SHALE Oil & Gas Business Magazine May/June 2015

M AY / J U N E 2 0 1 5

THE TRUTH ABOUT

OPEC

OIL & GAS BUSINESS MAGAZINE

STATE OF EMPLOYMENT TEXAS WORKFORCE COMMISSION TEXAS NATURAL GAS VEHICLE AND FUELING STATION GRANT PROGRAM

A FRESH PERSPECTIVE:

A NONPROFIT FOR FAMILIES: ANY BABY CAN // EMPLOYMENT STRESS AND HOW TO HANDLE IT

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AEP Texas: Your Business Partner in Shale Oil & Gas Extensive shale oil/gas reserves are located in and around geographic areas that align with the AEP Texas electric delivery service territory. Let the AEP Texas service team assist you with timely information regarding the location, capacity and availability of AEP Texas facilities.

To request electrical service or gain access to a certificated planning map, please complete the information request form located at www.AEPTexas.com/shaleoilgas Contact: Bradley Lenz 361-881-5455 bhlenz@aep.com

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John Longoria 361-881-5867 jflongoria@aep.com

www.AEPTexas.com/shaleoilgas @AEPTexasEconDev

Specializing in oilfield supplies and service throughout the Eagle Ford Shale  Dual & single belts -Cam belt  Hydraulic Rams, Value Banks, Pumps, Motors  Sauer Danfoss, Chains, Chain Drive  Specialized Tooling. Tool Box, Machining  Discharge & Suction Pumps  Suction Manifold  Discharge Manifold  Murphy Gauges  Sensors  Circuit Board

Exclusive Dealer for the Eagle Ford Shale Territory PYRICOAT: is an all-natural soil treatment application designed to inhibit the oxidation process of soil with harmful metals and minerals. By coating the soil with Pyricoat, minerals will be encapsulated, which will stop any liquids from further contamination such as coal mining runoff.

This application has increased acidic waters PH levels from 3.4 to 6.5 for over three years now in alpha test in coal mining areas.

FECONTROL: is an all natural product used to binds, encapsulates and creates a carrier for iron sulfites and other damaging microscopic particles from crude oil. When applied to crude oil directly it reduces iron, sulfides and other corrosives by up to 93% when separated. Using this product will save downtime by reducing maintenance days by eliminating the corrosive iron sulfides from the crude before being introduced into the refineries. This application will also augment the existing downstream process of removing iron from crude oil.

RELOAD: is an all natural product use for treating frac and produced water. This product creates a top layer of hydro Cardons in Frac or produced water. This application is perfect for recovering oil from the formation fracturing process in the flow back and produced water will help in the recycling of the water for reuse in the formation fracturing process. ReLoad is most effective when introduce into holding tanks or holding ponds with a circulating pump. ReLoad will also help keep out moisture when needed.

- Sand Kings - Sand Chiefs - Blenders - Hydration - FRAC Pumps - Falcons - Batch Mixers

ReLoad is used on water for the separation of water and hydro carbons PREMIUM RELOAD: is an all natural product use for treating frac and produced water. This product binds and encapsulates the heavy metals including the damaging iron sulfites and keeps them from the oxidation process. The method reduces iron sulfates by 90% and makes the separation of solids from water more efficient. This product pushes the hydrocarbons to the surface while creating a layer of encapsulated metals. This application is perfect for recovering oil from the formation fracturing process in the flow back and produced water will help in the recycling of the water for reuse in the formation fracturing process. Premium ReLoad is most effective when introduce into holding tanks or holding ponds with a high turbulence application.

Premium ReLoad also binds heavy metals in acidic water and helps eliminate corrosive effects.

Premium ReLoad is use on water for inert effect on heavy metals.

Clint Schweers / oilfieldexperts@gmail.com 13611 U.S. Hwy 181 S., San Antonio, Texas 78223 / (210) 471-1923

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CONTENTS

MAY/JUNE 2015

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FEATURE

16 State of Employment

COVER STORY A FRESH PERSPECTIVE: RYAN SITTON 18 An In-Depth Look at the Newest

Texas Railroad Commissioner

INDUSTRY

26 Will Work for Crude 28 The Truth About OPEC 30 What’s to Come for the Eagle Ford 32 PEMEX’s Forecast: Big Changes Ahead 34 New Record: Oil and Gas Industry Paid $15.7 Billion in Taxes and Royalties That Fund Schools, Roads, Services

BUSINESS

42 Live for Today and Plan for

Tomorrow 44 Texas Natural Gas Vehicle and Fueling Station Grant Program 46 How a Face-Lift Can Help Your Business

POLICY

52 Sine Die Countdown 56 Technology at the Railroad Commission

LIFESTYLE

58 Summertime at Joshua Creek

Ranch Is for Business, Fun and Fundraising 60 Employees and Workplace Stress

NONPROFIT 64 Any Baby Can

SCENE

70 March/April Cover Party 72 In the Oil Patch 72 WEN Lunch 74 Corpus Christi IceRays

COVER AND TABLE OF CONTENTS PHOTOGRAPHY BY: MICHAEL GIORDANO

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ADVISORY BOARD

OMAR GARCIA - SENIOR ADVISOR

JAMES M. SUMMERS

BRADLEY H. LENZ

JEFFREY A. WEBB

THOMAS TUNSTALL, PH.D.

PAULA WAGGONER-AGUILAR

As President and CEO of the South Texas Energy & Economic Roundtable (STEER), Omar Garcia is an expert on business opportunities associated with the Eagle Ford Shale. He works with the oil and gas industry, local officials, community members, regional stakeholders, educational institutions and economic development organizations to ensure that the natural oil and gas industry in South Texas is advancing in a positive way that is beneficial to both the community and the industry. Garcia has more than 12 years of economic development experience, and he spent two years working for Bank of America as Vice President of Business Development for the bank’s treasury management division. He is a certified economic development finance professional through the National Development Council, and he graduated from St. Edward’s University with a major in international business and Spanish. In 2010, Gov. Rick Perry appointed Garcia to the Texas Economic Development Corporation.

Jeffrey A. Webb is a Senior Associate in the San Antonio office of Norton Rose Fulbright, a global legal practice providing the world’s preeminent corporations and financial institutions with a full business law service. Recognized for its industry focus, Norton Rose Fulbright is strong across all of the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and health care.

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James M. Summers joined the San Antonio office of Norton Rose Fulbright in 1976 and became a Partner in 1985. He received his undergraduate degree from Southern Methodist University and his law degree from the University of Texas School of Law, and he has six professional honors. Summers’ legal practice focuses on real estate and oil and gas matters, which involve the representation of an array of clients who deal with complex and sophisticated financial transactions and situations. Summers represents many financial institutions and private equity groups in the securitization, CMBS and other related loan markets. He counsels clients and is involved in major workout and reorganization matters relating to all areas of real estate. His practice focuses on energy and oil and gas transactions with matters in the Eagle Ford Shale industry, representing everything from acquisitions and dispositions to refineries and solar power facilities.

Thomas Tunstall, Ph.D., is the Research Director for the Institute for Economic Development at the University of Texas at San Antonio. Previously, he was a Management Consultant for SME, and the Component 1 Team Leader for the Azerbaijan Competitiveness and Trade project.

Tunstall also served as an Advisor Relations Executive at ACS and was the founding Co-chair for the Texas chapter of the International Association of Outsourcing Professionals (IAOP). He has published a business book titled “Outsourcing and Management” (Palgrave, 2007) and was the technical editor for “Outsourcing for Dummies” (Wiley, 2008). Tunstall has consulted in both the public and private sectors. In 2006, he taught Ph.D. candidates in a business and government seminar at the University of Texas at Dallas, and in 2005, he completed a long-term assignment in Afghanistan, where he was Deputy Chief of Party for a central bank modernization project.

Bradley H. Lena is the Director of economic and business development at AEP Texas. As Director, he oversees the company’s economic and business development operations, including oil and gas operations. This activity extends throughout the AEP Texas service territory.

Previously he was the Operations Support Manager of the Electric Distribution System of AEP Texas. His responsibilities included resource planning, managing the electric distribution budget, and managing the back-office functions and the annual storm restoration drill to prepare for hurricanes and other major natural disasters. Prior to operations support, Lenz held several management positions with AEP Texas and the former West Texas Utilities Company. Lenz began his career in 1991 with West Texas Utilities in Abilene as an Engineer in Marketing, focusing on commercial customers.

Prior to that, Lenz was a cooperative student with TXU Electric. Lenz earned a bachelor of science degree in electrical engineering from Texas A&M University in College Station, and has completed the Ohio State University Leadership Development program.

Paula Waggoner-Aguilar is a Chief Financial Officer and the Owner and President of The Energy CFO, LLC, a niche entrepreneurial energy finance firm providing CFO leadership to energy and technology entrepreneurs and startup. She started her career in the ’90s working her way up the accounting ranks in Latin America beginning in oilfield services and highly engineered equipment. Over the past 20 years, Waggoner-Aguilar has built a successful track record working in senior leadership roles alongside hard-driving independents, notable industry executives and engineers. In 2014, the San Antonio Business Journal awarded Waggoner BEST CFO for Private Medium companies. Likewise, she has also been recognized as a trailblazer for her various efforts in recruiting and helping promote women in the industry.

Originally from Dallas, she is a graduate of The University of North Texas (MS, Taxation), The University of Texas at Arlington (BBA, Accounting), a Texas CPA and a member of the Association of International Petroleum Negotiators.

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CONTRIBUTORS

Thomas Tunstall is the Research Director for the Institute for Economic Development at the University of Texas at San Antonio. Previously, he was a Management Consultant for SME, and the Component 1 Team Leader for the Azerbaijan Competitiveness and Trade project.

Tunstall also served as an Advisor Relations Executive at ACS and was the founding Co-chair for the Texas chapter of the International Association of Outsourcing Professionals (IAOP). He has published a business book titled “Outsourcing and Management” (Palgrave, 2007) and was the technical editor for “Outsourcing for Dummies” (Wiley, 2008).

Tunstall has consulted in both the public and private sectors. In 2006, he taught Ph.D. candidates in a business and government seminar at the University of Texas at Dallas, and in 2005, he completed a long-term assignment in Afghanistan, where he was Deputy Chief of Party for a central bank modernization project.

Bill Keffer has practiced law for thirty years as In-House Counsel at a major oil and gas company and in private practice.

He currently teaches at the Texas Tech University School of Law and continues to consult. He served in the Texas legislature from 2003 to 2007 representing the 107th District in Dallas.

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David Blackmon is a Managing Director of the FTI Strategic Communications practice and is based in Houston.

Throughout his 34-year career in the oil and gas industry, Blackmon has led industry-wide efforts to develop and implement strategies to address key issues at the local, state and federal level. Blackmon has more than 15 years’ of experience working legislative and regulatory issues in Washington, DC, Texas and other states. He is a recognized subject-matter expert on a variety of oil and natural gas issues, and regularly offers testimony at legislative hearings. Blackmon is currently a contributing columnist for Forbes.com, focusing on public policy issues affecting the oil and gas industry. He also writes regular commentary for World Oil Magazine.

David Porter was elected statewide to serve a six-year term as Railroad Commissioner in November 2010. Commissioner Porter has been appointed to the Interstate Oil and Gas Compact Commission as the Official Representative of Texas, and in 2015, he will serve as the second Vice President. He has also been appointed as the Official Representative on the Interstate Mining Compact Commission and currently serves as an Advisory Board Member for the Texas Journal of Oil, Gas, and Energy Law.

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Ken Treviño is the President/CEO of Workforce Solutions of the Coastal Bend, based out of the regional office located in Corpus Christi, Texas.

Workforce Solutions invests in regional economic success through access to jobs, training and employer services offered at 10 employment centers throughout the region. Treviño oversees a $20 million budget that is appropriated throughout the 12-county Coastal Bend region. He holds a bachelor’s degree in political science from the University of Texas at San Antonio and a non-profit certification from the Institute of Organization Management at Loyola Marymount University.

He is a graduate of Leadership Corpus Christi Class 27.

Katie Carmichael is an Austin, Texas-based communications specialist. She is the founder and owner of Carmichael Communications and Consulting, which provides a wide range of communication services, including public affairs, government relations, consulting and writing, primarily within the energy industry. Notable clients include the Texas Alliance of Energy Producers and Power Across Texas. Most recently, Carmichael was the Director of Public Affairs for Railroad Commissioner David Porter. Prior to the RRC, she worked in the Texas House of Representatives.

Carmichael received a bachelor’s degree in journalism from Texas State University.

Gloria Leal is an Attorney and Government Affairs Consultant in Austin, Texas. Leal has a solo practice primarily relating to energy, environmental and healthcare/insurance matters.

She represents the Texas Alliance of Energy Producers, a national association of independent producers and service providers, and other clients. Leal is former General Counsel and International Counsel of the Texas Department of Insurance and represented the department in international financial services negotiations with Mexico. She was also an Assistant Attorney General in the Energy and Transportation Divisions. Leal is a graduate of the University of Texas School of Law.

Omar Garcia, President and CEO of the South Texas Energy & Economic Roundtable (STEER), is an expert on business opportunities associated with the Eagle Ford Shale. He works with the oil and gas industry, local officials, community members, regional stakeholders, educational institutions and economic development organizations to ensure that the natural oil and gas industry in South Texas is advancing in a positive way that is beneficial to both the community and the industry.

Garcia has more than 12 years of economic development experience, and he spent two years working for Bank of America as Vice President of Business Development for the bank’s treasury management division. He is a Certified Economic Development Finance Professional through the National Development Council, and he graduated from St. Edward’s University with a degree in international business and Spanish.

In 2010, Gov. Rick Perry appointed Garcia to the Texas Economic Development Corporation.

Dr. Janet M. Cunningham serves as the Executive Director of Citizens for Educational Excellence (CEE), a non-profit education organization, and Education to Employment Partners, the regional P-16 council that serves 42 school districts in 11 Coastal Bend counties.

Under her leadership, CEE has established the Coastal Compass Education and Career Resource Center located in Corpus Christi’s La Palmera Mall. She also serves as the director of the Northwest Center for Advanced Studies, a dual enrollment program in the Calallen ISD that provides college-level classes to students from four school districts. Dr. Cunningham serves on the Postsecondary Success City Action Network, Corpus Christi Mayor Nelda Martinez’s Education Workforce Task Force, Rep. Todd Hunter’s Workforce Task Force and the Flint Hills Resources Community Action Council.

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& GAS BUSINESS MAGAZINE OIL OIL & GAS BUSINESS MAGAZINE VOLUME 2 ISSUE 3 • MAY/JUNE 2015

KYM BOLADO CEO / PUBLISHER

CHIEF FINANCIAL OFFICER Deana Acosta

EDITOR IN CHIEF Lauren Guerra

ART DIRECTOR Elisa Giordano

ASSOCIATE EDITOR Katie Carmichael

COPY EDITORS

Katie Buniak, Maegan Sheppard

EDITORIAL INTERN Julia Le-Nguyen

ADMINISTRATIVE ASSISTANT Josie Cuellar

VICE PRESIDENT OF SALES Liz Massey Kimmel

CONSUMER INSIGHT MANAGER Gloria Perez

ACCOUNT MANAGERS

Christi Guillory, Ingrid Hollinger, Diana Keisler, Gloria Perez, Salome Stevens

ASSISTANT ACCOUNT MANAGERS Laura Martinez, Paula Mayberry

SENIOR BUSINESS ANALYST Fernando Guerra

CONTRIBUTING WRITERS

Travis Bradberry, Katie Carmichael, Omar Garcia, Bill Keffer, Julia Le-Nguyen, George F. Long, Rita Olufowoshe, PEMEX, David Porter, Todd Staples, Thomas Tunstall

STAFF PHOTOGRAPHER Malcolm Perez

CONTRIBUTING PHOTOGRAPHER Michael Giordano

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

For editorial comments and suggestions, please email lauren@shalemag.com.

SHALE MAGAZINE OFFICES: 5600 Broadway Ave., San Antonio, Texas 78209 18756 Stone Oak Pkwy, Ste. 301, San Antonio, Texas 78258 For general inquiries call: 210.854.3361

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Copyright © 2015 Shale Magazine. All rights reserved. Reproduction without the expressed written permission of the publisher is prohibited.

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PUBLISHER’S NOTE

THE TEXAS LEGISLATURE CONTINUES TO CONVENE ON IMPORTANT LEGISLATION AT THE TIME THIS ISSUE IS GOING TO PRINT. SOME OF THE LEGISLATION BEING DISCUSSED AND DECIDED ON WILL HAVE AN AFFECT ON THE OIL AND GAS INDUSTRY. A bill I would like to highlight in my letter to you is HB 40/SB 1165, which will reserve the authority to the state of Texas to regulate surface activities involving oil and gas. This bill will aid Texas in staying strong without patchwork ordinances that will hinder oil and gas production in this state. The goal of this bill is to keep Texas communities safe and strong, united in economic prosperity. I encourage you to reach out to your state representatives and show your support of this bill and the oil and gas industry in Texas.

I am happy to report we had a great turnout at our cover party in Houston honoring Wood Group from the March/April issue. Our cover parties are wonderful opportunities for our advertising partners to network and mingle. I look forward to these parties each issue because of our amazing guests and honorees. Our covers are distinguished members of the oil and gas community in Texas. It is the distinguished individuals, including oil and gas executives and elected officials, that attend and are a part of the event that make it so special and a one-of-a-kind experience. If you are interested in learning more about our cover parties and would like an invite, email josie@shalemag.com.

Not only has this magazine been made possible by you, our loyal readers, but our radio show, “In the Oil Patch,” has also been a great success due to our loyal followers. We are so proud to be bringing our audience interesting guests and industry news in a new, exciting way. Don’t forget to tune in every Saturday evening at 10 p.m. on channels 550 AM and 107.1 FM!

KYM BOLADO

CEO/Publisher of SHALE Oil & Gas Business Magazine kym@shalemag.com

SHALE OIL & GAS BUSINESS MAGAZINE MISSION STATEMENT:

SHALE Oil & Gas Business Magazine is a statewide publication that showcases the dynamic impact of the Texas energy industry. The mission of SHALE is to promote economic growth and business opportunities and to further the general understanding of how the energy industry contributes to the economic well-being of Texas and the United States as a whole. SHALE’s distribution includes industry leaders and businesses, service workers, entrepreneurs and the public at large.

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OIL & GAS PLAYERS

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BUSINESS

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TECHNOLOGY

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POLICY

Where industry comes to speak.

AUSTIN

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CORPUS CHRISTI

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HOUSTON

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SAN ANTONIO

Join us on Saturdays at 10 p.m. sponsored by:

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FEATUR E

STATE OF EMPLOYMENT How the Texas Workforce Commission can help applicants and employers

BY KEN TREVIÑO, President/CEO of Workforce Solutions of the Coastal Bend

A

sk any CEO or operations manager to identify their biggest challenge and the answer will likely be the same—finding and keeping good employees. The hiring process can be an expensive, time-consuming task. According to a U.S. Department of Labor analysis, costs in time, lost work, legal fees or even lost clients from the wrong hire can add up to an estimated 30 percent of the employee’s first-year earnings. For an employee with a $40,000 salary, that translates into a $12,000 impact—in addition to their earnings and benefits.

Companies routinely go through considerable efforts to recruit and train high-level employees. With the current dynamics related to shale drilling activity, the need to recruit and retain high-quality employees for support and entry-level positions is increasingly important. Securing entry-to mid-level employees who are skilled, prepared for the job and can become loyal employees sets the foundation for profitability and success.

HUMAN RESOURCES With so many challenges, how do companies go about meeting the demand for highquality employees? The answer is Workforce Solutions (WFS) – your employment office! Across the state, the Texas Workforce Commission (TWC) operates 28 regional Workforce Development Boards. Our purpose is simply to help connect employers who have jobs with job seekers capable of doing them.

The Permian Basin region has seen some positive outcomes from one of the shale plays in Texas.

“Our local employers and job seekers truly benefit from our strong support in classroom training and creating a workforce pipeline who have the skill sets employers need,” says Willie Taylor, CEO of Workforce Solutions Permian Basin. He added, “We really listen to our employers and try hard to be open, flexible and coordinate with all of our local partners in the community.”

For employers, the benefits of WFS are similar to having your own professional recruitment firm or in-house recruiter without the added costs. WFS professionals help companies of all sizes identify needed skills, build a pool of qualified applicants, pre-screen and

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refer only the best to fill the jobs. In addition, WFS can provide needed “intelligence” to understand the local labor market and identify educational trends, areas of expertise and pay ranges, to name just a few. Services offered to employers can assist them through every step of the hiring process, beginning even before their presence in the region is established and continuing as they grow and change in the marketplace.

For job seekers, WFS provides a one-stop shop for information on available jobs, skills training, information and support. With more than 248,000 jobs in TWC’s WorkinTexas.com job-matching database, job seekers have access to a wide range of openings. Connected job seekers can search anytime. For those who require additional services, regional centers provide professional guidance, computers and access to business services, such as customized job descriptions, occupational data and labor market intelligence.

HIGH-DEMAND JOBS The six Workforce Development Board regions (highlighted in the graph at left) have experienced the dynamic nature of high-demand jobs associated with the shale plays. A large number of these jobs are in fields directly tied to oil and gas activity, such as drilling engineers and rig operators. However, many of the jobs that have seen the greatest percentage increase are support positions as a result of downstream activity and don’t necessarily require oilfield experience. When searching for applicants whose skills are in demand, it can be challenging to catch their attention with recruitment efforts and make sure that the salary and benefits offered are competitive.

The data analysis provided by WFS can provide employers with accurate, detailed information about occupational salary ranges. In addition, our labor market intelligence provides employers with accurate accounts of educational attainment and skill sets for both employed and unemployed individuals by region. This labor market intelligence is updated regularly to account for shifts in the economic climate by region in the state.

LABOR MARKET INTELLIGENCE WFS data analysis found that the highest percentage

job growth in shale-related positions was in stock clerks and order fillers, indicating an increase in all types of support businesses that have increased volume due to oil exploration activity. These positions increased 100 percent in 2014. With a demand for support positions such as these, it is vital to have a knowledgeable team to source quality applicants and carefully screen them.

Other high-growth areas included surveying technicians, secretaries, truck drivers, administrative assistants and industrial mechanics. All these positions increased by at least 50 percent in 2014 and require a high school diploma or equivalent. These types of jobs potentially draw employees from other industries with relevant experience who don’t have previous experience working in oilfieldrelated positions. In jobs such as these, screening applicants is more important than ever. Hiring right the first time and retaining staff through fluctuations in oilfield demands requires a well-vetted candidate.

ONLINE RECRUITING While many companies hire employees through networking or in person, the majority need resources to reach a large number of potential employees in the easiest possible way. Online recruiting is a solution for that need, and WorkinTexas.com is an online job-matching database that is free to both employers and job seekers.

Employers can post positions or proactively search for applicants by narrowing down the candidates by experience and skill sets needed. By posting job openings of all sorts on WorkinTexas.com, companies can access the largest job-matching service in Texas. The site averages over 380,000 active job seeking users a month. The website also launched a mobile-friendly version last year, which allows users to search for jobs, submit applications, monitor application status and correspond with prospective employers. The free online resource hosts approximately 248,000 active job openings and more than 380,000 registered users. Over 3 million job seekers have utilized WorkinTexas.com over the past decade, with about 50,000 new users a month.

Offering another online service, TWC partnered with the Texas Higher Education Coordinating Board to create Texas CREWS (Consumer Resource for Education and Workforce Statistics). This site compares employment, wage and student loan debt data for all of Texas’ public two-year and four-year colleges and universities. In addition to helping students and their parents plan for college and

understand job skills, the data collected can help businesses know which schools focus on specific areas for recruitment purposes.

SKILLS DEVELOPMENT Even with all these tools, it can still be challenging for employers to find qualified applicants with all the necessary skills. TWC’s Skills Development Fund can help solve this problem. The $90 million statewide program pays for training courses for Texas businesses and their employees. As part of the program, a customized job-specific training course can be developed in partnership with community colleges. These training programs are designed after a business or group of businesses identifies a learning gap among job applicants and partners with community or technical colleges to design curriculum.

In the Coastal Bend, these grants have

already helped train Eagle Ford Shale workers.

Del Mar College has partnered with three companies—CB&I Inc., Dynamic Industries Inc. and Valero Energy Corp., to train more than 1,100 new workers in high-demand occupations, which include carpentry, welding and pipe fitting.

Another Skills Development Fund grant through Del Mar College specifically helps military veterans gain skills in carpentry, safety and construction skills needed for occupations in the petrochemical industry.

HELP FOR SMALL BUSINESSES Although Workforce Solutions of the Coastal Bend has helped large companies with hiring strategies, services for small businesses continue to be a huge priority. Across Texas, 77 percent of all businesses have 10 employees or fewer, and the impact of these businesses on the economy is considerable.

A program called Skills for Small Business targets these companies by providing up to $2 million for skills training. Small businesses can apply directly to TWC for training their employees at community or technical colleges or through the Texas Engineering Extension Service at Texas A&M University. Companies with fewer than 100 employees can use the training grants to help prepare new employees for work or upgrade skills for current employees.

ACCESS TO SERVICES Connecting with a Workforce Solutions professional is as easy as logging on to WorkinTexas.com. Business services specialists who understand the complexities specifically related to oil and gas industry jobs can assist in developing innovative approaches to meet your hiring needs. If finding employees is on your todo list, let Workforce Solutions be your human resources partner!

For more information: Applicants and employers interested in learning more about services available through the TWC should visit them online at www.twc.state.tx.us.

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A FRESH

PERSPECTIVE:

RYAN SITTON BY: KATIE CARMICHAEL PHOTOGRAPHY BY: MICHAEL GIORDANO

Seldom are the words “genuine” and “politician” used in the same sentence. Almost as often do you hear of an elected official being described as “energetic,” “innovative” or “passionate.” But in many respects, Texas’ newest Railroad Commissioner, Ryan Sitton, is breaking the traditional mold.

Not only is Sitton the first engineer to serve as a Commissioner in nearly 50 years, at the ripe age of 40 he is among the youngest.

But age is just a number, an adage Sitton is proving to be true. He possesses a level of vitality and enthusiasm that is impressive at any age. Equally as remarkable is the high level of industry expertise and comprehensive knowledge he has acquired in such time.

Sitton has an entrepreneurial drive and a scientific mind. He exudes business savvy, yet

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An in-depth look at the newest Texas Railroad Commissioner he is charismatic and engaging on a personal level. It could be said that the newest face at the Commission is a breath of fresh air for the centuries-old institution.

In speaking with Sitton, I found myself asking very little as he breezed through nearly every potential question unprompted, sharing his story and vision unabashedly. Sitton was forthright and open, eager to impart his knowledge on any given topic, and even more excited to discuss ideas— indicative of how he may help guide one of the oldest state agencies in the country into a new era of transparency, engagement and outreach.

Indeed, the former CEO appears to have big plans for the Railroad Commission of Texas and the industry it regulates. This kind of sea change calls for a fresh perspective and outside-the-box thinking—prerequisites that make Sitton just the man for the job.

Throwing the Book at Convention On November 4, 2014, Texas voters agreed that Sitton was indeed the right man for the job.

Courting those voters was no easy task, however, especially considering that a large number of Texans aren’t even sure what a Railroad Commissioner actually does.

On top of that, before he even made it to the general stage, Sitton faced a steep runoff election

cover story

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This may be the first in what could be many deviations from the traditional norms that we can expect to see from the state’s newest elected Commissioner.

He is unchained to the status quo, unencumbered by convention and undaunted by change.

Getting Down to Business

TEXAS’

NEWEST RAILROAD

COMMISSIONER, RYAN SITTON, IS BREAKING THE TRADITIONAL MOLD after coming in second in the Republican primary to former State Representative Wayne Christian, who took just over 40 percent of the vote.

“In the primary, I was kind of following the normal playbook,” Sitton recalls. “The playbook tells you, in Republican politics, in the primary you go out there and talk about how conservative you are. You try to just talk over and over about how conservative you are.”

And while he notes that being a conservative is not a bad thing—he considers himself as conservative as anyone—it failed to set him apart as a candidate. On a deeper level, it’s obvious that there is much more to Ryan Sitton than his conservative credentials.

That’s when the candidate chose to scrap the traditional rule book and shake up the game.

“We decided in the runoff, let’s focus on energy,” Sitton explains. “Let’s spend our entire campaign talking about energy.”

Sitton ditched traditional TV ads, opting instead for more personal interactions, town halls, tele-town halls and targeted mail distributions, all highlighting the important energy issues that matter to Texans. Dropping the political smoke and mirrors and getting down to the facts struck a resounding chord statewide and allowed him to heartily overtake his Republican opponent in the runoff—eventually earning him nearly 60 percent of the votes in the general election.

“How do you prove to the world that you’re the most conservative?” Sitton asks. “I don’t know, but I could prove that I was more qualified pretty easily. That’s what we focused on, and that’s why we won.”

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On January 5, 2015, Ryan Sitton was sworn in as the 49th Railroad Commissioner of Texas.

With the 84th Legislature gaveling in just a week later, a completely new roster of statewide elected officials, tumbling oil prices and a whole host of issues facing the energy industry, the newest Commissioner had his work cut out.

When asked about his top three priorities as Railroad Commissioner, Sitton lays out his vision for the future rather succinctly—starting with changes within the agency. “Building out our outreach capabilities and our expertise so that we have the ability, as an agency, to respond more and more dynamically to the changes in the landscape—whether they are community changes or technical changes,” Sitton says.

He goes on to explain that the Commission must learn to function in a new reality, one filled with streaming news, 24-hour news stations and social media—a reality in which anyone with a smartphone has the power to make headlines.

“We have to recognize the fact that the general public is going to be inundated with information that has no checks or balances,” Sitton explains.

“Because of that, we’re going to have to do more outreach than we had to do in the past.”

Fortunately, he is full of ideas on how to achieve this goal: targeted regional newsletters; consistently engaging in public forums, such as town hall meetings; speaking with local chamber of commerce groups; and a broader social media presence, just to name a few.

While the concept of increasing public outreach may not be a new or revolutionary one, the critical need for such communication has reached new heights, as Sitton points out, in light of changes in the local landscape. This is especially true with communities placing tighter regulations on drilling activities in their areas.

On November 4, 2014, 59 percent of voters in Denton approved a local ordinance banning hydraulic fracturing

within city limits. While the Denton ban is currently being challenged in court, and at this time no other municipality has implemented an outright ban, it’s still a matter that has warranted serious discussion and concern at the local, state and federal levels.

Relations between the oil and gas industry and North Texas residents has long been tumultuous. Drilling activity in urban communities skyrocketed in the 2000s following the advent of drilling techniques that allowed operators to unlock natural gas reserves contained in the underlying Barnett Shale.

Residents began expressing concern and discontent with some of the byproducts of shale production, such as noise, lights, unfamiliar odors and heavy truck traffic coming to and from drill sites. Some blame the industry for the frosty relationship, some point to a missed opportunity by the Railroad Commission to mitigate tension and educate the public on what’s actually going on in their backyards and others blame the wave of national environmental activists who swarmed the area and organized opposition groups, further escalating the situation.

By 2014, tensions had reached a fever pitch.

A petition to ban hydraulic fracturing was presented to the Denton City Council, placed on the November ballot and eventually won voter approval.

Sitton calls the series of events disappointing and points out that the bulk of residents’ concerns are not tied directly to hydraulic fracturing, which is a completion technique, but rather the actions associated with drilling in general, for which there are potential remedies.

Additionally, local taxpayers may be left holding the bill for litigation fees, and, if upheld, the rule could negatively impact funding for local services, such as schools and first responders.

“This is a good example of how political confusion is not only driving bad policy, it’s not serving the citizens,” Sitton says.

Following the vote, Railroad Commissioner David Porter immediately issued a statement, saying “Bans based on misinformation—instead of science and fact—potentially threaten [the Texas] energy renaissance and as a result, the well-being of all Texans.” Commission Chairman Christi Craddick has been outspoken on her position, maintaining such regulation is under the exclusive jurisdiction of the Railroad Commission. As such, the Commission would continue to issue drilling permits in the county.

The Texas General Land Office and the Texas Oil & Gas Association responded by immediately filing suits questioning the constitutional legitimacy of such ordinances. Now the matter is up for formal debate in the courts and at the state’s Capitol.

Sitton believes this issue is the most urgent one facing the industry today: “How can we manage this from both a relationships perspective with communities and also from a legislative perspective, making it clear where the lines are drawn so that people understand this is what the Railroad Commission does … so that we all know where to go with those concerns

and manage them effectively?” Sitton posits.

Sitton advocated for his own legislative concept, encapsulated in House Bill 3217 filed

by Representative Tony Dale, which includes the creation of formal channels of communication for political subdivisions to better engage with and have their concerns addressed at the Railroad Commission, rather than letting tension compound and potentially allowing a slew of similar ordinances and lawsuits, further wasting taxpayers’ dollars and putting the energy industry in a crippling state of flux.

renowned in energy circles around the world— but he believes the positive benefit of informing and educating Texas citizens outweighs any potential negatives.

Re-tagging the Railroad Commission is not the only name change Sitton is instituting at the agency. “I try not to let anybody here call me Commissioner,” he asserts, adding that he prefers to be on a first-name basis with staff. “We all have a job to do; we’re all on the same team.”

Sitton likens it to being on a football team, where no one would refer to their teammate, for

But he stands with his colleagues in maintaining the Commission’s exclusive authority and ability to regulate the state’s oil and gas industry.

“We’ve got a 750-person agency that specializes in this; this is what we do,” Sitton explains. “When it comes to protecting mineral owners, landowners, surface rights and correlative rights, when it comes to producing effectively and making sure that we are protecting groundwater, no one is going to be as well-suited as the Railroad Commission.”

Further increasing public awareness and encouraging engagement is Sitton’s support of changing the name of the historic agency, which no longer has any purview over railroads.

In fact, in 2005 the Texas Legislature removed all remaining oversight of the rail industry from the Railroad Commission, which had already been regulating the oil and gas industry since the 1910s—a fact that is unknown to an overwhelming majority of Texans.

“When you think about how huge energy is in this state, the fact that only 3 percent of the population knows that there is a state agency that regulates oil and gas and is looking out for the interests of the state and the operators—that is amiss,” Sitton states.

Sitton concedes that some prestige associated with the name may be compromised—the Railroad Commission is

example, as “Quarterback Manning,” instead calling him Peyton (or Eli, depending on the team, of course).

“Forget the hierarchy; that’s a waste of time,” Sitton says sensibly.

Educating the Masses Second on his list of priorities as Commissioner, yet very much in line with the goal of increasing public outreach, is education.

“I would like to see, over the next six years, that we educate 250,000 Texans on energy. That’s our target.”

Many of the challenges the industry is facing today—from negative public perceptions to preparing a future workforce to meet its growing needs—would be greatly alleviated by an increase in general knowledge of the industry and its methods of producing the natural resources on which Texans depend.

“Did you know it was possible for a child to be born in Texas and to go through public education from kindergarten all the way through college and have never had one hour of energy education?” Sitton asks.

After all, the state’s cultural heritage and economy have deep roots in the oil field.

Last year, the industry supported more than 40 percent of Texas’ economy and provided

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direct employment to 418,000 Texans.

Sitton believes the Railroad Commission and the state have the opportunity to play a huge role in this education process. He envisions an arrangement in which the state agency works with others to create and implement some kind of program or curriculum, whether it is rolled into a science class lesson or offered in a special practicum setting. Sitton firmly believes every child should have at least eight hours of basic oil and gas education. He even compares not educating Texas children on the science and facts behind energy production to giving someone a car with no instructions or lessons on how to drive it.

“Imagine how much stronger our ability to advocate for good public policy would be if everyone had even just an hour of energy education.”

World Domination? At Least in Terms of Energy …

Zooming out to a much broader scope, Sitton’s third priority is “Texas really leading the United States to be this global energy powerhouse that we should be.”

Texas already leads the nation in energy production. The Lone Star State contains nearly a third of total U.S. crude oil reserves, with production topping 3 million barrels a day in 2014. It is also the nation’s top natural gas producer and accounts for nearly 30 percent of its natural gas reserves.

Overregulation from the federal government, however, is a constant threat. The shifting geopolitical landscape abroad also threatens U.S. energy success, although Sitton believes the real vulnerability in this case is poorly advised domestic policy.

“We have shown over the past 20 years a propensity to knee-jerk reactions, politically, to what’s happening in energy,” Sitton remarks.

“We have been tempted too often to set energy policy based off a short-term perceived need or popularity versus a long-term strategy.”

Sitton maintains that it all goes back to making sure our elected officials and the public at large are fully educated on the basic fundamentals of energy production. He also points out that not since President Jimmy Carter has a U.S. commander in chief laid out a comprehensive, long-term energy plan— something he would like to see happen.

“I have this vision that … 30 to 40 years from now, people will look back and they will say it was in the 1970s that the U.S. lost control of global energy prices, but it was in 2020 that they got it back,” Sitton says.

The Commissioner sees the U.S. solidifying its top spot as the world’s leading energy provider, with the most substantial opportunities in natural gas markets abroad. There, the product is selling for north of three times as much as it fetches at home. He is also in favor of lifting the federal export ban on crude oil.

“If we could develop the infrastructure, you

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could see a world not that far away where the U.S. has become a global energy supplier, and because we do it better than everybody else … all of a sudden, we’re the only game in town,” Sitton predicts. “Imagine the ramifications that would have globally.”

History as Our Guide While Sitton’s ideas and goals for the future are certainly promising, even inspiring, perhaps we should look to the past to glean some important information about the man with a plan.

A native Texan, Sitton was born in Arlington and raised in nearby Irving, just outside Dallas.

The importance he places on education and his future engineering career may be derived from his upbringing. Both Sitton’s parents were science teachers—his mother taught chemistry and his father was a physics instructor.

He attended private school where his mother taught in Irving and went on to study engineering at Texas A&M University, where he met his wife, Jennifer, while enrolled in an engineering class together. After graduating with a degree in mechanical engineering, Sitton worked for

SITTON OPTS FOR MORE PERSONAL INTERACTIONS, TOWN HALLS, TELE-TOWN HALLS AND TARGETED MAIL DISTRIBUTIONS ALL HIGHLIGHTING THE IMPORTANT ENERGY ISSUES THAT MATTER TO TEXANS a handful of years as a production engineer and reliability engineer for various oil and gas companies, focused on ensuring all equipment was dependable and functioning properly.

In 2001, Sitton changed course and accepted a job with a small consulting company, Berwanger, after being offered an engineering position on a project in Australia. Although it was the opportunity to travel abroad that initially intrigued him, Sitton stayed on with the company for several more years managing projects.

Two years into his tenure, Sitton approached the owner of Berwanger with a proposal to develop a new unit within the business, the Mechanical Integrity Division. In less than three years, he was able to grow the division from just him to about 25 employees.

However, it was not long before Berwanger was bought out by a larger company, Siemens, and Sitton was left without a place at the table, an experience he describes as “crushing.”

“I had really sunk my whole heart and soul into building this division of the company,” Sitton explains. “But it turned out to be one of

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the biggest blessings, because in early 2006, I decided I was going to start my own company.”

That year, Sitton and Jennifer started Pinnacle Asset Integrity Services (AIS), an engineering consulting company specializing in the implementation and maintenance of asset integrity management systems for the oil and gas, chemical, mining, pharmaceutical, wastewater and electric power industries.

Sitton credits his experience of building the Mechanical Integrity Division at Berwanger for giving him the confidence and know-how needed to build a company from the ground up.

Today, Pinnacle AIS is the largest company in the world focused on reliability services. In December, Pinnacle successfully completed its first merger by acquiring Advanced Reliability Technologies and further expanded its comprehensive yet specialized reliability services.

Called to Serve It was 2009 and Pinnacle was already experiencing notable success in terms of growth. On the national stage, George W. Bush had just stepped down from the presidency and a new commander in chief, Barack Obama, was making waves in Washington, D.C. The Great Recession was gaining intensity, and the Troubled Asset Relief Program (TARP) bailout was grabbing headlines.

Sitton recalls sitting down to write yet another six-figure corporate tax payment to the federal government as President Obama was on TV espousing the need for the rich to pay more in taxes, calling it fair.

In the first several months of Pinnacle’s founding, the Sittons did not draw a single dime from the company as profit, instead relying on money judicially saved away until the company was financially viable. Even in the depths of the recession, Pinnacle was creating jobs, adding between 20 and 50 new employees each year.

“And yet I’ve got this president saying you need to pay more, and it was just really frustrating,” Sitton laments. “That was probably the first time I became hyper-politically aware—I mean I had voted and stuff like that, but really starting [to get] involved.”

Sitton began researching and meeting with elected officials as well as candidates, a move that only drew him deeper into politics. He was not overly impressed by some lawmakers’ knowledge or real-world application of issues impacting Texas businesses, in particular the energy business.

“It was around 2011 that I realized that the problem is people who actually do know about those things never run for office, because we’re off running our businesses,” Sitton recalls.

He remembers numerous conversations with fellow chief executives, colleagues and friends coalescing around the need for more business people in politics. Yet there was always the typical laundry list of reasons to not get involved—from kids’ sports games and church

activities to simply wanting vacation time. The conversations continued, and it was not long before Sitton felt the call to serve.

“In a more general sense, I always wanted to put my knowledge and my expertise in running a business in the energy industry to work,” Sitton remarks. “I knew what the Railroad Commission was and I thought maybe someday I could engage in that, but I didn’t know anything about politics or running for office, so I decided to run for the local House seat.”

Although Sitton ultimately did not win the seat in House District 24, he took the disappointment in stride and instead used the experience to propel him to bigger things. In the wise words of Winston Churchill, “Success consists of going from failure to failure without loss of enthusiasm.”

If Sitton suffered any loss of enthusiasm, he certainly hides it well. However, he is open about his faith and remembers feeling slightly misguided at the time. “It makes you think, Lord, maybe I didn’t hear You right,” he admits. “I really felt like I was supposed to do this.”

Less than two years later, Railroad Commission Chairman Barry Smitherman announced he would not be seeking reelection, and Sitton’s true path was revealed.

“If I had not run for that seat, I wouldn’t have had the confidence to run for this one,” Sitton says. “And if I had run for that seat and won, I probably wouldn’t have run for this one because I would have spent by then a whole lot more time serving in office and not felt like I could take the time to run for this.

“I think that it was all part of a master plan,” Sitton adds thoughtfully.

Service Is Not Without Sacrifice Although Sitton has fully embraced the call to serve the state, it does not come without some sacrifice.

Last April, while still on the campaign trail, he announced that if elected he would step down as CEO of Pinnacle and place his assets in a blind trust to “avoid even the appearance of conflict.” In doing so, he publicly stated at the time, he was “going beyond what is required by the statutes.”

Sitton had intended to continue his involvement with Pinnacle AIS in a limited capacity, but acquiesced after garnering criticism over the move, even though the company has no regulatory interaction or direct business with the Railroad Commission. The new Commissioner officially left his post at the company at the beginning of January.

In a press release issued in December, Sitton stated: “These steps will make sure that the citizens of the State of Texas are confident as I go to work for them. My time, energy and passion will be focused on utilizing my energy experience to help the Railroad Commission be as efficient and effective as it can be, and in turn, make all Texans confident in how our state’s energy industry is operating.”

In addition to leaving the company he built,

Sitton spends significant time serving the state away from his family. “I spend three days plus a week in Austin, I’ll spend another day or two out around the state, so I spend less time at home,” he explains, noting their decision to not yet uproot the family from their home in Friendswood, just outside Houston. He also credits his wife for her support in this endeavor. “I think we’ve found a good balance, and it is a sacrifice but it is one that I think everyone is really happy with and it suits our family really well.”

With three small children at home—Sarah, 11, Luke, 9, and Lance, 6—I couldn’t help but wonder what they thought of their dad as a Railroad Commissioner, or if they even grasped the concept. “We do talk a lot in our family about public service, and they see this as just like being active in your church,” Sitton explains.

“It’s time you put in to try to do something to serve the community. This is a little bigger community than our church serves, but I think they view it that way.”

Mixing Work With Play As the perpetual entrepreneur begins to unveil his latest business venture, which is inspired by paling around with his kids, it’s no wonder public office hasn’t phased how his children view him. “I own a company called Extreme Tricycles,” Sitton divulges. “We’re going to build adult versions of big wheels for guys like me to play on with our kids.”

If the visual of a Railroad Commissioner—or any elected official for that matter—cruising down his neighborhood block on an oversized adult tricycle doesn’t strike you as a far cry from stuffy political stereotypes, maybe nothing will.

These big-boy toys should be available on the market in the next six months to a year.

Staying Involved Aside from work and play, the Sittons are devoted members of St. Andrew’s Episcopal Church and active members of their community.

Sitton serves on the board of directors for multiple organizations, including the Pasadena Chamber of Commerce, the Pasadena Conservative Citizens Club and the Associated Republicans of Texas. Additionally, he proudly serves his alma mater as a Board Member on Texas A&M University’s Mechanical Engineering Advisory Council. He is also a member of several industry groups, such as the Texas Alliance of Energy Producers, the American Society of Mechanical Engineers and the American Petroleum Institute.

In February, Texas Gov. Greg Abbott appointed Sitton to serve as his official representative on the Interstate Mining Compact Commission.

To learn more about the Texas Railroad Commission and the commissioners, visit www. rrc.state.tx.us.

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INDUST RY

WILL WORK FOR CRUDE BY: BILL KEFFER

IT IS THE PERENNIAL platitude of all politicians. It is the Gregorian chant of gregarious challengers. It is the permanent bent of the permanent incumbent. It is the mantra of Main Street and the want of Wall Street. “It’s the economy, stupid,” as the Clinton administration once famously remonstrated.

It’s jobs. Politicians are always proclaiming the priority of their pursuit for full employment and are routinely handed their walking papers at reelection time, when the economy is suffering and jobs are scarce. Campaign platforms

Previous administrations have done likewise, as if to reassure the skeptical citizen that government holds the keys to the company van. Unemployment rates are monitored daily and reported by the media with as much gravity as your child’s temperature when he is sick with the flu.

Is it not puzzling, then, that those who claim to want to help so desperately seem oblivious when there is positive employment news to report—especially when one particular industry is the source of that positive news? And not just

significant employment throughout the economy and across the state.

In 2014, the oil and gas industry provided jobs for 418,000 Texans. Those jobs ranged from drilling wells to distribution to refining to transportation, along with all of the support activities that are required to make the road from exploration to end product work smoothly and effectively. It is difficult for most of us to comprehend just how complex each step of that road really is—to find and extract the petroleum that ultimately fuels our cars, heats our homes

revolve around jobs: more jobs, better jobs, local jobs, smarter jobs and higher paying jobs.

Talk about world peace and global warming all you want; when it gets down to the bottom line, it is all about the bottom line. As President Reagan pithily put it during his 1980 campaign: “A recession is when your neighbor loses his job; a depression is when you lose yours; and a recovery is when Jimmy Carter loses his.”

The Obama administration has trumpeted their desires and efforts to create “shovelready” jobs through the magic of government.

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positive, but so significant that no other industry even comes close? And all without one lick of help from the government? In fact, all in spite of the government?

In February, the Texas Oil & Gas Association (TXOGA) released a report that, once again, made it clear why Texas largely avoided the effects of the recent Great Recession. The report also illuminated why the oil and gas industry is not only providing substantial new reserves of the very resource on which our economy runs, but has also been responsible for providing

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and makes up the various parts of the computer and keyboard I’m using right now to write this article; not to mention the countless other products we depend on every day. Not only do petroleum products provide so many “things” and the fuel to power them, but they also provide an incredible number of jobs for Texans.

Economic-impact models have determined that each of those direct jobs generates multiple additional jobs in other sectors across the Texas economy, such that those 418,000 direct jobs triggered an additional 1.8 million indirect jobs

ILKER CANIKLIGIL/BIGSTOCK.COM

LAST YEARÕS OIL AND GAS ACTIVITY CREATED MORE THAN 2.2 MILLION DIRECT AND INDIRECT JOBS IN TEXAS

across the state. In other words, last year’s oil and gas activity created more than 2.2 million jobs in Texas. TXOGA reports that the oil and gas industry provided a whopping 41 percent of the state’s gross product in 2014. Such a significant portion of the world’s 14th largest economy (were Texas its own nation) is another way of saying—it’s a big deal.

Of course, the recent precipitous drop in crude oil prices has placed a temporary brake on the ever-increasing numbers of the past few years. There have been layoffs; companies have gone bankrupt; and activity levels have been dramatically reduced.

In other words, market forces have operated in a predictable way—greater supplies combined with a reduced demand has resulted in significantly lower prices, for now.

Even so, unemployment rates in Texas and certain areas within the state have remained significantly lower than the national average— due, in large part, to the oil and gas industry. The Permian Basin in West Texas has lived through many boom-bust cycles over the decades.

Interestingly, in all but one instance in the 1960s, every boom in Midland has led to a population increase, but no bust has ever resulted in a population decrease. The past few years have been so frenetic, in fact, that Midland officials are almost relieved to have a moment to catch their infrastructural breath. There are still “help wanted” signs all over the city. But no one wants crude oil prices to stay too low for too long; assuming that market forces will respond accordingly, prices will find a new equilibrium soon enough. Much of the momentum generated by the discovery and development of previously untapped fields—along with the recognition of how certain policy changes on the national level could positively affect our geopolitical options in the world—make it most unlikely that the current timeout is anything but temporary. Technology has opened the door to oil and gas reserves for decades to come.

Petroleum is the substance that both literally and figuratively lubricates the U.S.—and global—economy. It provides the product that enables us to build things, the fuel to power things and the need for jobs—so we can do all those things.

It is ironic, indeed, that there are those who actively seek to shut down the oil and gas industry. Invariably, they don’t comprehend all that petroleum contributes to our modern economy, nor the vast segment of our population whose very employment depends on a vibrant oil and gas industry. While it should always be their right to protest, we all would rightly regret the day their protest prevails.

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PETROLEUM IS THE SUBSTANCE THAT BOTH LITERALLY AND FIGURATIVELY LUBRICATES THE U.S. Ñ AND GLOBAL Ñ ECONOMY

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

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INDUST RY

OPEC BY: DAVID BLACKMON

U.S. figured out about 16 years ago how to extract oil from dense shale formations by combining the technologies of horizontal drilling and hydraulic fracturing.

It took about a decade for things to jell, but with the discovery of the Eagle Ford Shale in South Texas and several prolific shale plays in the Permian Basin, the U.S. has suddenly found itself in a certifiable oil boom over the last five years, raising its own production by more than 3 million barrels of oil per day since 2010.

The U.S. shale boom has caused a shift on Saudi thinking over time, from that of the need to maintain a steady, high price for oil to more of a concern for the maintenance and increase of their global market share. Russia, the world’s third largest producer and second largest exporter of oil, has come to share the Saudis’ market share concern.

During 2014, it became increasingly apparent that the U.S. shale boom, combined with slowing demand for oil in Asia and the Pacific Rim countries,

INDEPENDENT PRODUCERS IN THE U.S. FIGURED OUT ABOUT 16 YEARS AGO HOW TO EXTRACT OIL FROM DENSE SHALE FORMATIONS BY COMBINING THE TECHNOLOGIES OF HORIZONTAL DRILLING AND HYDRAULIC FRACTURING. 30

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FLOGEL/BIGSTOCK.COM

THE TRUTH ABOUT

OPEC IS NOT OUR FRIEND. There, I’ve said it. In print. No taking it back now.

But it’s true—The Organization of Petroleum Exporting Countries (OPEC) is not now, and never has been, a friend of the United States of America and other Western democracies. That should not come as a surprise, given that OPEC was created in 1960 by Saudi Arabia, Iran, Iraq, Kuwait and Venezuela, most of which were coming out of British colonial domination and having recently gained control of their own oil resources.

These countries realized that, because they together controlled such a large portion of the world’s then-known oil reserves, they could exert a heavy influence over the price of this global commodity if they could coordinate policies and strategies. And for more than half a century, as OPEC expanded from the five original member countries to its current fourteen members, these policies and strategies were pretty much always designed to create higher prices for their precious resource, a resource the rest of the world relies upon for much of the energy necessary to create and sustain economic growth and prosperity.

Throughout much of that half-century, Saudi Arabia, because it consistently has significant excess producing capacity, has often acted as the group’s main “swing producer,” raising or lowering production to maintain the pricing level that OPEC preferred. Acting in this role has seldom created a problem for the Saudis, as global demand for oil has steadily continued to rise throughout this period, and the producing capacity of OPEC’s single biggest customer—the United States of America—had steadily declined.

But a funny thing happened on the way to stable $100 oil prices as far as the eye could see: Independent producers in the

OPEC NEEDS SAUDI ARABIA IN ORDER TO REMAIN RELEVANT ON THE WORLD STAGE, BUT SAUDI ARABIA DOES NOT NEED OPEC

SPEEDFIGHTER/BIGSTOCK.COM

had begun to create a glut of oil on the world market. This glut had risen to about 1.5 million barrels of oil per day last September, as OPEC’s regular fall meeting was scheduled to take place. In years past, the expectation would have been for the OPEC countries to agree to new, lower oil production levels at that fall meeting in order to maintain a higher commodity price, with the Saudis taking the lead in making the largest cuts.

But the Saudi mood was shifting, and beginning in August their ministers began to send signals that they might not be willing

to continue serving in their traditional “swing producer” role going forward. Briefly prior to the November OPEC meeting, as global oil prices were in the midst of a rapid fall, Saudi ministers met with Russian representatives to see if the two largest exporters could jointly agree to reciprocal production cuts so that both could maintain market share going forward. The problem with this negotiation was that Saudi Arabia has an enormous surplus of cash from which it could draw for several years in an effort to gain market share, while the Russians, whose economy is in shambles, desperately need to sell every barrel of oil they can produce in order to survive. Inevitably, the meeting failed to produce an agreement to joint production cuts.

At the OPEC meeting in November, the Saudis made it clear they would not agree to bear the brunt of production cuts in order to maintain a higher commodity price,

because their national priority had shifted to maintenance of market share. But many other OPEC countries were in the same position as the Russians: Their own economic problems required them to cash flow all of the oil they could put onto the market. The net result was the ending of OPEC’s role as a cartel dedicated to maintaining high commodity prices.

No one can know today whether this will be a temporary blip on the screen, or if OPEC’s influence is permanently diminished. We do know in the several months since November, the Saudi strategy has begun to show its desired results.

Global demand for crude oil has begun to increase in response to lower prices.

Also, overall U.S. production plateaued in December, and more recent data points indicate that production in major shale plays began to fall in January.The U.S. rig count has fallen more than 45 percent from October 2014 levels, and we can expect U.S. production levels to begin to fall significantly as even more rigs are deactivated and stacked.

For the Saudis, the end result of all of this will be exactly what they desired: an increased share of the global market.

For OPEC’s other 13 member countries, the reality this episode in history creates is very stark: OPEC needs Saudi Arabia in order to remain relevant on the world stage, but Saudi Arabia does not need OPEC.

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OIL & GAS BUSINESS MAGAZINE

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Featured Speakers: Port of Houston Authority, Executive Director Roger Guenther, Texas Railroad Commissioner Ryan Sitton, Texas Chemistry Council President Hector Rivero Congressional Update: Gene Green, Brian Babin Refinery Plant Manager Panel Chemical Plant Manager Panel Industrial Workforce Panel Transportation & Logistics Panel

Sponsorships, Booths & Registration: About the author: David Blackmon has spent 35 years in the oil and natural gas industry, in a variety of roles. He has spent the last 20 years engaged in public policy issues at the state and national levels. Contact David Blackmon at david.blackmon@shalemag.com.

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For additional information contact: jerilyn@allianceportregion.com 281-476-9176 ext 4 MAY/JUNE 2015 // SHALE OIL & GAS BUSINESS MAGAZINE

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INDUST RY

WHAT’S TO COME FOR THE EAGLE FORD BY: OMAR GARCIA, PRESIDENT AND CEO OF STEER

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ONCE OIL INCREASES TO A MORE SUSTAINABLE PRICE, THE EAGLE FORD STANDS TO BOUNCE BACK FASTER THAN OTHER SHALE PLAYS

NIYAZZ/BIGSTOCK.COM

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ctivity in the Eagle Ford Shale region has spurred phenomenal growth in South Texas. In 2012, South Texas saw an economic impact of $61 billion, and in 2013 that number increased to $87 billion.

Eagle Ford area residents are curious about what the current decrease in oil prices means for their families and their communities.

The oil and gas industry is cyclical by nature. And, unfortunately, this fluctuation in price has meant decreased activity and the loss of jobs. Unlike past downturns,

we know where the oil and gas is located and how to produce it; but we need prices to allow economic development.

Operators in South Texas have invested billions of dollars in the region, and we will continue to develop the region—albeit at a slower pace.

Although activity is proceeding, we have certainly seen a decrease, causing local communities to feel the impact of lower oil prices. Many companies have scaled back their budgets and announced layoffs. We hate seeing these job losses and how they are affecting our families and friends. It is our hope that once activity picks back up, so will open positions. To fill those positions we still need a skilled workforce.

Communities are making more investments in education with new public schools and focusing on workforce development. We must continue to educate our children and future workforce—emphasizing STEM-related career paths. The oil and gas industry is constantly working on new innovations and technologies to become even more efficient and costeffective, which will require a skilled and knowledgeable workforce.

Some communities are wondering what they should do while waiting for activity to increase again. This is a good time for area communities to evaluate their strategic plans, work on infrastructure and plan for both the short-term and long-term needs of each individual community. Many communities understand the importance of diversification and have begun the process of expanding their economies.

Once oil increases to a more sustainable price, the Eagle Ford stands to bounce back faster than other shale plays. Not only because of the efficiencies already in place in our development, but also because being in South Texas makes it easier to get production to the coast.

For more information: Visit www.steer. com or email info@steer.com.

MAY/JUNE 2015 // SHALE OIL & GAS BUSINESS MAGAZINE

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INDUST RY

PEMEXÕS FORECAST: BIG CHANGES AHEAD SPECIAL TO SHALE FROM THE PEMEX PROCUREMENT DIVISION

»

Drilling

»

Logistics, which will provide land, maritime and pipeline transportation to PEMEX and third parties.

»

Cogeneration and Services, which will aim to maximize energy use in our operations by utilizing heat and steam methods generated in our industrial processes.

»

Fertilizers, which will integrate the ammonia production chain up to the point of sale of fertilizers.

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»

Ethylene, which will separate the ethylene business in order to take advantage of the integration of the ethylene production chain.

The new Exploration and Production subsidiary will emphasize the importance of exploration through its three purposes: production and development, exploration and a project management coordination office.

With the reorganization’s approval, PEMEX’s management team will propose the Organic Statutes and the Articles of Creation for each of the new enterprises.

With this system, PEMEX can manage commercial and financial information from suppliers and contractors, in addition to their products and services. As well, we can evaluate qualitative and quantitative aspects of the entire procurement chain and crosscheck information with other government entities such as the Servicio de Administración Tributaria (Tax Administration Service), Instituto del Fondo Nacional de la Vivienda para los Trabajadores (National Workers’ Housing Fund Institute), Instituto Mexicano del Seguro Social (Mexican Social Security Institute), Secretaría

THIS NEW LEGAL FRAMEWORK WILL ALLOW PEMEX TO OPERATE WITH INCREASED FLEXIBILITY AND DYNAMISM, SETTING THE GROUNDWORK FOR THE COMPANYÕS LEADERSHIP ROLE IN MEXICOÕS NEW ENERGY AGE Subsequently, management will present the pricing, fee and cost regime applicable to commercial transactions between PEMEX and its subsidiaries and affiliates, in addition to the guidelines and strategies for the comprehensive management of affiliates.

This new legal framework will allow PEMEX to operate with increased flexibility and dynamism, setting the groundwork for PEMEX’s leadership role in Mexico’s new energy age.

PROCUREMENT PERSPECTIVE: REGISTRATION AND EVALUATION OF SUPPLIERS AND CONTRACTORS

Due to a changing environment, we have implemented a new registration and evaluation platform for suppliers and contractors to promote long-term relationships. We aim to operate based on a reliable and transparent management model to promote long-term relationships with suppliers and improve procurement performance, according to international standards.

SHALE OIL & GAS BUSINESS MAGAZINE // MAY/JUNE 2015

del Trabajo y Previsión Social (Secretariat of Labor and Social Welfare), and Secretaría de la Función Pública (Secretariat of the Public Function). PEMEX will also be able to analyze suppliers and contractors by families and categories, with global access.

THE VALUE CREATION JOURNEY

Achieving excellence is a multiphase, transformative journey toward growth and value creation. To drive these results, PEMEX is making major investments in expanding and modernizing our industrial infrastructure to transform hydrocarbons into high-quality products.

We are deeply conscious of the impact our industrial and commercial transactions have on Mexico’s development. We take great pride in contributing to the construction of a better PEMEX and a brighter future for Mexico.

For more information: Visit PEMEX online at www.PEMEX.com.

DIEGO CERVO/BIGSTOCK.COM

O

n November 18, 2014, the board of directors of Petróleos Mexicanos (PEMEX) approved the Director General’s proposal for the corporate reorganization of PEMEX. Pursuant to this restructuring plan, the four existing subsidiaries of PEMEX will be transformed into two new state-owned productive enterprises, which will assume the rights and obligations of the existing divisions.

PEMEX is one of the top 10 largest oil companies in the world and the 13th largest oil producer worldwide. Based on our responsibility of managing Mexico’s vast hydrocarbon resources, PEMEX is immersed in a process of growth and modernization.

Driven by entrepreneurial vision, we face the challenges of innovation in Mexico’s energy revolution.

The first of these state-owned productive subsidiaries, Exploración y Producción (Exploration and Production), will subsume the existing PEMEX Exploration and Production. The second, Transformación Industrial (Industrial Transformation) will comprise the following existing subsidiaries: PEMEX Refining, PEMEX Gas and Basic Petrochemicals and PEMEX Petrochemicals.

As part of the corporate reorganization plan, the board of directors also approved the creation of the following five state-owned productive subsidiary enterprises, each of which is scheduled to become an affiliate of PEMEX in 2015:

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INDUST RY

NEW RECORD:

OIL AND GAS INDUSTRY PAID $15.7 BILLION IN TAXES AND ROYALTIES THAT FUND SCHOOLS, ROADS, SERVICES BY: TODD STAPLES, President of the Texas Oil & Gas Association

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Even in years when oil and gas tax revenue doesn’t make history, it always makes a tremendous impact on Texas schools, public services and the critical infrastructure our growing state needs.

Beyond paying taxes and royalties, the oil and gas industry supports fully 41 percent of the Texas economy, up from 33 percent in the previous year. The industry creates an economic ripple effect, with every direct oil and gas job creating additional jobs in supporting industries.

Because the industry invests in goods like pipe and machinery and services such as construction and engineering, the economic multiplier associated with oil and gas production is tremendous. A typical job in petroleum refining, for example, drives another 26 jobs in other sectors across the Texas economy.

In 2014, the oil and natural gas industry directly employed 418,000 Texans, with indirect economic gains resulting in another 1.8 million Texas jobs in supporting industries and sectors.

More than 2.2 million Texans have a job as a result of oil and gas activity in our state.

The surge in oil and gas production in Texas is made possible by hydraulic fracturing, or fracing, a 60-year-old technique that frees oil and natural gas trapped in tight shale rock formations. Notably, as production has increased dramatically, methane emissions from oil and gas operations have decreased significantly, according to data from the U.S. Environmental Protection Agency. What’s more, fracing has helped to revive the Texas manufacturing industry. And by 2025, it’s estimated that shale energy production will support 1 million manufacturing jobs in the U.S. Fracing and drilling innovations have allowed us to produce our own natural resources, which bolsters our nation’s energy security, keeps energy prices down and clearly benefits all Texans. That’s something everyone in our state can be proud of. Sensible and predictable regulation will help keep us on the right path toward prosperity, including a safe environment and a healthy economy.

SHALE OIL & GAS BUSINESS MAGAZINE // MAY/JUNE 2015

THE TEXAS OIL AND GAS INDUSTRY HAS A LONG AND CONTINUING LEGACY OF PROVIDING BILLIONS OF DOLLARS IN TAX REVENUE EACH YEAR THAT DIRECTLY FUNDS OUR SCHOOLS, ROADS, FIRST RESPONDERS, ESSENTIAL PUBLIC SERVICES AND MORE About the author: Todd Staples is the President of the Texas Oil & Gas Association, the state’s oldest and largest trade association representing every facet of the oil and gas industry, including small independents, major producers, pipelines and refineries. Staples was twice elected statewide to serve as the Texas Department of Agriculture Commissioner and is the author of Broken Borders, Broken Promises, a book that details our nation’s border and immigration challenges and provides a bold path forward. He served with distinction as a member of the Texas Senate and House and began his elected service on the city council in his hometown of Palestine.

As a successful businessman and rancher, he was deeply involved in volunteer service for his local church, community and state. Today, Staples continues his passion to help make the Lone Star State the best place to do business and raise a family.

PHOTO COURTESY OF TODD STAPLES

F

or more than 100 years, the natural resources under our feet have anchored the Texas economy, creating good jobs, funding for schools and roads and stability for our state. Today, the oil and gas industry’s positive economic impact for Texas has reached historic levels. In 2014, the Texas oil and natural gas industry paid a record $15.7 billion in state and local taxes and royalties, the highest such collection from the oil and gas industry in Texas history.

When Texans think of the oil and gas industry, they likely envision an oil rig or a pump jack. Beyond iconic imagery, the oil and gas industry has a long and continuing legacy of providing billions of dollars in tax revenue each year that directly funds our schools, roads, first responders, essential public services and more. Safe and responsible oil and gas production is unmistakably helping the state meet the needs of Texans.

The positive impact of oil and gas tax revenue on the state takes many forms. Texas’ Rainy Day Fund, funded almost exclusively by oil and gas severance taxes, has been used to support public schools, children’s health insurance, economic development initiatives and more.

Last year, voters approved a constitutional amendment to direct billions of dollars in oil and natural gas tax revenue toward Texas highways.

Just before that, Texans approved using $2 billion from the Rainy Day Fund to fund the state’s water plan. Also, oil and gas royalties and leases fund the Permanent School Fund, which supports Texas public schools. The fund, worth $37.7 billion, recently became the largest education endowment in the nation.

Even with decreased oil prices, Texas is and will remain an oil and gas state whose economy depends on robust oil and gas activity. The industry contributed mightily to this state when oil prices were below $100 a barrel.

A look back to 2012 provides healthy perspective on any possible impact on state and local tax revenue as oil prices stabilize. In 2012, when oil production in Texas was a million barrels a day less than it is today, the oil and gas industry paid a hefty $12.1 billion in state and local taxes and royalties. When Texas produced half of the oil we are producing today, the oil and gas industry paid $9.3 billion in state and local taxes and royalties.

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We are committed to providing experienced Safety Advisors to fit our clients’ needs – from one Safety Advisor to multiple ones – at a reasonable price with 24/7 availability. Our Safety Advisors have a wide variety of knowledge and experience from the petrochemical industry performing turnarounds, construction, drilling and completions (onshore and offshore), pipeline, as well as operations onshore and offshore. Whatever our clients need, we have the experience necessary.

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Excel Safety Consultants also provides Case Management services. We have partnered with a board-certified occupational physician and a Texas Workers’ Compensation insurance adjuster who believe in the ability to interpret OSHA recordkeeping standards and to implement best-practice methods which not only offer the employee the best medical care but also allow for reduced OSHA recordability to our customers.

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MAY/JUNE 2015 // SHALE OIL & GAS BUSINESS MAGAZINE

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Our expanded Ranch Club complex is the perfect paradise for rest, relaxing and recreation. Just steps from Clubhouse Village, it now offers many additional resort-style amenities including four separate swimming pools, Jacuzzi, Ranch Club Grill featuring a wood burning pizza oven, a luxurious open-air pavilion for lounging and seating for up to 300, lighted hard-surface tennis and sport courts, and much more.

To learn more please contact Sean Gioffre at 830-997-7693 / sgioffre@bootranch.com or Andrew Ball at 830-997-6200 / aball@bootranch.com. bootranch.com

MAY/JUNE 2015 // SHALE OIL & GAS BUSINESS MAGAZINE

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BUSINE S S

LIVE FOR TODAY AND PLAN FOR TOMORROW BY: GEORGE F. LONG risk that those assets could decline in value during times of market volatility. We don’t have to look back very far into U.S. economic history for events that resulted in double-digit declines: the Great Recession of 2008, the financial downturn following the 9/11 terrorist attacks, and the stock market crash of 1987.

OTHER FACTORS CHALLENGE TODAY’S PRE-RETIREES

Current socioeconomic and demographic factors that have made it more important than ever to prepare financially for retirement include: » Longer life spans and uncertainty surrounding the future cost of health care » As people grow older, their need for health care and long-term care services increases. » Fluctuations of financial markets and the impact on retirement account balances

For as long as anyone can remember, people have depended on three primary sources for their retirement income: pensions, personal savings and Social Security.

Over the past several decades, however, this picture has changed.

One significant change is that retirement funding, for most people, has gradually moved from an emphasis on employer-paid defined benefit pension plans to employeefunded defined contribution plans, like 401(k)s.

Furthermore, as the burden of retirement savings has shifted, so has the investment risk. Individuals are now increasingly responsible for funding their own plans, making their own investment choice, and taking on the

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PLANNING QUESTIONS TO ASK YOURSELF

Whether retirement is around the corner or decades away, planning for it should raise these questions: » What would happen if you retired at a time when stock and bond prices were declining? » What is the erosive impact of taking income from an equity-based retirement account in a bear market? » How can you prepare to more effectively manage your income during retirement?

In today’s challenging environment, how can you take more control of your retirement planning and find the right strategy to help you face the future with confidence?

SZEFEI/BIGSTOCK.COM

THE CHANGING ENVIRONMENT FOR RETIREMENT PLANNING

The shift from employer-paid pensions to employeefunded contribution plans does have the advantage of the potential for significant gains in investments. However, financial markets may be subject to periods of volatility.

Many parents entering retirement today are concerned that they will outlive their retirement savings or not be able to leave a financial legacy for their children and grandchildren. As a result, they may try to limit their spending to what their retirement accounts earn each year, preserving the principal to help ensure that they will never run out of money. While this will help maintain their savings, this conservative income strategy may limit their ability to fully enjoy retirement.

Finally, retired couples also face another issue. The monthly income payments that they receive from Social Security, pensions and annuities may be reduced after the death of the primary recipient. This may occur at a time when a surviving spouse still needs this source of income to live on.

HOW CAN YOU TAKE MORE CONTROL OF YOUR RETIREMENT PLANNING AND FIND THE RIGHT STRATEGY TO HELP YOU FACE THE FUTURE WITH CONFIDENCE? Your ideal supplemental retirement income strategy might offer: » A systematic and disciplined approach to setting aside funds » Stable and consistent growth in cash value » Tax advantages and flexibility

Would like to thank these companies for their

GENEROUS DONATION

to this year's Power in Partnership Conference on the Concho and all the individuals who support our mission.

THE WHOLE LIFE RETIREMENT SOLUTION

A whole life insurance policy from Massachusetts Mutual Life Insurance Company (MassMutual) can help you take more control of your retirement planning strategy.

Whole life insurance offers a combination of death benefit protection, cash value accumulation, guarantees and income tax advantages that differentiate it from most other types of financial products.

It’s always wise to prepare for the worst. What if the worst thing happens and you don’t live long enough to retire? If you die before retirement—or after—your whole life policy will pay a generally income tax-free death benefit to your beneficiaries to provide for their future financial needs.

Suppose your healthy lifestyle pays off and you are physically able to enjoy a long, active retirement. Will your savings be affected by market volatility, possibly forcing you to reduce your income?

With whole life insurance you can use your policy’s cash value to provide a stable source of tax-favored supplemental retirement income that is not impacted by short-term market volatility. This is what we call one of the policy’s “living benefits.”

The accumulation of a whole life policy’s cash value is guaranteed and can help provide a reliable source of retirement income, regardless of market conditions. You can depend on your policy’s guaranteed cash value growing to a specific amount over time.

PARTNER WITH A FINANCIAL SERVICES PROFESSIONAL

Life is full of uncertainties, but you can take control by being prepared for whatever life brings. Whole life insurance can help you and your loved ones meet life’s challenges.

The good news is that you don’t have to develop financial protection strategies on your own.

You can benefit from working with a financial services professional who has knowledge, experience, insight and an active interest in your financial success. A skilled financial services professional will not only advise you on the type and amount of insurance protection that is right for you, he or she can also coordinate your financial strategies with your attorney, accountant and any other professional advisors with whom you work to help you achieve what is most important to you.

Your financial services professional can help you live better today and be prepared for whatever tomorrow may bring.

For more information: Contact George F. Long, a financial representative with MassMutual South Texas, a MassMutual Agency, at gflong@ financialguide.com or 210-384-5314; this article is provided courtesy of Massachusetts Mutual Life Insurance Company (MassMutual).

INTERESTED IN SPONSORSHIP? WTxEC has something for everybody.

To learn more about supporting our work in West Texas and the benefits to your company or organization, contact Katherine Stokes, Executive Director katherine@wtxec.org and 325-669-2769.

Please visit wtxec.org for full updates!

MAY/JUNE 2015 // SHALE OIL & GAS BUSINESS MAGAZINE

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BUSINE S S

ECONOMIC IMPACT OF TEXAS NATURAL GAS VEHICLE AND FUELING STATION GRANT PROGRAM BY: THOMAS TUNSTALL, PH.D.

I

n late February, the University of Texas at San Antonio’s Institute for Economic Development released a report analyzing the impact of grant programs authorized by the Texas Legislature. The intent of the grants is to encourage the development of natural gas fueling infrastructure and to convert gasoline or diesel-powered vehicles. Only about 3 percent of vehicles in the U.S. run on natural gas, so the potential to increase usage is vast.

The energy landscape in the United States has fundamentally changed over the past decade. If we were to look back at the 2000-2010 time frame, we would see that natural gas prices have fluctuated wildly—ranging from $2 per thousand cubic feet (mcf) to as much as $14 per mcf. That kind of volatility discouraged the use of natural gas in a wide range of applications, from vehicle fuel to power generation usage, or as a feedstock for manufacturing plastics, fertilizers and

Texas Clean Energy Triangle vs.

State of Texas with current and future CNG and LNG Fueling Stations. Source: Alternative Fuel Center, Department of Energy, CCBR GIS, H. Eid

chemicals. In the past few years, however, widespread use of unconventional extraction techniques from shale, in places like the Eagle Ford, has pushed natural gas prices down and kept them there. In fact, the UTSA Institute for Economic Development analysis of the market suggests that natural gas prices will remain at $3-$6 per mcf for the foreseeable future—at least a decade or more.

One of the challenges associated with increasing the use of natural gas comes down to the proverbial chicken-and-egg conundrum. Fueling station owners will only invest in natural gas infrastructure if they believe there is sufficient vehicle demand, and would-be purchasers of natural gas vehicles will

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do so only if there are enough fueling facilities located regularly along highways. In Texas, so far, there are only about 100 natural gas fueling stations—compared to over 16,000 stations that dispense gasoline.

In order to address the lack of natural gas infrastructure, a series of grant programs under the Texas Emissions Reduction Plan are being administered by the Texas Commission on Environmental Quality to encourage the use of natural gas. The focus is on the Texas Triangle, which includes Dallas-Fort Worth, Houston, Austin and San Antonio.

While that geography covers less than 25 percent of the state, over 70 percent of the population lives there.

Two of the grants are geared toward developing fueling stations for natural gas: the Clean Transportation Triangle grant and the Alternative Fueling Facilities Program. The third type of grant is known as the Texas Natural Gas Vehicle Grant Program. Together, the grants totaled $53 million but had a $128 million economic impact for the state. Jobs supported by the investments made as a result of the grants were nearly 1,000 in 2014, and if the programs are renewed, they could support over 3,000 jobs this year.

Diversifying our use of transportation fuels and moving away from a heavy reliance on gasoline and diesel helps make us less dependent on crude oil. Natural gas burns cleaner than gasoline and diesel due to its lower carbon content, and it serves to improve air quality,

particularly in heavily populated urban areas. Natural gas is also the most popular alternative fuel for medium and heavyduty trucks in Texas. And even with lower crude oil prices that have driven gasoline prices down around $2 per gallon, the natural gas price equivalent is still lower at around $1.50.

So while energy independence may remain an elusive goal, particularly with regard to crude oil, we have the opportunity to take an important step in that direction by transitioning many more vehicles to use natural gas. As an added bonus, we will also make a positive impact on air quality in Texas.

About the author: Thomas Tunstall, Ph.D., is the Research Director at the Institute for Economic Development at the University of Texas at San Antonio. He was the principal investigator for the Economic Impact of the Eagle Ford Shale studies released in May 2012, March 2013 and September 2014, as well as the West Texas Energy Consortium Shale Study.

He has published peer-reviewed articles on shale oil and gas, and has written op-ed articles for The Wall Street Journal. Dr. Tunstall has spent a significant portion of his career on overseas workforce and economic development assignments in such locations as Azerbaijan, Afghanistan, Kenya and Zambia.

He holds a Ph.D. in economics and public policy and an M.B.A. from the University of Texas at Dallas, as well as a B.B.A. from the University of Texas at Austin.

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BUSINE S S

HOW A FACE-LIFT CAN HELP YOUR BUSINESS BY: JULIA LE-NGUYEN

location. Consumers are able to access your page at any time, on their time. They can find your business without having to speak to anyone. You’re no longer limited to your business’ physical location or operating hours. Your Web presence can reach people down the street, across the country or even across the world.

This opens up a much broader, wider customer base.

COST-EFFECTIVENESS

MARKETING

Marketing is crucial for any sort of business. You want your product or service to be promoted and sold effectively. With an online presence, you are able to build your company’s reputation and a reputation with your clients. According to Forbes, more and “more businesses are finding success publishing original content rather than embedding advertisements within external content.”

BUILDING A BRAND

Having an online presence not only allows you to sell your product or service, but it also lets customers provide you with feedback. Online reviews are important because they show consumers what clients thought about your product or service, not just what you’re trying to sell. They also provide you with the opportunity to make any suggested changes to improve the customer experience. By building a trusting and honest relationship with your consumers, you can make a name for your business.

With so many social media outlets at the ready and—without a doubt—more on the way, this changing technology can seem very overwhelming. SHALE not only offers print advertisements, but it also offers online advertising on our website (www.shalemag. com), as well as digital marketing services outside of SHALE to increase your online visibility and website traffic. Let us show you how our online experts can help you grow your business.

ACCESSIBILITY

Thanks to Google and other search engines, everything—and everyone—is just a click away. You can easily and readily go online from almost any

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For more information: Contact Fernando Guerra at fernando@shalemag.com.

LVNEL/BIGSTOCK.COM

I

t’s no surprise that the era we now live in is called “the digital age.” If you were to go outside right now, it is almost guaranteed you would find someone with a phone, tablet, laptop or, in some cases, all three in hand. People are constantly communicating through social media. And as technology progresses, so does the Internet. It’s not enough to have just a website with your address and phone number anymore. Now you need a Facebook, Twitter, Yelp and Instagram profile—and the list goes on. What are the perks of creating an account with these social media sites? How can you use them to your advantage? And what can they do for you and your business?

Business costs money to make money, but something as simple as a social media strategy can prove to be very cost-effective. Most social media sites have no fee when signing up. For example, you can create your own Facebook page for free, and just like that you have access to the social networking conglomerate’s 1.39 billion monthly users.

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POLIC Y

SINE DIE COUNTDOWN: Pace picks up as key and priority bills start advancing to the finish line

T BY: GLORIA LEAL

BUDGET BRAWL

Every session is different and this one is decidedly so.

The 84th legislative session has been marked by major differences in philosophy between the higher and lower chambers on spending proposals for the key government functions of border security, maintenance of facilities, public education, transportation and other programs. Most notable are the different approaches to tax relief. Despite disagreements on approach, there are champions for tax cuts in both houses.

Following 18 hours of debate that lasted into the early morning hours of the next day, lawmakers in the House passed the General Appropriations Act by huge margins.

HB 1, authorizing a $209.8 billion state budget for the next biennium, was passed on a vote of 141 to 5. Voting no were five Tea Party-backed Republicans. With very little debate and no nays, members also signed off on the “supplemental” appropriations bill to offset a shortfall in some programs. More than 300 amendments had been filed in advance of the debate and controversy was expected from those with ideological stances against the

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funding or the levels of funding for certain state programs.

Many of the amendments that could have caused the hottest fights—including proposals on women’s health, vouchers and in-state tuition for undocumented college students—were withdrawn before they could be debated. The angst of the Tea Party was mostly contained,

THE GENERAL APPROPRIATIONS ACT, AUTHORIZING A $209.8 BILLION STATE BUDGET FOR THE NEXT BIENNIUM, WAS PASSED ON A VOTE OF 141 TO 5 although efforts were made to rally the troops on several amendments. Democrats also lost battles on several fronts; efforts to move money for border security and the Texas Department of Public Safety to other programs failed, as did efforts to settle the school finance lawsuit. In the end, however, all 55 voted for HB 1.

The House budget bill was the culmination of months of hearings and testimony, and reflected the priorities of the 27-member Appropriations Committee. Bill sponsor and Appropriations Chair Rep. John Otto (R-Dayton) deftly defended against efforts to substantially change negotiated funding provisions on pensions, public school finance, border security and Medicaid.

Moving one step closer to intense negotiations with the House, the Senate passed its version of the budget by a 30-1 vote. In the Senate, the spending plan primarily reflects the priorities of the Governor, the Lieutenant Governor and

ZIMMYTWS/BIGSTOCK.COM

he 84th Texas Legislature has reached the crucial time of the session with deadlines for action approaching and expiring.

End-of-session deadlines are resulting in a flurry of activity at the state Capitol as some 6,305 House and Senate bills and resolutions make their way through the legislative process.

The majority are dead—more will die in the ensuing logjam or as a result of procedural moves such as the dreaded “point of order.” In the House, the deadline for committees to report House bills and joint resolutions to meet calendar deadlines for consideration on the floor is May 11. May 15 is the last day for the House to consider consent House bills on second and third reading, and all third reading House bills or joint resolutions on the Supplemental Calendar. The Senate operates under its own rules and does not take House deadlines into consideration. The result is marathon debates by lawmakers in both chambers and lengthy hearings past midnight to make sure designated bills make it to the floor for discussion and vote. So far no bill has made it to the Governor’s desk for signature at the time this issue goes to print. June 1—the last day of the regular session—is fast approaching, and the legislature is at full steam.

Senate leadership. Even though they voted for the bill, several Democrats and one Republican filed amendments to increase funding for certain programs. As is common, though, the Senate’s lead budget writer, Sen. Jane Nelson (R-Flower Mound), did not accept changes. The $211 billion budget differs from the approach of the House in a variety of ways—it funds $2.1 billion in property tax relief in the form of

oil and gas operations is expressly preempted except for measures that meet a four-part test.

A municipal ordinance or measure is not subject to preemption if it regulates only surface activity that is incident to an oil and gas operation, is “commercially reasonable,” does not effectively prohibit an oil and gas operation and is not otherwise preempted by state or federal law.

Also, HB 539 by Rep. Phil King (R-Weatherford)

in committee and the subject of intense negotiating, press and editorials. The bill was reported favorably as substituted after providing clarification and addressing some sticking points to gain support for the bill.

CSHB 40 retained the “commercially reasonable standard” and a modified four-part test for municipal surface regulations. The role of cities to undertake regulations governing fire and

PROPOSED LEGISLATION WOULD PROHIBIT FRACING BANS AND EXPRESSLY PREEMPT THE REGULATION OF OIL AND GAS OPERATIONS BY MUNICIPALITIES AND OTHER POLITICAL SUBDIVISIONS ACROSS THE STATE an increase in the homestead exemption as well as a $2.3 billion business tax cut. The House plan focuses on a sales cut coupled with a 25 percent across-the-board margins tax cut. Like tax relief, the Legislature is in agreement that increased revenue to increase state transportation funding is necessary for maintenance and upgrades, and to relieve congestion in urban and energy-producing areas. However, the House and Senate disagree on specific funding mechanisms, such as ending diversions, redirecting vehicle sales tax revenue and the amount of the general fund gift.

Progress continues. After the House votes to reject the Senate’s changes to the twoyear spending plan, a few chosen lawmakers from each chamber will attempt to work out the differences between the two budgets in a conference committee before June 1. The budget is the only bill state lawmakers are required to pass when they convene every two years.

would require that a city obtain a fiscal note from the Legislative Budget Board identifying the economic impact of regulation on state and school funding and remit that cost to the state if drilling was prohibited.

Both bills were heard by the House Energy Resources Committee, chaired by Darby, at a contentious, lengthy hearing that went past midnight as witness after witness testified for or against. Witnesses for the oil and gas industry squared off against representatives of municipalities, primarily city officials and attorneys. Taking a bystander position were real estate agents and developers who are clearly connected to the issue of reverse setbacks. In the Senate, the Natural Resources & Economic Development Committee chaired

by Sen. Troy Fraser (R-Horseshoe Bay) held a hearing on SB 1065, the companion bill to HB 40. After a lengthy hearing and owing to the Senator’s seemingly magic touch, the bill

emergency response, traffic, lights or noise, notice and reasonable setback requirements was preserved. The bill also contains a “safe harbor” for qualifying existing ordinances providing that “(a)n ordinance or other measure is considered prima facie to be commercially reasonable if the ordinance or other measure has been in effect for five years and has allowed oil and gas operations … to continue during that period.”

In a notable development, the Texas Municipal League (TML) and the Texas Oil & Gas Association (TXOGA) reached an agreement on the bill. TML Executive Director Bennett Sandlin and TXOGA President Todd Staples signed a letter agreeing “to support or be neutral on the committee substitute to House Bill 40, provided no amendments are supported by either party unless mutually agreed to.” The rallying cry for the oil and gas industry became “Support Chairman Darby on CSHB 40—Keep

was passed out of committee that same night with the recommendation that it should pass.

Fraser, the bill’s author, said he would consider any amendments on the floor.

Meanwhile in the House, dynamics were considerably different. HB 40 was left pending

Amendments Off.” Following debate on the House floor, the bill is expected to pass, albeit not without more drama. Due to a computer glitch, the bill was subject to a technical point of order on the floor, which slowed consideration; and environmental groups continue to mount

MOSHE RIVEL/BIGSTOCK.COM

OIL AND GAS REGULATION

Spurred by the Denton ban on hydraulic fracing passed last November, the Legislature is taking a hard look at Texas’ role in oil and gas regulation and what role municipalities can play related to some aspects of drilling in the urban context. Both the House and Senate have held public hearings on legislation that would expressly confirm the state’s authority to regulate oil and gas operations in this state.

Proposed legislation would prohibit fracing bans and expressly preempt the regulation of oil and gas operations by municipalities and other political subdivisions across the state. All existing city ordinances may be impacted. The politics and policy of state versus local control have made for some interesting drama within the dome and the oil and gas industry.

BILLS TAKING CENTER STAGE

Of the 12 preemption-related bills filed this session, HB 40 by Rep. Drew Darby (R-San Angelo) is considered the key industry bill and has garnered most of the attention and support. The bill states that the authority of a municipality or other political subdivision over

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efforts to kill the bill. Assuming final passage, the House version of the bill will have to be reconciled with the Senate version. Therefore, the bill could quite possibly also head to conference committee.

UPPING THE ANTE

The Environmental Defense Fund has filed three petitions for rulemaking before the Railroad Commission of Texas:  Require installation and maintenance of subsurface shut-off valves.  Provide for the delegation of permitting authority and notification of pipeline locations to local governments, or, alternatively, assumption of direct oversight by the commission.  Amend rules to regulate truck traffic in populated areas.

THE NEXT CHAPTER IN REGULATION

Site Development

•

excavation

•

UtilitieS

•

paving

Another legislative policy dilemma for state lawmakers is balancing the protection of water resources with the need to reduce regulation and maintain the state’s predominant economic status. Several bills granted hearing in the House Natural Resources Committee dealt with groundwater regulation and the responsibilities of groundwater conservation districts. Currently there are 98 districts in the state operating under rules and procedures that vary from district to district.

Committee Chair Rep. James L. “Jim” Keffer (R-Eastland) filed several bills that would establish some uniformity across the state. HB 200 would establish a framework for regulation of groundwater resources, whereas HB 2767 deals with the powers, duties and administration of groundwater conservation districts. HB 1972, also filed by Keffer, imposes uniform requirements for obtaining a permit from a groundwater conservation district, including reporting and assessment of a fee. A bill filed by Rep. Lyle Larson (R-San Antonio) encourages the storage and recovery of water in underground aquifers as opposed to above-ground reservoirs where quantities of water are lost to evaporation.

Other bills call for increased oversight and uniform treatment of brackish water resources and incentives for desalination efforts. HB 30, also filed by Larson, would establish a statewide framework for development of brackish water. The bill was heard in committee, and similar to other priority legislation was the subject of contentious testimony that went late into the evening. Landowners, water producers and conservation districts took opposing positions on the need for regulation and on the definition of “brackish water” itself.

The bill was sent to subcommittee for resolution, but progress is being made. SB 1738 by Sen. Juan Hinojosa (D-Edinburg) looks into the development and production of marine seawater desalination, integrated marine seawater desalination, and facilities for the storage, conveyance, and delivery of desalinated marine seawater.

Also generating energetic, even contentious, discussion in hearing are bills related to annexation and eminent domain authority, utility rate-making and contested case proceedings. Lawmakers also considered bills regarding allocation wells and granting unitization authority for tertiary recovery. Of note, HB 3291 by Rep. Richard Peña Raymond (D-Laredo) would make the theft of and unauthorized purchase or sale of pipeline, oil and gas equipment, oil, gas or condensate a second-degree felony. Lawmakers continue to work around the clock to resolve some of these issues before the midnight hour on June 1.

Still to come: Stay tuned for the July/August issue to find out what passed and what didn’t in the 84th legislative session.

For the complete text of the aforementioned bills, visit Texas Legislature Online at www. capitol.state.tx.us.

713-838-7300 • www.slackandco.com

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houston • Eagle ford • Permian basin

SHALE OIL & GAS BUSINESS MAGAZINE // MAY/JUNE 2015

About the author: Gloria Leal is an attorney and government affairs consultant in Austin, Texas.

Ms. Leal has a solo practice primarily relating to energy, environmental and healthcare matters.

She also represents the Texas Alliance of Energy Producers, a national association of independent producers and service providers. She can be reached at gleallaw@sbcglobal.net.

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MAY/JUNE 2015 // SHALE OIL & GAS BUSINESS MAGAZINE

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POLIC Y

TECHNOLOGY AT THE RAILROAD COMMISSION Enhancing regulatory oversight and fostering energy independence BY: DAVID PORTER, SENIOR RAILROAD COMMISSIONER OF TEXAS

NEXT YEAR the Railroad Commission of Texas will celebrate its 125th birthday.

As we are well into the 21st century, so are our technological efforts to better protect the people of Texas and our state’s natural resources, as well as providing a stable and predictable regulatory environment for the oil and gas industry.

Since I came on board in 2011 as a Railroad Commissioner, we have been working tirelessly—with immense help in funding from the Texas Legislature—to update our information technology systems. This includes a redesign of our agency website based on input from stakeholders; development of webbased applications to help quickly process

well from and protecting groundwater while providing a channel through which deeper drilling occurs. Protecting groundwater when oil and gas wells are drilled is one of the most important roles we have as a regulatory agency. By allowing operators to more quickly request and obtain information on how to construct their wells to protect groundwater, we are strengthening this vital role.

The other launch in March allows operators to complete and submit online exceptions to Statewide Rule 13-Casing, Cementing, Drilling, Well Control and Completion Requirements. In May 2013, our agency updated and clarified Statewide Rule 13 construction requirements for oil and gas wells drilled on or after Jan. 1, 2014.

Last June, we launched our redesigned website, www.rrc.texas.gov, which now provides user-friendly online resources for the public and our regulated industries. The revised website features pages organized by industry, such as Oil & Gas, Gas Services and Pipeline Safety; audience-specific pages for consumers and land and mineral owners; a Resource Center to help users find the most popular Commission resources and services, including online research queries and the GIS map; and a Calendar of Events.

And we are not done yet. This year, we have plans for additional enhancements, including consolidating many online queries related to oil and gas drilling and production data,

JUST AS THE INDUSTRY WILL CONTINUE TO INNOVATE AND EVOLVE, SO TOO WILL THE COMMISSION critical oil and gas permits; enabling operators to pay for permit fees online; and providing the industry and public with online timely and accurate oil and gas data.

The Commission’s most recent upgrade was launched in March with two applications that operators can complete and file online.

Form GW-1 is a request for a determination of depth of usable quality water, which varies throughout the state; this request must be made before any oil or gas well is drilled. Our Groundwater Advisory Unit determines this depth, in which surface casing must be set from the surface to at least 25 feet below the base of usable quality water to isolate an oil or gas well from groundwater. Surface casing acts as a protective sleeve, sealing off the

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The Commission has also upgraded hardware and software and refined internal processes for analyzing drilling permit applications. These enhancements resulted in expedited permit processing reduced from a peak of 30 days experienced, with a surge in industry activity last spring, to a one-day processing rate in November 2014.

Last December, we also upgraded one of our most popular website tools—the Geographic Information System (GIS) Viewer, which shows statewide oil and gas wells and pipelines. Along with access to well data by county, API numbers or street addresses, this enhanced viewer allows the public to draw a defined radius tool around a well and select a variety of printing formats.

SHALE OIL & GAS BUSINESS MAGAZINE // MAY/JUNE 2015

and providing operators with the ability to file more permits online. Just as the industry will continue to innovate and evolve, so too will the Commission.

About the author: Commissioner David Porter was elected statewide to the Railroad Commission of Texas on November 2, 2010.

A certified public accountant and successful small business owner, Commissioner Porter has worked with oil and gas producers for nearly three decades, providing strategic financial advice and tax counsel. He has a long record of pro-business, free market, conservative credentials. He can be reached at mary.bell@rrc.state.tx.us.

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LIFESTY LE

SUMMERTIME AT JOSHUA CREEK RANCH IS FOR BUSINESS, FUN AND FUNDRAISING Premier facilities, lodging, dining and activities at a Hill Country resort destination

SPECIAL TO SHALE

habitats that have been nurtured at this Hill Country paradise for more than 25 years.

7:45 a.m. Begin with a morning stroll along cypress tree-lined Joshua Creek, followed by a hearty, country-style breakfast buffet at the Cypress Lodge dining room.

9 a.m. Once fueled for the day, stroll the short distance up the hill to conduct business in the comfort of the brand-new 2,400-square-foot Utopia Great Room at Branch Haus Lodge, featuring the latest technologies and amenities you would expect from the finest resort conference and event facilities.

12 p.m. Plan for a working lunch in the Utopia Great Room or take a break to enjoy a chef-prepared meal on the oak-canopied patio at the Cypress Lodge.

1:30 p.m. Reconvene in the Utopia Great Room to wrap up any loose ends on the business front.

You simply will not find a comparable all-inclusive resort in the Texas Hill Country that offers state-ofthe-art event facilities, luxury lodging, gourmet dining and a variety of outdoor activities. Combine that with warm Texas hospitality and a private, serene Hill Country setting and you have the perfect venue for conducting important business, hosting staff teambuilding, entertaining clients and/or raising funds for a cause that your organization is committed to helping.

Joshua Creek Ranch has become a year-round resort destination for corporate groups that are looking to get away from the office for a few days to experience an environment that helps trigger big ideas, cultivate relationships and solidify new deals.

It’s a place where a typical work day can be much more productive.

So what does a typical summer business day look like at Joshua Creek Ranch?

7 a.m. Awaken to the tranquility of bird calls from a variety of species that make their home in the varied

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6 p.m. Regroup for appetizers and cocktails on the Cypress Lodge patio, where coastal breezes and scenic views create a relaxing atmosphere to build relationships with colleagues and clients.

6:30 p.m. Settle in to the private dining room at Cypress Lodge and toast a glass of fine wine before enjoying a sumptuous gourmet meal.

8 p.m. Find a rocking chair at one of several viewpoints around the ranch to experience a breathtaking Hill Country sunset while sipping your favorite afterdinner drink and reflecting on the most productive business day you’ve had in quite some time.

10 p.m. Retire to one of several comfortable guest lodge suites or ranch houses, where rustic Texas Hill Country elegance mixes with stylish amenities to create the ideal nighttime nest to complete your home away from home experience.

7 a.m.

Rise and repeat.

PHOTOS COURTESY OF JOSHUA CREEK RANCH

A

s a world-class wingshooting lodge from October through March each year, Joshua Creek Ranch might not seem like it has much going on during the summer season.

That couldn’t be further from the truth—especially as it relates to corporate events like meetings, conferences, retreats and fundraisers.

3 p.m. Migrate together or split up into smaller groups to spend the afternoon building camaraderie with your staff or closing your next big deal with a customer in one of many outdoor activities, including sporting clays on the 15-station course, fly-fishing in the crystal-clear waters of Joshua Creek or kayaking down the renowned Guadalupe River.

When it may not be possible to break away during the business week, summer weekends are ideal for fundraiser shoots at Joshua Creek Ranch. The scenic, fully automatic sporting clays course makes it easy to host groups of 50 to over 200 shooters to help your organization reach its fundraising goals. Add breakfast or lunch with an award ceremony on the patio to make a full day of fun for a great cause.

“Our corporate customers come from different industries and companies from around the world. The one thing I hear most is how much they appreciate the service, comfort, privacy and serenity at Joshua Creek, which provides a more relaxed setting than your typical office environment or off-site conference venue,” mentioned Kevin Welborn, Director of Marketing & Sales at Joshua Creek Ranch. “There seems to be a huge trend toward sporting clays shoots for corporate fundraisers as opposed to golf tournaments—sporting clays are something anyone can do. With the addition of our new lodge and event facility, we are in a great position to cater to corporate clients year-round,” Welborn added.

Recent customer testimonials (as posted on Orvis.com) reinforce the notion that Joshua Creek Ranch is the perfect place for business, fun and fundraising.

“Our executive planning session was more successful because we were at Joshua Creek.

The new members, all from out of Texas, got to experience the beauty of the Hill Country up close. Our 2 mornings of hunting were true team builders.”

“Clients love this experience and great venue to bond. We make money here. Good value proposition.”

PHOTOS COURTESY OF JOSHUA CREEK RANCH

“Great place to take clients. Excellent 1 on 1 time with our customers in a great environment. Customers were happy, should lead to more business for us.”

“As always, JCR exceeds our expectations.

This is the “go to” place to entertain clients.

Amazing service, food and not to mention great hunting!”

“Best sporting clay facility I’ve ever been to.

Beautiful property!”

The ranch is recognized as one of only five Beretta Trident Lodges for Excellence in Upland Bird Hunting in the United States and the only one in Texas, as well as one of only two Orvis Endorsed Wingshooting Lodges in Texas. Also the recipient of the 2013 Award of Excellence from Sporting Classics Magazine for Hunting Lodge of the Year, Joshua Creek Ranch truly represents the best of the best … and it’s getting even better!

JOSHUA CREEK RANCH HAS BECOME A YEAR-ROUND RESORT DESTINATION FOR CORPORATE GROUPS THAT ARE LOOKING TO GET AWAY FROM THE OFFICE To learn more about Joshua Creek Ranch or to book your next corporate or social event, visit www.joshuacreek.com or call 830-537-5090.

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LIFESTY L E

EMPLOYEES AND WORKPLACE STRESS BY: RITA OLUFOWOSHE

C

hanging dynamics in the workplace are creating increasingly high levels of stress on employees, affecting their health and well-being. Research shows that a job’s psychological, physical, environmental and emotional demands, including heavy workloads, long hours, lack of managerial support, poor communication and fear of losing a job, cause stress in the workplace. These are all hazards to employees’ sustained health, optimum productivity and an organization’s bottom line.

Stress is any emotional and physical situation that causes anxiety. It is the response to circumstances that threaten our safety. As Dr. Richard Swenson

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puts it, stress is not the cause; our reaction to the cause of stress is what causes distress. Untreated accumulation of stress over many years can lead to anxiety and depression. Yet some stress is actually good for the brain. Low levels of stress make life exciting by stimulating positive energy, creativity and healthy behaviors. To be stressed is not a bad thing; however, to be “stressed out” is destructive to the body, mind and spirit. In essence, how we manage a stressful circumstance is very important. If you are feeling stressed, know you are not alone. We all have one stress or another. What do we do about stressful situations in our lives?

Workplace stress causes organizations billions

WAVEBREAK MEDIA LTD/BIGSTOCK.COM

WORKPLACE STRESS CAUSES ORGANIZATIONS BILLIONS OF LOST HOURS, HIGH MEDICAL EXPENSES AND EMPLOYEE ABSENCES

of lost hours, high medical expenses and employee absences. Early signs of job stress may include headaches, sleep disturbances, difficulty to concentrating and focusing, short temper, upset stomach, job dissatisfaction and low morale. Ignoring early signs of job stress may lead to chronic stress that may cause physical, psychological and emotional disorders; chronic diseases; workplace injuries; and even suicide.

WORKPLACE STRESSORS

Several situations that may create a stressful environment include:

Job Stress

Working conditions, in addition to an individual’s personal circumstances, can cause job stress, which may result in injuries and illness. Such conditions may include environmental conditions, work roles, career concerns, interpersonal relationships, management style, job design and excessive workloads and demands.

Individual Stress

Some individual stress factors may include chronically ill family members, attitudes, unrealistic goals, lifestyle, achievements, divorce, loss of loved ones, loss of a job or even chronic pain.

Oxidative Stress

Workers are exposed to free radicals from natural environmental and man-made pollutants. Free radicals absorbed by the body through metabolism may also cause oxidative stress that can lead to chronic diseases, such as heart conditions, arthritis, diabetes, inflammation and neurodegenerative diseases.

Regular aerobic exercise can help to manage oxidative stress.

Traumatic and Post-Traumatic Stress

The final and perhaps most influential type of stress is traumatic and post-traumatic stress, which occurs as a result of natural disasters, terrorist attacks, technological failures, personal loss and trauma, and chronic pain.

MANAGING STRESS IN THE WORKPLACE

Achieving a stress-free work environment requires a two-way solution. Management must create low-stress organizations, and employees must develop positive strategies to manage stressful situations. Programs should be provided that are focused on the education and management of job stressors, and policies and procedures to minimize job stress. Other useful methods which can be initiated by management include employeeassistance programs, recognition of good work performance, career development encouragement and constant communication of the value and appreciation of employees.

Creation of health and wellness programs such as health and fitness centers, on-site massage therapy and yoga classes will also significantly

help employees manage stress, increase performance and maximize productivity.

It is the responsibility of the stressed-out employee to find ways to relax. Relaxation is a natural medication with no side effects.

Doing something you love that helps you unwind during stressful situations helps to speed recovery from physical, emotional and psychological pain triggered by stress.

Relaxation is not a task to add to your to-do list. It is a lifestyle change to prevent overreacting when stress knocks on your door.

Some holistic approaches to managing stress include:

» Health spas and alternative therapies,

such as massages, facials, body scrubs and wraps, reflexology and infrared sauna. These therapies promote deep relaxation that initiates physiological changes to overcome stress and anxiety. They encourage better sleep and less insomnia, reduce occurrence of headaches, increase energy and productivity, lower blood pressure, improve skin texture, reduce muscle tension and increase metabolic rate and oxygen absorption. » Aromatherapy and other alternative therapies. » Homeopathic therapy, which aims at treating the person rather than the disease. » Color therapy for color balance and well-being. » Hypnotherapy to reach one’s inner self and resolve problems through the power of the mind. » Meditation, which is a proven method of relieving stress. Meditation can be performed through breathing exercises, prayers or yoga. » Autogenic training to harness the brain’s healing powers. This therapy helps to train the body to relax. » Exercise to help improve mood and blood circulation, while decreasing the production of stress hormones. Some stress-relief exercises include walking, dancing, stretching and aerobic respiration exercise. » Having fun and listening to music. » Seeking help through counseling, recognition and acceptance of stressors, developing strategies and using available help and programs to manage distress. » Healthy lifestyle choices, which can make a big difference.

In dealing with stress, the ball is in your court. Your health and wellness is in your hands. Management can only achieve a certain level of success in making the workplace as stress free as possible. It is your responsibility not to let stressful circumstances lead you down the path of anxiety and depression.

For more information: Contact Rita Olufowoshe at info@depremierspa.com or 281-4963772. Visit De Premier Spa online at www. depremierspa.com.

Disclaimer: This article is for your information only. It is neither a diagnosis nor a prescription.

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/ / N O NPR OF I T

Aiding families in San Antonio for over 30 years SPECIAL TO SHALE

SINCE 1982, San Antonio’s Any Baby Can has been a compass for families in need. Providing direction and guidance for families of children and youths with special needs is at the heart of the organization.

Any Baby Can’s mission is to serve families with children and youths facing serious health or developmental challenges. Through the nonprofit, families who live in Bexar County (or one of the 18 surrounding counties) can receive free support services for their child or youth with a chronic illness, disability, developmental delay or health risk. The organization follows four core values that have helped them continue to serve over 9,000 individuals annually:  The child can be saved without losing his or her family  In a world of “high tech” medicine, families of chronically and critically ill children need “high touch”  Every child deserves a chance at a better life  Every child can achieve maximum potential

Any Baby Can does not treat a child directly; it offers support to the entire family in the form of resources, education, counseling, purchasing equipment, helping with bills and other services.

The organization’s goal is to be a safety net for all families and to fill gaps within services. Just recently, the organization expanded its case management services to assist families with children from birth to age 17. Previously, case management services were only available to families with children through the age of 12.

“There is an enormous need. Many adolescents with chronic health issues need navigation and our excellent case managers become the family’s best friend, analyzing where they are, where they need

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PROGRAMS AND SERVICES

The case management program is at the center of the safety net that is Any Baby Can. Case managers are available to meet with any family who is seeking support for their child by referring them to other organizations and programs within their community and/ or to Any Baby Can programs.

Case managers assist families with accessing, coordinating and monitoring services as outlined in their family’s individualized service plan, which is developed from the results of a needs assessment conducted with the family. Over 1,100 families are served through case management every year with a cost association of $800 per family.

Growing up is hard enough for a young child, especially when they have a sibling whose special needs require a great deal of time and attention. For siblings who feel alone or left out, Any Baby Can offers a sibling support group for children 6 to 14 years of age. The group utilizes books, team-building exercises, educational information, and arts and crafts activities to teach children about the disabilities or chronic illnesses affecting their siblings.

Any Baby Can also has a program designed specifically for families who have a child diagnosed with autism spectrum disorder (ASD). As a parent education and support program, it offers many services, including parent training, counseling, education groups, safety training, toilet training, parent’s night out and free, printable visual supports.

The ASD parent training class supports parents by increasing their knowledge of how behavior is learned and the underlying function or purpose of their child’s challenging behaviors. Side by side, parents learn the meaning behind their child’s behavioral problems and how to address them accordingly.

Many individuals with ASD struggle with communication and social skills. As part of the nonprofit’s efforts to build positive interaction and autism awareness in its community, Any Baby Can’s Autism Services program offers a free wallet ID card designed to help individuals communicate clearly

with law enforcement and first responders. Along with a description of autism and how it affects the individual, the ID provides identifying information for first responders to be able to contact his or her family in case of an emergency.

The Autism Services team also provides community training to local groups, such as San Antonio’s first responders and law enforcement.

In fact, Any Baby Can has provided autism awareness training for the San Antonio police department and fire department for several years. To date, the organization has trained more than 200 local first responders in autism awareness. The nonprofit also provides visual books for first responders to keep in their vehicles to help when communicating with an individual with autism.

In 2009, Any Baby Can developed an education curriculum called Blue Cat PIES (Providing Innovative Educational Strategies).

Designed for children with unique learning abilities, Blue Cat PIES products are structured teaching activities for the unique learner.

Some activities are ready-made and can be printed or cut by the end user. Through a partnership with Family Endeavors, adults with disabilities assemble all Blue Cat PIES ready-made activity books.

Working hard to continue to fill gaps in services, Any Baby Can began offering health and wellness services through a program called Any Body Can in 2011. Any Body Can is a daily exercise program designed specifically for people with unique learning abilities. The program strives to promote optimal health, physical fitness and inclusion of school-age individuals diagnosed with developmental

PHOTOS COURTESY OF ANY BABY CAN

ANY BABY CAN

to go and helping them find the resources to get there,” stated Dawn Dixon, President and CEO of Any Baby Can.

PHOTOS COURTESY OF ANY BABY CAN

disabilities through recreational fitness offerings, fitness exploration, support and education. Services include weekly visits from an adaptive fitness specialist, nutrition education and an exercise kit that includes a wellness navigator and

an individualized fitness UPCOMING EVENTS agenda.

In the organization’s last Any Baby CanÕs fiscal year, it saved 1,881 Annual Style Show & Luncheon individuals a combined total September 25 of $2.27 million through Pearl Stable, San Antonio its Prescription Assistance Program (PAP). PAP FORE! Any Baby Golf Tournament enables individuals with a November 2 chronic condition who are Oak Hills Country Club, without medical insurance San Antonio or who have exhausted all other insurance resources to apply for free or low-cost prescription drugs. This program does not have an age limit.

Any Baby Can’s Center for Infant and Child Loss assists over 40 families annually. This program provides support to families who have experienced the tragic loss of their infant or young child due to any cause. Services offered through the center include funeral assistance, individual and family counseling, a grandparent support group and grief support literature for bereaved families.

Any Baby Can is proud to be a United Way of San Antonio and Bexar County, Comal County and Kerr County agency.

YOU CAN HELP

Any Baby Can couldn’t operate without volunteers, community partners, donors and friends. Any amount of support goes a long way to support many families. Volunteers help remove many barriers for families.

They not only assist with special events and office work, they also help with child supervision. When families attend an autism parent training class or a counseling session, on-site child supervision is available.

Learn more about Any Baby Can at www.anybabycansa.org. To find out how to volunteer, contact Lizel Sandoval at lsandoval@ anybabycansa.org or 210-227-0170.

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Are you struggling to conserve cash, strengthen your balance sheet, delay activities, and cut costs?

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Energy CFOs Serving Energy & Technology Entrepreneurs & Start-ups

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 SC ENE 

SHALE HOSTED THE COVER PARTY for the March/April issue on April 9 at the Palm Restaurant in Houston, Texas. The Wood Group, a business focusing on supporting oil, gas and power facilities, was the honoree of the event. Guests enjoyed drinks and appetizers while networking and mingling with SHALE media partners, elected officials, and oil and gas executives and business owners.

PHOTOGRAPHY: MALCOLM PEREZ

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 S C ENE 

PHOTOS COURTESY OF SHALE MAGAZINE

“IN THE OIL PATCH” hosts, Kym Bolado, publisher of SHALE Magazine, Roy Holley and Alvin Bailey, delve into the latest topics buzzing in local and national news in the energy sector. Recent guests include David Blackmon, writer for Forbes Magazine and Director of Strategic Communications at FTI Consulting; Texas state Sen. Carlos I. Uresti; Paula Waggoner-Aguilar, CEO of The Energy CFO; and Bill Stevens, of the Texas Alliance of Energy Producers. Listen to past episodes online at the SHALE website, www.SHALEmag.com, and tune in every Saturday at 10 p.m. on channels 550 AM and 107.1 FM!

PHOTOS COURTESY OF SHALE MAGAZINE

SHALE ATTENDED the Women’s Energy Network lunch in of the Houston chapter on April 21 at the Lakeside Country Club. The lunch featured Omar Garcia of STEER and covered topics such as the impact of ongoing technological advancements in the areas of horizontal drilling, hydraulic fracturing and water conservation. Garcia demonstrated that through the advancements and efforts being done in the Eagle Ford Shale, economic growth will continue in the oil and gas industry in South Texas.

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SHALE OIL & GAS BUSINESS MAGAZINE // MAY/JUNE 2015

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 SC ENE 

PHOTOS COURTESY OF CORPUS CHRISTI ICERAYS

SHALE ATTENDED a pre-game mixer and game with the Corpus Christi IceRays on March 13 at the American Bank Center arena. This event kicked off a partnership between the ice hockey team and SHALE Magazine. The pregame mixer provided guests complimentary food and drinks before the big game in which Kym Bolado of SHALE and Omar Garcia of STEER threw out the game-opening puck!

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SHALE COVER PARTY ALE OIL & GAS BUSINESS MAGAZINE

SH UN M AY / J

CELEBRATING MAY/JUNE ISSUE

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ESS MAG

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STATE OFT EN P EM LOYFM RCE O K R O ION TEXAS W S IS M M O C

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FOR INFORMATION ON HOW TO GET INVITED, CONTACT JOSIE@SHALEMAG.COM

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