In difficult 2020, Alliance leads the way in advocacy.....13
Alliance enters 2021 with legal challenges on the horizon.....15
Oilfield Angels: Industry groups join forces to assist those in need.....20
DECEMBER 2020
David D. Le Norman Chairman
TABLE OF CONTENTS
Brook A. Simmons President
17
Adria Berry Senior V.P. - Government Affairs & Public Policy
Senate backstop offers protections for Oklahoma’s oil and gas industry
Natalie Kinmonth Senior V.P. - Membership & Development
19
Cody Bannister Senior V.P. Communications
Natural gas will play key role in president’s ‘transition’
Teresa Yoder V.P. - Finance
23
Ellis Ebel Director of Operations/HR
Industry philanthropy a long-standing tradition
Lauren Burnett Director of Events Bud Ground Director of Regulatory Affairs Madison Miller Committee Coordinator & Policy Analyst Annie Parks Membership & Marketing Coordinator
25 Industrial Progress: A New Cultural Ideal for America
27 Experts examine the future of the fuel & petrochemical industries
Marcy Ayers Partners Program Consultant
29
Valerie Flaherty Receptionist
Oil market fundamentals suggest 2021 may recoup much Of 2020 losses
This newsletter is produced by
33 Decreased drilling continues to drag down Energy Index
500 N.E. 4th St. Oklahoma City, OK 73104 405-942-2334 contact@okpetro.com www.thepetroleumalliance.com
38 Rig Gig spotlights generosity of member companies December | 3
A
LETTER
FROM
THE
PRESIDENT
B ROO K A . SIMMONS The Petroleum Alliance of Oklahoma goes to press on its final 2020 edition of Wellhead with gratitude for our members, partners and sponsors who helped the association deliver on its mission in an extremely difficult year. I couldn’t be prouder of the staff who adapted quickly to deliver solid virtual and in-person networking events that were safe, effective and fun. Your team got really good at putting the “social” in “social distance.” We will update all members on our slate of 2021 events in the next few weeks. Despite pandemic restrictions, The Alliance delivered on all fronts: legislative, regulatory, legal, and political. We cover the highlights on page 13. Of special mention is the team’s work in the wake of the McGirt v. Oklahoma ruling. Our effort became the template for national trade organizations to follow. We continue to deliver timely, actionable intelligence, legal advice and policy work to protect our members amidst many uncertainties. This great work will continue in 2021. We have been busy for weeks laying groundwork for a successful 2021 legislative session. Your involvement in our robust committee process feeds policy efforts on the regulatory and legislative fronts to benefit every sector of our industry. Get involved! Inside, we recap briefly Alex Epstein’s keynote at our Virtual Annual Meeting. It is a good reminder of our value to society and an inspiration for our continued work to win hearts and minds. It’ll be the hard-working and creative people of the oil and natural gas industry who will solve our world’s energy and environmental challenges, not scribbling modelers, unelected bureaucrats, nor political windbags. Chairman David Le Norman’s column inside reminds us: 1) despite radicals’ pledge to end the industry, we remain optimistic as we retool for a future which will NEED us; 2) we are stronger together regardless of industry sector and regardless of whether we are big, publicly traded businesses or family-owned small businesses. On this last point, each year as part of our budgeting exercise we review a long list of who is a member and who should be a member but is not yet. Members, thank you for investing in your industry’s future. Now, who do you know who should be helping you shoulder the burden, has expertise to offer, and would benefit from what we collectively provide? Make a mental note and ask them to join. Pass your contact names to Natalie Kinmonth and the membership and development team. We’ll reach out too. A The challenges of 2020 have proven just how valuable our Alliance is. We are leaning into 2021 with a winning attitude. A global economic rebound is expected over the next two years. We are cautiously optimistic for demand increases for both oil and clean-burning natural gas. The Alliance is focused on advancing Oklahoma’s position and helping create the right environment for your investment here. Let’s put a difficult 2020 firmly in the rear view window and prepare to meet the future. Continue to lean in with us. The best is yet to come. Merry Christmas and a prosperous New Year!
Read on. Be well.
SOEROK.COM
Supporting Oklahoma Producers workshops
.
networking
.
technology
December | 5
A LETTER
FROM
THE
CHAIRMAN
DAVI D LE N O R MAN alliance [əˈlīəns] — a union or association formed for mutual benefit, especially between countries or organizations; a relationship based on an affinity in interests, nature, or qualities. The state of being joined or associated. The above is a definition of what our hopes and dreams were when we formed The Petroleum Alliance of Oklahoma by combining the tradition rich Oklahoma Oil & Gas Association (OKOGA) and Oklahoma Independent Petroleum Association (OIPA). Equal representation between each of the organizations headed by the leadership of each of the industry groups, Wade Hutchings and Berry Mullennix. We chose Chad Warmington from OKOGA to serve as President and lead the new organization on behalf of the combined entities. We came fast out of the gate utilizing the best procedures, policies, organizational traits, and most of all … the outstanding leadership availed to us through the combination of OKOGA and OIPA. With a high-quality staff supporting the goals of the organization, we forged a single voice for Oklahoma’s oil and gas industry. I was honored to be elected the first Chairman of the newly minted Alliance, and, subsequently, the Executive Committee (EC) ran an outstanding process to replace Chad Warmington, who departed to run Oklahoma’s State Chamber of Commerce, with Brook Simmons…the right guy at the right time. Fast Forward… Price war between Russia and Saudi Arabia. Demand destroying global pandemic. Abandonment of the industry by most capital sources. Massive layoffs. Reckless regulation. Demonizing of the industry by the progressive left. Changes in the EC, staffing, and budgets due to the economic adversity. Basically, an epic myriad of head winds erupted to challenge our way of life. In an April 2020 Wellhead article titled “Stronger, Together,” I wrote about the challenges ahead, spoke of the tenacity of our membership and industry, and proposed a call to arms for all producers, service providers, and midstreamupstream-downstream stakeholders to band together with us to speak with a single, loud voice in defense of our business and our
families. As is often quoted from the writings of Dylan Thomas, “We will not go gentle into that good night”. However, I am personally more in Mark Twain’s (Samuel Clemens) camp with his words … “the reports of my death are greatly exaggerated.” WE ARE NOT DEAD YET MY FRIENDS! Frankly, the simple facts support a different conclusion. There is NOT an economic, abundant substitute for fossil fuels. Our friend, Alex Epstein, who spoke at our Virtual Annual Meeting goes a step further in espousing the goal of Human Flourishing: “Continuing fossil fuel use is essential to billions of people having the reliable, low-cost energy they need to flourish. Restricting fossil fuel use would be genocidal.” There are over 7.5 billion people who share planet Earth with us. Over 3 billion people lack reliable, low-cost energy. 835 million people do NOT even have access to electricity (2018). We are much more formidable when we speak together in a single voice. We need to continue to consolidate our voices and bring back or anew those in the oil and gas business to stand with us in Oklahoma and beyond our borders. There is no replacement for what we do for our state, country, and planet regardless of what is yelled by the uninformed. Our colleagues need to be encouraged and embrace change in all its forms. One of our leaders called me and said, “Dave, I’m so sorry that you are getting gypped in your role as Chairman with all of this going on.” I smiled to myself and said, “Wish it was better for all of us, especially our younger folks, but I signed up for this.” Luckily, I am not alone, but with the most persistent, tough, and resilient people on the planet. Ronald Reagan once said, “A nation’s greatness is measured not just by its gross national product or military power, but by the strength of its devotion to the principles and values that bind its people and define their character.” I believe this is who we are and why December the strength of our industry is in our unity. There| 7 is no greater group of people I’d rather share a foxhole with.
2
2
2 1 3 STATE ROUNDUP 1 | New Mexico New Mexico promised its students free college. Then oil prices tanked. The New Mexico governor’s office made sure to alert The New York Times before the big announcement last year that a public college education would soon be free for all residents. Gov. Michelle Lujan Grisham said New Mexico, notoriously poor and almost last in state education rankings, would be the first state to take the step, thanks to a blue wave that swept the state in 2018, when Democrats elected Lujan Grisham after eight years of a Republican governor, flipped the state’s sole Republican seat in Congress from red to blue and strengthened majorities in the state Legislature. But the plan, to be funded by revenue earned from fracking in the Permian Basin, never materialized. Grisham faced opposition in the Legislature, even from members of her own party, and from some college presidents skeptical about how much it would help low-income students. Instead, the state implemented a massively scaleddown version of the idea during the 2020 legislative session that provides tuition assistance for residents enrolled in two-year colleges. When the plan was first announced, New Mexico’s oil industry was booming, accounting for almost 40 percent of the state’s general fund revenue in 2019. Suddenly, New Mexico could afford to invest in education, child care, highways and health care. “Our fiscal house is in order. We’re saving money, “
8 | thepetroleumalliance.com
Lujan Grisham said last year. “We do have an oil and gas boom.” After the coronavirus pandemic devastated international oil markets in April and prices tanked, Lujan Grisham could no longer pull cash out of the Permian Basin, an oil field in west Texas and southeastern New Mexico that had become the country’s top-producing oil field through new horizontal fracking technology. As the economy slumped, the state was forced to cut its budget and to reconsider ambitious and expensive legislation. Originally published by nbcnews.com
2 | Pennsylvania PA’s natural gas is stranded from ‘high risk’ energy regions like New England If the winter turns brutal, the New England states and California are at a much higher risk of facing interruptions to their power supply or other “energy emergencies” because of a lack of natural gas infrastructure, according to a nonprofit that monitors these conditions for the government. The irony is that the country is swimming in readyto-go natural gas according to the report from the North American Energy Reliability Corporation (NERC). And the heavy supply is thanks in large part to Pennsylvania’s “oil patch.” “New England [power] generation continues to be limited by the availability of natural gas,” the NERC report said, even though the same report noted gas supplies are adequate. In February energy giant Williams pulled the plug on
the Constitution Pipeline, which would have begun in northeast Pennsylvania and run a 124-mile course to the Albany-Schenectady region in New York. The Oklahoma-based company said it was better off upgrading the pipelines it already owned rather than build a new one “which can be impacted by an ambiguous and vulnerable regulatory framework.” Dave Spigelmyer, president of the Marcellus Shale Coalition, says that’s technical speak for “politics.” “No American should ever have to worry about access to affordable and reliable energy, especially as we head into the winter season while so many families and communities are confronting COVID-related crisis matters,” Spigelmyer told Delaware Valley Journal.. Originally published by the Patch.com
3 | Louisiana Does cleaner energy have a chance of taking off in oil-friendly Louisiana? When Shell announced it would close its big oil refinery in Convent, the energy company said the 1,100-employee complex didn’t fit into its plans for a low-carbon future. The Nov. 5 announcement came two days after Americans picked Joe Biden as their next president and two weeks after Biden said in a nationally televised debate that he wanted to transition the country away from fossil fuels.
Those disparate announcements — which came amid dire warnings from Louisiana Republicans, led by U.S. Sen. Bill Cassidy, about the dangers of Biden’s energy policies — seemed to cast a pall over the future of the state’s energy-centric economy. But the real picture is much more complicated, industry analysts say. In Louisiana, the industry’s towering profile has been shrinking in importance for years. In 1964, oil and gas taxes financed 56% of state government’s general fund. In 1984, during an oil boom, it was 35%. The rate has steadily declined since then, nudging up during another period of high prices in 2009 to 13% but dropping to about 4.5% for 2020. The oil industry’s importance to the operations of state government has diminished in part because of the sector’s decline but also because lawmakers have raised sales and other taxes and are taxing other activities such as gambling. It’s also because oil production in Louisiana has steadily declined, from 772,000 barrels per day in 1977 to 129,000 barrels per day in 2019, according to the state Department of Natural Resources. That’s an 83% decline over the past 43 years. Natural gas production in Louisiana has dropped too, although far less dramatically, going from 9 billion cubic feet per day in 1977 to 8.6 billion cubic feet per day in 2019. Originally published by the New Orleans Times-Picayune
Serving All Areas in Oklahoma. FLUID SERVICES
RENTALS
Trucking, Storage, Heating, Poly transfer
BOPS/Frac Stacks, Power Swivels
COILED TUBING
THRU TUBING
Drill and Clean Outs, N2
Motors, Bits, Agitators, Chem Add
SERVICE RIGS 500 HHP, Mast up to 112’
December | 9
OfďŹ cial IT Provider of Best IT Outsourcing Firm (2019 Journal Record Reader Rankings)
8th Fastest-Growing Company in Metro (2019 Greater OKC Chamber Metro 50)
Your new IT provider 10 | thepetroleumalliance.com amshot oers Alliance members a 15 percent discount on new service contracts.
amshot.com | 405.418.6282 | 428 Dean A McGee Ave., OKC, OK 73102
Dividends cannot be legally guaranteed and are subject to approval by the BITCO Board of Directors. Historically, BITCO has never failed to declare/pay a dividend in accordance with approved dividend plans. Insurance contracts are underwritten and issued by one or more of the following: BITCO General Insurance Corporation and BITCO National Insurance Company, rated A+ (Superior) by A.M. Best, A2 Stable by Moody’s, and A+ Strong by Standard and Poor’s.
Contact the Petroleum Alliance of Oklahoma office at 405-942-2334 or you can find a BITCO agent near you by visiting BITCO.com today.
A Safety Group Dividend Plan available to Members of the Petroleum Alliance of Oklahoma for over 12 years Benefit from coverages and services customized to the energy industry. As an added benefit to your Association membership, you may be eligible to participate in the Petroleum Alliance of Oklahoma Safety Group Dividend Plan. Your participation in this plan affords you the following benefits: • BITCO’s broad coverages including property, inland marine, general, property, inland marine, general, umbrella and pollution liability, and commercial auto • Competitive rates • Local claims service • Possibility of a dividend each year BITCO offers customers programs for:
Oklahoma City Branch 1601 NW Expressway Suite 700 Oklahoma City, OK 73118 405-847-6000
• Oil or gas lease operators • Oil lease contractors • Well servicing contractors • Drillers • Miscellaneous oilfield service companies Providing specialized coverage and risk control services for members of the energy industry for over 70 years, BITCO has a long-term commitment to the oil and gas industry. As a member of the Old Republic General Insurance Group, the largest segment of Old Republic International, BITCO provides our insureds with the financial strength and stability of one of America’s 50 largest shareholder owned insurance organizations, that also ranks among the Fortune 500 list of the nation’s biggest companies. December | 11
www.BITCO.com
P R O F E S S I O N A L
D E V E L O P M E N T
ONLINE
For the past 25 years, the Energy Institute of the Americas has provided professionals with energy education (in person) and development opportunities to people around the world. Now, we are moving our professional development programs to fully online learning. We are here to make a difference. We will build the program to meet your needs and as a member of the Alliance, you receive a 30% discount on continuing education courses.
COURSES Crisis Management Machine Learning Flow Dynamics of Horizontal Well Production Environmental, Social and Governance Leadership Diversity, Equity and Inclusion in the Energy Industry /ENERGYINSTITUTEOFTHEAMERICAS
LINK.OU.EDU/EIAOKLAHOMA
12 | thepetroleumalliance.com
C ON T A C T: LU I S VERG ARA | L U IFER@ OU .E D U
YEAR IN REVIEW
2020: A YEAR OF SUCCESS In difficult year, Alliance leads way in advocacy for Oklahoma’s oil and natural gas industry The mission of The Petroleum Alliance of Oklahoma is to work at all times for the improvement of our state’s oil and natural gas industry. Focusing on legislation, regulation and industry affairs, the work of The Alliance is concentrated in these areas in order to be responsive to the ever-growing demands made on the industry by federal, state and local governments and by the general public. We’ve faced challenges in 2020 — from depressed energy markets and decreased drilling activity to changes in how we learn, work and share ideas thanks to a global pandemic. Through it all, The Alliance has been steadfast in its support of our members.
LEGISLATIVE •
Blocked a bill that would have given radical, anti-hydrocarbon interests a boost by codifying in Oklahoma law that oil and gas work is a health hazard.
•
Won enactment of Senate Bill 1875 which clarified who owns and is responsible for produced water and waste from drilling and production opportunities.
•
Through the Petroleum Alliance PAC, supported 34 successful state legislative incumbents and candidates seeking election in 2020, including the primary opponent of the author of the anti-industry legislation blocked by The Alliance.
REGULATORY •
Requested and received Corporation Commission Chapter 5 Rules including improvements to handling confidential documents, use of video and teleconference technology in court cases, and exhibit protocols for spacing orders.
•
In Chapter 10 rulemakings, The Alliance was successful in separating UIC rules into commercial and noncommercial pathways, improving commercial recycling facility rules, and creating an alternative to shut-in pressure tests for gas wells in unallocated pools.
LEGAL •
Following the ruling of McGirt V. Oklahoma, The Alliance quickly briefed its members on the impacts of the decision with special webinars featuring Gov. Kevin Stitt, Attorney General Mike Hunter and Indian law/energy law experts from across the country.
•
Our policy brief for Congress on why The Alliance preferred federal legislation to cure uncertainties created by McGirt became the bedrock document for follow-up by all federal oil and gas trade associations working in Washington, D.C., and influenced the responses of allied industries across Oklahoma.
•
Led the charge to trigger a 2005 federal law preventing a patchwork of Indian country environmental regulations across southern and eastern Oklahoma, providing regulatory certainty for Alliance members.
FEDERAL •
We have re-engaged our PAC following the Nov. 3 election to help ensure Republicans remain in control of the U.S. Senate and provide the necessary balance to an expected anti-oil White House agenda.
December | 13
REAL ESTATE SALES • CONSTRUCTION • EXCAVATION • PASTURE MANAGEMENT • WILDLIFE MANAGEMENT
THREE RANCHES $2,172,200 Francis, Oklahoma
The Land Doctors have listed three contiguous ranches that offer a unique blend of features. These three ranches are located just north of Ada, OK, 90 miles from OKC, 120 miles from Tulsa and 180 miles from Dallas, making it an easy drive from metro areas. In total, the three ranches contain 1195 acres of land with no public roads passing through it. The ranches can be accessed by paved road frontage along the south boundary and for a very short distance on the eastern edge. There are no major transmission lines crossing the properties while a major pipeline runs along the eastern edge of the ranches. Mostly hidden from view and shielded from the world by other ranches, these properties feel much more remote than they are. • The 28 acre Eagles Nest provides over one mile of frontage on the South Canadian River. • The South Canadian River Ranch offers 591 acres of forest, trophy deer and 7300 feet of the crystal clear Factory Creek. • Boulder Ranch is a very affordable 576 acre tract of timber that brings the average cost of the three ranches down to less than $1820/ac. • Located near the prosperous Chickasaw Nation Headquarters of Ada, OK.
For more information, please call Kelly Hurt at 580-421-7512 www.landdoctors.com
Kelly@LandDoctors.com
LEGAL
ALLIANCE ENTERS 2021 WITH LEGAL CHALLENGES ON THE HORIZON As 2020 gives way to 2021, the Petroleum Alliance and its Legal Committee are faced with challenges that will have long-standing ramifications for Oklahoma’s oil and natural gas industry. On Dec. 14, the committee held an emergency meeting to formulate the Alliance’s response to two significant issues that arose the week prior — the implementation of onerous setback requirements in the City of Blanchard and the pursuit of severance tax collections by the Seminole Tribe.
BLANCHARD SETBACK ORDINANCE On Dec. 8, the Blanchard City Council approved a new ordinance that change’s the city’s setbacks for oil and gas well sites. The new ordinance requires a setback distance of 500 feet measured from the edge of the well pad from any “protected land use.” The city’s previous setback regulations required a setback of 660 feet from the wellhead from an occupied structure. “Protected land uses,” per the ordinance, include buildings used for religious institutions, public buildings, hospital buildings, schools buildings, platted subdivisions with residential uses present, residentially zoned properties and residential dwellings. In a letter to Blanchard city officials in October, the Petroleum Alliance warned the city that the expanded definition of “protected land use” are incompatible with state law because they exceed the city’s rule-making authority. Municipalities and other political subdivisions are allowed to establish setbacks and fencing requirements for oil and gas locations. However, setbacks are only allowed if they are: necessary to protect health and safety; does not effectively ban any oil and gas operations; and are “reasonable.” “There are few areas within Blanchard’s city limits where oil and gas exploration and production would be allowed under this onerous ordinance,” Alliance President Brook A. Simmons said. “The Alliance will explore every legal avenue to overturn this effort to stymie oil and gas activity and to ensure other Oklahoma communities do not take similar actions.” Blanchard and the “Tri-City” area of suburban southern Oklahoma City that includes Tuttle and Newcastle have become a hot-bed for anti-industry regulations as city
leaders there grapple with economic growth in a once rural area. Part of the issue lies in the substantial growth the cities have seen in recent years, with Blanchard population growing from 2,800 in 2000 to an estimated 8,900 today. Tuttle’s population has nearly doubled, increasing from 4,200 to 7,500 in the same time frame, and Newcastle has done the same, growing from 5,400 residents to 10,600. All three bedroom communities of Oklahoma City have expanded their city limits to accommodate the growing populations and to stave off Oklahoma City’s annexation efforts south of the Canadian River along the I-44 corridor.
SEMINOLE SEVERANCE TAX Ramifications from the U.S. Supreme Court’s McGirt v. Oklahoma decision continue to threaten investment in Oklahoma, this time in the form of a tribal severance tax in Seminole County. Earlier in December, the Seminole Nation sent letters to oil and natural gas producers with wells in Seminole County informing those operators of the tribe’s 8% severance fee put in place in 2018. The letters were identical to ones sent in 2018 when the fee was instituted. The state’s Attorney General has intervened on the industry’s behalf, sending a letter to the tribe asking it to cease, retract, clarify and legally justify its request of producers. The Seminole Nation does not have the legal authority to regulate oil and gas operations, nor to tax non-tribal minerals. The Alliance urges its members receiving such notices from the Seminole Nation or any other tribe to forward them to Alliance staff. Notices can be emailed to Alliance Senior Vice President of Government Affairs & Public Policy Adria G. Berry at adria@okpetro.com. “Such overreach is an example of the uncertainty created by the McGirt decision, which threatens to undermine the prosperity of non-Indians and tribal members alike,” Simmons said. “Our industry may be the first target for a shakedown, but we will not be the last.”
December | 15
POWERING OKLAHOMA’S ECONOMY By Supporting Organizations That Power Our State
Drill into industry-leading Corporate Benefits solutions with NFP. We offer expertise in: EMPLOYEE BENEFITS
EXECUTIVE BENEFITS
HR CONSULTING
RETIREMENT PLANNING
You’re driving a better tomorrow: We’ve got you covered. Contact Jordan Cook at NFP today: 4811 Gaillardia Parkway, Suite 300 | Oklahoma City, OK 73142 405.513.8904 | 405.413.3353 | jordan.cook@nfp.com
NFP is a leading insurance broker and consultant that provides employee benefits, property and casualty, retirement and individual private client solutions through our licensed subsidiaries and affiliates. Our expertise is matched by our commitment to each client’s goals and is enhanced by our investments in innovative technologies in the insurance brokerage and consulting space. #2 retirement plan aggregator firm (Investment News)
NFP.com
(19-FCB-EMBN-C-0152)
16 | thepetroleumalliance.com
#6 largest benefits broker by global revenue (Business Insurance)
#10 largest employee benefits broker (Employee Benefit Adviser)
FEDERAL
PLAY BALL
Senate backstop offers protections for Oklahoma’s oil and gas industry By Brook A. Simmons In baseball, backstops are there for a reason. The fence and net in place on nearly every baseball diamond in America is designed to protect spectators from foul balls and wild pitches. We will not know until Georgia’s January 2021 runoff the final U.S. Senate numbers, but GOP outperformance on Election Day likely means America will have its own backstop in a Republican Senate majority regardless of who sits in the Oval Office. Congress’ upper chamber has the power to promote or thwart presidential policies, holding sway over judicial nominations and the legislative agenda to protect the country from foul ideas and wild legislative priorities. For Oklahoma’s oil and natural gas industry and the state as a whole, that’s good news. As a presidential candidate Joe Biden said the nation must “transition” from hydrocarbons and has embraced renewables as the U.S. energy future. For all Oklahomans, a Biden presidency that diminishes the state’s defining industry would have dire consequences. We have seen first-hand how depressed oil and natural gas industry activity can unravel our state’s economy, with low crude oil prices all but shutting in new production in the state, unemployment increasing and tax dollars that fund our state government’s core services dwindling. Oklahoma’s economy is intertwined with the oil and natural gas industry. For the past decade, statewide gains and losses in private sector employment have mirrored employment in the oil and natural gas industry. Ebbs in oil and gas employment tend to lead a slowdown in general economic activity. An outright energy contraction leads to an outright state recession, as Oklahomans witnessed first-hand when the number of active drilling rigs in the state fell from more than 100 in June of 2019 to less than a dozen a month ago.
“
What Oklahoma has seen recently might be the state’s new normal if there were no GOPcontrolled Senate to stand in the way of anti-oil and -natural gas policies we expect from a Biden administration.
What Oklahoma has seen recently might be the state’s new normal if there were no GOP-controlled Senate to stand in the way of antioil and -natural gas policies we expect from a Biden administration. While a president can still use executive orders to slow roll oil and natural gas exploration and production – a tactic used heavily during the Obama administration – a Senate backstop created by a Republican majority will offer Oklahoma and its hallmark industry more protection from wild green pitches. — Brook A. Simmons is president of the Petroleum Alliance of Oklahoma.
December | 17
FEDERAL
FUEL OF THE FUTURE Natural gas will play key role in president’s ‘transition’ By Brook A. Simmons What does the future hold for an energy-producing state when the nation’s president has vowed to “transition” away from the hydrocarbon resources that serve as that state’s economic foundation? Oklahoma may soon find out as President-elect Joe Biden prepares for his move into the White House with “climate change” pegged as one of his top priorities. Biden’s team already has plans on how it will restrict oil and natural gas drilling on public lands and waters; ratchet up federal mileage standards for cars and SUVs; block pipelines that transport oil and gas across the country; transfer more tax dollars to renewable interests; and fully integrate climate change into foreign policy and national security strategies. None of those plans bode well for a state economy and government dependent on the oil and natural gas industry. But the key to Biden’s climate goals lies in the same industry that the Left vilifies when promoting its clean energy future. Natural gas is clean-burning, affordable and abundant, and Oklahoma has it in spades. While crude oil prices and production hog the headlines, Oklahoma is and has been a natural gas state. The Sooner State is the fourth largest producer of natural gas in the nation and we have the large largest proven reserves, trailing only Texas, Pennsylvania and Louisiana in production and Texas and Pennsylvania in proven reserves. Natural gas gives our nation the reliable fuel source needed to power progress while also reducing the nation’s carbon footprint. For Oklahoma, it gives us the economic foundation to drive our state forward and the tax revenue needed to fund government’s core services.
U.S. NATURAL GAS MARKETED PRODUCTION Rank State
Natural Gas Production*
1 Texas
9,301,616
2
Pennsylvania 6,896,792
3 Louisiana 3,223,642 4 Oklahoma 3,175,008 5 Ohio
2,654,186
6
2,155,757
West Virginia
7 Colorado 1,988,714 8
New Mexico
1,787,334
9 Wyoming 1,460,477 10
North Dakota
851,750
* million cu ft
Depressed prices have plagued Oklahoma natural gas producers for more than a decade when the shale revolution unlocked vast new supplies and pushed prices from an annual average of $8.86 in 2008 to $3.94 the following year when that new supply overwhelmed demand. For 2019, the average annual price for natural gas was $2.56.
In 2008, gross production tax receipts from natural gas totaled more than $800 million, with $685 million sent straight to the general fund for lawmakers to appropriate to state agencies in most need. This year, the GPT from natural gas brought in just $214 million with $174 million sent to the general fund. Oklahoma natural gas holds the key to Biden’s plans for a greener America that does not jeopardize the economic well-being of Oklahoma and its residents. — Brook A. Simmons is president of The Petroleum Alliance of Oklahoma.
December | 19
s l e g n A d l e fi l i O Industry groups join forces to assist those in need
V
ickey Leech saw the need.
When drilling rigs were laid down across the state, the price of oil fell to historic lows and decreased demand for oil and natural gas driven by a global pandemic stalled Oklahoma’s flagship industry, Leech watched as friends and coworkers found themselves without employment. So, Leech launched an effort to help. Using her own social media platform, Leech began sharing resumes of industry friends and acquaintances who were now on the hunt for employment. As the year went on, the holidays moved closer and the number of people in need of employment grew, Leech knew more needed to be done. Enter the Oilfield Angels. Proposed by Leech and created and supported by a coalition of industry organizations, including The Petroleum Alliance,
20 | thepetroleumalliance.com
MEET THE ANGELS
the Oilfield Angels launched a grassroots effort to assist Oklahoma oilfield families in need. Money raised by the organization this year will ensure Christmas joy is still found for six Oklahoma families who were nominated by word of mouth to the new organization’s founders. “The holidays are not a time for depression,” Leech said. “I wanted to spread some cheer. Spread a little hope.” The creation of the Oilfield Angels, patterned after a similar organization in Texas, comes at a time when the industry needs it most. In the past year, employment has fallen by 30 percent in Oklahoma’s oil and gas industry, with production employment and support employment losing more than 20,000 jobs since October of 2019.
Catina D’Achille IADC
Nine oil and gas industry professionals representing a coalition of industry organizations founded the Oilfield Angels this year to assist Oklahoma oilfield families in need.
Compounding the industry’s increase in unemployment is a global pandemic that has impacted nearly all other industries as well, limiting opportunities outside of oil and gas. “So many have been dealt a hard hand,” said Charley Mathis, SPE Mid-Continent member. “It’s not just our industry, it’s every industry. COVID has changed everything. Usually when this industry goes south, you can jump out get into another one. That’s not the case right now.”
Steve Garrison
Max Holloway
AADE
Oilfield Christian Fellowship
Jeff Hubbard
Vickey Leech
Initial supporters and contributors to the Oilfield Angels include Oilfield Christian Fellowship (OCF), International Association of Drilling Contractors (IADC), American Association of Drilling Engineers (AADE), Plaster & Wald Consulting, The Petroleum Alliance of Oklahoma, Power Rig and SPE MidContinent. “Our industry is, no doubt, a group of dedicated, hard-working individuals who are willing to work together,” said Max Holloway, chairman of the Oilfield Christian Fellowship. “When there’s a common cause – whether it’s a safety issue in the field or someone in need – they come together to find a solution.”
IADC
Plaster & Wald’s Geree Wald Morton, a Petroleum Alliance board member, said the 2020 efforts of the Oilfield Angels is the first step in what the group hopes will become a long-term avenue for assistance. “When we started, we didn’t know how many people we could help or how we could help them,” Wald said. “We’re learning as we go.” If you or your company would like to assist with a donation to the Oilfield Angels, please contact Wald via email at geree.wald@plasterandwald.com “The last few months have been a huge struggle for our family because of the industry and now it’s Christmas time,” said one of the recipients of the Oilfield Angels’ contributions. “Christmas has always been an exciting time for our children, but this year is different. My husband saw the information about Oilfield Angels on Vickey’s LinkedIn page while he was searching for jobs. We aren’t ones to ask for help, but the stress and anxiety this year is overwhelming. This program was amazing to see! A giant burden has been lifted from our shoulders. We are grateful more than words can say!”
Charley Mathis
Hap Pinkerton
SPE Mid-Continent
SPE Mid-Continent
Casey Vinson
Geree Wald Morton
Power Rig
Plaster & Wald
December | 21
PROUD TO PARTNER IN OKLAHOMA’S SUCCESS As our customers’ needs continue to evolve and change, we remain committed to offering creative, innovative solutions that contribute to a brighter and more responsible energy future.
YOUR OUTSOURCING
SOLUTION FOR
OIL AND GAS ACCOUNTING, DIVISION ORDERS, LEASE RECORDS AND DUE DILIGENCE.
Do what you do best... We’ll handle the rest! TULSA, OK OFFICE: 22 | thepetroleumalliance.com 918.584.2111
ASSOCIATED-RESOURCES.COM
Brandon Ward | bward@associated-resources.com
HOUSTON, TX OFFICE: 832.725.2236
Michael Gibson | mgibson@associated-resources.com
PHILANTHROPY
INDUSTRY PHILANTHROPY A LONG-STANDING TRADITION Christmas is here, and in the Sooner State, the giving season is powered by Oklahoma oil and natural gas. Oklahoma’s oil and natural gas industry and its member companies have a long history of assisting the communities we live and work in, and during the holidays, that becomes even more apparent. It is companies from the oil and natural gas industry that financially support many of the holiday traditions and events we now hold dear. As leaders in the business world, Oklahoma energy companies have collected warm clothing to give coats and gloves to those in need through cold winter months. Others have focused on toy collections so no child wakes up Christmas morning without the joy of this season. But giving doesn’t stop when December makes way for January. Philanthropy has been a part of Oklahoma’s oil and natural gas industry since the Nellie Johnstone No. 1 came online in 1897, opening an era of oil exploration and development in Oklahoma. Since then, the names of Oklahoma’s oilfield giants have been etched for eternity on university campuses, medical facilities, museums and civic centers where their charitable gifts helped create enrichment opportunities for fellow Oklahomans. Of the 40 largest charitable foundations in Oklahoma, 20 have ties to the oil and natural gas industry. Number 5 on the list is the William K. Warren Foundation, created by the industry giant who founded the Warren Petroleum Company in 1922 with himself and his wife as the only people on the payroll. Focused on producing and marketing liquefied petroleum gas, Warren’s company saw significant growth and sold in 1953 to Gulf Oil Corp. for $420 million, at the time the largest exchange of money in history of the industry. With his wealth, Warren devoted much of his time, energy and money to philanthropic activities. In 1959, his foundation established the Saint Francis Hospital in Tulsa. The Foundation also financed the first Warren Clinic facility in 1988 as part of the Saint Francis Health System with the goal of expanding the base of available primary care physicians. Since then it has grown to more than 70 locations and over 350 physicians who provide health care to patients in northeastern Oklahoma.
LARGEST FOUNDATIONS IN OKLAHOMA The Grantsmanship Center annually identifies the top 40 charitable foundations in Oklahoma ranked by amount given. The center’s most recent list of Oklahoma foundations includes 20 with ties to the state’s oil and natural gas industry. 1. Charles and Lynn Schusterman Family Foundation* 2. Tulsa Community Foundation 3. The J.E. and L.E. Mabee Foundation, Inc.* 4. Oklahoma City Community Foundation, Inc. 5. William K. Warren Foundation* 6. Inasmuch Foundation 7. The Anne and Henry Zarrow Foundation* 8. Communities Foundation of Oklahoma, Inc. 9. Presbyterian Health Foundation 10. Arnall Family Foundation* 11. The Williams Companies Foundation, Inc.* 12. Sarkey’s Foundation* 13. The Bank of Oklahoma Financial Foundation 14. Southern Oklahoma Memorial Foundation 15. H.A. and Mary K. Chapman Charitable Trust* 16. City of Muskogee Foundation 17. ONEOK Foundation, Inc.* 18. The Maxine and Jack Zarrow Family Foundation* 19. McMahon Foundation* 20. Noble Research Institute* 21. John Steele Zink Foundation* 22. Valley View Foundation 23. Lyon Foundation* 24. Kirkpatrick Foundation, Inc.* 25. Oklahoma Gas & Electric Co. Foundation* 26. Grace and Franklin Bernsen Foundation 27. Robert Glenn Rapp Foundation* 28. Cherokee Strip Community Foundation 29. Cresap Family Foundation 30. American Fidelity Foundation 31. Bartlesville Community Foundation 32. Zarrow Families Foundation* 33. Puterbaugh Foundation 34. The David E. and Cassie L. Temple Foundation 35. The McGee Foundation, Inc.* 36. Stone Family Foundation 37. The Merrick Foundation 38. The Nick and Alma Robson Foundation 39. The Gelvin Foundation 40. The Kerr Foundation, Inc.* *Oil and gas based foundation December | 23
24 | thepetroleumalliance.com
ANNUAL MEETING
INDUSTRIAL PROGRESS: A NEW CULTURAL IDEAL FOR AMERICA Editor’s note: The following is an exerpt from Petroleum Alliance of Oklahoma Virtual Annual Meeting speaker Alex Epstein’s essay “The Industrial Manifesto.” The full essay is available through the Center for Industrial Progress at industrial progress.com. The only solution to a false ideal put forward by philosophical corruption is a true ideal put forward with philosophical clarity. We need to embrace, unambiguously, the never-ending project that is the industrial revolution: the transformation of nature on a massive scale, with the unlimited potential to produce more energy, create more wealth, create more productivity, increase leisure time, transport things more quickly, conduct more complex scientific experiments, build sturdier, more comfortable places to live. We can travel farther and faster. We can live longer and better. For the same reasons, we need to embrace, unambiguously, the harmony of industrial progress and the human environment. Industrial progress should be celebrated in classrooms, on YouTube, on t-shirts. Americans should think of fracking with the same excitement they feel for iPhones. It is a moral embarrassment that in today’s world, where billions die for lack of energy, where Americans still have so much untapped potential, that what passes for idealism is driving a battery-powered car or sorting through one’s trash to make sure everything is in its “proper” bin. What does it say about our cultural self-esteem when we believe it is wrong to do something as necessary as generate trash—which simply amounts to taking some matter from the earth, making profitable use of it, and putting its waste product in a safe place? For too long, Americans have taken industrial progress for granted, and carelessly embraced “going green” as an ideal–expecting that the unprecedented standard of living we had would automatically continue, even though we permitted environmentalists to oppose new energy production and new development at every turn. Today, we are paying the price, with an economy whose productive fundamentals are less and less sound. So long as the anti-industrialists have the moral high ground, they can inspire support for their suicidal “green economy,” and inspire guilt to gain power and thwart the opposition. Way too much of free-market criticism of environmentalism bends over backwards to declare itself “green” and mouth environmentalist terminology such as “protect the environment”—as if the kangaroo rat environment and the human environment are interchangeably valuable.
Author and founder of the Center for Industrial Progress Alex Epstein served as the keynote speaker for the Petroleum Alliance’s 2020 Virtual Annual Meeting in a presentation sponsored by Reign Capital Holdings. You can watch Epstein’s presentation and the full Virtual Annual Meeting in the Video Archive on the Petroleum Alliance web site at thepetroleumalliance.com.
Thus, we must clearly identify and steadfastly reject any trace of the “green” ideal: to sacrifice the human environment to the non-human environment. And any trace of “green” must be removed from politics. The one and only industrial policy that is needed is the proper definition and protection of property rights for individuals and companies. Human ingenuity directed toward the improvement of human life, will do the rest. In the past, Americans’ unprecedented industrial freedom and growth depended on a certain industrial philosophy. With industrial progress as our ideal, and with policies that fully respect property rights and fully allow free markets, the brilliantly talented individuals of this great country can lead us to the next industrial renaissance and an ever-improving environment. Don’t “go green.” Go industrial.
December | 25
Norman...... 405-364-2601 Lindsay...... 405-756-4060 Wilburton... 918-465-3899 Yukon......... 405-354-3373
AATank.com
ENVIRONMENTALLY RESPONSIBLE OIL & GAS WASTE SOLUTIONS. For 30 years, A&A Tank Truck Co. has managed waste streams in the Mid-Con. Waste-water Hauling | Drilling Mud Hauling | Pit Transfers Vacuum, Winch and Pump Truck Services | Watering Jobs Saltwater Disposal Wells | Pulling Bottoms | Tank Cleaning Frac Tank Rentals | Hot Oilers ..................................................................................................
A&A is an OMNI Environmental Solutions Company
OMNI’s operating brands provide environmental solutions to oilfield operators in prolific energy plays throughout the U.S.
ECONOMY
WHAT THEY’RE SAYING Experts examine the future of the fuel & petrochemical industries Dramatic predictions and commentaries about the potential impact of the COVID-19 pandemic on the future of the fuel and petrochemical industries have made headlines. But less attention has been paid to the experts who are reiterating that the industries going to continue to be essential for the foreseeable future. As Raoul LeBlanc, vice president at IHS Markit, recently said, “If this is the sunset time for oil and gas, someone forgot to tell consumers.” Below are a few recent quotes provided by the American Fuel & Petrochemical Manufacturers that help contextualize the importance of these industries in the near and long-term: •
“Eighty-four percent of world energy comes from fossil fuel. There’s 280 million automobiles in the United States and 279 million of those run on gasoline. It’s just the scale of change. There’s an energy transition, but it seems to me there's a lot of hope and talk about when it's going to happen … I think also people sometimes forget that it's not just transportation that [relies on] oil. Look at a hospital operating room, how much of it depends on oil and plastics made from oil and gas. This famous N95 mask is an oil product. There’s more than one use, including also in medicine.” – Daniel Yergin, Vice Chair of IHS Markit, September 18
•
“American business consultants using Zoom will not compensate for 150 million new urban residents in India and Africa traveling, working in factories and buying products transported by trucks.” – Fatih Birol, Executive Director of the International Energy Agency, May 25
•
“Oil is going nowhere, and the economies battered by the coronavirus will sooner or later recover. When they do, they will need more oil, and yes, this includes Europe, which has firmly stepped on the green path of renewable energy and electric cars … There have been many attempts at coming up with cost-effective alternatives to plastics, but the fact remains that the world consumes tons of plastic despite the alternatives. Chances are until they remain the cheapest option … plastics will have a market, and not a small one … Oil and gas—especially gas— for power generation are also not going anywhere despite the green push. Someday the world may be powered by renewable energy sources exclusively, but this day is far into the future if it ever comes. For the observable future, we will be relying on fossil fuels.” – OilPrice.com, September 13
•
“Oil and gas remain an important part of the energy mix, especially in developing regions. The International Energy Agency’s Sustainable Development Scenario (SDS) and the Shell Sky Scenario—both aggressive decarbonization forecasts—show an ongoing, long-term role for oil and gas …” – Atlantic Council, January 9
This year has brought a host of unexpected challenges for the country and economy, but it has also emphasized the critical role of the fuel and petrochemical industries that produce the N95 masks, PPE, hand sanitizers and even the fuels needed to keep first responders moving. As we look ahead to the important task of disseminating COVID-19 vaccines around the country and the world, it’s clear our industries will continue to play a crucial part in protecting the health and well-being of modern societies.
“
This year has brought a host of unexpected challenges for the country and economy, but it has also emphasized the critical role of the fuel and petrochemical industries that produce the N95 masks, PPE, hand sanitizers and even the fuels needed to keep first responders moving.
WTW Custom Clearing Tackles
INVASIVE CEDARS
Cedars are invasive. Left unchecked, they will cover your property leaving it useless to you, livestock and even wildlife. Doing nothing is the most expensive thing you can do. Hand to hand combat is exhausting, leaves ugly burn piles and is just not effective. Burning works, but is not selective so you lose the good with the bad. Calling in a Dozer is expensive, it leaves burn piles and is still not selective.
Custom Clearing is your best alternative. Your favorite trees and shrubs are untouched, and your land will be left with a covering of cedar mulch nurturing the soil instead of the trees that leach 55,000 gallons of water a year per acre.
Call me today to discuss how we can increase the value of your asset with firebreaks, Sendero’s and the elimination of the invasive Wild Vines.
Darrell Noblitt WTW Custom Clearing 405-833-2112 28 | thepetroleumalliance.com
Helping Oklahoma’s Energy Firms control their True Cost of Risk since 1948.
Specialty Property & Casualty Insurance Programs Employee Benefit Programs
T.J. Riley
Business Risk Advisor tjriley@bramlettagency.com The Bramlett Agency www.bramlettagency.com (800) 797-3371 1505 N. Commerce, Ardmore, OK 73401
ECONOMY
OIL MARKET FUNDAMENTALS SUGGEST 2021 MAY RECOUP MUCH OF 2020 LOSSES By Dean Foreman Although many uncertainties remain, oil market fundamentals have recently improved along with economic recovery from the 2020 COVID-19 recession, as we discussed here. If estimates from the U.S. Energy Information Administration (EIA) and others prove to be correct, 2021 could recoup much of the growth, spending, investment and energy demand that was forgone this year. While 2020 has been an especially challenging year and business climate, what we’re seeing is that the U.S. natural gas and oil industry has resiliently increased its productivity to record levels, lowered its costs and expanded critical infrastructure to reposition for growth in a potential recovery. A critical question for the United States — its economic growth, energy security and trade balance – concerns who will supply the market if it recovers as expected. Importantly, will the world increase its reliance on nation-state producers, or will the United States resume its progress as a preferred provider of crude oil and natural gas to global markets? Of course, answers to these important questions are also uncertain and subject to how markets evolve, but EIA currently projects that every producing region is likely to benefit from a potential recovery. Based on its recent infrastructure increases, the Permian basin in particular appears well positioned to participate in a recovery, both for oil and natural gas. Let’s begin with how global oil consumption is expected to recover along with the economy. Historically, despite recessions and myriad world events, there’s been a relatively consistent relationship between global economic and oil demand growth, and this relationship has persevered despite segments of the economy that were disrupted this year. Along with a rebound in economic activity, EIA expects global oil demand to rise by 6.0 million barrels per day (mb/d) in 2021 (to 99.0 mb/d). Coupled with the natural decline of global oil production, which by International Energy Agency (IEA) estimates generally amounts to as much as 6% per year, global markets may require an additional 4.0 mb/d to 6.0 mb/d of new oil production in addition to meeting prospective demand growth. If demand recovers along these lines, essentially every barrel of production capacity that was taken off the market this year could be required to meet 2021 demand. However, restoring production requires capital investments, and industry-wide capital investment recently fell to its lowest levels on modern record, so the industry’s investment cycle could potentially improve in coming quarters. Continued on page 31
December | 29
ECONOMY
Continued from page 29 Specifically, here’s a comparison of the industry’s quarterly investment flows and the backlog of new capital projects currently under construction. In API’s compilation of financial reports by nearly 200 companies across the natural gas and oil value chain, industry-wide capital investment in Q3 2020 was less than half of its lowest point during the Great Financial Crisis. Capital investments by firms that focus on upstream resource development fell by more than 60% year on year (y/y) in the third quarter of this year. Yet, counterbalancing the relatively weak recent flow of investment is an API-estimated $288 billion project backlog – not including upstream resource development – that’s currently under construction. Although some projects could take years to complete, finishing what has been started and creating value for investors requires a continuation of investments in infrastructure that enables the U.S. to increase supply to domestic and access global markets. The Permian basin is perhaps the best example of a U.S. region that appears prepared to participate in a potential rebound. For one thing, Permian well productivity rose to record levels in the fourth quarter of this year per EIA and contributed to better estimated breakeven prices – that is, the market price needed to at least pay for drilling a new well – that improved over year-ago levels and recently have been below the spot price of West Texas Intermediate (WTI) crude oil. Importantly, new Permian pipeline infrastructure should give regional producers the ability to transport oil and natural gas economically to refiners, petrochemical and liquefaction plants, and export terminals across the Gulf Coast. And even though some pipeline projects have been delayed or canceled through the 2020 COVID-19 recession, the Permian basin’s natural gas and oil pipeline capacity has appeared to be ample for production and could potentially enable large increases. The ultimate question is how much new and incremental supply the Permian basin might bring in 2021, and EIA’s current projection is that every major oil producing region stands to increase its output next year. As we said above, it’s been a difficult year, but industry’s increased productivity and ability to expand critical infrastructure has it poised for growth in a broader economic recovery. That’s American ingenuity by any other name and a reason to have confidence in addition to cautious optimism for 2021 and beyond. — Dr. R. Dean Foreman is API’s chief economist, specializing in energy and global business.
December | 31
32 | thepetroleumalliance.com
ENERGY INDEX
DECREASED DRILLING CONTINUES TO DRAG DOWN ENERGY INDEX The barometer of Oklahoma’s oil and natural gas industry is the drilling rig. The more rigs dotting the Oklahoma landscape, the more vibrant the state’s defining industry and overall economy.
Permian Basin is the expected first mover in this return to drilling, leaving Oklahoma open to the possibility that a significant rebound in field activity may not materialize here until late 2021 or 2022.”
Oklahoma, however, has seen a precipitous decline in drilling activity, and the decreased exploration and the job losses associated with it continue to drag down the Oklahoma Energy Index. The most recent Energy Index stands at 104.7, a decrease of 0.6% from the previous month and 36.8% less than one year ago.
Evans noted that Oklahoma stands alone in the decline in drilling activity when compared to other similar energy producing states. Throughout 2019, Oklahoma’s peer states saw minimal declines in state rig counts, with New Mexico and North Dakota losing just five drilling rigs combined. In Oklahoma, however, during that same time frame, rig activity fell 61%, dropping from 132 to 52 rigs. For the first 10 months of 2020, when decreased demand for crude oil driven by the COVID-19 pandemic stymied energy markets and sent
“Any significant increase in new drilling activity will likely be deferred until later in 2021 when economic conditions improve and demand for energy rebounds,” said Dr. Russell Evans, executive director of the Steven C. Agee Economic Research and Policy Institute. “The
Continued on page 35 December | 33
www.lagoonwater.com info@lagoonwater.com (405) 900-6900
Servant Mindset Focus on People Stewardship Safety Integrity
34 | thepetroleumalliance.com
Serve our customers, our community, and our employees Treating others with dignity and respect Be good stewards of our environment and corporate resources Keeping safety at the forefront of everything that we do Doing the right thing, even when no one is looking and even when it’s difficult
ENERGY INDEX
Continued from page 33 oil prices to historic lows, demand for drilling activity fell as well, and Oklahoma rig activity fell another 75% from 52 to 13 rigs. The 2020 decrease in drilling activity is on par with other energy producing states, but the double whammy decrease seen in 2019 and 2020 in Oklahoma foretells a longer road to recovery than the nation’s other leading oilproducing states. “It is precisely this differential response entering this cycle that points to a differential response exiting the cycle, with Oklahoma lagging rather than leading the recovery,” Evans said. Petroleum Alliance President Brook A. Simmons said the oil and natural gas industry’s role as an employment driver for the state is dependent on continued drilling activity. With the limited number of drilling rigs running in the state today, Simmons said the industry’s slower recovery will reverberate throughout the economy and policymakers need to realize this. “The state’s economy and the state’s oil and natural gas industry are intertwined,” Simmons said. “When our industry suffers, so do car dealerships in Kingfisher, diners in Drumright, hardware stores in Enid and countless other Oklahoma businesses in cities where
oil and gas workers live and work. Several factors -among them public policy -- will play into the pace of the industry’s recovery. Our industry is climbing up off the bottom, but the road to recovery will be a lengthy process.” The OEI is a comprehensive measure of the state’s oil and natural gas economy established to track industry growth rates and cycles in one of the country’s most active energy-producing states. The OEI is a joint project of The Petroleum Alliance of Oklahoma and the Steven C. Agee Economic Research and Policy Institute.
December | 35
If your employees recently lost health care coverage, they have options.
Help them get the health care coverage they need What is a special enrollment period? A Special Enrollment Period allows them to sign up for health care coverage outside the regular Open Enrollment window, if there’s been a qualifying event, such as a job loss, getting married, or addition to the family.
What do they need to qualify? All they need is proof of a qualifying event, such as loss of job, marriage, addition to the family, or other life change. They can see if they qualify at bcbsok.com/SEP.
Can they get financial help? They may be able to get a premium tax credit or other financial assistance based on their income and family size. They can see if they qualify at bcbsok.com/SEP.
How long do they have to enroll?
Blue Cross and Blue Shield of Oklahoma (BCBSOK) offers different plan options to meet budget and needs. If your employee(s) recently lost their job and need health coverage, BCBSOK may be able to provide the coverage that’s right for them and their families.
THEY MAY EVEN QUALIFY FOR FINANCIAL HELP. Visit NeedCoverageNowOK.com
or call 844-689-2227 today.
They have 60 days from the date of their qualifying event to enroll in a health plan. 36 | thepetroleumalliance.com Blue Cross and Blue Shield of Oklahoma, a Division of Health Care Service Corporation, a Mutual Legal Reserve Company, an Independent Licensee of the Blue Cross and Blue Shield Association
610411.0620
PARTNER SPOTLIGHT
URGENT! IMPORTANT: PLEASE READ Now that I’ve got your attention. The words used in the title of this article are amongst the top subject line keywords for email compromise attacks – also known as phishing or spear phishing. Others include “Finance Request”, “Invoice”, and “Credentials”. According to Verizon’s 2020 Data Breach Investigations Report, phishing is still the threat that is most likely to cause a breach in an organization’s IT security. As organizations work from home more in 2020, communication via email has also become more abundant. Because this normalizes email for decisions and transactions there is a larger opportunity in 2020 and 2021 for these attacks to be successful and make an impact. 86% of breaches are financially motivated. These breaches include ransomware which encrypts crucial files and charges fees to unencrypt them. To do this, the attacker needs to gain appropriate credentials to gain access to the network. Those credentials are often obtained through phishing. Other tactics include impersonating decision-makers to trick employees into wiring large sums of money or purchase gift cards under the guise of following through on requests from those leaders - also known as whaling. With these attacks on organizations both small and large, we must stay vigilant in our handling of email. There are ways we can protect ourselves. Things to do as an individual: •
Slow down. The more an email is prompting you to make a rash decision the more likely it is to be fraudulent.
•
Verify. Validate the email address in detail, email addresses can be very similar. In higher-risk situations like transferring money, data, or credentials have a process in place outside of email to verify the activity is legitimate. Examples include calling, walking to the person’s office (if possible), and reaching out through internal collaboration tools like Teams. Be careful opening attachments from suspect emails. Also, poor grammar and misspelled words are always red flags for phishing attempts.
•
Notify IT Department or Provider. They can block future emails from the same domain or specific email address.
The Petroleum Alliance Partner Program offers members significant cost savings on products and services necessary for the day-to-day operation of businesses within the oil and natural gas industry. As a program member, amshot provides full-service managed IT, 24/7 help desk support, vendor management, software development, business intelligence, application management, and more to businesses of all sizes. As the Official IT Provider of The Petroleum Alliance of Oklahoma, amshot offers Alliance members a 15 percent discount on new service contracts.
Things to do as an organization: •
Multi-Factor Authentication. One key step to preventing account takeovers when users have had their account information compromised by a phishing attack is to require all users to use multi-factor authentication.
•
Data backups. With proper data backups many of the approaches used by attackers can be reversed.
•
Robust Company Policies for financial transactions. This could look as complex as an accounts payable process application or as simple as a phone call verification/approval for requests made for payments via email.
•
Training. Workforce awareness is key in recognizing and thwarting phishing attempts.
December | 37
EVENTS
Oklahoma recording artist Jason Boland performs during The Petroleum Alliance’s 2020 Rig Gig, a special sponsor recognition event held Oct. 29.
CELEBRATING SPONSORS Rig Gig spotlights generosity of member companies The Petroleum Alliance hosted its 2020 Rig Gig Oct. 29. The special event for Alliance sponsors gave the organization the opportunity to celebrate and thank the member companies whose generosity helps Oklahoma’s oil and natural gas industry achieve its advocacy goals. Whether it’s at the legislature, at the Corporation Commission or in Washington, the valuable support from Alliance sponsors provides the resources needed to help make Oklahoma a more attractive place for investment in our industry.
Alliance President Brook Simmons, left, and Chairman David Le Norman welcome sponsors to the Rig Gig. 38 | thepetroleumalliance.com
EVENTS
ABOVE: When you’re here for a good time and a safe time, you wear your Crown Royal face mask like Tim Haley. AT LEFT: State Sen. Chuck Hall, center, waves to the crowd after being introduced along with Sen. Paul Rosino, left, and Senate President Pro Tempore Greg Treat.
2020 PETROLEUM ALLIANCE SPONSORS PARTNERS
NFP Corporate Benefits
SPN Well Services
amshot
Ovintiv USA, Inc
Tapstone Energy
BITCO Insurance Companies
Reign Capital Holdings LLC
The Chickasaw Nation
Blue Cross Blue Shield of Oklahoma
XTO Energy
The University of OklahomaMewbourne College of Earth and Energy
SILVER SPONSORS
GOLD SPONSORS Chesapeake Energy Cimarex Energy Continental Resources Devon Energy Enable Midstream Partners EOG Resources FourPoint Energy Gulfport Energy INSURICA Marathon Oil Messer-Bowers Insurance
BRONZE SPONSORS Crawley Petroleum CVR Refining DCP Midstream Enbridge Energy Company, Inc EnergyNet, Inc. Halliburton Energy Services JMA Energy Company Lagoon Water Midstream Mewbourne Oil Company Mustang Fuel Corporation ONEOK, Inc. Phillips 66 Spitfire Energy Group
A&A Tank Truck Co. an Omni Environmental Solutions Company Baker Hughes Compsource Mutual Insurance Company Flex-Chem Healthcare Highways JP Consultants Midship Pipeline Pinnacle Energy Services Plaster & Wald Consulting Corp. Red Bluff Resources TC Energy Unit Corporation Valero December | 39
EVENTS
Steve Jordan of Jordan-Gray & Associates reacts to a putt while Michael Gray looks on.
Former Alliance Chairman Berry Mullennix lines up a putt while Lt. Gov. Matt Pinnell, Sen. Chuck Hall and Continental Resources’ Brad Crowdis look on.
From left, Alliance Chairman David Le Norman, board member Ethan House and Ventana Exploration and Production’s Tom Divine talk prior to the tournament.
TEE TIME
Alliance members hit the links for Wildcatters Invitational More than 130 golfers took to the course for the Alliance’s 2020 Wildcatters Invitational. Sponsored by Enable Midstream Partners, the golf tournament, held this year at Gaillardia Country Club, has proven to be the state’s premier golf event for oil and natural gas industry professionals. “Our generous sponsors and enthusiastic participants make the Wildcatters Invitational a can’t-miss event each and every year,” Alliance Senior Vice President of Membership and Development Natalie Kinmonth said. “This year is no exception.” 40 | thepetroleumalliance.com
2020 Wildcatters Invitational Winners First Place - Chance Hardaker, Brock Werdel, Robert Mitchell and Ben Johnson. Second place - Jimmie Hobbs, Jeff Dahlberg, Stephen Ingram and Mike Gialousis. Third Place - Berry Mullennix, Sen. Chuck Hall, Lt. Gov. Matt Pinnell and Brad Crowdis. Longest drive - Kevin Palma and Brock Werdel. Closest to the pin - Tyler Fixley and Ben Williams.
EVENTS
Continental Resource’s Blu Hulsey, left, and J. Price Energy Services President Cody Bradshaw let the lead fly during a Nov. 13 European pheasant hunt hosted by the Petroleum Alliance at Perry’s Bluestem Hunting.
Petroleum Alliance board member Walt Duncan warms up with skeet shooting prior to the hunt.
Petroleum Alliance President Brook Simmons speaks with board member Darrell Noblitt.
ALLIANCE MEMBERS HEAD OUTDOORS FOR HUNT Twenty-two Petroleum Alliance board members and sponsors spent time in the great outdoors on Nov. 13 during a special European pheasant hunt hosted by the Alliance with the assistance of board member Darrell Noblitt. “It’s clear our members and sponsors want to have personal interaction, but the COVID pandemic has changed how we are able to gather,” Alliance President Brook A. Simmons said. “Our pheasant hunt is one way we can come together while still adhering to health guidelines, and the Alliance staff will continue to seek out new ways that will allow our members the opportunity to network while keeping their health and safety a priority.”
December | 41
CATHY LEBSACK VICE PRESIDENT OF LAND A N D E X P L O R AT I O N AT D E VO N E N E RGY AN D PETROLE U M ALLIANCE EXECUTIVE COMMITTE E ME MBE R
1 2 3 4 5 6
7 8 9 10 11 12
If you could eat one food the rest of your life, what would it be? Breakfast. Keep bringing the eggs, bacon and biscuits & gravy. Mountains or beach? Mountains for sure, and specifically somewhere in Summit County, Colorado.
13 14
Have you met anyone famous? Yes, President George W. Bush. What’s your favorite drink? Arnold Palmer. Favorite college team? University of Oklahoma In one sentence, what do you actually do all day in your job? My goal for myself each day is to make a positive impact on every person I interact with and in every situation I encounter — this might mean giving an encouraging smile, listening intently to someone, providing constructive feedback, providing strategic insight or decisions, or successfully negotiating a transaction. . Favorite band in junior high? Bon Jovi Name of your pet? Paisley (Black Pug) What was your first job? Working in a sporting goods store. What was your first car? Nissan 300ZX. If you could have dinner with one person, alive or dead, who would it be? Condoleeza Rice. What was your favorite TV show as a child? Happy Days.
42 | thepetroleumalliance.com
15 16 17 18 19
What’s the number one item you would save from your burning house? Other than my husband and my pug, probably my wedding ring.. What is your favorite thing about working in the oil and gas industry? I believe we produce a valuable commodity that is fundamental to our society and am proud to be a part of this industry. At Devon, we do it in a safe, environmentally responsible and ethical way. I am motivated to continue to find ways to more efficiently produce energy with as little surface and environmental impact as possible. We have so many talented and incredibly smart people in our industry and our use of technology continues to amaze me. I am excited to continue to be a part of an industry that can impact so many people’s lives on a daily basis and to continue to be a part of a company that has a core set of values that resonate so well with others. What is your favorite holiday? Christmas. What is the best gift you have ever received? My pug Paisley What is the first thing you would do if you won the lottery? Have a shopping spree to buy gifts for my family and friends and then buy a house in the Colorado mountains. Last movie you saw at the theater? Star Wars: The Rise of Skywalker What’s your favorite app? Apple Podcasts – I listen to the Big Life Devotional podcast daily and several news, spiritual, leadership, and fun podcasts regularly.
December | 43
THE PETROLEUM ALLIANCE OF OKLAHOMA 500 N.E. FOURTH ST. OKLAHOMA CITY, OK 73104
Prsrt Std U.S. Postage Paid Permit No. 1541 Okla. City, OK