Texas Eagle Ford Shale

IGNITING

INDUSTRY.

FUELING

COMMERCE.

EDUCATING

COMMUNITIES.

TOUTS NATIONWIDE ECONOMIC BENEFITS OF LIFTING BAN ON OIL EXPORTS

PG 28

Volume III | Issue I | 2015

THE SECRET’S OUT NOV UNVEILS SOPHISTICATED SERVICE CENTER

INSIDE

IEA FORECASTS DECLINE IN SHALE PRODUCTION, BUT THE NEWS ISN’T ALL BAD PG 48

OILFIELD SERVICES GIANTS SEAL THE DEAL WITH MEGA-MERGER PG 54

DESPITE ENERGY REFORMS IN MEXICO, FUTURE OF GLOBAL INVESTMENT UNCERTAIN PG 90

welcome to our

new home

Calfrac leads the way in extracting oil and gas from some of the toughest reservoirs in the world. We’re proud to announce our new home in San Antonio, Texas which allows us to better serve customers. As a top-tier pressure pumping company, we pioneer innovative hydraulic fracturing and completions solutions that help our customers grow and yield maximum production—even in the most challenging unconventional plays.

Welcome to Calfrac. Welcome to the future of oil and gas production.

www.calfrac.com

Dear Readers, As I join you in recovering from holiday revelry, I recognize that it is now time for all of us to get back to work. For me, that means

MESSAGE From The Editor

producing a magazine that addresses your needs, concerns and issues relative to the Eagle Ford Shale. For most everyone else, it means continuing to make our region one of the most economically stable and productive in the nation. It hasn’t been that long ago that South Texas was relegated to the economic junk heap. In the span of a couple of years, your efforts have helped make the United States a world superpower as far as energy production is concerned. The Saudis are quaking in their boots and playing tit for tat with oil prices. Egad, the thought of an energy independent North America terrifies them! I think it is something that the Arabs never thought of! We can produce our own energy. They cannot eat what’s left of that part of the world after the oil — sand.

Now that the U.S. political climate is shifting a little to the right, let’s hope we can ram through the Keystone Pipeline, get the Environmental Protection Agency’s collective foot off our necks and keep Texans at work and cash flushed. I hope your holidays were blissful. I hope 2015 proves even better than 2014. Now let’s all get the frack back to work!

Cheers!

Jaime

Jaime

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Jaime Powell Executive Editor

CONTENTS VOLUME III

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ISSUE I

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What’s New! Soaring in the Eagle Ford Shale

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IEA forecasts decline in shale production, but the news isn’t all bad

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Texas governor pushes for unlimited LNG exports

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National Oilwell Varco proudly unveils sophisticated service center

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Oilfield services giants seal the deal with mega-merger

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Polyflow opens new manufacturing plant in the Permian Basin

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ExxonMobil CEO touts nationwide economic benefits of lifting ban on oil exports

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Cracking the glass ceiling: Two from Houston listed as top-paid female execs

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Engraved with excellence in the lodging/hospitality arena

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Let someone else deal with spill containment

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ExxonMobil promotes engineering as a career

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Despite energy reforms in Mexico, future of global investment uncertain

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Stay informed … ‘Know the limits’

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Geared for greatness: A trusted blue print based on prompt, personalized service

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Water desalination is one answer to Texas’ growing water use

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FOUNDER/PUBLISHER

Sandra Castillo-Swallow sandra@tefsmag.com

CHIEF FINANCIAL OFFICER

EXECUTIVE EDITOR

CREATIVE DIRECTOR/ GRAPHIC DESIGNER

DIRECTOR OF BUSINE S S OPER AT IONS

Troy W. Swallow troy@tefsmag.com

Jaime Powell jaime@tefsmag.com

Gilbert Cantu graphics@tefsmag.com

Lisa T. Wunderlich lisa@tefsmag.com

ACCOUNTS ASSISTANT

ACCOUNT EXECUTIVE

BRAND & MARKETING STRATEGIST

Anita Castillo anita@tefsmag.com

Ayde Castillo ayde@tefsmag.com

Ashlee Arnn Ashlee@tefsmag.com

REGIONAL BUSINESS DEVELOPMENT DIRECTOR

DISTRIBUTION MANAGER

James Parks james@tefsmag.com

Troy D. Swallow daniel@tefsmag.com

COPY EDITOR

Lori Steindorf lori@tefsmag.com

DIRECTOR OF SALES

Margie Castillo margie@tefsmag.com

CONTRIBUTING WRITERS Clinton M. Butler, Steve Burnett, Calvin Chapman, Bill Cromey, Roger Graham, Mary Lee Grant, Cynthia Hicks, Karen Kale, Nathan Leonard, Nix Health Care System, Jeremy Osborne, Samuel W. Pullig, Nick Rogers, Dr. J. Keith Rose, Kalyn Stralow, Bradley Stroud, Texas A&M University System, Manuel Ugues, Greg Drew

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WHAT’S NEW!

SO OA RIN N G IN T HE E E AGLE FO OR D SH H ALE E

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The Shell Petroleum Development Company of Nigeria Limited (SPDC), a subsidiary of Royal Dutch Shell plc (Shell), completed the assignment of its 30 percent interest in Oil Mining Lease 24 and related facilities in the Eastern Niger Delta to Newcross Exploration and Production Limited (Newcross). Total cash proceeds for Shell amount to $600 million.

This divestment is part of the strategic review of SPDC’s onshore portfolio and is in line with the Federal Government of Nigeria’s aim of developing Nigerian companies in the country’s upstream oil and gas business.

Shell has been in Nigeria for more than 50 years and remains committed to keeping a long-term presence there, both onshore and offshore. Through SPDC and its other Nigerian companies, Shell responsibly produces the oil and gas needed to fuel the economic and industrial growth that generates wealth for the nation and jobs for Nigerians.

OML24 covers an area of 430 square kilometers and includes the Awoba, Awoba 5VY[O^LZ[ HUK ,R\SHTH Ă„LSKZ HUK YLSH[LK facilities. The divested infrastructure PUJS\KLZ [OYLL VPS Ă…V^ Z[H[PVUZ HUK [OYLL gas processing plants, in addition to various VPS HUK NHZ WPWLSPULZ ;OL KP]LZ[LK Ă„LSKZ produced on average around 13,000 barrels of oil equivalent per day (100 percent) during the Ă„YZ[ OHSM VM Total E&P Nigeria Limited (10 percent) and Nigerian Agip Oil Company Limited (5 percent) have also assigned their interests in the lease, ultimately giving Newcross a 45 percent interest.

All approvals have been received from the relevant authorities of the Federal Government of Nigeria.

ConocoPhillips Chairman and CEO Ryan Lance says exports of the nationâ&#x20AC;&#x2122;s impending surplus of light (unconventional) oil could ILULĂ&#x201E;[ [OL <UP[LK :[H[LZ I` LUJV\YHNPUN further job creation and economic development, while reducing gasoline prices and improving global energy security.

Enabling such exports requires lifting the federal governmentâ&#x20AC;&#x2122;s outdated 1970s-era L_WVY[ IHU PTWSLTLU[LK H[ H [PTL ^OLU < : VPS WYVK\J[PVU ^HZ MHSSPUN 0U JVU[YHZ[ < : production increased from a low of about 7 million barrels of oil per day (MMBOD) in 2008 to about 10 MMBOD last year, primarily due to rapid growth in unconventional production of light oil and condensate from shale rock and tight sands. Further growth is expected. â&#x20AC;&#x153;The economic transformation resulting from the renaissance in light sweet oil production has been great for our industry and our country. It has proven to be a job-creation

machine, an engine for the country, as well as a source of economic development,â&#x20AC;? Lance told members of the Independent Petroleum Association of America (IPAA) last week. â&#x20AC;&#x153;Since 2007, oil and gas jobs grew by 65 percent. These tend to be high-paying jobs ^P[O NVVK ILULĂ&#x201E;[Z 4LHU^OPSL [V[HS WYP]H[L sector job growth was only 2 percent.â&#x20AC;?

(SSV^PUN L_WVY[Z JV\SK YHPZL < : M\[\YL production by 1.5 million to 3 million barrels per day, according to the Brookings Institution, a 10 to 20 percent increase over likely production levels without exports. â&#x20AC;&#x153;There is also a huge multiplier effect from our investments as they pass through the oil and gas supply chain, such as for materials, manufacturing and all the services and support equipment we use,â&#x20AC;? Lance said. â&#x20AC;&#x153;And [OLZL QVIZ HYLUÂť[ JVUĂ&#x201E;ULK [V [YHKP[PVUHS HYLHZ with 35 states now producing oil and gas.

Also, IHS (an energy consultancy) found that one-in-four jobs created by the exports would be in states that donâ&#x20AC;&#x2122;t even produce oil today.â&#x20AC;?

Lance added that consumers could also ILULĂ&#x201E;[ MYVT SV^LY WYPJLZ VU NHZVSPUL OLH[PUN oil and diesel fuel. Prices on these fuels are set by the global market, and exporting our excess light oil into that market could reduce upward price pressure, he said. American consumers could expect to save $18 billion annually, while governmental entities could gain $1.3 trillion in revenue from higher federal, state and local taxes and royalties from 2016 to 2030. These estimates are from an IHS study. ;OL < : JV\SK ILULĂ&#x201E;[ PU [OL NLVWVSP[PJHS arena as well by gaining the ability to provide allies with secure energy supplies. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;d likely use most of our oil here at home, (and) we would only export the (light oil and JVUKLUZH[L Z\YWS\Z [OH[ KVLZUÂť[ TH[JO < : YLĂ&#x201E;UPUN JHWHJP[` š OL HKKLK Growing light oil and condensate production PZ H TPZTH[JO MVY H U\TILY VM < : YLĂ&#x201E;ULYPLZ that have invested billions of dollars to handle heavy, sour crude oil. Light oil and condensate donâ&#x20AC;&#x2122;t yield an optimum product mix when WYVJLZZLK I` Z\JO YLĂ&#x201E;ULYPLZ VY JV\SK YLX\PYL cuts in run rates. Consequently, they would likely require a steep crude price discount to LUHISL [OLZL YLĂ&#x201E;ULYPLZ [V WYVJLZZ P[ â&#x20AC;&#x153;Without a lifting of the export ban, weâ&#x20AC;&#x2122;ll face an impact from the resulting domestic crude price discount,â&#x20AC;? Lance said. â&#x20AC;&#x153;The discount would ultimately threaten the producing industryâ&#x20AC;&#x2122;s ability to make investments in new crude supplies. In short, it could shut down the energy boom.â&#x20AC;?

Marathon Oil Corporation (NYSE: MRO), through its wholly owned subsidiary Marathon Oil KDV B.V., announced today that the Jisik-1 exploration well has discovered multiple

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stacked oil and natural gas producing zones on the companyâ&#x20AC;&#x2122;s operated Harir Block in the Kurdistan Region of Iraq.

Located approximately 40 miles northeast of Erbil, the Jisik-1 well was drilled to a total depth of approximately 15,000 feet. Oil and natural gas shows were noted over an extensive gross interval of both Jurassic and Triassic reservoirs. A drill-stem testing WYVNYHT `PLSKLK H Z\Z[HPULK Ă&#x2026;V^ YH[L VM 6,100 barrels per day of oil, and multiple nonHZZVJPH[LK NHZ aVULZ Ă&#x2026;V^LK H[ H JVTIPULK rate of approximately 10-15 million cubic feet per day, without stimulation, together with associated condensate, all of which were equipment constrained. The Jisik-1 well will be suspended for potential future use as a producing well.

Marathon Oil is the operator of the Harir Block, with a 45 percent working interest. Total holds a 35 percent working interest and the Kurdistan Regional Government holds a 20 percent carried interest.

Marathon Oil Corporation is a global exploration and production company. Based in Houston, the company had net proved reserves at the end of 2013 of 2.2 billion barrels of oil equivalent in North America, Europe and Africa.

Talisman Energy Inc. (TSX:TLM) (NYSE:TLM) HMĂ&#x201E;SPH[L ;HSPZTHU *VSVTIPH 6PS .HZ Ltd., (â&#x20AC;&#x153;Talismanâ&#x20AC;?) and Ecopetrol S.A. (BVC: ECOPETROL NYSE: EC; TSX: ECP) have proven the presence of hydrocarbons in the Nueva Esperanza-1 exploratory well (A2b), located in block CPO-9, Department of Meta, Colombia.

The Nueva Esperanza-1 well was spudded on July 18, 2014 and reached total depth at 12,056 feet on September 26, 2014. During HU PUP[PHS KH` Ă&#x2026;V^ [LZ[ \ZPUN HU LSLJ[YV submersible pumping system, 309 feet of perforations in the T2 formation stabilized at a KHPS` Ă&#x2026;V^ YH[L VM IHYYLSZ VM Â&#x2021; (70 JY\KL VPS with less than 2 percent water cut during the SHZ[ KH` VM Ă&#x2026;V^ Talisman and Ecopetrol are jointly analyzing [OL YLZ\S[Z HUK ^PSS Ă&#x201E;SL HU HWWSPJH[PVU ^P[O [OL Colombian authorities to place the Nueva Esperanza-1 well on long-term test. Approval has been granted to drill two down-dip HWWYHPZHS ^LSSZ [OL Ă&#x201E;YZ[ VM ^OPJO 5\L]H Esperanza-2, started drilling operations on Nov. 16.

Nueva Esperanza-1 is the second oil discovery made by Talisman and Ecopetrol in Block CPO-9, following the discovery of hydrocarbons in the Akacias structure in 2010.

In accordance with Colombian regulations, the partners declared commerciality of the Akacias Field in December 2013 and currently await receipt of a development license.

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The Nueva Esperanza structure is adjacent to, and along the same structural trend as, the Akacias Field. Additional exploration wells along the continuation of this trend are planned.

Ecopetrol S.A. is the operator of Block CPO-9 with a 55% interest and Talisman (Colombia) Oil & Gas Ltd. (TCOG) has a 45 percent interest in the license.

Talisman Energy Inc. is a global upstream oil and gas company, headquartered in Canada.

Talisman has two core operating areas: the Americas (North America and Colombia) HUK (ZPH 7HJPÄJ ;HSPZTHU PZ JVTTP[[LK [V conducting business safely, in a socially and environmentally responsible manner, and is included in the Dow Jones Sustainability (North America) Index. Talisman is listed on the Toronto and New York stock exchanges under the symbol TLM. Stephen D. Pryor, president, ExxonMobil Chemical Company and vice president of ExxonMobil Corporation (NYSE:XOM), elected to retire on Jan. 1, after more than 44 years of service.

It is anticipated that the board of directors of Exxon Mobil Corporation will appoint Neil

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A. Chapman as president of ExxonMobil Chemical Company and elect him a vice president of the corporation, effective Jan. 1, 2015. Chapman is currently senior vice president, Polymers, ExxonMobil Chemical Company.

Pryor, 64, joined Mobil Corporation in 1971 HUK OHZ OLSK H U\TILY VM ÄUHUJPHS HUK THUHNLYPHS WVZP[PVUZ PU [OL <UP[LK :[H[LZ *`WY\Z [OL <UP[LK 2PUNKVT HUK 5L^ Zealand. In 1993, he was appointed vice president, Mobil Chemical Company and general manager, plastics division.

In 1996, he became president, Mobil (ZPH 7HJPÄJ HUK PU L_LJ\[P]L ]PJL president responsible for Mobil’s international downstream business. Following the merger between Exxon and Mobil, he was appointed president of ExxonMobil Lubricants & Specialties Company, and in 2002 became executive vice president, ExxonMobil Chemical Company. He was HWWVPU[LK WYLZPKLU[ VM ,__VU4VIPS 9LÄUPUN & Supply Company in 2004 and president of ExxonMobil Chemical Company in 2008.

Pryor was born in New York, NY. He holds a bachelor’s degree in biology from Lafayette College and a master’s degree in business

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HKTPUPZ[YH[PVU MYVT /HY]HYK <UP]LYZP[` Chapman, 52, joined Esso Chemical in 1984 at [OL ,ZZV YLÄULY` PU -H^SL` <2 /L HK]HUJLK through a series of engineering, operations, planning and marketing roles in various JOLTPJHSZ HMÄSPH[LZ PU [OL <UP[LK 2PUNKVT )LSNP\T <UP[LK :[H[LZ HUK /VUN 2VUN After the merger, Chapman was chemicals ZHSLZ THUHNLY PU (ZPH 7HJPÄJ HUK WYVQLJ[ L_LJ\[P]L VM [OL -\QPHU 0U[LNYH[LK 9LÄUPUN and Ethylene Joint Venture Project in China.

In 2002, he joined the fuels marketing division as head of ExxonMobil Aviation International 3[K PU [OL <UP[LK 2PUNKVT ILMVYL ILJVTPUN vice president, Industrial and Wholesale Fuels IHZLK PU [OL <UP[LK :[H[LZ Chapman became vice president, global polyethylene business unit of ExxonMobil Chemical Company in 2005 and was appointed executive assistant to the chairman of Exxon Mobil Corporation in 2006. He became president of ExxonMobil Global Services Company in 2007 and was appointed to his current role in 2011.

Chapman was born in Stoke-on-Trent, England. He received his bachelor’s degree in JOLTPJHS LUNPULLYPUN MYVT :\YYL` <UP]LYZP[` England.

THE SECRETâ&#x20AC;&#x2122;S NOV unveils sophisticated service center

By Lori Steindorf

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Catering to the Eagle Ford Shale while nurturing the South Texas economy, enterprising National Oilwell Varco has proudly unveiled its state-of-the-art, climate-controlled service center totaling 72,000 square feet and boasting a massive inventory of hightech service equipment and trusted products.

Located at 3267 County Road 48 in Nueces County, the NOV Wellbore Technologies, Robstown, Texas Service Center employs approximately 100 workers to share their technical knowledge. Playing a pivotal role in securing jobs for South Texas, it has also created additional positions for sales staff, service technicians and engineers.

National Oilwell Varco has had a robust presence PU :V\[O ;L_HZ MVY THU` `LHYZ <U[PS YLJLU[S` Alice, Texas was the service hub for NOV, but with the Eagle Ford Shale energy boom, came the increased demand for expansion, company VMÄJPHSZ ZHPK ;OHURZ [V 56=»Z WYVNYLZZP]LULZZ V]LYÅV^ ^VYR V\[ZV\YJLK PU WYL]PV\Z `LHYZ PZ UV longer a hindrance for NOV service centers outside of this district. Keeping abreast of ever-changing technology and trends, NOV also prides itself on V\[Ä[[PUN P[Z LTWSV`LLZ ^P[O JVU[PU\V\Z [YHPUPUN HUK the necessary tools to carry out their responsibilities PU H ZHML LMÄJPLU[ LU]PYVUTLU[ ZHPK +HS[VU >`H[[ district sales manager.

In doing so, NOV provides the best available services and products to its customers while ensuring employee satisfaction.

“The Eagle Ford has been a big shot in the arm to the economy of South Texas, and so now the employees here are from the community – more locally than ever before. We have more jobs in the workforce than what our previous infrastructure allowed for,” Wyatt said. ;OL UL^ ZLY]PJL JLU[LY [OL ÄM[O VM P[Z RPUK MVY NOV in North America, is equipped with innovative technology designed to service companies within

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â&#x20AC;&#x153;One of the greatest things about this new facility is that it will allow us to provide a full array of services to our customers on a localized basis.â&#x20AC;?

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[OL ,HNSL -VYK :OHSL PU H [PTLS` LMÄJPLU[ THUULY “It is geared to really help us be able to provide better service to our Eagle Ford Shale customers by having a larger facility with newer and better equipment. This facility is quite a bit larger than our previous facility in Alice. This new facility is over 72,000 square feet, of that, about ZX\HYL MLL[ VM P[ PZ VMÄJL ZWHJL ZV ^L OH]L square feet of area that we will be using for our equipment as far as the TorqueMaster™ units, the NOV jar testers, the NOV CT dyno testers. There are over 13 service vises. It will help us provide better turnaround time for our customers,” explained Steve McCullough, southern area sales manager.

Situated on 14 acres, the sophisticated facility is responsible for servicing about 1,000 downhole drilling tools, including coil-tubing operations and motors, per month. As part of its expansive inventory, it also stocks the Agitator™ system, Bowen ÄZOPUN [VVSZ HUK ReedHycalog™ drill bits. It encompasses an automated parts washer unit, six 10-ton overhead cranes and 32 oneton jib cranes.

“One of the greatest things about this new facility is that it will allow us to provide a full array of services to our customers on a localized basis. A lot of different vendors might have to come out of Houston for the services we provide. We are employing a lot of people,” McCullough said.

He reveals that the Robstown service facility is hosting an invitation-only grand-opening ceremony in January for its customer base. Tours of the facility and product showcases are part of the event. Product-line specialists will also be on-site to answer questions customers have.

“It’s really a great time for our sales team to invite our customers to come out and see the facility, and we’ll have probably customers coming from the Corpus Christi and South Texas area, some from San Antonio and maybe some from as far away as Houston as well,” McCullough said.

National Oilwell Varco also has its service centers located in Casper, Wyoming, Oklahoma City, Oklahoma, Rosenberg, Texas, Williston, North Dakota and Broussard, Louisiana. It has broken ground on another service center in Odessa, Texas to address the needs of the Permian Basin energy boom. The Odessa location is expected to open in the summer of 2015, McCullough said.

National Oilwell Varco, based in Houston, Texas, is a leading worldwide provider of equipment and components used in oil and gas drilling and production operations, VPSÄLSK ZLY]PJLZ HUK Z\WWS` JOHPU PU[LNYH[PVU ZLY]PJLZ to the upstream oil and gas industry. The prestigious company conducts operations in more than 1,200 locations across six continents.

According to its website, NOV, every day, puts the oil and gas industry’s best minds to work, with 150 years of experience, to help its large customer base achieve lasting success. Throughout every region in the world, across every area of drilling and production, its family of companies provides the technical expertise, advanced equipment and operational support necessary for success.

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CEO touts nationwide economic beneďŹ ts of lifting ban on oil exports

By Cynthia Hicks

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According to Tillerson, this means that we not only have abundant supplies for growing the domestic use of natural gas to meet U.S. energy needs, but also for the export of natural gas to other markets. â&#x20AC;&#x153;In fact, industry technologies have now put within reach enough natural gas to help power the U.S. economy at current demand for about a century,â&#x20AC;? he said. â&#x20AC;&#x153;The revolution in domestic oil production has been just as striking.â&#x20AC;?

When it comes to lifting the nearly four decadesold ban on crude oil exports, ExxonMobil Corporation Chairman and CEO Rex Tillerson has a lot to say. And while it may stand to reason that the head of one of the worldâ&#x20AC;&#x2122;s largest oil producers would want to open the market for his product, it isnâ&#x20AC;&#x2122;t just about the money his company stands to make, but more about the economic beneďŹ ts for the entire country. â&#x20AC;&#x153;North America is creating a new era of energy abundance,â&#x20AC;? said Tillerson during a speech at Greater Houston Partnership Address on the State of Energy in early October. â&#x20AC;&#x153;We need energy policies that are designed for this new era of abundance.â&#x20AC;?

Energy has been one of the foundations of the United Statesâ&#x20AC;&#x2122; economic strength for most of our nationâ&#x20AC;&#x2122;s history. In recent years, the growth in domestic oil and gas production has been an important economic ESJWFS CFOFmUJOH B XJEF SBOHF PG "NFSJDBOT businesses and every level of government. â&#x20AC;&#x153;Across America, new supplies of affordable energy are spurring economic growth, creating jobs and strengthening our international competitiveness,â&#x20AC;? he said. â&#x20AC;&#x153;Since early 2008, U.S. natural gas production and reserves are both up 25 percent, and they continue to increase,â&#x20AC;?

Since early 2011 U.S. oil production has jumped 50 percent, from 5.4 million barrels per day (bpd) to the nearly 9 million bpd. Thatâ&#x20AC;&#x2122;s an increase of over 3 million bpd produced in the United States every single day.

He credits the current abundance to new technologies and techniques that have enabled oil producers to unlock new conventional and unconventional sources of energy across North America. â&#x20AC;&#x153;The most unexpected and farreaching breakthrough in recent years is the advanced integration of hydraulic fracturing and horizontal drilling,â&#x20AC;? said Tillerson. â&#x20AC;&#x153;Sources of oil and natural gas long dismissed as â&#x20AC;&#x2DC;uneconomicâ&#x20AC;&#x2122; and â&#x20AC;&#x2DC;inaccessibleâ&#x20AC;&#x2122; are being transformed into energy supplies that are accessible, reliable and competitive.â&#x20AC;?

Texas alone is producing more than 3 million barrels of oil a day due to growth in production in places like the Eagle Ford Shale and the Permian Basin. This represents an astounding 35 percent of daily U.S. production and makes Texas the number eight oil producer in the world.

All of this is important in considering lifting the ban signed into law in 1975 at a time when lawmakers were trying to protect the United States from drastic energy price increases that were the result of foreign oil embargos. â&#x20AC;&#x153;Our industryâ&#x20AC;&#x2122;s efforts have put the United States in a position to become an energy exporter, reversing four decades of fear and anxiety about energy scarcity,â&#x20AC;? said Tillerson. â&#x20AC;&#x153;With bold leadership and sound policymaking North Americaâ&#x20AC;&#x2122;s newfound abundance could help reduce global price volatility, moderate international tensions, BOE QSPWJEF FOFSHZ nFYJCJMJUZ UP GSJFOET allies and trading partners.â&#x20AC;?

With such development, Tillerson contends that the same economic and environmental CFOFmUT UIBU IBWF UBLFO QMBDF JO UIF 6OJUFE States, could be repeated around the globe.

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â&#x20AC;&#x153;Even today, there are billions of people around the world who need these advances in safe and responsible energy production to ensure they have access to BMM UIF CFOFmUT PG NPEFSO MJWJOH TVDI BT sanitation, health care, proper nutrition, and education,â&#x20AC;? he said.

Tillerson also warns that short-sighted policies aimed at achieving U.S. energy independence can jeopardize U.S. economic and energy security. â&#x20AC;&#x153;For example, in the current debates about MJRVFmFE OBUVSBM HBT BOE DSVEF PJM FYQPSUT economists and leaders from across the political spectrum on all sides agree that free trade would lead to increased investment, more jobs, and, importantly, increased production,â&#x20AC;? he said.

He also says that allowing the marketplace to determine the viability of energy exports DBO QSPWJEF TJHOJmDBOU TIPSU BOE MPOH UFSN CFOFmUT UP UIF 6 4 FDPOPNZ XIJMF strengthening energy security. And while the Obama administration is looking at approving the export of LNG for select companies, Tillerson is concerned that the process is not moving fast enough.

â&#x20AC;&#x153;THE WINDOW IS QUICKLY CLOSING FOR US TO DEVELOP POLICIES THAT CAN PROPERLY POSITION NORTH AMERICA FOR THE MARKET REALITIES OF THE FUTURE,â&#x20AC;? HE SAID. â&#x20AC;&#x153;SOUND POLICY LEADS TO WISE AND DISCIPLINED INVESTMENT, NEW AND REVOLUTIONARY INNOVATIONS, AND INCREASED TRADE AND ECONOMIC GROWTH.â&#x20AC;?

Tillerson says that, in turn, these market developments will create jobs and expand TVQQMJFT 5IFZ XJMM JNQSPWF UIF nFYJCJMJUZ and diversity of our energy portfolio. And, together, can lead to energy security and, over time, prosperity for people all over the world.

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LET SOMEONE ELSE DEAL WITH SPILL CONTAINMENT In the last few years the climate environmentally in the Eagle Ford has changed. Regulations have become more stringent, and many multi-national and global companies have developed their own set of environmental standards. With this change in regulations and standards, comes a change in onsite spill containment requirements.

Protecting the environment in and around a site is crucial but not the top priority. Most producers and fracking companies rely on third-party service companies or berm set companies for their spill containment needs so that they can focus their efforts on a successful and productive frack.

The question is why? Why would fracking companies use their own manpower and equipment to set up spill containment when the barrel price is on a four-year low? Why spend the money and take the risk and responsibility of maintaining environmental protection when there are plenty of companies willing to do it for you? Advances in technology and design of containment berms and pads have increased the products’ durability and longevity. New designs and unique sidewall supporting systems have also enabled the berms to be quickly set for rig up and rig down.

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THE CONS: Almost everything in life has its pros and cons, and containment on the Eagle Ford is no different. Here are the top issues producers and fracking companies should weigh when considering taking over spill containment set up and environmental operations:

THE PROS: 1) <ZPUN `V\Y V^U LTWSV`LLZ [V WLYMVYT [OL duties of a containment company. Setting the containment prior to a frack and rigging down, decon, patching and moving the containment.

2) <ZPUN `V\Y V^U LX\PWTLU[ MVY transportation of the berms, pressure washers to clean them and fork trucks to move them.

3) Knowledge of your own jobs and not having to rely on another company to have hands and product on the sites. Without the worry of HU \UPUZ\YLK VY UVU :HML[` JLY[PÄJH[PVU [`WL hand on an active frack.

4) Not incurring extra costs for moving containment or being charged when a berm is damaged.

5) Multiple yard locations for storage of containment berms. And the means to repair and refurbish the units for multiple uses.

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1) You are now responsible to get to sites early and to set up containment as well as waiting hours for equipment to arrive.

2) You get to be the one to worry about what happens after the frack. You don’t get to pull away, move to the next well site and leave the clean up to someone else.

3) You have to manage inventory - repair, refurbish and replenish the containment berms you have in stock.

4) You are responsible for keeping up with TCEQ, Texas Railroad Commission and other regulatory bodies on the innovations or various types of containment on the frack. Complying is essential HUK [OL [HZR VM ÄUKPUN [OL ZWLJPÄLK JVU[HPUTLU[ is tasked to the berm-set company.

5V[ L]LY` ZOVL Ä[Z L]LY` MVV[ :V [OLYL TH` IL cases where setting containment for a work over rig makes sense because the investment in time and product is not hard to manage. In other cases, a large frack may be too cumbersome to deal with from a containment standpoint. With most businesses, the perfect solution may be a blending of both tactics. This means contracting out site containment but also having available containment on-hand for emergency situations, spills and/or when extra equipment comes on location. Spill containment management is about being proactive and not reactive. Spills happen. Is your company prepared?

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SHALE SAFETY SOLUTIONS

TAKE ADVANTAGE OF THE GOLDEN HOUR FOR PRODUCTIVITY

By Michael Roger, CSP

The first hour or so in the regular day of work can be looked at as an opportunistic timeline. This timeline allows the site management the ability to create a safety culture and mindset resulting in good production with reduced probability of incidents.

This is all based on good planning.

The following are areas that should be included in this Golden Hour timeline: SIMOPS (Simultaneous Operations) – open discussion with personnel in order to set the expectations for the upcoming day.

While SIMOPS are best conducted at the end of the day planning for the next day, start of the day serves as an excellent reminder.

Permits – focuses on the planned activities that require permitting and further assessment.

Traffic flow for workforce, deliveries, emergency vehicle access and placement of site equipment.

Review of previous incidents that are relevant to site or company.

The above are some of the items that should receive attention and discussed to the level of depth necessary for assurance in understanding. Communication and training are paramount in the development of the attitudes and commitment for the planned scope of work.

The end results of the start of the day planning meeting can result in the following: 1. Better understanding of what is to actually take place at the jobsite.

2. Establishes goals and how to safely achieve results.

Risk Assessment – All activities should be evaluated through a risk-assessment process. This process should identify conditions or actions that may cause personal illness, injury, environmental or property damage, and compliance with established safety and health standards. This is where material data information sheets are reviewed and discussed.

3. Informs site personnel via communication and involvement in the plan development.

Competency of workforce to conduct assigned tasks. Discussion of requirements and review of training records as assurance prior to start of work. Specific attention should be placed on equipment operations and any necessary certifications required such as crane operators.

6. Allows site management the ability of communicating company rules/regulations/concerns/policies and procedures.

JSA (Job Safety Analysis) / JRA (Job Risk Analysis) – development of a site specific and job specific step by step. All personnel involved should be active participants. Signatures of participants required.

Review of P&ID’s, plans, drawings, as-built plans, diagrams, etc. to be used to further educate the workforce of planned activities.

These can also be used to clarify any design / layout issues.

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Discussion of planned deliveries and how managed. Offloading operations may require the use of crane(s), forklift(s), overhead jibs, gin poles, etc. All equipment and rigging should have associated documentation and up to date certifications/inspections.

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4. Allows for a format where anyone can question the process without repercussions.

5. Allows site management to set the tempo of the jobsite.

7. Success for the enterprise. (Good community relations for the corporation).

Overall, the final product will effectively assist in the development of a positive culture and consequently protect the assets of the corporation via production and focus on continual improvement.

Michael Roger, CSP

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THE OIL BUSINESS IS FICKLE

By Nick Rogers

hile the drop in oil prices has been well received by consumers and some sectors of the economy, for companies that drill in the Shale, falling costs do not necessarily bring glad tidings.

Although prices have not, as of yet, slowed current U.S. drilling projects, they are certainly forcing companies to rethink future projects.

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“Although we are beginning to hear some companies talk about the potential for scaling back, I don’t think we will see a very noticeable effect overall unless prices fall farther or stay low for an extended period of time,” said economist M. Ray Perryman, head of the

Saudi Arabia’s massive role in the global energy economy is because, simply, it is the world’s largest exporter of oil. Inadvertently, [OL < : Z\WWVY[Z [OPZ YVSL ILJH\ZL KLZWP[L the massive amounts of oil Americans produce, its crude cannot be exported.

Perryman Group. “The economics of each well are affected, but most companies have drilling options that are still economically feasible and will shift their focus to those areas rather than cutting back drastically.”

What caused the price drop?

The seemingly sudden drop in prices has JVTL HZ [OL < : PZ O\Y[SPUN [V^HYK ILJVTPUN the world’s leading oil producer, ahead of Saudi Arabia and Russia, according to the International Energy Agency. But, the lower oil prices are a stark reminder that the Saudis remain the most important actors on the global energy stage.

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Shale drillers have made enormous strides in hydraulic fracturing, which has allowed companies to produce greater amounts of oil for ever-lowering costs. This has led to oil WYVK\J[PVU V\[Z[YPWWPUN YLÄUPUN JHWHJP[` ¸3V^LY VPS WYPJLZ OLSW YLÄULYZ ILJH\ZL [OL` can purchase oil cheaper,” said Thomas ;\UZ[HSS YLZLHYJO KPYLJ[VY MVY [OL <UP]LYZP[` VM Texas at San Antonio’s Institute for Economic +L]LSVWTLU[ ¸9PNO[ UV^ YLÄULYZ HYL HISL

to buy West Texas International at a discount because thereâ&#x20AC;&#x2122;s no other place to sell it. You canâ&#x20AC;&#x2122;t sell it anywhere in the world except for Canada with a special license. If they were allowed to sell WTI to any government, then chances are we would get higher prices.â&#x20AC;?

The increase in shale operations allowed the < : [V I\` SLZZ VPS MYVT >LZ[ (MYPJHU UH[PVUZ who are now marketing their crude to Asia.

The combined effect has meant more oil Ă&#x2026;V^PUN PU[V NSVIHS THYRL[Z ^OPSL KLTHUK PZ shifting downward.

John C. Felmy, chief economist with the American Petroleum Institute, makes an important distinction regarding demand, which he says is often misinterpreted in the general media.

â&#x20AC;&#x153;Demand isnâ&#x20AC;&#x2122;t slowing, growth in demand is slowing,â&#x20AC;? he said. â&#x20AC;&#x153;There is still record demand. â&#x20AC;&#x153;For the longer term, the projections are out there for continued worldwide growth in demand for oil in China, India and other developing countries,â&#x20AC;? the API economist said. â&#x20AC;&#x153;That shows little signs of slowing down. The question is will the supply keep up?â&#x20AC;?

Of course, one the longtime factors that often leads to higher oil prices is that much of the worldâ&#x20AC;&#x2122;s supply sits beneath some of the worldâ&#x20AC;&#x2122;s most politically explosive territories.

Prices for crude are greatly susceptible to unrest in the Mideast. â&#x20AC;&#x153;Pricing in the $110 per barrel range like we were seeing earlier this year was probably H SP[[SL PUĂ&#x2026;H[LK K\L [V MLHYZ [OH[ [OL ZP[\H[PVU in the Middle East would lead to supply disruptions,â&#x20AC;? Perryman said. â&#x20AC;&#x153;Even so, there is also the possibility that we could see prices ratchet back up if tensions escalate.â&#x20AC;?

Since oil is traded in future purchases, those prices are bets, in some respect, on the potential of volatility. The pricing of oil futures is a balancing act between projections of future demands and supplies. Libyaâ&#x20AC;&#x2122;s unexpected but noticeable increase in production combined with the unexpected decline in demand growth in Asia, thus creating a glut.

Felmy points out future prices could ratchet up again with a further or unforeseen destabilization in the Mideast. As well, the < : MHJLZ [OL WV[LU[PHS MVY H OHYZO ^PU[LY [OH[ could further increase demand.

Certainly, there are many who have welcomed the drop in fuel prices.

â&#x20AC;&#x153;While areas proximate to oil and gas plays clearly lose if drilling rates decline, lower fuel prices are actually good news for most of the economy,â&#x20AC;? according to Perryman. â&#x20AC;&#x153;Virtually all industries depend to some extent on fuel and transportation, so lower prices will improve WYVĂ&#x201E;[HIPSP[` MVY THU` [`WLZ VM I\ZPULZZLZ Consumers also have more money to spend on other items as they pay less for gasoline.â&#x20AC;?

the resources to be able to lose money for long,â&#x20AC;? Felmy said. â&#x20AC;&#x153;But, if you have production thatâ&#x20AC;&#x2122;s already going on, then youâ&#x20AC;&#x2122;re probably not going to shut it off unless it costs you more to produce than youâ&#x20AC;&#x2122;re getting.

But in Texas, Tunstall points out, â&#x20AC;&#x153;drivers in other states are probably happier about it than drivers here because Texas drivers have a pretty good idea how the industry works.â&#x20AC;?

Perryman concurs, noting that â&#x20AC;&#x153;there is still some room for prices to drop before drilling activity is dramatically affected. Many areas of [OL ,HNSL -VYK HYL WYVĂ&#x201E;[HISL H[ WYPJLZ PU [OL low to mid $70s per barrel.â&#x20AC;?

How long can shale drillers hold out?

The question is not whether the industry can handle lower prices, but whether the drillers can survive sustained low prices? Actions by Saudi Arabia to keep prices low mean drillers on the Eagle Ford could be in for the long haul.

There have been suspicions that Saudi Arabia is waging a price war of attrition to run the shale operators out of business, an accusation denied by Saudi Oil Minister Ali al-Naimi, who has said publicly that his countryâ&#x20AC;&#x2122;s crude price cuts were market driven and not part of a broader price war.

â&#x20AC;&#x153;New projects, new iron in the ground, however, thatâ&#x20AC;&#x2122;s something everyone is going to look at very carefully,â&#x20AC;? he said.

There is no doubt that Saudi Arabia can THPU[HPU H SV^LY WYVĂ&#x201E;[HIPSP[` THYNPU MHY SVUNLY than the independent producers that dominate shale drilling. The price to produce a barrel of oil on the Eagle Ford, for example, runs $55$60. The Saudis, by contrast, can produce a barrel for less than $10 in the countryâ&#x20AC;&#x2122;s massive .OH^HY Ă&#x201E;LSK ;OPZ PZ ILJH\ZL VM [OL ZPTWSL fact that hydraulic fracturing is a much more expensive process than the conventional drilling the Saudis practice.

As well, Saudi Arabia and its state-owned oil JVTWHU` (YHTJV OH]L THZZP]L Ă&#x201E;UHUJPHS reserves to fall back on if lower prices linger for a lengthy period.

â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;ve heard theyâ&#x20AC;&#x2122;re not hugely concerned HIV\[ ^OH[ÂťZ NVPUN VU PU [OL < : š ;\UZ[HSS said. â&#x20AC;&#x153;Theyâ&#x20AC;&#x2122;re aware of it and theyâ&#x20AC;&#x2122;re probably not happy about it, though.â&#x20AC;?

â&#x20AC;&#x153;Independent drillers do a good job managing their costs,â&#x20AC;? Tunstall said. â&#x20AC;&#x153;But the lower price of oil can ultimately affect them because no JVTWHU` PZ NVPUN [V WYVK\JL \UWYVĂ&#x201E;[HISL ^LSSZ PUKLĂ&#x201E;UP[LS` š

There is, as Tunstall points out, a potential caveat to the Saudisâ&#x20AC;&#x2122; views of the strides being made in hydraulic fracturing.

Change in export laws needed

â&#x20AC;&#x153;I think their larger concern is how far can MYHJRPUN [LJOUVSVNPLZ L_[LUK IL`VUK [OL < : such as in Argentina and other countries?â&#x20AC;? he said. â&#x20AC;&#x153;If that continues to happen, then OPEC can become increasingly irrelevant and, obviously, theyâ&#x20AC;&#x2122;re not going to like that.â&#x20AC;?

An email seeking comment from the Saudi oil ministry was not answered.

Currently, Texas drillers can handle the mid$70 price range WTI has been trading at. â&#x20AC;&#x153;I havenâ&#x20AC;&#x2122;t seen any statement about much of a slowdown,â&#x20AC;? Felmy said. â&#x20AC;&#x153;So, I donâ&#x20AC;&#x2122;t see a wholesale change at this point. I mean, $77 is still a high price for oil. When I started working for API, it was $8 a barrel.â&#x20AC;?

If those prices remain lower for an extended period of time or, worse, fall farther, Eagle Ford WYVK\JLYZ JV\SK Ă&#x201E;UK [OLTZLS]LZ PU H WPUJO especially in regards to future planning. â&#x20AC;&#x153;The ones who are least capitalized donâ&#x20AC;&#x2122;t have

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0U 6J[VILY [OL .V]LYUTLU[ (JJV\U[HIPSP[` 6MĂ&#x201E;JL PZZ\LK H YLWVY[ [OH[ YLJVTTLUKLK [OL <UP[LK :[H[LZ IYPUN HU LUK [V [OL IHU VU < : VPS L_WVY[Z Passed in 1975, the Energy Policy and Conservation Act was a response the economic battering America took from OPECâ&#x20AC;&#x2122;s 1973 oil embargo to the States. The export measure was necessary at the time, as the < : PTWVY[LK HSTVZ[ HSS VM P[Z VPS MYVT 67,* 0U OV^L]LY < : VPS PTWVY[Z HYL ILSV^ 30 percent, and most of that comes from Canada and Mexico. Although some oil and oil condensates can be exported (with special permission and licenses), for the most part crude cannot be sold overseas. With the massive growth in domestic production, there seems little reason to maintain the ban.

(Z HU L_HTWSL [OL .(6 UV[LK [OH[ [OL < : is required to maintain at least 90 days of oil reserves as part of its Strategic Petroleum Reserve. Currently, the SPR is at 106 days, which is â&#x20AC;&#x153;worth $73 billion,â&#x20AC;? oil that â&#x20AC;&#x153;could be sold to fund other national priorities.â&#x20AC;?

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*VUJLYUZ [OH[ ZLSSPUN < : VPS HIYVHK ^V\SK result in further lowered prices were dismissed by the GAO report. The independent agency said “that removing crude oil export restrictions is likely to increase domestic crude oil prices but decrease consumer fuel prices.”

“The price of West Texas International is already depressed,” Tunstall explained. “You start to export, then WTI would become better in sync with Brent crude prices. Exporting would mean Brent prices coming down or WTI prices coming up, or possibly a combination where the two meet somewhere in the middle.

“If you allow exports the impact, at worse, will be where prices are now,” he said.

The Department of Energy, for example, agreed with the GAO report, as did the Energy Information Agency. In the summer, the DOE began permitting the sale of condensates.

More recently, the White House has indicated that it will reconsider the size of the Strategic Petroleum Reserve.

greater safety standards, this increases costs.

Since all politics are local, however, it is likely [OL < : ZOPWWPUN PUK\Z[Y` ^V\SK ÄNO[ [VV[O and-nail against any changes to the Act.

The Jones Act hitch

¸9LÄULYZ HSVUN [OL .\SM *VHZ[ HYL HSS VW[PTPaLK for heavier crude, which makes another case MVY L_WVY[Z ¹ OL ZHPK ¸;OLYL HYL YLÄULYZ PU ,\YVWL HUK 4L_PJV [OH[ HYL Z\P[LK [V YLÄUL the lighter crude, so if you export West Texas International to those places, and import heavier crudes from Canada and OPEC to process on the Gulf Coast, it better optimizes IV[O ZL[Z VM YLÄUPUN MHJPSP[PLZ [OVZL PU [OL < : as well as Europe, Mexico and elsewhere.”

One of the major problems for Texas shale drillers is that they usually have to sell their JY\KL [V .\SM *VHZ[ YLÄULYZ ^OV JHU I\` P[ at a lower cost because they are not normally calibrated for the lighter WTI fare.

A repeal of the Energy Policy and Conservation (J[ ^V\SK NLULYHSS` ILULÄ[ [OL < : LJVUVT` as a whole, according to the GAO.

4HQVY WPWLSPULZ Y\UUPUN MYVT VPS ÄLSKZ HZ MHY HZ [OL 7LYTPHU )HZPU [V .\SM *VHZ[ YLÄULYZ are expected to be completed by the end of this year. However, this could cause to further NS\[ [OL JVHZ[HS YLÄULYZ ^OPJO JV\SK M\Y[OLY depress prices.

“Removing export restrictions is expected to increase the size of the economy, with implications for employment, investment, public revenue, and trade,” the report maintained. “For example, removing restrictions is expected to contribute to further declines in net crude oil PTWVY[Z YLK\JPUN [OL < : [YHKL KLÄJP[ ¹

¸;OL YLÄULYZ HYL LP[OLY NVPUN [V OH]L [V Z[HY[ storing the lighter West Texas International oil, or taking it by barge or other ship to the East *VHZ[ YLÄULYPLZ ;OL KV^UZPKL PZ [OL L_WLUZL because the Jones Act.”

There have been some signs from President Barack Obama’s Administration that it would be willing to do away with the export ban.

The Jones Act, passed in 1920, demands [OH[ HSS PU[YH JVHZ[HS ZOPWWPUN IL PU < : THKL HUK ÅHNNLK ZOPWZ JYL^LK I` < : JP[PaLUZ )LJH\ZL < : ZOPWWPUN YLN\SH[PVUZ YLX\PYL

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Tunstall notes that the Jones Act is a further argument in favor of removing the export ban.

Oil can be a temperamental market and while prices are lower now, higher prices can come with the next cold snap or Mideast explosion.

Never-the-less, oil is being produced at a greater rate than ever before, so global supplies ZOV\SK IL TVYL [OHU Z\MÄJPLU[ PU [OL ULHY M\[\YL “Once the oil prices drop, it’s kind of hard to reverse course,” Tunstall warned. “I think the fact of the slowdown in China and the fact that OPEC is seemingly unconcerned by dropping oil prices, its possible oil prices could certainly go lower. I hope that’s not the case, but it is certainly possible.”

OILFIELD SERVICES GIANTS SEAL THE DEAL WITH

MEGA-MERGER

By Cynthia Hicks

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TWO LARGE HOUSTON OILFIELD SERVICE COMPANIES HAVE SAID “YES” TO A MARRIAGE WITH AN ENGAGEMENT RING VALUED IN CASH AND STOCK AT NEARLY $35 BILLION. THE TAKEOVER OF BAKER HUGHES

BY HALLIBURTON WILL MAKE IT THE SECOND LARGEST OIL SERVICES COMPANY IN THE WORLD BEHIND SCHLUMBERGER. “This combination will create a bellwether global VPSÄLSK ZLY]PJLZ JVTWHU` HUK VMMLY JVTWLSSPUN ILULÄ[Z MVY [OL Z[VJROVSKLYZ J\Z[VTLYZ HUK other stakeholders of Baker Hughes and Halliburton,” said Halliburton Chairman and *OPLM ,_LJ\[P]L 6MÄJLY +H]L 3LZHY This move comes amid plunging oil prices that have caused many companies to slow production. A cut-back in production, inturn amounts to less business for services companies like Halliburton and Baker Hughes.

Since June, the price per barrel of oil has dropped more than 30 percent and so has Baker Hughes stock price. Baker Hughes shares went from $75 a share in June to just $51 a share the day the merger was announced.

Despite the stock market price, Halliburton says it is paying $78.62 per Baker Hughes share. Baker Hughes shareholders will receive 1.12 Halliburton shares plus $19 in cash for each share they own. When the transaction is complete, Baker Hughes stockholders will own approximately 36 percent of the combined company.

¸;OPZ IYPUNZ V\Y Z[VJROVSKLYZ H ZPNUPÄJHU[ premium and the opportunity to own a meaningful share in a larger, more competitive global company,” said Martin Craighead, JOHPYTHU HUK JOPLM L_LJ\[P]L VMÄJLY VM )HRLY Hughes. Lesar says the combined company would be able to reduce costs by $2 billion a year.

“OUR STOCKHOLDERS KNOW OUR MANAGEMENT TEAM AND KNOW WE LIVE UP TO OUR COMMITMENTS,” SAID LESAR. “WE KNOW HOW TO CREATE VALUE, HOW TO EXECUTE, AND HOW TO INTEGRATE IN ORDER TO MAKE THIS COMBINATION SUCCESSFUL.” *VTWHU` VMÄJPHSZ HKTP[ [OH[ ZH]PUN TVUL` PZ VUS` VUL VM [OL ILULÄ[Z VM [OL TLYNLY “By combining two great companies that have delivered cutting-edge solutions to customers in the worldwide oil and gas industry for more than a century, we will create a new world of opportunities to advance the development of technologies for our customers,” said Craighead.

Both companies have been leaders in the boom in domestic drilling, which they helped fuel through the development of technology used extract oil and gas from shale, deep offshore locations, and other tricky geologic formations.

And while Halliburton is a leader in hydraulic fracturing services, Baker Hughes has developed some new technology that will help Halliburton expand the services it offers in shale plays like Eagle Ford.

That technology includes improved drill bits that can change direction underground, allowing drillers to stay in the most productive sections of rock, sensors that allow drillers to understand what kind of rock they are hitting, and chemicals [V OLSW THRL [OL VPS HUK NHZ ÅV^ TVYL LHZPS` out of the well.

The combined company will have more than 136,000 employees and operations in more than 80 countries around the world.

The deal was approved unanimously by both boards of the Houston-based companies and is expected to close in the second half of 2015.

Shareholders and regulators must still sign off on the merger.

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Every day the wellhead is down means lost production and lost earnings. I need to stay up and running 24/7 to meet output and revenue goals.

YOU CAN DO THAT Keep production on target with the help of Emerson Service Centers located in the heart of the Eagle Ford. Emerson factory-trained and certified engineers are now close by to quickly deliver the service, training and measurement instruments you need to to keep production, and profits, flowing at full capacity. Make sure your wellhead is fully equipped with Rosemount instrumentation by visiting store.rosemount.com/eagleford

For more information, contact us: 255 Hwy. 72, Calliham, TX 78007 T: 361-786-1600 E: Emersonprodcenter-eagleford@emerson.com

The Emerson logo is a trademark and a service mark of Emerson Electric Co. Š 2014 Emerson Electric Co.

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Cracking the glass ceiling: Two from Houston listed as top paid female execs

By Cynthia Hicks

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Women have made enormous progress in the workforce since the Equal Pay Act was signed into law in 1963, but the fact remains that ďŹ ve decades later, the basic goal of the act has not been realized. But that hasnâ&#x20AC;&#x2122;t stopped two Houston women from rising through the ranks to be named on the Fortune list of top 25 paid female executives.

Cheniere Energy Senior Vice President of Marketing Meg Gentle is number four on the list. But, while she made $21.7 million, $18 million of which came from stock awards, in 2013, her boss made six times that amount. This is not surprising considering government studies that show the average (TLYPJHU ^VTLU PU [OL <UP[LK :[H[LZ PZ paid on average 77 cents for every dollar paid to men, and the gap is even larger for women in the corporate world.

No place is that more prevalent than in the energy sector, which has been historically dominated by men. A 2014 study authored

by Rayola Dougher, senior economic advisor at the American Petroleum Institute (API), shows that women make up just \UKLY VUL PU Ă&#x201E;]L WLVWSL LTWSV`LK PU [OL VPS and gas industry, or about 19 percent, comWHYLK ^P[O WLYJLU[ VM [OL V]LYHSS < : labor force. However, in her study, Dougher points out that more than 60 percent of the women in oil and gas were in administrative or support roles, not leadership positions.

There have been improvements made, however. The World Petroleum Council reports that about 12 percent of ExxonMobil executives were women in 2007 compared to just 9 percent in 2000, and the number of female executives doubled at BP in the same time period.

But while women are still small in numbers in management positions, it hasnâ&#x20AC;&#x2122;t stopped Gentle from breaking through the proverbial glass ceiling.

Gentle was named executive vice president of marketing at Cheniere in February 2014 and has worked for the company since 2004. Prior to joining Cheniere, she spent eight years in energy market development, economic evaluation and long-range planning. She conducted international business development and strategic planning for Anadarko Petroleum Corporation for six years and energy market analysis for Pace Global Energy Services, an energy THUHNLTLU[ HUK JVUZ\S[PUN Ă&#x201E;YT MVY [^V years. Gentle holds a BA in economics and international affairs from James Madison <UP]LYZP[` HUK HU 4)( MYVT 9PJL <UP]LYZP[` Taking the number 20 spot on Fortuneâ&#x20AC;&#x2122;s list of top paid female executives is Kimberly Dang, vice president and CFO of Houston-based Kinder Morgan. Her compensation totaled $10.4 million in 2013, $9 million of which came from stock awards.

According to the Kinder Morgan company website, Dangâ&#x20AC;&#x2122;s responsibilities include KLI[ HUK LX\P[` Ă&#x201E;UHUJPUNZ HJJV\U[PUN HUK tax. She joined Kinder Morgan in 2001 as director of investor relations and was named vice president, investor relations in 2002, treasurer in 2004 and CFO in 2005. Prior to joining Kinder Morgan, Dang spent six years at Goldman Sachs working in the companyâ&#x20AC;&#x2122;s real estate investment area. She also worked in Washington, D.C., as a legislative assistant for Congressman Jack Fields and PU (\Z[PU MVY H ]LU[\YL JHWP[HS Ă&#x201E;YT +HUN holds an MBA from the J.L. Kellogg Graduate School of Management at NorthwestLYU <UP]LYZP[` HUK H IHJOLSVYÂťZ KLNYLL PU HJJV\U[PUN MYVT ;L_HZ ( 4 <UP]LYZP[` The Houston Business Journal listed both Gentle and Dang in its newest CEO draft, where top energy analysts picked which rising stars they would draft to lead their oil and gas dream team. An honor considering Houston has long lagged behind the national average percentage of women on corporate boards. Still the city of big oil companies has made improvements in the past year, increasing from 8.2 percent female board members in 2012 to 11.9 percent in 2013.

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ExxonMobil promotes engineering as a career

By Dana Worchel

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There arenâ&#x20AC;&#x2122;t enough young people who want to be engineers in America, a fact which doesnâ&#x20AC;&#x2122;t sit well with ExxonMobil.

The companyâ&#x20AC;&#x2122;s concern lies in the fact that a lack of quality engineers could cause the United States to lose its competiveness in the global marketplace in the years to KWUM WNĂ&#x2026;KQIT[ there say.

The company decided earlier this year to do something about the shortage by launching a special initiative called â&#x20AC;&#x153;Be an Engineer,â&#x20AC;? to show how attractive the engineering profession can be. The draw does not lie simply in the jobâ&#x20AC;&#x2122;s potential earning power, but for the chances it offers to solve some of societyâ&#x20AC;&#x2122;s most challenging problems, such as water shortages or generating adequate electricity.

Launched in Fall 2014, the initiative is designed to get more young people to take part in science, technology, engineering and math classes and to consider an engineering career, public affairs representatives at ExxonMobil say. â&#x20AC;&#x153;There simply are not enough applicants XJUI BEFRVBUF TLJMMT UP mMM NBOZ PG UIF most promising positions available in the 21st century. This lack of skills is especially acute in jobs that increasingly rely on science, technology, engineering, and math,â&#x20AC;? Ken Cohen, vice president for government and public affairs at the company, said in a recent blog entry.

One reason for a young person to consider engineering is that jobs pay well â&#x20AC;&#x201C; roughly $51,000 to $57,000 per year for recent graduates with little experience, according to the U.S. Department of Laborâ&#x20AC;&#x2122;s Bureau of Labor Statistics.

Another reason is projected growth in the mFME 5IF OFFE GPS TPGUXBSF BOE QFUSPMFVN engineers will continue to grow with about 250,000 engineering positions being added over the next 10 years, according to the U.S. Department of Laborâ&#x20AC;&#x2122;s Bureau of Labor Statistics. â&#x20AC;&#x153;Technological innovation is increasingly a driving force in modern society, and the need for engineers â&#x20AC;&#x201C; across the many TQFDJBMJ[FE EJTDJQMJOFT XJUIJO UIF mFME â&#x20AC;&#x201C; has never been greater,â&#x20AC;? ExxonMobil representatives say.

The program, which can be accessed online at www.beanengineer.com, includes a broad range of original and shared content and highlights the meaningful contributions engineers make JO UIF XPSME DPNQBOZ PGmDJBMT TBJE Television commercials featuring young students who say they want to become an engineer are also running as a part of the initiative.

It also provides resources to encourage students to choose engineering careers, which have lower unemployment rates and higher starting salaries compared to PUIFS QSPGFTTJPOT PGmDJBMT TBJE Over the past decade, ExxonMobil PGmDJBMT TBZ UIFZ IBWF JOWFTUFE NPSF UIBO $230 million in U.S. programs to advance STEM education â&#x20AC;&#x201C; including programs to support teacher training and college and career readiness.

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“We want to help ensure kids are prepared for the jobs of the 21st century and are able to ÅTT \PM[M XW[Q\QWV[ _Q\P LQ^MZ[M talent. Currently, minorities hold only about 10 percent of science and engineering jobs, and only about 14 percent of engineers are women,” public INNIQZ[ ZMXZM[MV\I\Q^M[ [IQL Cohen cited a recent Brookings Institution study in his Oct. 9 blog entry, which listed various engineering disciplines as among the top nine lifetime money-earning jobs in the country.

For several types of engineering disciplines, the mean lifetime earnings top more than $2 million, he stated in the blog.

“That’s like a baseball team’s lineup featuring the top nine hitters in the league in terms of batting average. It’s extraordinary,” Cohen stated.

For more information: www.beanengineer.com

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Odessa Pumps: Geared for Greatness A TRUSTED BLUEPRINT BASED ON PROMPT, PERSONALIZED SERVICE

By Lori Steindorf

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dessa Pumps known for its strong presence in the Permian Basin, adheres to its promise to service the pumping equipment it sells in a prompt, efficient manner. This is one of the founding principles that has kept the business thriving in times of both booms and busts.

The production-minded business realizes that the oil and gas industry is here to stay, and they take their responsibilities regarding the management of water, gas and oil stemming from production very seriously.

Morris Vannoy, who presides over operations of the western region as regional manager, vows that energy is the future. He foresees the employee-owned company he helps operate sticking around for the long haul rather than selling out. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re building a company for the future.

Twenty years, there will still be Odessa Pumps throughout the nation. We have 15 branches now throughout Texas, New Mexico and Oklahoma, and we see that weâ&#x20AC;&#x2122;ll to grow. Weâ&#x20AC;&#x2122;re not ready to sit down yet. I think youâ&#x20AC;&#x2122;ll see our company in 20 years being at the forefront of the energy business,â&#x20AC;? Vannoy said. )F IBT CFFO JO UIF PJMmFME CVTJOFTT TJODF TP IF LOPXT mSTUIBOE IPX WPMBUJMF UIF PJM BOE gas market can be. He is optimistic, however, and predicts many more years of continued success for Odessa Pumps spurred by the Permian Basin and Eagle Ford Shale energy booms. i5IF mOBODJBMMZ TUSPOH DPNQBOJFT MJLF 0EFTTB Pumps will maintain and weather any of the storms. I am very excited to be a part of this group,â&#x20AC;? Vannoy said. â&#x20AC;&#x153;The quality of the employees we have and the beliefs that they have brings out that pride. Everybody here wants to do their job well and they want to come together as a team to do well for the whole company.â&#x20AC;?

The western region of Odessa Pumps

caters to the expansive Permian Basin and encompasses Odessa, San Angelo and Amarillo in Texas and Hobbs and Farmington in New Mexico. The business sells the latest and greatest pumps available and services them in a timely fashion to please its evergrowing customer base. It also maintains a large inventory of pumping equipment from reputable companies such as National Oilwell Varco. In fact, Odessa Pumps is stocked with a little more than $2 million in NOV inventory, said Jackie Swanson, vice president of products and applications for Odessa Pumps.

He acts as product specialist to ensure that Odessa Pumps is equipped with a vast assortment of inventory.

According to Swanson, Odessa Pumps will soon celebrate another banner year. He attributes the success of the company to the diligence and cooperative spirit between outside and in-house sales staff. â&#x20AC;&#x153;It has been a tough year because there is more competition. Our inside guys â&#x20AC;&#x201C; just the amount of work they have done â&#x20AC;&#x201C; it is very impressive how much they have stepped up in taking care of our outside sales guys,â&#x20AC;?

Swanson said.

â&#x20AC;&#x153;Service is the key.

We have to take care of the equipment that we have already sold in the past and our competitorsâ&#x20AC;&#x2122; equipment, whether it be something we sold or something somebody else sold.

Itâ&#x20AC;&#x2122;s our nature of business,â&#x20AC;?

Vannoy said.

Odessa Pumps, in the past, has outsourced repair work. It quickly realized that this was B UJNF DPOTVNJOH QSPDFTT XIJDI SFnFDUFE poorly on the companyâ&#x20AC;&#x2122;s unblemished image. â&#x20AC;&#x153;It was getting too common for us to not always get our material back in a timely fashion. If they couldnâ&#x20AC;&#x2122;t stay on our schedule, then it SFnFDUFE PO VT 8F TUSJDUMZ EP JO IPVTF XPSL for ourselves for Odessa Pumps. It is much NPSF FGmDJFOU 8F IBWF UPUBM DPOUSPM PG JU TP XF can extend better service to our customers,â&#x20AC;? said David Hood, regional operations manager for Odessa Pumps.

5IF 0EFTTB PGmDF XJUI FNQMPZFFT JT fully equipped with a service center and machine shop manned by seven specialized machinists, four in-house mechanics and four fabricators, all of whom work full-time.

Hood said that Odessa Pumps relies on an internal audit process to gauge its progress and ensure that its operations are running smoothly. i8F SF WFSZ FGmDJFOU BU XIBU XF EP 8F IBWF procedures and policies in place, and we audit those inside the company on a continuous basis. I think thatâ&#x20AC;&#x2122;s one thing that makes us successful. The processes that we go through NBLF VT WFSZ FGmDJFOU w )PPE TBJE The Hobbs, New Mexico branch has a full-time shop mechanic and a full-time fabricator.

The San Angelo branch, which opened Oct. IBT POF GVMM UJNF NFDIBOJD BOE UISFF mFME mechanics.

Vannoy agrees with Hood that Odessa Pumps goes the extra mile to guarantee customer satisfaction. â&#x20AC;&#x153;If a customer calls for service work, we do not like to put them off until tomorrow. Our customers are very understanding, and we hate to put them off. Even if it is tomorrow, it usually means that we have beat our competitors by about several days,â&#x20AC;? he said.

Odessa Pumps, which heralds continued education and training for its employees, is primarily based on selling plunger pumps, centrifugal pumps and air-operated diaphragms. The full-service center at the Odessa branch is responsible for about 40 percent of total business and sales in the West Texas area, explained Vannoy. Additionally, he added, that in West Texas and southeastern New Mexico, there are 13 fully equipped 1-ton

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USVDLT PQFSBUFE CZ RVBMJmFE TUBGG NFNCFST who are available 24 hours a day, seven days a week to service the equipment that Odessa Pumps and other companies sell.

The western region of Odessa Pumps also includes full-service maintenance crews that work on tank batteries. Odessa Pumps is in the process of upgrading this service.

Odessa Pumps, which has a low turnover rate, is constantly hiring new talent, including mechanical engineers, in its plan to expand its line of products and services. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re a very strong company, and also with our growth plans, we are hiring mechanical engineers on a regular basis and doing our own in-house mechanical engineering for our customers. At the same time, we have a very young group of people who are growing up to the business,â&#x20AC;? Vannoy said.

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Texas governor pushes for unlimited LNG exports

By Cynthia Hicks

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Recently the United States became the largest RTQFWEGT QH NKSWGĂŚGF PCVWTCN ICU /1* KP VJG YQTNF UWTRCUUKPI HQT VJG ĂŚTUV VKOG 5WUUKC YJQ JCF previously held the top spot. Much of that natural gas is produced in Texas and that has Texas Gov. Rick Perry calling for unlimited natural gas exports. He maintains that it would help the American economy and create a bigger role for the United States in world energy markets and potentially reduce the KPçWGPEG QH EQWPVTKGU UWEJ CU 5WUUKC QT ,TCP â&#x20AC;&#x153;Energy is a weapon in the hands of aggressors, so hereâ&#x20AC;&#x2122;s what I say,â&#x20AC;? said Perry. â&#x20AC;&#x153;If energy is going to be used as a weapon, America needs to have the largest arsenal. But our arsenal, that arsenal of American energy, will not be used to bully other nations, but to set them free.â&#x20AC;?

That was also the thought of President Gerald Ford as he signed the Energy Policy and Conservation Act (EPCA) on Dec. 22, 1975 that banned not only the export of oil, but also LNG, with but a few exceptions. This was done in response to a 1973 Arab oil embargo that shook the U.S. and the world with high energy prices. Ford was determined to give the U.S. energy independence and lessen the future impacts of such embargos. But, while oil imports dropped after EPCA, they rose again a decade later, and the debate over EPCA hasnâ&#x20AC;&#x2122;t stopped since. That is slowly changing in the face of a glut of production in the U.S. in the past few years. This abundance has been spurred by new drilling technologies and has put our country on track to be not only the top producer of LNG, but by next year, most likely, the top producer of oil in the world.

Because of the availability of LNG, cheap prices are currently driving a building boom of chemical and other manufacturing plants that use natural gas. Still, President Barack Obamaâ&#x20AC;&#x2122;s administration has been approving export applications very slowly. And while political gains are certainly one of the top reasons to pursue allowing exports, those who oppose the move say boosting exports would make gas more expensive in the United States and that it will lead to increased fracking, which is considered by groups like the Sierra Club to be bad for the environment. On the nJQ TJEF UIF "NFSJDBO 1FUSPMFVN *OTUJUVUF argues that exports could add as much as $31 billion to the economies of fracking states and add as many as 155,000 jobs. Experts believe that boom will, most certainly, be led by the Lone Star State. â&#x20AC;&#x153;The positive economic impacts will be more prominent for the state of Texas, which is a net oil and gas producer, than the rest of the U.S., which is a net energy consumer,â&#x20AC;? said Dr. Jim Lee, professor of economics at Texas A&M University-Corpus Christi. â&#x20AC;&#x153;Exports of

natural gas will eventually translate into higher natural gas prices for consumers and households.â&#x20AC;?

The increases in energy costs for the public would be larger for the many states that produce no natural gas. Lee estimates those increases could be as high as 10 percent in areas. But, he also thinks this negative economic impact would pale in comparison to the positive effects, especially for South Texas. â&#x20AC;&#x153;The future of Texas, and particularly Corpus Christi, depends on the extent that â&#x20AC;&#x2DC;ourâ&#x20AC;&#x2122; oil and natural gas can be exported to the rest of the world,â&#x20AC;? he said. â&#x20AC;&#x153;If we are able to export oil and gas in any form, a 10 percent increase in gasoline prices would be a small price to pay for Texans.â&#x20AC;?

Thatâ&#x20AC;&#x2122;s because there are currently 40 LNG export plants seeking approval along the Gulf Coast. In South Texas, Cheniere is proposing the construction of a $12 billion LNG export plant near the La Quinta Channel. This plant is only second to Cheniereâ&#x20AC;&#x2122;s LNG plant in Sabine Pass, La., which is the largest LNG plant in the U.S. In addition, Cheniere is proposing another smaller plant in Ingleside, Texas for processing gas condensate. These plants will process supplies from the Eagle Ford and Permian Basin regions.

Earlier this year, Judy Hawley, chair of the Corpus Christi Port $PNNJTTJPO UFTUJmFE UP MBXNBLFST JO "VTUJO JO GBWPS PG -/( FYQPSUT saying it would support an estimated 8,000 permanent jobs annually BOE DSFBUF DPOTUSVDUJPO KPCT PWFS B mWF ZFBS QFSJPE â&#x20AC;&#x153;Once the facility is built, it will provide the foundation for thousands of stable and high-paying jobs beyond the estimated 225 positions required to operate the facility,â&#x20AC;? Hawley told the House Ways and Means Subcommittee on Trade. â&#x20AC;&#x153;The ability to add and support thousands of jobs during an era of chronic underemployment is an economic godsend to countless workers.â&#x20AC;?

The U.S. Federal Energy Regulatory Commission (FERC) has ruled UIBU UIF $IFOJFSF QSPKFDU XJMM OPU TJHOJmDBOUMZ BGGFDU UIF FOWJSPONFOU With this favorable environmental review, the project is expected to receive a construction license from FERC at any time now.

What the future holds for LNG exports remains to be seen, but following the Republican Party gaining control of the Senate in November, approval appears to be on the horizon. Thatâ&#x20AC;&#x2122;s because many Republican senators say they will now prioritize passing legislation that XPVME FYQFEJUF UIF &OFSHZ %FQBSUNFOU T BQQSPWBM QSPDFTT GPS MJRVFmFE natural gas exports. A prospect that undoubtedly makes Perry, who still may run for president again in 2016, a happy Texan.

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P O LY F L O W

opens new manufacturing plant in the Permian Basin

By Lori Steindorf

Emphasizing safety and quality, PolyďŹ&#x201A;ow, LLC, the leading manufacturer of spoolable reinforced thermoplastic pipe for transporting hydrocarbons, water and other ďŹ&#x201A;uids and gases, is celebrating its new manufacturing plant in Midland.

region the best products and service possible as we support their aggressive drilling and tiein schedules,â&#x20AC;? Medalie said. â&#x20AC;&#x153;This meets our strategic objective of providing customers with unmatched responsiveness, consistent stock levels and high quality piping that delivers top QFSGPSNBODF JO B WBSJFUZ PG BQQMJDBUJPOT nVJET and gas transport.â&#x20AC;?

The state-of-the-art integrated design, manufacturing and service facility, roughly between 50,000 and 60,000 square feet in size, includes a spacious inventory yard as well as a service center. The facility produces 1PMZnPX T 5IFSNPnFY QJQJOH XIJDI IBT CFFO on the market for more than a decade.

â&#x20AC;&#x153;The people working there â&#x20AC;&#x201C; almost all of them are from the Midland-Odessa area.

We pay very competitive wages and provide HPPE CFOFmUT "OE * UIJOL UIFSF T OPU B MPU PG manufacturing in the Midland area so weâ&#x20AC;&#x2122;re one of the few to not just be a distributor or service area. Weâ&#x20AC;&#x2122;re actually manufacturing right where we do work,â&#x20AC;? Medalie said.

1PMZnPX T BJN JO PQFOJOH UIF .JEMBOE QMBOU is to improve responsiveness and source of supply for its customers in West Texas, New Mexico, South Texas and the entire Mid$POUJOFOU SFHJPO TBJE 1PMZnPX $&0 +JN Medalie. The company is proud to cater to the Eagle Ford Shale as well as the Permian Basin energy booms. â&#x20AC;&#x153;This facility will give our customers in the

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"MUIPVHI 1PMZnPX DPOEVDUT PQFSBUJPOT across the globe in such places as Romania, Colombia, Argentina, Peru, Australia and Malaysia, Medalie said that the bulk of the companyâ&#x20AC;&#x2122;s business is presently concentrated JO 8FTU 5FYBT 5IF QMBOU JT CFOFmDJBM UP UIF 8FTU 5FYBT FDPOPNZ BOE JT UIF mSTU PG JUT LJOE in manufacturing reinforced thermoplastic pipe in the Permian Basin.

He said that the facility employs a team of experienced manufacturing, account NBOBHFNFOU BOE mFME TFSWJDF QSPGFTTJPOBMT XJUI FYUFOTJWF PJMmFME BOE QJQF NBOVGBDUVSJOH backgrounds.

1PMZnPX DIBNQJPOT DVTUPNJ[FE TPMVUJPOT fast, easy installation and superior operating MJGF XJUI JUT 5IFSNPnFY QJQJOH "DDPSEJOH UP UIF DPNQBOZ T XFCTJUF 1PMZnPX XPSLT JO TPNF PG the most challenging applications such as the following: t (BUIFSJOH -JOFT 8JUI 5IFSNPnFY QJQJOH BOE 1PMZnPX T TFSWJDF UFBN ZPV DBO JOTUBMM UXP

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lines of gathering line in one day. t &OIBODFE 0JM 3FDPWFSZ 5IFSNPnFY QJQJOH T ease of use and corrosion resistance makes it ideal for gas injection and other EOR methods. t 1JQFMJOF 3FIBCJMJUBUJPO &Y1&35 &YJTUJOH Pipe Enhanced Rehabilitation Technologies) is an innovative process to revitalize old wells.

Compared to steel pipes and other varieties PG QJQJOH 5IFSNPnFY QJQJOH JT IFSBMEFE BT superior for a number of reasons, Medalie said. It is lightweight, durable to brave the elements, easy to install, reliable, cheaper to maintain and does not require the use of corrosion inhibitors. It also does not require welding or the use of large equipment to install it. The exclusive polymer systems that BSF VOJRVF UP 1PMZnPX EFMJWFS VOCFBUBCMF resistance to hydrocarbons and sour environments. Personnel are also thoroughly trained on safety. i8F HFU XFMMT nPXJOH GBTUFS TP UIBU UIFZ can start producing oil more quickly and recovering their investment more quickly,â&#x20AC;?

Medalie said. â&#x20AC;&#x153;Safety is never compromised.

Safety and reliability are our two primary responsibilities.â&#x20AC;?

5IF DPNQBOZ JT BMXBZT PO UIF MPPLPVU GPS mSTU rate employees who share their commitment to safety and quality. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re always looking for good people,â&#x20AC;?

Medalie said.

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INSIGNIA

HOSPITALITY GROUP

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ENGRAVED WITH EXCELLENCE IN THE LODGING/ HOSPITALITY ARENA OTEL DEVELOPMENT AND MANAGEMENT COMPANY INSIGNIA HOSPITALITY GROUP HAS GROWN EXPONENTIALLY WITHIN THE LAST 10 YEARS. OFFICIALS ARE QUICK TO ATTRIBUTE THE MIDLAND-BASED COMPANY’S STEADY GROWTH TO ITS TALENTED, TRUSTWORTHY TEAM OF ASSOCIATES WHO WORK CEASELESSLY TO NOT ONLY DEVELOP FUTURE PROPERTIES, BUT ALSO MAINTAIN EXISTING ONES.

as a guest service agent to be promoted to the role of mid-management, if not higher.

Partnering with Marriott International, Hilton Hotels Worldwide and Intercontinental Hotels Group, Insignia Hospitality Group demonstrates an unfaltering commitment to its associates who are traditionally promoted from within. According to Vice President of Sales and Marketing Rachel Overman, who has been with Insignia for eight years, and Brett Turnage, XJUI UIF DPNQBOZ GPS mWF ZFBST TUBGG NFNCFST have earned service pins and years of service recognition gifts. They opt to remain with the company where they are valued as true assets.

“We hire and develop the right people. We are not one to shy away from the expense of going BCPWF BOE CFZPOE XJUI DFSUJmDBUJPOT BOE training and making sure they can succeed.

It’s our people who make us successful.” said Turnage, vice president of operations.

Insignia currently operates 15 hotels with plans in the works for several more top-quality locations throughout Texas and New Mexico as well as plans for further expansion within the Western United States.

The management structure is admirable because associates of various backgrounds and differing levels of experience work together seamlessly to ensure operations run smoothly. Associates are encouraged to grow with the company, and it’s common for someone who began their career with Insignia

“We believe that it is important to reinvest our time, money, and efforts into these hotels,” said Overman, vice president of business development.

“My motto is to work hard and play hard. When it comes to working hard, I’m going to be right there with our people,” Turnage said.

Overman and Turnage describe the company as young and aggressive while meeting its associates’ needs. There is a general sense of cohesiveness among employees who share the drive and determination to see Insignia exceed its already stellar expectations.

For instance, the family-owned company, established in 2004 by the Bhakta family, recently celebrated grand openings for its Holiday Inn Express on Interstate-20 in Midland and the Courtyard by Marriott Lubbock Downtown.

“As we open them, we are growing our pipeline. There’s no end in sight. We want to build on our properties and take care of our people, but we are still looking at growing the company,” Turnage said.

“Not only are we focused on developing new properties, but we have a commitment to maintaining our existing hotels.”

Two Odessa properties are presently undergoing extensive renovations.

Insignia’s properties tout high-end amenities, focus on staying on top of a technology-based

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By Lori Steindorf

environment, and its employees realize that it is their responsibility to provide supreme accommodations in the lodging/hospitality arena.

“We’re not afraid to spend a little more when we are developing and renovating properties,” Turnage said.

Signature touches are prevalent throughout the properties Insignia encompasses. The Courtyard by Marriott Lubbock Downtown, adjacent to the Texas Tech University campus, JT SFQMFUF XJUI UIF mOFTU JO GVSOJTIJOHT B CJTUSP and full bar and three spacious meeting venues. Fitness rooms, equipped with elliptical machines and treadmills as well as free weights, are designed to yield optimal results and stress-relief.

Along with dedicated associates, it is these nuances that have strongly spurred the company’s growth, Turnage said.

“WE’RE PROMOTING THE COMMUNITY, AND SAYING, ‘YES, WE BELIEVE IN IT.’” The company also distinguishes itself as a civic leader. By faithfully supporting charities such as The Children’s Miracle Network, United Way, Habitat for Humanity, United Blood Services and Meals on Wheels, it has formed unbreakable bonds with those who inhabit its respective communities. Insignia’s hotels also sponsored classrooms for back to school, this year, in each of the communities where they operate.

“Being able to give back to our communities is a big part of what keeps our associates connected,” Overman said.

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It possesses good hearing, and though it has no ear openings, it does have ears. The lizard lays its eggs underground, and hatches two batches of eggs in spring and summer. It eats ants and other invertebrates and lives in areas of low grass and shrub vegetation with patches of bare ground and burrows in fallen logs and ground debris.

The lizard is at risk because of human development in JUT IBCJUBU UIF HSPVQ TBZT 5IF JODSFBTF PG mSF BOUT an invasive species that has gained strength with the disturbance of native habitat, sometimes swarms the lizard and kills it. Fire ants have increased as native brush country has been destroyed to make way for crop land. The lizardâ&#x20AC;&#x2122;s well-being also is threatened by agricultural pesticides and herbicides. Invasive grasses brought in with the cattle industry, in particular, buffelgrass have disturbed its habitat, doing away with the open spaces the lizard needs for foraging and escape, the group states in its petition. The lizard previously ranged from Comanche County, Oklahoma throughout central and southern Texas and northern Mexico. But now it has disappeared entirely from Oklahoma and is rarely seen elsewhere. According to the WildEarth Guardians, the southern subspecies may already be extinct.

In its initial review, Fish and Wildlife determined that there are serious concerns regarding the lizard that XBSSBOU GVSUIFS SFTFBSDI i*O PVS SFWJFX XF mOE UIBU UIF QFUJUJPO QSFTFOUT TVCTUBOUJBM TDJFOUJmD PS commercial information indicating that listing this species may be warranted,â&#x20AC;? the federal agencyâ&#x20AC;&#x2122;s report stated.

WildEarth Guardians, an environmental group based in Santa Fe, N.M., submitted a petition in 2010 to the federal agency asking that the lizard be placed under the protection of the Endangered Species Act.

State Rep. J.M. Lozano, a Republican who represents District 43, said that it would be devastating to South Texas if the lizard is listed as endangered.

â&#x20AC;&#x153;We petitioned for listing in 2010 and got a positive response,â&#x20AC;? said Taylor Jones, endangered species BEWPDBUF JO UIF HSPVQ T %FOWFS PGmDF i5IFZ BSF supposed to make their decision in 12 months, but they have not done it yet. So we are expecting it soon.â&#x20AC;?

Jones said there are three ways the decision can go. Fish and Wildlife can rule that the concerns the environmental group has raised are warranted and the lizard would be placed on the endangered species candidate list. It can be immediately listed as threatened or endangered. Or the concerns about the destruction of the lizardâ&#x20AC;&#x2122;s habitat can be found to be not warranted. â&#x20AC;&#x153; Jones said it is unclear what effect the activity of energy companies in the Eagle Ford Shale area will IBWF PO UIF MJ[BSE TJODF UIF QFUJUJPO XBT mMFE CFGPSF the oil and gas boom. â&#x20AC;&#x153;Often it is hard for the species to deal with roads and pollution and all the things that come with EFWFMPQNFOU CVU JU JT EJGmDVMU UP LOPX BOZUIJOH GPS DFSUBJO w +POFT TBJE i8F BSF EFmOJUFMZ DPODFSOFE with habitat fragmentation because of roads.â&#x20AC;?

The lizard has rounded dark spots under its tail.

The Texas Railroad Commission, the state regulatory agency that oversees the oil and gas industry, also IBT WPXFE UP mHIU BUUFNQUT UP MJTU UIF MJ[BSE BT endangered. i#Z mMJOH BO PVUMBOEJTI OVNCFS PG MBXTVJUT HSPVQT like WildEarth Guardians are trying to overwhelm Fish and Wildlife resources and force settlements that the

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group can dictate,â&#x20AC;? said Railroad Commissioner David Porter. â&#x20AC;&#x153;Such groups are willing to use extreme tactics to pursue their goals of shutting down the oil and gas industry with blatant disregard for how their actions will affect the economy or the power supply on which we all depend.â&#x20AC;?

Porter blamed the Obama administration for the groupâ&#x20AC;&#x2122;s actions, saying the efforts to list the lizard are a sign of the presidentâ&#x20AC;&#x2122;s animosity to the oil and gas industry. â&#x20AC;&#x153;We must not allow the Obama administration to use the Endangered Species Act as a weapon against the oil and gas industry,â&#x20AC;? Porter said â&#x20AC;&#x153;The federal government needs to understand that we here in Texas best understand our VOJRVF HFPMPHJDBM FDPOPNJDBM BOE SFHVMBUPSZ FOWJSPONFOU 0OF TJ[F mUT BMM regulation doesnâ&#x20AC;&#x2122;t work, and thinly veiled attempts to control energy production masquerading as environmentalism donâ&#x20AC;&#x2122;t fool anyone.â&#x20AC;?

But Jones said the groupâ&#x20AC;&#x2122;s actions have nothing to do with Obama, and that the commissionerâ&#x20AC;&#x2122;s comments are a tool to distract from the real issues. â&#x20AC;&#x153;Those accusations are completely misplaced,â&#x20AC;? Jones said. â&#x20AC;&#x153;Obama has an â&#x20AC;&#x2DC;all of the aboveâ&#x20AC;&#x2122; energy policy. The oil and gas industry is trying to distract from the real issues that come with oil and gas production. This little lizard is the least PG UIFJS XPSSJFT 5IFZ IBWF UP EFBM XJUI UIF JOnVFODF UIFZ BSF IBWJOH PO HMPCBM warming and the fact that they are an industry that causes a lot of destruction.â&#x20AC;?

5IFO 5FYBT -BOE $PNNJTTJPOFS +FSSZ 1BUUFSTPO UFTUJmFE UP $POHSFTT UIBU EarthGuardians, which also was behind attempts to protect the dunes sagebrush lizard, is spending taxpayer money to sue federal agencies. He said the group collected $680,492 in taxpayer funding from Fish and Wildlife between 2007 and 2011 and during that time the group sued the agency 76 times for alleged environmental violations.

The listing of species under the Endangered Species Act has caused major disruption recently. In 2012, a $29 million road construction project in San Antonio was halted because it endangered the Bracken Bat Cave meshweaver spider.

Construction will start again in 2015, but at considerable cost â&#x20AC;&#x201C; about $44 million for the entire project.

The listing of the Lesser prairie chicken, a threatened species under the Endangered Species Act in March of 2014, has caused an outcry in the oil and gas industry. The species is primarily found in West Texas and the Panhandle but the listing XJMM BGGFDU B mWF TUBUF BSFB UIBU JODMVEFT TPNF PG UIF OBUJPO T NBKPS FOFSHZ mFMET TVDI BT UIF 1FSNJBO #BTJO 5ISFF NJMMJPO acres of land have been set aside for habitat preservation. The TUBUFT PG ,BOTBT BOE 0LMBIPNB IBWF mMFE MBXTVJUT BHBJOTU designating the prairie chicken as endangered.

Porter described listing of the prairie chicken as â&#x20AC;&#x153;another desperate ploy by the Obama administration to further its campaign against oil and gas drilling. Such egregious overreach has been a specialty of the Environmental Protection Agency in the past. The administration has now found another agency to do its bidding.â&#x20AC;?

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UT ENGINEERING STUDENTS DRIVEN TO PROVIDE BIODIESEL

By Lori Steindorf

In their quest to make the University of Texas campus more environmentally friendly and save the university money, several engineering students have been working on a reactor that will convert leftover grease from university dining halls into biodiesel.

The project was initiated by forwardthinking UT graduate Kendall Ernst who pitched the proposal to the Green Fee Committee located on the UT campus in Austin. Ernst is responsible for setting the plan in motion, and funding has been allocated by The Green Fee to purchase the biodiesel reactor. â&#x20AC;&#x153;About $5 from each studentâ&#x20AC;&#x2122;s tuition is put toward the Green Fee Fund, which funds various environmental and sustainable student-run projects,â&#x20AC;? said Claire Sembera, a 22-year-old senior who is working toward obtaining her bachelorâ&#x20AC;&#x2122;s degree in civil engineering with a minor in chemistry.

In previous months, 10-15 students, including Sembera, have been working on getting the reactor bolted down with IPQFT PG DSFBUJOH UIFJS mSTU UFTU CBUDI 5IF studentsâ&#x20AC;&#x2122; long-range goal is to expand their ambitious project and have the entire 65 EJFTFM SVO nFFU VTJOH UIF CJPEJFTFM made from university kitchens.

â&#x20AC;&#x153;Our goal is to start using the biodiesel in the UT ďŹ&#x201A;eet during the Fall 2015 semester,â&#x20AC;? she said.

The studentsâ&#x20AC;&#x2122; intent is to take the discarded oil, add a base such as sodium hydroxide or potassium hydroxide before having it react with methanol. According to Sembera, this XJMM VOEFSHP USBOTFTUFSJmDBUJPO NFBOJOH

that essentially the triglycerides in the oil are converted into fatty acid methyl esters, which are chemically equivalent to diesel fuels. She adds that only up to 20 percent of diesel can be replaced with this biofuel without alternations being made to the engines. â&#x20AC;&#x153;The combination of 20 percent biofuel and 80 percent diesel is how we get biodiesel. This mix is called a B20 mix, and this is what we intend to make,â&#x20AC;?

Sembera said.

Sembera praises biodiesel for its number PG CFOFmUT *U SFEVDFT UIF VTF PG GPTTJM fuels, a limited natural resource, as well as reduces emissions from the burning of fossil fuels, reducing greenhouse gas effects. â&#x20AC;&#x153;In addition, we are recycling waste from university kitchens back into the university, making something useful out of a waste product. It will also save the university money by obtaining fuel from an in-house source, allowing those funds to be allocated elsewhere,â&#x20AC;? Sembera said.

The project fascinates her because of its potential to improve the environment. â&#x20AC;&#x153;The fact that we, as students, are taking the initiative to add an untouched aspect of sustainability to the university by recycling a waste, reducing the use of a limited natural resource and reducing the release of greenhouse gases by implementing this one initiative. There is so much potential, and itâ&#x20AC;&#x2122;s really exciting to see where this project is going to go,â&#x20AC;? she said.

In charge of university vehicle maintenance is UT Parking and Transportation Services. Fifty of the universityâ&#x20AC;&#x2122;s 600 vehicles are compatible XJUI CJPEJFTFM 4UVEFOUT mSTU BQQSPBDIFE UT Parking and Transportation Services to determine whether the department could assist them with their project.

Mark Kaligian with UT Parking and Transportation Services said his department was eager to join forces with

the students for their project. He said the university uses 40,000 gallons of diesel per year, and in the long run, perhaps more vehicles will be able to run on the biodiesel generated from university waste. The project is starting small, however, to determine its feasibility, with students yielding between 40 to 80 gallons of biodiesel per month. He describes the project as a nice outlet to dispose of waste from dining halls and said it has potential to save the university money. â&#x20AC;&#x153;It will help the university by testing this as a possible solution to some of our future fueling needs. We have tried this before so the reality is it can be done. We just donâ&#x20AC;&#x2122;t know if it can be done in our environment in quantities that can make an impact on our vehicles. Thatâ&#x20AC;&#x2122;s what weâ&#x20AC;&#x2122;re hoping this project will test for us,â&#x20AC;?

Kaligian said.

He emphasizes that it is too soon to tell the outcome of the project, and there are risks involved. Though 50 vehicles JO UIF VOJWFSTJUZ nFFU BSF HFBSFE UP VTF biodiesel, one of the drawbacks is that biodiesel has a cleansing effect. This means that it can loosen the sludge in gas UBOLT BOE MJOFT BOE DMPH UIF GVFM mMUFST JO older vehicle models. â&#x20AC;&#x153;There are some inherent risks,â&#x20AC;? he said.

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Despite energy reforms in Mexico, future of global investment uncertain

By Mary Lee Grant

For the ďŹ rst time in 75 years, Mexico is opening up for investment by foreign oil and gas companies. Recent reforms within the Mexican government ended the monopoly of the national oil company, PEMEX, allowing for outside investment by global companies. But to what extent U.S. oil and gas companies will take advantage of that opportunity remains to be seen.

formation that makes up the rich Texas Eagle Ford Shale. Deposits are heavy in areas such as the border state of Tamaulipas, where drug cartels battle over territory, making it perilous for oil and gas crews. Recently a crew from Weatherford was caught in the middle of a gun battle in Ciudad Mier, only a few miles south of the border. And even if safety werenâ&#x20AC;&#x2122;t a hindrance, infrastructure is, as much of the Mexico is without the pipelines and roads that NBLF FYUSBDUJPO FGmDJFOU "MTP DPNQBOJFT investing in Mexico will face the threat of possible re-nationalization of the oil industry in the future, making pouring money into Mexican drilling operations a gamble.

Many of the richest shale areas in the world are believed to lie in the dangerous regions of northern Mexico, part of the same geological

â&#x20AC;&#x153;ExxonMobil welcomes Mexicoâ&#x20AC;&#x2122;s steps to reform its energy policy,â&#x20AC;? said Patrick McGinn, ExxonMobil spokesman.â&#x20AC;? These historic changes could enable Mexico to further

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ExxonMobil responded to queries from the magazine about its plans for involvement in the Mexican oil and gas industry by saying they would pursue investment opportunities in Mexico if the opportunities were competitive with those in other parts of the world.

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develop its natural resources and improve its productivity. By reinvigorating its energy industry and with the support of private investment, technology and expertise, Mexico can create many new opportunities and FNQMPZNFOU UIBU XJMM CFOFmU UIF DPVOUSZ 8F will pursue potential investment opportunities in Mexico that are competitive with other opportunities around the world.â&#x20AC;?

Gustavo Hernandez Garcia, head of PEMEXâ&#x20AC;&#x2122;s Exploracion y Produccion division, said he has met with companies including Chevron, Shell, ExxonMobil, BP, Petrobras, Ecopetrol, Petronas, PetroChina and Petroleos de Venezuela, or PDVSA. The state oil giant has JEFOUJmFE QSPKFDUT JU XBOUT UP EFWFMPQ XJUI QSJWBUF mSNT PWFS UIF OFYU ZFBST 1FNFY $&0 Emilio Lozoya said in a recent news release that the company and its associates are expected to invest $76 billion over the next 10 years, with $33 billion going into the 10 jointventure projects.

For the past 75 years, PEMEX has completely controlled the Mexican oil industry. The company originally was created in the

nationalistic heat of the Mexican revolution, and became one of the largest sources of income fueling the Mexican government.

But the state-owned oil company, known for CVSFBVDSBUJD JOFGmDJFODZ BOE DPSSVQUJPO IJU a 24-year production low last year, fueling a push for reform from within the Mexican government.

Beginning in January, the government will auction off most of the countryâ&#x20AC;&#x2122;s drilling and production rights, although PEMEX will keep about one-third of its holdings.

Drilling in the Gulf of Mexico obviously is a big draw to outsiders, but so is extracting shale from the Eagle Ford Shale formation which is thought to extend hundreds of miles into Mexico, where it is called the Burgos Basin.

The oil and gas wealth in this geological formation remains largely untouched. While more than 5,400 wells have been drilled in the Texas Eagle Ford Shale since 2008, Mexico has drilled fewer than 25.

PEMEX has estimated that the shale formations of the country hold about 60 billion barrels of oil. Tapping these resources would not only provide an enormous source of revenue for Mexico, it could also lower electricity costs at the maquiladora plants that assemble and manufacture goods along the Mexican side of the border.

Large global companies with vast reserves of capital are the ones expected to have the

resources to take advantage of the opening up of the Mexican industry. It remains to be seen whether smaller companies that have developed expertise in fracking in the Eagle 'PSE 4IBMF XJMM CF BCMF UP mOBODF UIF SJTLT PG investing in shale exploration across the border.

Fracking tends to be dominated by smaller independent companies, but they may not be willing to shoulder the burden of risks and costs that could go with an initial venture in Mexico. There are almost no pipelines in the heavy shale regions of northern Mexico, and highways are poor. Northern Mexico also is experiencing a drought, and the vast amounts of water required for fracking may be unavailable.

Also, smaller companies often donâ&#x20AC;&#x2122;t have the security experience that larger companies have developed while working in volatile areas of Africa and the Middle East so they may not feel they have the resources to protect their crews GSPN WJPMFOU OBSDP USBGmDLJOH PSHBOJ[BUJPOT PEMEX itself is not likely to develop its TIBMF mFMET CFDBVTF PG MBCPS DPTUT MBDL PG experience in that area and the large number of wells needed, said Miguel Labardini, a partner in Marco y Asociadadod, a Mexican FOFSHZ DPOTVMUJOH mSN But Kennether Medlock, a senior director for energy studies at Rice Universityâ&#x20AC;&#x2122;s Baker Institute, said at a recent energy forum hosted by the university that international investors may be gun-shy as well because of lack of infrastructure necessary to bring gas to market and the

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dangers of cartel violence in northern Mexico.

1&.&9 BOUJDJQBUFT JOWFTUNFOU GPS UIF mSTU round of tenders for private partners to be about $12 billion annually, according to .FYJDP T FOFSHZ NJOJTUSZ 5IF mSTU SPVOE XJMM include 160 oil and gas blocks, 109 of them for projects already in development and 60 to hydrocarbon extraction projects that will be tendered out in stages in 2015, the energy ministry, said. Oil revenues make up about 35 percent of the countryâ&#x20AC;&#x2122;s budget and about 6 percent of the GDP. However, the country needs to review its oil PVUQVU BT UIF mHVSFT GSPN UIF QSFWJPVT GFEFSBM administration (2006-12) do not correspond to the real production levels, senate energy committee president David Penchyna of the ruling PRI party has said in the Mexican press.

PEMEX has had contacts with about 80 foreign energy companies to discuss possible oil and gas exploration, according to reports in the Mexican media.

The Mexican government expects the PEMEXâ&#x20AC;&#x2122;s production to rise along with the new investment GSPN PVUTJEF mSNT %FQVUZ &OFSHZ 4FDSFUBSZ Lourdes Melgar said that the production should rise from 2.5 million barrels per day to 3 million by 2018 and 3.5 million by 2025.

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CRUDE Oilfield Advertising Cartoon Calendars

By Steve Burnett

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“Thanks for what you do, have a grin on me.”

www.crudeoilcalendars.com Email: crudeoilcalendars@yahoo.com Friend us on facebook: Crude Oil Calendars Comments, suggestions, and oilfield stories welcome.

WATER DESALINATION: ONE ANSWER TO TEXAS’ GROWING WATER USE

By State Rep. Todd Hunter, District 32

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Earlier this year, the Speaker of the Texas House of Representatives appointed the House members to the Joint Interim Committee to Study Water Desalination. I am pleased to announce that the Speaker has given me the honor of serving as Co-Chair of this important committee.

As many of you are aware, the Texas Legislature is not currently in session. The Texas Legislature constitutionally meets for 140 days every odd numbered year, which makes the next official session for the Texas Legislature to meet January 2015. It is important to note however, that this does not mean that the Texas Legislature stops working. In fact, the period in between sessions, often referred to as the interim, is when the Texas Legislature identifies and studies the important issues facing the State of Texas in preparation for the next legislative session. This is one of the reasons I filed and passed House Concurrent Resolution (HCR) 59. HCR 59 requested that the Speaker of the House of Representatives and the Lieutenant Governor create a joint interim committee to study water desalination in Texas. The joint interim committee is composed of Texas House and Texas Senate members.

When we look at the growing population in our area and various economic development initiatives, there is an ever growing demand for access to clean water across the state. In addition, it is important that we identify the different components that relate to the use of water and find ways of trying to reduce the overall use and loss.

According to the National Weather Service, about 90% of the water loss comes from evaporation. Due to this staggering figure, we also have to try and find other

avenues to help the growing demand for water. One of the possible solutions is to develop and create salt water desalination facilities along the Texas Coast.

As many of you know, water desalination has been a topic of discussion in our area for many years. This is why I thought it was important that the State of Texas start taking a serious look at water desalination in our state. There are multiple types of desalination, such as brackish ground water, brackish surface water, and seawater desalination. Below are some interesting facts about water desalination in Texas according to the Texas Water Development Board: ;L_HZ J\YYLU[S` OHZ HU LZ[PTH[LK [V[HS T\UPJPWHS desalination capacity of about 123 million gallons per day (about 137,760 acre-feet per year) which includes 73 million gallons per day (about 81,760 acre-feet per year) of brackish groundwater desalination and 50 million gallons per day (about 56,000 acre-feet per year) of brackish surface water desalination.

0U HKKP[PVU [V T\UPJPWHS KLZHSPUH[PVU PUK\Z[YPHS desalination capacity in the state is estimated to be about 60 to 100 million gallons per day (about 67,000 to 112,000 acre-feet per year) mainly in the power and semi-conductor industries. ;OL SHYNLZ[ PUSHUK T\UPJPWHS KLZHSPUH[PVU WSHU[ PU Texas, the Kay Bailey Hutchison desalination plant in El Paso, has a design capacity of approximately 27.5 million gallons per day (30,800 acre-feet per year) and went into production in August 2007. ;OL H]LYHNL JVZ[ [V WYVK\JL HJYL MVV[ VM desalinated water from brackish groundwater ranges from approximately $357 to $782. ;OL H]LYHNL JVZ[ [V WYVK\JL HJYL MVV[ VM desalinated water from seawater is projected to range from approximately $800 to about $1,400.

All of this data is subject to change and the recent water desalination hearings have brought new information to the forefront.

If you are interested in water desalination in Texas, I highly encourage you to follow the Joint Interim Committee to Study Water Desalination. In the meantime, if you are interested in learning more about water desalination in Texas, check the Texas Water Development Board’s website at http://www.twdb.texas. gov/innovativewater/desal/.

If you have questions regarding any of the information mentioned in this article, please do not hesitate to call my Capitol or District Office. As always, my offices are available at any time to assist with questions, concerns or comments (Capitol Office, 512-463-0672; District Office, 361-949-4603).

Rep. Hunter represents Nueces (Part) County. He can be contacted at todd.hunter@house.state.tx.us or at 512-463-0672.

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