa.org.

SEPTEMBER/OCTOBER 2018  SHALE MAGAZINE

INDUSTRY

Community and Social Investment in the Eagle Ford Shale By: Omar Garcia, President, STEER

he oil and gas industry’s commitment to the communities in which we operate is steadfast and strong. In South Texas, we believe it’s important for everyone to give back to the communities in which we live and work. Being a good corporate citizen is essential to the success of the industry and the success of the communities in South Texas. Each year, to show our commitment to the communities of South Texas, STEER holds the Eagle Ford Excellence Awards. The awards are focused on honoring members of the oil and gas community for diligent efforts to preserve the environment, ensure safety in and around the Eagle Ford Shale region and give back to the community in which they live in and serve. STEER and its members value organizations that focus on building partnerships to leverage the economic benefits of the oil and gas industry throughout the region. As part of the Eagle Ford Excellence Awards, STEER gives an award for Community and Social Investment. This particular award recognizes leading companies and contractors in the Eagle Ford area that are working with communities to make a positive impact. Companies and contractors working in or with the oil and gas industry in the Eagle Ford Shale region that demonstrate active

programs for community and social investment are eligible to enter this category. Successful entries will demonstrate elements of, but are not limited to, the following: • Corporate community engagement showing benefit to the social fabric of the local area • Providing a benefit to deserving individuals or groups • Positive impact on the company’s reputation in the communities in which it works • A measurable and positive impact on the community • Number of company volunteers and/or volunteer hours dedicated to the community To be considered for the Community and Social Investment award, companies are asked to provide a detailed description, not to exceed 500 words, of your company’s activities and performance in any or all of the following areas: direct community engagement showing real benefit to the community; providing benefit to deserving individuals or groups; benefit to the company’s reputation in the communities in which it works; measurable impacts and number of company

SHALE MAGAZINE  SEPTEMBER/OCTOBER 2018

As part of the Eagle Ford Excellence Awards, STEER gives an award for Community and Social Investment which recognizes leading companies and contractors in the Eagle Ford area that are working with communities to make a positive impact

volunteers and/or volunteer hours dedicated to communities where your company operates. Third-party judges will examine the project description and evidence relative to the above criteria. Entries for the Eagle Ford Excellence Award for Community and Social Investment should be accompanied by supporting documentation such as testimonials, project descriptions, case studies, photographs and published articles. Supporting materials should be collated, attached and submitted along with the entry form. STEER will accept both applications and third-party nominations for the Eagle Ford Excellence Awards. To apply for an award or submit a nomination for other companies, contractors or

organizations working in the Eagle Ford Shale visit steer.com and complete the necessary forms. I encourage all those working to give back to the communities of the Eagle Ford Shale region to submit an entry into STEER’s Eagle Ford Excellence awards. Good luck!

Visit STEER.com for more information about the great things our members are doing to give back to the community and to submit an entry or nomination for the Eagle Ford Excellence Awards.

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INDUSTRY

“Our Oil IS Clean Energy!” Special to SHALE

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That distance is the difference between Canada’s damp, subarctic terrain and Utah’s desert conditions. Thus, there’s very little water in Utah’s tar sands. Water is also scarce at and around the Petroteq site. So, it’s not possible for Petroteq’s Utah plant to use the Canadian method of flushing oil from the tar sands. Fortunately, Petroteq’s water issues in Utah were solved with solvent. Company founders developed what Bailey calls “the secret sauce,” which is a chemical brew that liberates virtually all petroleum in the tar sands. Petroteq fiercely guards that formula. Petroteq was launched by close friends from Ukraine, Aleksandr Blyumkin and Vladimir Podlipskiy. Blyumkin ran a fuel distribution company, while Podlipskiy was a chemist for a tar sands company in Russia. Podlipskiy is

PHOTOS COURTESY OF PETROTEQ

his declaration comes from respected energy veteran David Sealock. His stellar career now includes the Chief Executive Officer position at Petroteq Energy, a bold oil producer that’s also an environmental innovator. Petroteq utilizes a revolutionary, costeffective system that cleanly pulls high-grade oil from tar sands and heavy crude. In fact, Petroteq executives insist that food can be grown in sand and soil following their processing system. Petroteq is currently working their magic at a cutting-edge plant in the heart of Utah’s tar sands. To prevent confusion, Petroteq wants everyone to know that their company does not mine tar sands in Canada and isn’t involved in disputes related to Canadian tar sands. Of course, the harvesting of Canadian tar sands is controversial because of the impact on the surrounding areas. Vast quantities of water and intense heat are used in Canada to separate petroleum from sand, clay and other material. That extraction technique creates heavy emissions and has left immense pools of industrial waste across Canada’s tar sands region. Donald Clark, a Petroteq geologist, calls the Canadian tar sands landscape “an environmental nightmare. No one wants to see that anywhere.” Petroteq President Jerry Bailey is also adamant. “We’re worlds apart from the Canadian tar sands.” For emphasis, Bailey adds, “That means geography, geology and technology.” Bailey has a doctorate in chemical engineering and is a former President of Exxon’s Arabian Gulf operations. He states bluntly that the only thing the Utah and Canadian fields have in common is oil. The Canadian tar sands are about 1,200 miles north of the deposits in Vernal, Utah, where Petroteq has its initial facility.

also Petroteq’s Chief Technology Officer. The two men were drawn to Utah’s vast tar sands, which have the potential for 13 billion barrels of oil, according to the Utah Geological Survey. Bailey has said the company’s system is “crazily simplistic.” At a recent press event, company officials laid out the stages for getting commercial grade oil from rugged material that’s regularly used to pave roads. It starts in Utah with digging up the raw material — petroleum-laden asphalt. In fact, the substance is so abundant there resulting in the Utah location being called “Asphalt Ridge.” Petroteq notes that their mining will cause limited disturbance to the landscape because the asphalt is concentrated in robust 50-foot seams close to the surface. Petroteq spent $10 million for the rights to mine asphalt on 2,230 acres owned by ranchers and pays a seven percent royalty on production — dramatically less than mining on public land. Once asphalt is out of the ground, machinery crushes it to roughly three quarter-inch chunks. Those pieces are then put in a vertical tank with three horizontal propellers. The company’s solvent is added, and everything in the tank is spun by the propellers. “It is like a cyclone,” Podlipskiy says. He

Petroteq utilizes a revolutionary, costeffective system that cleanly pulls highgrade oil from tar sands and heavy crude

added that it was a challenge finding the right alloy for the propellers, to keep churning sand from eroding the tank’s blades too quickly. “Because everything is a consistent size, it goes through the conveyor belts, it goes through the pumps and the centrifuges a lot easier,“ Clark explained. “Most importantly, with all that surface area, you have a more complete extraction and the time in the mixing tank can be a bit less.” Solids fall out of the mixture in the tank, and the liquid is run through a heated separation column. As a result, solvents become vapor, which is captured, condensed and run back

through the process with fresh asphalt. Oil is piped out. Meanwhile, sand emerges dry from the tank, scrubbed almost entirely of hydrocarbons and solvents. That clean sand is safely returned to the mine pit, without risk of soil contamination. Petroteq’s Utah leases are estimated to hold 86 million barrels of oil, or enough to yield thousands of barrels per day over a generation. “When you look at the resource we have in this area, it is tremendous,’’ Sealock says. “We have enough oil here to produce 10,000 barrels per day for over 25 years.’’ Each ton of the Utah asphalt yields 0.62 barrel, or 26 gallons of oil, according to Sealock. Petroteq’s break-even production cost is about $30 a barrel. By contrast, oil-sand production in Canada breaks even at $65 to $75 a barrel, according to Kevin Birn, an analyst at IHS Markit. Petroteq notes that its tar sands require less processing than Canada’s sands, bringing costs down.

For more information, visit www.petroteq.energy

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COLORADO’S UPCOMING ELECTION IS CRUCIAL FOR ENERGY INDUSTRY By: Matt Dempsey

here is no question Colorado’s upcoming election cycle is going to be a doozy — headlined by the gubernatorial race between Democratic nominee, U.S. Rep. Jared Polis, and the Republican nominee, State Treasurer Walker Stapleton. Certainly, energy issues are primed to be front and center up and down the ticket given the tremendous growth of the oil and gas industry in the state over the past decade. The contrast on paper on energy issues between Polis and Stapleton

SHALE MAGAZINE  SEPTEMBER/OCTOBER 2018

couldn’t be more dramatic. Polis has a long history of teaming up with anti-fossil fuel groups and funding anti-fossil fuel ballot measures in recent years that would increase setbacks and make it easier for local communities to issue arbitrary drilling bans. Yet, now as he runs for governor, we are seeing Polis try to reposition himself closer to the center, telling the business community that he supports a “thriving” oil and gas industry. His campaign team has gone out of its way to push back on industry assertions that he is “anti-fracking,” despite his extensive record of being just that. Even antifossil fuel activists have raised their own concerns with Polis’s flip-flopping on his energy positions, saying, “the problem with Jared is I’m not sure which Jared will show up.” On the other hand, there is no question where Stapleton stands on energy issues. In a show of support for the industry, he recently attended the “Energy Proud” rally which brought together thousands of oil and gas workers on the steps of the state Capitol. Stapleton consistently preaches the importance of business certainty and a balanced approach to safely developing Colorado’s natural resources in a responsible, regulated manner, all the while acknowledging the immense economic impact the industry has on our state. Ironically, what could end up defining Colorado’s political landscape this year is a backdoor fracking-ban ballot measure called Initiative 97. If passed, the measure would increase setbacks fivefold to 2,500 feet, suddenly putting large amounts of Colorado’s nonfederal lands off limits to new oil and gas development. An anti-fossil fuel group called Colorado Rising told the press they have turned in more than 170,000 signatures to put Ini-

tiative 97 on the ballot this fall, putting them in a decent position of attaining the 98,462 valid signature requirement. This ballot measure is similar to the campaign Polis funded and then pulled at the last minute back in 2014 which ended up creating a gigantic rift in the Democratic Party. This time around, Democrats again are speaking out against such large setbacks, which basically amount to a widespread drilling ban on more than 85 percent of the state’s nonfederal lands. While Colorado’s Democratic Party endorsed Initiative 97, key Democratic leaders in the state like Governor John Hickenlooper and former Obama administration Interior Secretary Ken Salazar have both opposed the measure, showing how toxic a debate this can become for the party come November. For what it’s worth, Polis says he doesn’t support it either, calling it inflexible. But it’s not just the governor’s race where energy issues will be critical. The attorney general’s race between Republican George Brauchler and Democrat Phil Weiser features a similar divide on the issues. Though the attorney general is a position that tends to be overshadowed by whoever occupies the governor’s mansion, given the office’s autonomy, fewer statewide officials have more influence or impact on the energy industry. In Colorado, Weiser announced his support for the Martinez vs. Colorado Oil and Gas Conservation Commission (COGCC) lawsuit brought forth by the environmental organization, Our Children’s Trust. If that case is successful, it could have wide-ranging ramifications on how the COGCC makes permitting decisions on new oil and gas development. On the other hand, Brauchler has said that he will “vigor-

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POLICY

ously” defend the COGCC position if elected attorney general. Colorado’s State Supreme Court, which ruled in 2016 that the state has supremacy over oil and gas regulations, has agreed to hear the case. Come 2019, whoever is the new chief legal officer for Colorado will have a substantial impact on how the state’s position will be represented. And we must not forget the state Legislature, where Democrats hold the State House and Republicans control the State Senate by a thin margin. We have already seen the likes of California billionaire Tom Steyer engage early in the process. To date, Steyer has maxed out to five Democratic candidates directly and has his sights set on flipping the State Senate, where Republicans enjoy a slim, single-vote majority. There is a lot at stake for responsible energy development and one of the largest economic segments in Colorado in November – the lasting impact of these races will be enormous, given that Colorado’s energy industry makes up more than $31 billion of the State’s gross domestic product (GDP) and employs more than 230,000 Coloradans. Colorado has typically been able to bridge differences between parties, collaborate, and take a common-sense approach to issues. But 2018 may represent the most dramatic political divisions and shift on energy issues we’ve ever seen.

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About the Author: Matt is the opinion editor for Western Wire, a new news reporting project of the Western Energy Alliance. Established in 2017, Western Wire is the go-to source for news, commentary and analysis on pro-growth, pro-development policies across the West. Western Wire covers the news and viewpoints frequently overlooked when regulations and legislation are debated in Washington, D.C. and across the region. Additionally, Matt, who is based in Denver, Colorado and is with FTI Consulting, works with companies and industry groups in the energy and natural resources sector to secure positive media coverage in local, state and national media markets. He also advises on how to use this media coverage to secure the best possible government-relations outcomes.

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POLICY

ISSUES FACING THE TEXAS LEGISLATURE IN 2019 By: David Porter

here are many major issues facing the Texas Legislature during the 2019 session. In early August I attended an event in San Angelo called the West Texas Legislative Summit which gave us insight into what those issues will be. The Summit was well attended this year with a handful of state senators, a good number of state representatives, lobbyist, staffers, trade association members, local elected officials and even some interested citizens. Some of the themes I heard mentioned several times during the Summit included school finance reform, property tax reform, transportation, water, rural issues, eminent domain and health issues. Of course, several of these issues impact each other and the issues blend together. School finance reform has not seen any major changes since 1993. The changes styled as “Robin Hood” allowed a portion of taxes collected by property-rich districts to be diverted to the state and sent to property-poor districts. Since that time, the property tax burden, namely school taxes, has grown exponentially. Some rural districts, especially in West Texas and the Eagle Ford area of South Texas, that were once property-poor districts are now considered property-rich districts because of oil and gas activity. Unfortunately, now these districts must send substantial amounts of money to the state, money they cannot use to build the infrastructure needed for their own districts. While there is a consensus that something needs to be done, there is no agreement on what is the best solution to the problem. Property tax reform is another area that garnered a lot of interest. Since the biggest share of school finance money comes from property taxes and the majority of property taxes go to education, any change in this area will have a dramatic impact on school finance reform and vice versa. Depending on how those changes are made, they may drastically impact rural communities without serious consideration of those impacts by the majority of urban and suburban legislators passing the changes. Transportation is another area where the rural/urban divide raises its head. The urban areas want new roads built to ease congestion. The rural communities want roads built to replace worn out and unsafe roads. One interesting statistic I heard at the Summit is that approximately 2.5 percent of the state’s population lives in the Permian Basin while 10 percent of the state’s traffic fatalities occur in the Permian Basin. Other transportation-related issues potentially arising this coming session are regarding using taxpayer funds to pay for the construction of toll roads, and ways to get money to rural counties

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that have roads that are heavily impacted by major oil and gas production in their areas. A warning was also issued about the potential problems ahead for transportation funding if electric vehicles gain in popularity. Since most funds collected for road building and maintenance come from the gas tax, large-scale adoption of electric vehicles will reduce the amount of tax collected. This will either reduce the amount of funding available for roads or will require new revenue sources. Water, whether too much as from Harvey last August, or too little, like we have this August, is becoming a consistent issue in Texas. Several legislators suggested that laws surrounding the movement of water from one watershed to another might be revisited this session. If this is done it will be very controversial. We will once again see rural versus urban divide lines and well as different areas of the state lining up on different sides on these proposed changes. There are lots of ideas as to why Texas has water shortages. I think the single biggest problem is the rapid growth the state has had in the past 30 plus years and is projected to have for the next few decades. If substantial quantities of water are moved from one watershed to another in Texas it’s going to take pipelines. If more pipelines are built in the state, the issue of eminent domain will become even more prominent. This may be the only issue that I discuss in this article that directly impacts the oil and gas industry (the property tax, transportation and water issues all have huge indirect impacts) but It seems that some of the agricultural and rural interest will make a big push to tighten up eminent domain law this next session. I have mixed feelings about this legislation. As a former Texas Railroad Commissioner, I understand the

If you are concerned about these or other issues, the next few months are ripe with opportunity

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

important economic advantages the pipeline infrastructure has given Texas. However, it is a powerful thing to be able to take someone’s property and use it against their wishes. I would like to see eminent domain as something that is fair, rare and, yes, still legal. It is important that pipeline companies using eminent domain understand that by using this powerful tool they have certain moral and legal obligations to the people whose property they use. The pipeline companies need to pay a fair price for the property. They should use the property for the intended uses, and, if they claim to be a common carrier, they should behave as one. The last general area that received several mentions was health. A couple of health-related issues mentioned by legislators were the opioid crisis and mental health — especially in the context of preventing school shootings. This area is going to be important next session since health is the largest budget item for the state.

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To put these issues into some context let’s briefly look at some budget percentages. For Fiscal Year (FY) 2018, the State of Texas spent: • Education - 25 percent • Healthcare - 36 percent • Transportation - 8 percent • Pensions - 13 percent In total, 82 percent of its budget on these 4 items. Now, if you combine state and local spending for FY 2018 you get the following budget percentages: • Education - 34 percent • Healthcare - 23 percent • Transportation - 8 percent • Pensions - 7 percent Making up 72 percent of the combined state and local budgets. If you are concerned about these or other issues, the next few months are ripe with opportunity. There is still time to speak with your representatives regarding your views on the issues facing Texas in the 2019 session and beyond. My greatest advice is to educate yourself about these issues before the election. This November the voters of Texas will elect the Texas House and half of the Senate which will have a large impact on the issues I mentioned above.

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BUSINESS

“IT’S SO GOOD TO SEE YOU HERE” By: Kelly Warren Moore

paired. Our friends are safe and healthy. The birds are back and flowers are blooming again. The technicolor, seaside sunrises and sunsets never left, of course. While things in Rockport have improved more than any of us would have thought possible in those early days of devastation and chaos, it doesn’t feel right to say they are back to “normal.” I’m not sure anyone who lived through that storm will ever feel comfortable saying things are back to normal again. When something happens that is so out of human control, so beyond the reach of expectation as Harvey was, it substantially shifts one’s foundation of certainty. One of the most profound changes we’ve observed in this past year has been a far greater level of true community with our town and our feeling of personal responsibility to it. Our home in Rockport is a second home. Prior to the storm, when we needed something there, we just ordered it from Amazon or some other online retailer, or brought it from our home in Austin. It was so easy to arrive there, with whatever we needed delivered right to our door. We could enjoy the water view and sunshine and everything else from our back deck. Once we arrived in the

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Helping rebuild a community is more than just putting physical pieces back together driveway, we never had to leave. Our home offered us such privacy and peace, and we really didn’t feel a need to expand our horizons much beyond that driveway. That may sound selfish or self-absorbed, though I would never describe us in that way. We just thought of our place as a retreat, and not really as part of a larger community. That has absolutely changed, and for the better. That privacy and peace is still there, but we find ourselves much more engaged in our front yard now. We have met many of our neighbors, most of whom are part-timers like ourselves. We talk to the joggers or walkers as they pass our home. We wave to everyone who passes and they wave back. It sounds crazy, since this is Texas and waving to passing cars is as expected as “please” and “thank you,” but it does feel like now when we wave, it’s a real, sincere acknowledgment. “I may not know who you are, but you are here and so am I. We made it.

About the author: Kelly Warren Moore has sold clinical research and development software solutions to the pharmaceutical and biotech industry for the past several years. She previously spent 20 years in business development for the pharmaceutical research and development field, focusing on multi-study, global clinical programs. She has a Bachelor of Arts degree in economics from The University of Texas at Austin. Any opinions expressed in this article are strictly her own and are not meant to represent those of any employer, client or organization with whom she is affiliated.

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everal years ago in the midst of a family crisis, dear friends of ours counseled us to try to stay focused on praying for “best possible outcome” and reminded us that something good always comes from every terrible situation. When one is in the depths of despair, with so much uncertainty and worry that it’s hard to even know what to do next, that advice is very difficult to appreciate. However, in the case of that crisis, and with every other trial that has come our way since then, I now know in the depths of my soul that that advice was some of the best, and most remembered, that we will ever receive. And so it has been with Hurricane Harvey. From the time the storm was named, to the agonizing hours we spent watching him strengthen and sharpen his focus on our beloved Rockport a year ago, to the hours immediately following when we didn’t know if our home or our friends had survived or perished, those sage words lodged themselves in our mind like a centering prayer. We had insurance, we could rebuild, we were able to watch the storm from safety; we were fortunate. Our home sustained significant damage but has since been re-

“It’s so good to see you here.” And it is! Immediately after the storm, it was necessary to bring supplies and needed tools from afar, as the stores weren’t open or were packed with contractors who were busy rebuilding vital services and infrastructure. The stores that were open also had trouble keeping anything on the shelves due to the vast need. In the months since then, we’ve not ordered anything from anywhere outside Rockport or Aransas Pass unless it absolutely isn’t available locally. We know that if our community is to survive, our businesses need to survive. If our businesses are to survive, they need employees. We have to support those in our own backyard. There are some businesses that I’ll try to visit every time I come to town, and I’ll buy something, even if it’s only a pack of cocktail napkins or a night light or a T-shirt. There is almost always a good conversation that begins with “It’s so good to see you here.” We usually prefer, and enjoy, cooking and eating at home; now we make an effort to support local restaurants far more often than before. We engage with the staff in a more substantial way than we might have before. We ask questions and listen to the answers, not just exchange perfunctory niceties. We try to offer encouragement to them, and they offer encouragement to us, as well. It feels more important and true now when we say to each other, “It’s so good to see you here.” The Rockport-Fulton Chamber of Commerce and other local churches and organizations have done a phenomenal job of helping, and in some cases, almost willing the business community to pick themselves up and dust themselves off. Each reopened or new business is celebrated regardless of size or scope. Festivals are scheduled and organized and volunteers turn out in droves to support them. Early on, it seemed like the last thing anyone wanted to do was to go hang out in a hot tent and listen to music when there was so much work to do. But that moment last fall, at SeaFair, when we watched kids dancing with their parents and weary neighbors sitting together with a cold beverage, tapping their toes and laughing, was a profound moment for us. Everything had been so frantic to that point. There was always something else that needed to be done before resting. Even if only for a moment, hundreds of locals came together and took a breath. “This is how you rebuild a community,” we thought. Since that afternoon, we’ve stopped by every event they’ve planned, and so have many others. Before, it might have been easier or more restful to read a book on the patio and listen to the water. There is still time to do that, of course. Helping rebuild a community is more than just putting physical pieces back together. It’s helping to reweave the fabric of a place, and maybe even transforming it into something more inclusive, more colorful and stronger than before. That can only be done with face-to-face, hand-to-hand, wave-towave personal commitment and interaction from everyone. Rockport has come back to where it is because of that kind of commitment, interaction and love from so many people. We are all more aware than ever before that everyone is in this together and we depend on each other if the community is to flourish. So please, when you see a chance to pay Rockport-Fulton, Aransas Pass or Port Aransas a visit — do it! Visit the businesses, visit the restaurants, buy your groceries locally. I promise you that someone, and maybe everyone, you meet will say, “It’s so good to see you here.”

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For more info: Visit the Rockport-Fulton Chamber of Commerce at www.rockport-fulton.org, the Aransas Pass Chamber of Commerce at www.aransaspass.org, and the Port Aransas Chamber of Commerce at portaransas.org.

SEPTEMBER/OCTOBER 2018  SHALE MAGAZINE

BUSINESS

Benefits of Social and Community Investing By: Joshua Simpson

long run, especially when decisions are being made to do business with or invest in your company. Community investing is a long-term investment in the public image of a business. This is a very valuable tool for small businesses, allowing them to compete with larger companies by becoming part of the fabric of their communities. Because community investing is about more than the amount of money being spent, it allows smaller businesses to use this as a way to contribute by donating their time. In showing up to help build houses and playgrounds, or participating in a walk, businesses can meet people in the local community and garner good will in that area. Also, many nonprofit and charity events have some sort of media coverage, which means the companies that sponsor or participate in events are often mentioned along with the event. Social and community investing can go hand in hand to help grow a business. These are effective tools for businesses to grow their brand and provide goodwill. By investing in its community, a business has an opportunity to become ingrained in the community and compete with the other larger companies even though their pockets may not be as deep for investing purposes. An example of commu-

SHALE MAGAZINE ď &#x201C; SEPTEMBER/OCTOBER 2018

nity investing is to sponsor local golf tournaments that help local organizations like veteranâ&#x20AC;&#x2122;s groups, local scholarship funds and local police departments. Generally, for a small donation to the event, companies can get their names included in the advertisements. Additionally, some of the items that are given away to all participants may even mention your company as a sponsor for the event. By investing in the community, consumers may view this company as more socially responsible, thereby making it a business that they are more likely to invest in and do business with in the future. The important thing to remember is that community and social investing are not strategies to use for quick results for your business. Because they are long-term tactics to boost the image, brand and name identity of your company within the local community, they cannot be used to see immediate financial gain. Social and community investing are important parts of any business, regardless of how large or small it may be. A company that is active in its community will help it become part of the geographical area. When first starting out, a business may not have the funds available to donate but may be able to volunteer time to help out with community projects. Time is just as valuable as

contributions in many cases and, in some situations, it is needed more than actual funds. However, as a business grows, it may have less time to devote to the community while it may be able to contribute more financially. The important thing to remember is that when a business becomes a part of the community, everyone wins.

About: Josh Simpson, Investment Advisor with Lake Advisory Group, brings a history of management experience with him to the financial field. Josh prides himself on his ability to work with people of many backgrounds in order to create the best possible plan for their unique situations. To contact Simpson, call 352-350-2008 or visit www.lakeadvisorygroup.com

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hen used correctly, social and community investing can be valuable for growing your business. Social investing is the practice of investing in companies that fit with your personal beliefs, such as health-related companies or pet supply businesses. Similarly, if you are against smoking, you would probably not invest in any tobacco or cigarette companies. Community investing is the practice of spending time or money to improve the community in which your business is located. Examples of community investing would include volunteering time with groups like Habitat for Humanity or spending money to help improve the local schools. Social and community investing are not the best mechanisms for quickly growing a company financially, but they are still important to the life of a business. Social investing is a longterm process. Depending on the type of company, there are different ways to follow the principles of social investing. The basic rule of thumb for social investing is to only invest in, do business and be associated with other groups doing the same. If your company does not take the time to research the other companies and individuals with whom you do business, it could come back to hurt you in the

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SEPTEMBER/OCTOBER 2018 ď &#x201C; SHALE MAGAZINE

BUSINESS

The World Is Round — The Economy Should Be Circular By: Thomas Tunstall, Ph.D.

ntropy, life-cycle accounting and the circular economy are terms and concepts indicative of how society now looks at the world differently than previous generations. As the global population pushes toward ten billion people by the end of this century, thoughtful approaches to sustainability will become ever more essential to policymakers. Yet a coherent narrative remains elusive. Industrialized countries continue to operate very far from a circular economy. Instead, they rely heavily on a linear economy, where the make-use-dispose product lifecycle dominates. A circular economy, by contrast, encourages product reuse and longevity, not disposability and planned obsolescence. Efforts by communities and policymakers to develop circular economies and maintain the viability of natural ecosystems in the United States and other countries take on many forms. Several cities around the U.S., including San Antonio, have made it a priority to implement policies aimed at long-term sustainability. For example, in August 2016, the City of San Antonio adopted its “SA Tomorrow Sustainability Plan” intended to prepare the city for smart, sustainable growth in light of the prospect of an additional million residents by 2040. The

plan is a fuller elaboration of past efforts such as Mission Verde and SA2020. For 14 months, the City of San Antonio engaged a broad range of stakeholders in a variety of venues in order to solicit input and develop the plan. Focus areas include energy, food systems, green buildings and infrastructure, land use and transportation, natural resources, public health, and solid waste resources. Cross-cutting themes include air quality, economic vitality, equity, resilience and water resources. On a global basis, some of the most systematic research dealing with sustainability comes from the Stockholm Resilience Centre, which examines planetary boundaries affected by our waste outputs, and attempts to gauge which are most at risk. The boundaries include stratospheric ozone depletion (which filters out ultraviolet radiation), loss of biosphere integrity (necessary for biodiversity), chemical pollution, climate change, ocean acidification, the freshwater cycle, land system change (when forests, grasslands wetlands, coastal fisheries, savannas and other habitats that recycle are converted to municipal, industrial or agricultural use), the nitrogen/phosphorous cycle (fertilizer runoff), and atmospheric aerosol loading. What is most telling about research on sustainability is

SHALE MAGAZINE  SEPTEMBER/OCTOBER 2018

that economics and ecosystems are closely interlinked. Modern economic systems require low entropy inputs (e.g. solar radiation, oil and gas) to provide useful services. As a result, high entropy waste outputs return to ecosystems and impact planetary boundaries. In previous columns, I have noted that economic theory leaves out such considerations, treating waste or high entropy outputs simply as negative externalities — largely absent from economic models. Preliminary work by researchers demonstrates that current pricing for industrial activities, such as solid waste combustion, coal-fired electric power generation and sewage treatment, are negative from an air quality standpoint alone. Essentially this means the services are underpriced. This is very analogous to the way most of us now realize that we underprice clean water relative to its long-term value. A full set of environmental accounts would more appropriately track not only air, but also water pollution, solid waste and hazardous waste as part of the national economic accounts system. Currently, no such function exists at the federal level in the Bureau of Economic Analysis. For the most part, economic theory and ecosystem theory remain disconnected — even at odds with one another. Increasing awareness of this

implication would better guide policymakers in the future. As an attempt to highlight the issue in a more accessible format, I developed a fictionalized scenario in Texas called “The Entropy Model.” Perhaps for public policy discussions, a story can resonate better than a dry research paper. Only time will tell whether sustainability efforts will be sufficient to correct the longterm environmental trends that began with large-scale industrialization barely more than a hundred years ago. A circular economy that reduces our waste outputs as close to zero as possible should become a key policy objective for every industry.

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.

SEPTEMBER/OCTOBER 2018  SHALE MAGAZINE

LIFESTYLE

3 Belief Systems that Hurt High Achievers MALIGNANT MINDSETS OF CURRENT AND ASPIRING LEADERS LIKELY TO BE COUNTERPRODUCTIVE By: Dr. Marissa Pei

AS AN ORGANIZATIONAL PSYCHOLOGIST and 28 years working with the top three levels in Fortune 100 companies, I’ve noticed some common themes with some of the most successful people in the world. See if you can identify with any of these:

I’m not any harder on others than I am on myself.

At first glance, these belief systems seem rational and logical, and part of the success formula for the high achiever ... or are they? I call them “BS” belief systems that hurt leaders because of their unintended consequences in their relationships at work and at home. BS #1: A Leader’s Job is to Whip You into Shape If I can do it anyone else can and it’s my job to push you to your highest potential. I’ll never forget my first year in my doctoral program. I took an internship on the East Coast with a prominent consulting firm and loved the fact that my nickname was “The Ice Queen of Attila.” I had a reputation for cracking the whip, and I thought that was a good thing. My partner in charge pulled me into his office one day and asked why I was so tough on people? I answered that I was trying to make them into better people – that it was for their own good. He thoughtfully retorted, “Did they ask you to make them better people?”

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You say perfectionist like it’s a bad thing.

This is not rocket science. Why is it so difficult to find people to do their job?

I wish everyone were like _____ (the one you are accused of favoritism for).

I only want what’s best for everyone.

I AM NOT ANGRY!

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I’m harder on myself than anyone else ever is ... and it’s never enough.

I wouldn’t have these issues if I were allowed to hire my own people!

That was a lightbulb moment. I could be hard on myself to my heart’s discontent, but I had no right to make others miserable. Leadership by dictatorship went out with assembly lines. BS #2: Perfectionism is a Noble Endeavor The majority of leaders I’ve met are recovering perfectionists, and their ability to be effective was highly correlated with the level of recovery. Picture a horizontal line where the left end is zero or start, and the far right is 100 percent or finish. High achievers are almost always at 88 percent. They tackle all goals, jobs and projects with gusto and get to the 88 percent yard line. The 12 percent gap between where we are and finish is where we live. It’s where the tension is ... what still has to be done, what isn’t finished, what is still wrong. The good news is that it gives us the impetus to strive forward. The bad news is that it’s where stress lives, and that anxious feeling will take its toll. And then the straw that breaks the overachievers back is that if and when we do hit the 100 percent, we are off to the races on the next project, goal or activity and right back at the 88 percent mark. The lesson in this line? We need to stand at the 88 percent mark and instead of lamenting what still needs to be done, turn around to look at the 88 percent that has been accomplished and smile with a “Wow, that’s great work!” acknowledgment to self and others, we would reduce our stress by 88 percent and give ourselves and others the validation we crave. BS #3: I Need Smart People to Execute, I Don’t Have Time for This Touchy-Feely Stuff Every single one of my executive coaching clients has started with the same vent: “I don’t know why things have to be so difficult – it’s not rocket science, it’s common sense.” My response has not changed, “There is one organization where pure logic, rational thought prevails, where’s there no politics, power plays, peripherally located egos, conflict and miscommunication ... the CEMETERY. Where there are no people and there are no problems. Once my clients accept the BS, they spend less time fighting the illogical, irrational part of organizational life and allow for natural human dynamics to take place at work. That takes 88 percent of the angst out of the situation. At that point, processes and plans can be made which harness the great parts of having humans at work, including creativity, inspiration, collaboration, synergy and joy.

I call them “BS” belief systems that hurt leaders because of their unintended consequences in their relationships at work and at home

About the author: Consulting Psychologist Dr. Marissa Pei is author of the newly-released title, “8 Ways to Happiness from Wherever You Are” that outlines eight ways to transition from sadness to being happy 88% of the time. Dr. Marissa has been speaking, coaching and facilitating to hundreds of Fortune 500 companies for nearly three decades. Her popular award-winning syndicated talk radio show “Take My Advice, I’m Not Using It: Get Balanced with Dr. Marissa” is syndicated on CNBC News Radio and iHeart Radio. Find her book online at www.8WaysToHappiness.com.

SEPTEMBER/OCTOBER 2018  SHALE MAGAZINE

LIFESTYLE

What Financial Toxicity Means — and a Novel Solution SERIOUS ILLNESSES LIKE CANCER CAN TAKE A DAMAGING TOLL ON AN INDIVIDUAL’S FINANCES―BUT THERE ARE SMART SOLUTIONS By: Adam Balinsky, CEO of Fifth Season Financial

What is “financial toxicity”? There’s a phrase for this mix of medical and financial pressure: “financial toxicity.” According to the National Cancer Institute, financial toxicity “describes problems a cancer patient has related to the cost of treatment.” All sorts of traits — from age to severity of illness to type of employment — can worsen one’s financial toxicity. Further, financial toxicity can lead to a vicious cycle: “Studies have shown that patients who have financial toxicity reported … more symptoms, and more pain,” the National Cancer Institute writes. Indeed, a recent Washington Post report examined how childhood cancer survivors, in particular, can be plagued by financial toxicity. “[Recent] research … found that financial concerns prompted about onethird of the 2,800 [study] participants to skip or delay needed screenings, recommended medications or trips to a doctor or hospital,” the alarming article reads. “Half said they worry about how to pay for their care.” Dr. Yousuf Zafar, a medical oncologist affiliated with the Duke Global Health Institute, was quoted in a recent NPQ article saying, “Multiple studies have shown that cancer patients and survivors are at risk for facing treatment-related financial burden, with a small minority at risk for extreme burden in the form of personal bankruptcy.” Recent data indicate that at least 30 percent of cancer patients will go into debt, three percent of whom will file for bankruptcy. When an initial diagnosis of a serious illness occurs, it is critical to assess your financial situation as one of the first steps in dealing with the potential financial ramifications. What are the factors and resulting potential outcomes of financial toxicity? Factors that may affect your risk of financial toxicity: • Whether you make the most money for your household

SHALE MAGAZINE  SEPTEMBER/OCTOBER 2018

• How much money other people in your household make • How much debt you had before being diagnosed • Your assets • Costs related to your illness • How the illness and its treatment affect your ability to work • Whether you have health and disability insurance and what they cover Resulting financial problems associated with the diagnosis of an advanced stage illness: • Less income and assets • Debt because of the cost of your cancer care • Trouble paying for housing, food, and bills • Bankruptcy • Choosing between advised course of treatment (i.e., expensive oral chemotherapy) and other uses of limited financial resources (i.e., basic necessities like food and clothing) How can the nonprofit sector help? There’s a plethora of national and local chapter nonprofits that individuals dealing with an advanced staged illness or disease should take advantage of when it comes to medical research, psychological and emotional support and patient advocacy. Although the Affordable Care Act has helped alleviate some of the financial burden through increased coverage and eliminating caps on lifetime payouts, these benefits are in jeopardy as the debate over “repeal and replace” continues. If rollback efforts succeed, we should expect to see an increase in the effects of financial toxicity. The nonprofit sector has stepped in on this front by advocating against repeal and replace, as well as by providing financial assistance for cancer patients and their families. That being said, while nonprofits focus on access to care, copay assistance and access to drugs, there is little help for discretionary needs. The nonprofit world can only do so much when it comes to the staggering financial burden that has resulted from the effects of financial toxicity on patients and their families. How do we help? Unfortunately, financial toxicity is a scenario many Americans and their loved ones are familiar with. But fortunately, there’s a sound solution — it’s just not well known. At my company, Fifth Season Financial,

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TOO OFTEN, SERIOUS ILLNESS is accompanied by another woe: major financial strain. Coping with an illness like late-stage cancer, advanced heart disease or ALS can drain savings and rack up bills swiftly. Even if an individual has health insurance coverage, the economic toll — from pricey copays and out-of-network expenses to time away from work — can be difficult to bear.

we have a program titled FLAG, “funds for living and giving.” It’s a novel approach to financial assistance that leverages both lending and life insurance. And it can help combat the pain and challenges associated with financial toxicity. So how do programs like FLAG work? They leverage an asset most individuals already have; their existing life insurance policy. FLAG and similar programs advance to individuals a significant portion of the face value of their life insurance policy. Throughout this process, the individuals’ policies remain in place, allowing them to give the remaining amount to family once they’re gone. Unlike a traditional loan, there are no current payments — any fees and costs (plus the loan itself) are paid at a later date from policy proceeds. Further, FLAG covers individuals’ premium payments, helping reduce the bills that led to financial toxicity to begin with. With FLAG, we work directly with insurance and health care providers, freeing individuals from onerous paperwork. Perhaps the most empowering part of FLAG — and the element that best helps overcome financial toxicity — is the complete lack of restrictions. Individuals can spend their funds in a way that best suits their context and lifestyle, with absolutely no stipulations or conditions. During my time in the industry,

I’ve seen a range of uses: Some individuals may use the funds to pay down medical bills; others may take a memorable trip abroad with family and friends; others still may carry out long-overdue home improvements or give a generous gift to loved ones. Programs like ours provide sorely-needed relief to individuals who need it most. Financial toxicity is a painful and far-too-common experience — but it doesn’t need to be. There are sources to financially aid and empower individuals when they most need a helping hand. There are solutions out there to combat financial toxicity. It’s a matter of learning about them and taking action so that you can live the fullest life possible, even after the diagnosis of an advanced stage illness.

Financial toxicity is a painful and far-toocommon experience — but it doesn’t need to be

About the author: Adam Balinsky is the Founder and President of Fifth Season Financial. He passionately believes in the mission of the company—to help relieve the financial pressures faced by many patients struggling with advanced illnesses including cancer. After a personal experience dealing with his wife’s breast cancer diagnosis, Adam recognized that people facing advanced-stage diseases have incremental financial pressures affecting everyday life that are not being addressed. Inspired to do something, he developed Fifth Season’s financial assistance program, FLAG (Funds for Living and Giving), designed to bridge the gap between the traditional financial assistance programs available to mitigate the direct medical and treatment costs, and the much broader financial needs of patients. Learn more at www. fifthseasonfinancial.com.

SEPTEMBER/OCTOBER 2018  SHALE MAGAZINE

LIFESTYLE

Workplace Wellness: HOW STAFFERS CAN ACHIEVE & SUSTAIN DIET GOALS ... STARTING NOW

AS CORPORATE WELLNESS PURVEYORS STRATEGIZE THEIR APPROACH, THERE ARE A FEW SIMPLE BUT KEY CONSIDERATIONS THAT CAN MAKE ALL THE DIFFERENCE BETWEEN AN EMPLOYEE SUCCESSFULLY — AND EVEN PROFITABLY — REALIZING A WEIGHT-LOSS ENDEAVOR VERSUS A WELL-INTENTIONED EFFORT THAT FALLS FAR SHORT. In seeking advice relating to waistline-friendly workplace wellness, I connected with diet and fitness industry insider Jimmy Fleming, co-founder of HealthyWage—the industry-leading provider of corporate and team-based weight loss challenges and financially-induced diet contests for individuals. For human resource (HR) professionals, business owners and others whose bottom lines depend on a healthy, present and productive staff pool, he offered insights on critical elements needed for the best chance of success with a weight-loss initiative. Here’s what Fleming says staffers can do to diet more effectively: Map out specific goals & time frames. You are far more likely to achieve your diet goal if you spend a few minutes thinking it through. Sit down at your desk and dedicate even just 10 minutes of your life to strategizing your goal. Put pen to paper, or, better yet, send an email to a friend or family mem-

ber and make a list of the things you’re going to do to change your weight. Simply stating “I’m going to lose weight” is not nearly specific enough, but it makes a good headline at the top. Write down a date when you will achieve your first goal. This date should be in the near future — one month is a good bet. Now, make a specific, realistic goal. Most experts agree that you’re most likely to succeed if you don’t starve yourself, and plan on losing one to two pounds per week. In fact, setting a modest goal — say, one pound per week — can spare you a lot of hunger and stress. You might even forget you’re on a diet! Suppose you choose one and a half pounds per week and a onemonth goal date: your goal will be about six pounds. A piece of cake (so to speak)! Put your goal and goal date on your calendar (e.g., “Weigh 150 pounds” as an entry for Jan. 30). Go back to your piece of paper or email. Under your goal and goal date, write down the word “food.” Ask yourself: What exactly is your eating plan? Are you going to follow a particular

SHALE MAGAZINE  SEPTEMBER/OCTOBER 2018

diet? If so, when are you going to start? Your answer should be “right now.” Don’t be afraid. This is going to be great! If your diet requires that you purchase something or register on a certain website, go do that right now! What about exercise? What specific days and times will you commit to exercising? Who will you exercise with? If possible, call a friend now and set something up. Review your plan frequently as you work your way toward your goal. When your goal date comes, call a friend to either brag about your achievement or confess that you didn’t achieve it and tell them what’s going to be different for the next goal date. Now, sit down again (pen to paper or fingers to keyboard) and set a new goal date and goal. Keep going! Set up financial incentives. After you’ve written out your specific goals and dates, your best bet is to build a little structure into them. Enter: prizes and rewards. A significant amount of academic research shows that you are much more likely to achieve your goal if you include a double financial incentive — i.e., money to lose if you fail and money to win if you succeed! The reason money works better than the natural motivators of vanity and health is that money can be tied to specific, measurable goals and deadlines. In other words, financial incentives help prevent procrastination by establishing a firm

start date and help prevent quitting by establishing a firm goal date. Financial incentives also make weight loss a lot more fun and exciting by transforming the process into a game. There are highly effective, proven tools and resources available online for setting up financial incentives. For example, HealthyWage allows participants to make various kinds of personal weight loss “bets” and win payouts up to $10,000. The double financial incentive is an incredible motivator and source of structure that most winners say is indispensable. Do one thing at a time. Trying to stick to more than one goal creates a willpower diffusion that is almost always a recipe for failure. Your weight loss

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By: Merilee Kern, MBA

goal requires time, planning and lots of action items. The winding road from plump to sexy is made of many cobblestones that you have to lay down one at a time with lots of small, frequent decisions (e.g., “This morning, I am going to skip that second donut.”). With all the good judgment and willpower those little decisions require, you simply won’t have the time and energy for your other goals, too. You’re booked solid! If you think your weight loss goal isn’t that big of a deal, you might be off track. Tell everyone. Or, at least tell a few friends or family members about your endeavor. If you’re not willing to tell someone about your diet goal, you might not be committed enough to succeed.

When you tell other people about your plans, a magical thing happens. You know that your supporters are waiting to hear news of your success, and you don’t want to let them down. Some researchers believe that the social element is one of the most powerful tools in your arsenal. Plus, it’s important to have support — i.e., people to brag to when you succeed; people to talk to when you feel like overeating. Talking is a great antidote to a desire to binge or eat things that could get in the way of your success. If you’re really determined to achieve your goal, you should consider taking the social element even farther. Try writing a blog about your progress. Not only will your readers help keep you seriously accountable, but you may discover that being a great teacher is one of the best ways to learn and improve your own success. Seek fellowship. When you tell people about your diet goal, be on the lookout for a dieting partner (or group of partners). When you work on your diet goal with a buddy or

group of friends or family members, you are even more likely to accomplish your goals. You get all the benefits of accountability plus the comfort and fun of knowing there’s someone waiting for you to exercise, compare food and restaurant experiences, and share the ups and downs of dieting. According to the American Psychiatric Association, “Enlisting family and friends in the effort may help.” One study shows that participants who do a weight loss program with friends are more than twice as likely to keep their weight off than those that try to do it on their own. Does Money Motivate Weight-Loss? Weight loss doesn't have to be a difficult or costly endeavor. It can actually be quite profitable. HealthyWage.com has found a way to help dieters overcome their short-term financial woes and spur weight loss from the start by applying "double-incentivization" methodology. Through its website, HealthyWage.com shares an array of inspirational success stories of both women and men who gained financially for their pound-shedding achievements using the company’s unique gamification approach — many of which have lost over 100 pounds with this “carrot and stick” methodology. It’s no surprise such money-driven competitions have surged in popularity, given that multiple highly credible studies have underscored the value of employing financial incentives and peer support to positively influence weight loss. HealthyWage.com’s own diet-for-dollars program allows participants to make a wager upfront ranging anywhere from $20 a month to as much as $500. Participants then commit to a specific amount of weight loss in a specific time frame, for which they’ll receive a cash prize payout if they achieve their goal in the allotted time. Company reps cite that the average participant wagers $60 per month for nine months and roughly triples their investment if they are successful at achieving their goal. The financial upside potential is impressive. So if you’re looking for a fun and competitive diet program that proffers cash incentives, social and expert-based support, online tools and resources, goal-setting and tracking technologies and other helpful support mechanisms to better assure your pound shedding success (and monetary earnings related thereto), HealthyWage. com just may be for you. After all, the company was founded in response to academic research proving that even small cash rewards triple the effectiveness of weight-loss programs; that people are more effective at losing weight when their own money is at risk; and that social dynamics play a large role in the spread of obesity, and will likely play a large role in reversing obesity. Getting paid for shedding pounds and getting healthy certainly makes dollars and sense to me.

Getting paid for shedding pounds and getting healthy certainly makes dollars and sense to me

As a branding pundit, wellness industry veteran, consumer health advocate and influential media voice, Merilee Kern spotlights noteworthy marketplace innovations, change makers, movers and shakers. Also a two-time fitness champion, her groundbreaking, award-winning “Kids Making Healthy Choices” Smartphone APP for children, parents/caregivers and educators is based on her awardwinning, illustrated fictional children’s book, “Making Healthy Choices — A Story to Inspire Fit, Weight-Wise Kids.” Merilee may be reached online at www.LuxeListReviews.com. Follow her on Twitter at www.twitter.com/ LuxeListEditor and Facebook at www. Facebook.com/TheLuxeList.

SEPTEMBER/OCTOBER 2018  SHALE MAGAZINE

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SEPTEMBER/OCTOBER 2018  SHALE MAGAZINE

SOCIAL

SHALE Magazine and In the Oil Patch hosted the Fourth Annual State of Energy luncheon on Aug. 29 at the Solomon P. Ortiz International Center in Corpus Christi, Texas. This event was held in partnership with nearly every Corpus Christi-area chamber of commerce, including the Aransas Pass Chamber of Commerce, Ingleside Chamber of Commerce, Port Aransas Chamber of Commerce, Portland Chamber of Commerce, Rockport/ Fulton Chamber of Commerce and the United Corpus Christi Chamber of Commerce. Additionally, the Corpus Christi Regional Economic Development Corporation also partnered with SHALE Magazine and In the Oil Patch. U.S. Representative Michael Cloud (TX-27) served as the distinguished speaker at the event and addressed attendees on energy activity in Texas and the United States from a policy and economic stimulation perspective. Congressman Cloud was recently elected in a special election for the 27th district which extends from the Gulf Coast to Austin. Port Corpus Christi Chief Executive Officer Sean Strawbridge was the featured speaker at the luncheon. Strawbridge spoke on the importance of the continued growth of the energy industry in Texas, particularly in infrastructure, and how the Port plans to navigate through increased demand for natural resources around the world. A dynamic panel concluded the event, addressing a number of topics from across the energy sector value chain. The panel consisted of industry experts including David Blackmon, Editor of SHALE Magazine; Jeff Dorrow, Vice President of Commercial Operations at EPIC Pipeline LP; Paul Sheppard, Vice President, Southeast at Halliburton; and Thomas Tunstall, Ph.D., Director of Research at the UTSA Institute of Economic Development. The event brought in nearly 500 attendees representing various industries ranging from energy-related companies, housing organizations, engineering firms, banking institutions and more. Sponsors of this event include Black Mountain, Citgo, IBC Bank, Gulf Coast Growth Ventures, Marathon Oil, MMR Group, Port Corpus Christi and the South Texas Energy & Economic Roundtable (STEER).

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PHOTOS COURTESY OF SHALE

SHALE & In the Oil Patch Host Fourth Annual State of Energy Luncheon

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SEPTEMBER/OCTOBER 2018  SHALE MAGAZINE

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EMBRACE & EXCEL IN A MOBILE ERA PIPELINE PROJECTS GET NEW LIFE UNDER TRUMP

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

MAR/APR 2017

COMBILIFT: INNOVATION IN THE FORKLIFT INDUSTRY ATTRACTING MORE WOMEN AS THE INDUSTRY POWERS PAST IMPOSSIBLE

CULTURE OF INNOVATION:

OIL & GAS BUSINESS MAGAZINE

JULY/AUGUST 2017

OIL & GAS BUSINESS MAGAZINE

ATV ADVENTURE TAKES FLIGHT NATIONAL SAFE DIGGING MONTH

CITIZENS FOR LNG & ENERGY DAY A GREAT SUCCESS!

DOUG SUTTLES WITH ENCANA

THE BLM METHANE RULE WAS FLAWED FROM THE START

WAYNE CHRISTIAN A GOOD MAN FOR A CHALLENGING TIME

THE INFLUENTIAL LEADER:

OIL & GAS BUSINESS MAGAZINE

JAN/FEB 2017

MAGAZINE

SEPTEMBER/OCTOBER 2017

MAGAZINE

JANUARY/FEBRUARY 2018

2016 FUTURE OF THE REGION SOUTH TEXAS

TRUMP MEANS BUSINESS

THE NORTH AMERICAN FREE TRADE AGREEMENT – GOOD FOR AMERICAN ENERGY

BALANCE AND DIFFUSION OF POWER: THE 10TH AMENDMENT

STEER HOSTS PRESS CONFERENCE ON EAGLE FORD IMPACT STUDY RECLAIMED LAND CREATES AN OUTDOOR ASSET FOR EVERYONE

LIFESTYLE GUIDE: RESTAURANTS AND FOOD

WOMEN IN BUSINESS

ANNUAL WOMEN’S EDITION

SHANA ROBINSON HEALTHY SOLUTIONS FOR TEXANS

CONFIDENT, COMPETENT AND CREDIBLE

CAN ALASKA TURN IT AROUND?

OSHA

MAKE 2017 HEALTHY

ENFORCER OR YOUR FREE SAFETY COACH?

STEER

ENERGY EMPLOYEES MUST LEAD IN THE HALLS OF GOVERNMENT

OIL AND GAS OUTLOOK IN 2018

LEADING GROWTH AT THE PORT OF CORPUS CHRISTI

SOCIAL: STEER EAGLE FORD EXCELLENCE AWARDS

SEAN STRAWBRIDGE

NEW OPPORTUNITIES IN THE NEW YEAR

A NEW KIND OF TRADE ASSOCIATION A RISE IN TEXAS’ LNG EXPORTS

THE 98TH MERIDIAN FOUNDATION

TEXAS ATTRACTIONS AND FUN

WEN ENJOYS WINE AND CHEESE

APPALACHIAN BASIN SEES GROWTH IN NATURAL GAS PRODUCTION

THE FDA APPROVES THE FIRST DIGITAL PILL

CYBERSECURITY IS IMPORTANT FOR ENERGY INDUSTRY INFRASTRUCTURE

FOR ADVERTISING INFORMATION PLEASE CONTACT:

KYM BOLADO / kym@shalemag.com / 210.240.7188 www.shalemag.com @shalemagazinetexas Shale Oil & Gas Business Magazine @shalemag

OTHER SERVICES OFFERED BY SHALE MAGAZINE Branding / Web Production / Search Engine Optimization / Ad Design / Social Media Video Production / Public Relations / Email Marketing / Campaign Strategy / Direct Mail SHALE Magazine is a statewide industry publication that showcases the significance of the South Texas petroleum and energy market. SHALE’s mission is to promote economic growth and business opportunities that connect regional businesses with oil and gas companies. The publication supports market growth through promoting industry education JANUARY/FEBRUARY 2018  SHALE MAGAZINE 71 and policy, and its content includes particular insight into the development of the Eagle Ford Shale and Permian Basin plays and the businesses affected.

SHALE MAGAZINE  SEPTEMBER/OCTOBER 2018

SEPTEMBER/OCTOBER 2018  SHALE MAGAZINE

SHALE MAGAZINE  SEPTEMBER/OCTOBER 2018