SHALE Oil & Gas Business Magazine Sept/Oct 2016

SHALE SEPT/OCT 2016

OIL & GAS BUSINESS MAGAZINE

THE LAW ON CONFIDENTIALITY IN THE OIL PATCH GETS TOP RANKING

ELECTION 2016: A CLEAR CHOICE TEXAS PORTS: TWO PERSPECTIVES

VEGAS WEDDINGS

LEADERSHIP AND T GOVERNMEN ISSUE

HAROLD HAMM: POWERING AMERICA’S FUTURE

CAN LAWMAKERS BE AS DYNAMIC AS THE ENERGY INDUSTRY? SEPTEMBER/OCTOVER 2016  SHALE OIL & GAS BUSINESS MAGAZINE

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SHALE OIL & GAS BUSINESS MAGAZINE  SEPTEMBER/OCTOBER 2016

Specializing in oilfield supplies and service throughout the Eagle Ford Shale  Oilfield Experts specializes in machine parts and machine work (wireline, coiled tubing, fracturing and gun loading departments).  Providing a full line of automotive and truck parts and accessories (OEM and after-market parts).  We offer a full line of gauges, butterfly valves, complete line of tools (Proto Tools), filters, chemicals, gear oil and synthetic gear oil, silicones, hydraulic hoses and hydraulic fittings, starters, alternators (12 and 24 volt), serpentine and V belts, hydraulic motors, pumps.  We are open and provide hot shot services 7 days a week and 24 hours a day. 

Free delivery service with a quick turn around time.

 Oilfield Experts offers great service with affordable prices for all your oilfield, automotive, and mechanical needs. 

Hydraulic pumps, motors and relief valves

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.

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 SEPTEMBER/OCTOVER 2016  13611 U.S. Hwy 181 S., San Antonio, Texas 78223 / (210) 471-1923

SHALE OIL & GAS BUSINESS MAGAZINE

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SHALE OIL & GAS BUSINESS MAGAZINE  SEPTEMBER/OCTOBER 2016

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SHALE is proud to announce the creation of

Texas energy advocaTes coaliTion

TEAC is a social, educational and advocacy group of energy supporters. The goal of the organization is to encourage networking within our community and the community that surrounds us.

JOIN TODAY AT SHALEMAG.COM 6

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SHALE OIL & GAS BUSINESS MAGAZINE  SEPTEMBER/OCTOBER 2016

CT

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Continuous Teamwork is the way STEP Energy Services is redefining coiled tubing. There’s a reason we call our employees “professionals”. They are the experts. They are passionate about the execution of safe projects and committed to providing energy producers an unparalleled level of service; what we call the “exceptional client experience”.

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SEPTEMBER/OCTOBER 2016

CONTENTS FEATURE

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Election 2016: A Clear Choice on Energy

COVER STORY

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Harold Hamm built his company from the ground up. As a leader, he’s made the decisions that brought his company success.

Now, he recognizes, the country needs a leader to do the same.

INDUSTRY

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COVER AND TABLE OF CONTENTS PHOTOGRAPHY COURTESY OF CONTINENTAL RESOURCES

INDUSTRY 28 Energy2016: The Leaders We Elect Will Inpact Our Industry

30 PESA President Leslie Shockley

Beyer Keynotes the World Energy Cities Partnership Luncheon

32 Texas Ports Are on the Rise 34 Texas Ports Are Leading the Way 36 Leaders STEP Up

POLICY 42 Policymakers Must Be as Dynamic as the Energy Industry

44 A Time for Choosing

BUSINESS

50 Argentina Will Be the Next Big Shale Play 52 Donʼt Compromise Confidentiality

LIFESTYLE 58 Healthy Solutions for All Your VIPs 60 Taking the Worry Out of Weddings

SCENE 68 The Corpus Christi Chapter of the Texas Energy Advocates Coalition

70 San Antonio Pipeliners Association Luncheon 70 STEER and Cheniere's Cocktail Reception

Q&A with Matt Scullin, CEO & Founder of Alphabet Energy

POLICY

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Governmental Overreach Detrimental to Improvement and Efficiency

BUSINESS

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Propel, Don't Sell: The Only Way to Create a Team Buy-In

LIFESTYLE

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Navigating the New Nutrition Facts Label

COMMUNITY

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UTSA Receives Funding for STEM Students

SCENE

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In the Oil Patch SEPTEMBER/OCTOVER 2016  SHALE OIL & GAS BUSINESS MAGAZINE

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ADVISORY BOARD

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Omar Garcia Senior Advisor

bradley h. lenz

Thomas Tunstall, Ph.D.

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 oil and natural 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 majors in international business and Spanish. In 2010, Gov. Rick Perry appointed Garcia to the Texas Economic Development Corporation.

Bradley H. Lenz 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 and managing the electric distribution budget, back-office functions and 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.

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

SHALE OIL & GAS BUSINESS MAGAZINE  SEPTEMBER/OCTOBER 2016

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LOCATIONS IN TEXAS

1 GOAL - YOUR TOTAL SATISFACTION FLEET SALES AND SERVICE • PICKUP AND DELIVERY ALVIN BAILEY | ABAILEY@KAHLIGAUTO.COM | 830-480-3656 The Kahlig Auto Group are Minority OwnerSEPTEMBER/OCTOVER Dealerships 2016  SHALE OIL & GAS BUSINESS MAGAZINE 13

PUBLISHER’S NOTE OIL & GAS BUSINESS MAGAZINE VOLUME 3 ISSUE 5 • SEPTEMBER/OCTOBER 2016

IT’S AN IMPORTANT TIME FOR THE AMERICAN ENERGY INDUSTRY. The market is changing, prices are fluctuating and an end to the downturn is near. But energy policy is crucial to the health and growth of our beloved industry. For that reason, we have put together a leadership- and government-themed issue so you can hear from our experts on the topics we should all be concerned with going into the presidential and legislative elections. As an energy advocate, do your research. Pick candidates who believe in what you believe in and who do what they can to continue the growth in the energy independence America has seen over the last decade.

We are very excited to have Harold Hamm on this cover because he represents a well-known and very successful oil and gas company, Continental Resources. As you may know, and certainly will know after reading our story on Hamm and his company, Continental Resources operates outside of Texas. We are very proud to announce that going forward, SHALE is moving into covering news from additional shale plays across the United States. We will continue to bring you the same quality of expert views and knowledge, however. So keep an eye out for information on the nationwide oil and gas market in our issues to follow.

On a separate topic, if you have the desire to advocate for your energy industry, I strongly urge you to visit our website, shalemag.com, to learn more about our advocacy organization, Texas Energy Advocates Coalition (TEAC). This organization is growing steadily and providing new opportunities to network and grow your awareness of other energy advocates in your community. Upon the start of the legislative session, we will be planning an Energy Day, which will consist of TEAC members gathering and visiting the state Capitol together to advocate and share our view with our state legislators. Don’t miss out on this opportunity to be a part of the future of the energy industry!

Finally, I would like to close out my letter to you with a final announcement. We have been working diligently to bring to the Eagle Ford and beyond a tool to help oil and gas companies and other businesses navigate the area. The app, named the SHALE Mobile Network, is available free of charge on iPhone and Android. App users will be able to utilize the smart directory, which features GPS technology to provide location-based business listings, including everything from legal services to staffing services to trucking companies. The companies you can find listed are endless.

This announcement is twofold because while this is a great tool for the mobile user, it’s also a new marketing arm of SHALE. Now our clients can further target a new audience with the use of a mobile phone, further diversifying our marketing capabilities.

This is an exciting time for SHALE. Even in the downturn the industry has faced, we, like others in the industry, are finding new ways to improve efficiency and diversify our company. As the industry bounces back, I know we will see that the hard work put in now will further our ability to provide our readers and audience with the best SHALE experience and provide even more benefits to our partners.

KYM SCHWEERS

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

KYM SCHWEERS CEO / PUBLISHER

CHIEF FINANCIAL OFFICER Deana Acosta

EDITOR IN CHIEF Lauren Guerra

ART DIRECTOR Elisa G Creative

COPY EDITORS

Katie Buniak, Maegan Sheppard

VICE PRESIDENT OF SALES Liz Massey Kimmel

ACCOUNT MANAGERS

Susan Brown, Kristy Sommers

ONLINE CONTENT MANAGER Fernando Guerra

SOCIAL MEDIA DIRECTOR Courtney Boedeker

CORRESPONDENT WESTERN REGION Raymond Bolado

CONTRIBUTING WRITERS

David Blackmon, Alex Charfen, Lauren Guerra, Luanne Jorewicz, Bill Keffer, Sen. Lois W. Kolkhorst, David Porter, Mike Sizemore, Thomas Tunstall, Sen. Carlos I. Uresti

STAFF PHOTOGRAPHER Malcolm Perez

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

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

SHALE MAGAZINE OFFICE: 5600 Broadway Ave., San Antonio, Texas 78209 For general inquiries, call 210.240.7188 Copyright © 2016 Shale Magazine. All rights reserved. Reproduction without the expressed written permission of the publisher is prohibited.

2nd Annual

STATE ENERGY of

OIL & GAS BUSINESS MAGAZINE

oct.

12 2016 At the Omni Corpus Christi hotel 900 N. Shoreline Blvd., Corpus Christi, Texas 78401 Doors Open 11:15 am - 1:00 pm

JOIN SHALE OIL & GAS BUSINESS MAGAZINE IN PARTNERSHIP WITH THE CORPUS CHRISTI REGIONAL ECONOMIC DEVELOPMENT CORP. AT THE 2ND ANNUAL STATE OF ENERGY EVENT. SHALE MAGAZINE AND THE CCREDC WILL WELCOME INDUSTRY LEADERS, BUSINESS & COMMUNITY STAKEHOLDERS FOR A DISCUSSION ON THE CURRENT STATE OF THE ENERGY SECTORS THAT INCLUDES EXPLORATION & PRODUCTION, LNG & REFINERIES, AND THE INDUSTRY'S FUTURE OPPORTUNITIES AND CHALLENGES IN A DISRUPTIVE MARKET.

The ENERGY INDUSTRY is a key driver of the global economy in Texas. This industry has transformed Corpus Christi and will continue to shape it’s future. The State of Energy is an annual event that features top energy industry leaders and gives insight into their future development plans.

Panelists will be announced soon!

For sponsorship information, contact Sarah Tindall at 361-882-7448 or at saraht@ccredc.com. The luncheon will include a panel discussion and key note speaker to address oil and gas, refinery and LNG representatives.

For more information on SHALE visit shalemag.com For more information on CCREDC visit http://www.ccredc.com

TICKETS CAN BE PURCHASED AT THE CORPUS CHRISTI REGIONAL ECONOMIC DEVELOPMENT CORP'S WEBSITE.

TO PURCHASE TICKETS OR TABLES PLEASE VISIT THE CCREDC EVENTS CALENDAR OR CALL 361-882-7448.

www.ccredc.com

Karen Alderman Harbert is president and chief executive officer of the U.S. Chamber of Commerce’s Institute for 21st Century Energy Institute.

Harbert leads the Institute’s efforts to build support for meaningful energy action nationally and internationally through policy development, education, and advocacy.

Under Harbert’s leadership, the Energy Institute has evolved into a premier national and international organization dedicated to advancing a constructive energy agenda with the business community, KEYNOTE SPEAKER policymakers, and consumers. Harbert frequently testifies in front of Congress and provides analysis to the media, KAREN HARBERT policymakers, and industry leaders.

21st Century Energy Institute

SEPTEMBER/OCTOVER 2016  SHALE OIL & GAS BUSINESS MAGAZINE

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 FEATURE

Election 2016: A Clear Choice on Energy By: David Blackmon

T

The Clinton Energy Plan: Building on the Obama Years Where energy is concerned, the Clinton plan boils down to a simple premise: If you approve of the direction in which President Barack Obama has moved on energy policy over the last eight years, you will love the Clinton plan. Unsurprisingly, Clinton is a true believer in climate change theory and thus endorses all of the priorities that flow from that set of beliefs.

For renewables, that means efforts to increase federal subsidies in tax policy and the Department of Energy, which has thrown billions at a series of doomed-to-fail enterprises during the Obama administration.

And it would mean more efforts to implement legislative and regulatory policies that distort markets in favor of wind, solar, corn ethanol and other biofuels.

All such policies are an invisible tax on everyday Americans, given that they have the effect of raising the cost of energy on consumers as the government attempts to artificially make these uncompetitive energy sources competitive with fossil fuels in the marketplace.

President Obama has proudly boasted about that being his means to an end in the past, and Clinton endorses the approach.

A Clinton presidency would also mean a continuation of President Obama’s program of implementing massive new command-and-control regulatory plans on the energy sector of the economy, which over the last few years have dramatically raised the costs of producing oil, gas and coal. Prior to his election in 2008, President Obama made no secret of his goal to essentially regulate the coal industry out of existence, and he has been largely successful in that effort. Today it is virtually impossible for anyone to permit new coal-fired powergenerating capacity; coal production in the U.S. is on the decline; and tens of thousands of coal-related jobs are being lost. Clinton often tells audiences she plans to complete the job Obama began.

One might say, “Well, that’s good for natural gas, right? After all, most of the retiring coal capacity is being replaced by cleaner-burning natural gas capacity.” That is correct, as far as it goes.

But we all must remember that the progressive Democratic anti-fossil fuel agenda does not end with the destruction of the coal industry.

Once it devours the coal industry, oil and natural gas have always been

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the next items on the menu.

Indeed, the Obama administration has already gotten off to a jump-start on the process of overly burdening the oil and gas industry with new regulations on methane, coordinating efforts on endangered species listings with radical anti-development groups, a new ozone standard that no major population center will be able to meet and a massive new EPA power grab under the Clean Water Act. Finally, Clinton has fully supported the efforts by President Obama to repeal the century-old ability of the oil and gas industry to deduct intangible drilling costs and every other tax treatment that allows the oil and gas industry to be treated the same as every other industry under the tax code.

All of these are policy priorities that Clinton has endorsed and would plan to continue and expand during her term in office. All of these priorities lead

The choice between Republican nominee Donald Trump and Democratic nominee Hillary Clinton will likely determine the direction the country takes for a generation or more

GINO SANTA MARIA/BIGSTOCK.COM, MIKELEDRAY/BIGSTOCK.COM

his is a timely issue to discuss what the presidential election might mean in the world of energy policy, depending upon who the winner is.

The short answer is that it means a lot. The long answer is more complicated, obviously.

Without question, this is a tipping point election in almost every way.

From healthcare and trade to immigration and defense, and yes, to energy, the choice between Republican nominee Donald Trump and Democratic nominee Hillary Clinton will likely determine the direction the country takes for a generation or more. I wouldn’t dare touch on any of those other topics here, but the plans presented by each campaign make the choice on energy very clear.

inevitably to higher energy costs to consumers.

None of these priorities would be positive for the oil and natural gas industry.

The Trump Energy Plan: A Change in Direction The Trump energy plan can be best described as an America first, all-of-the-above energy plan.

It begins with freeing up producers of America’s abundant natural energy resources to produce them and get them to market.

America has in place more reserves of coal, oil and natural gas than any other nation on the planet, and has been the only country to have to work so hard via heavy-handed regulation to prevent their use.

Trump has promised that upon assuming office he will rescind Obama’s executive orders that have inhibited energy production.

His next step would be to instruct EPA, Department of Energy and Department of the Interior appointees to perform a review of heavy-handed regulations put into place during Obama’s final years with an eye toward dismantling those that are arbitrary, ill-considered, duplicative of state regulations or just plain unnecessary. He singles out the infamous Waters of the United States regulation as a prime example of the kind of regulations he would do away with.

Trump promises to encourage TransCanada to renew its permit application for the Keystone XL Pipeline, which President Obama chose to use as a political football to placate his radical anti-development supporters. This is key because Keystone XL would facilitate increased imports from Canada, thus lessening the need to import oil from hostile nations in the Middle East and elsewhere in the world, a key goal of a Trump administration.

Trump also plans to reverse the Obama policy of closing off federal lands and waters to oil and gas development. Today, less than 15 percent of publicly owned lands and waters are open to exploration for these mineral resources — Trump promises to increase that percentage substantially and rapidly.

Finally, the Trump plan would end the federal government’s practice of intentionally distorting the marketplace in vain efforts to pick winners and losers. It promises there would be no more half-billion dollar grants to doomed-to-fail companies like Solyndra.

The producers of corn ethanol would find their gravy train of mandates and subsidies

in peril. Wind power companies would find it far more difficult, perhaps impossible, to continue obtaining federal waivers allowing them to kill thousands of eagles and other raptors with impunity.

All of these policies would be designed to protect American consumers and make the country far more competitive in the global marketplace — America first in action.

A Clear Choice The choice in this election could not be more clearly defined where energy policy is concerned. Once one strips away all the rhetoric and misdirection, one is left with a clear choice between diminished domestic energy and growth; between consumers burdened with rising energy costs or benefiting from lower ones; between government command and control and the free market.

If you like the way energy policy has been handled the last eight years, then you are going to love a Hillary Clinton presidency. If you don’t, your choice is very, very clear.

The choice in this election could not be more clearly defined where energy policy is concerned

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.

SEPTEMBER/OCTOVER 2016  SHALE OIL & GAS BUSINESS MAGAZINE

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COVER STORY

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SHALE OIL & GAS BUSINESS MAGAZINE  SEPTEMBER/OCTOBER 2016

Harold

Hamm: Powering America’s Future By: Luanne Jorewicz Photos courtesy of Continental Resources

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I've rarely met a more down-to-earth person than Harold Hamm. Hamm's rags-to-riches success is the quintessential "only in America" story.

Growing up in rural Oklahoma, he was the last of 13 kids of sharecroppers who never owned land. He didn't have money to go to college, so as a teenager he went to work in the oil fields and developed a passion. “I always wanted to find oil. It was always an irresistible calling.”

Today, Hamm is the Founder, Chairman and Chief Executive Officer of Continental Resources and one of the most successful men in America, with a level of influence that follows him everywhere he goes.

Early Life and Education Harold can hardly remember a time when he didn’t work. As a child, he gathered eggs, milked the cows, and slopped the hogs. He worked the cotton fields with his family every fall. Hamm could not attend school until the last cotton crop was in. While he was always behind in school, this didn’t suppress his love of learning.

While attending high school in Enid, Oklahoma, Hamm participated in distributive education (DECA), which allowed him to earn school credit while working. Through DECA, Hamm hauled fuel for a truck stop/fuel distributor — his first job in the petroleum industry. Hamm would deliver fuel to wells that were located in the current STACK Play in Oklahoma. These were some of the first wells to implement hydraulic fracturing technology.

Hamm recalls it as a pretty broad area. “Try to imagine a young man going out in a fuel truck, and the whole thing — it was about 26 drilling rigs, and you could see them all lit up at night. It was something to behold.”

As a DECA requirement, Hamm had to write a report on the vast benefits of the petroleum industry in America. He researched all of the industry greats — E.W. Marland, J. Paul Getty, and others. He saw all the good things they did for the country and decided he wanted to be part of it.

“DECA had a lot to do with my future. Not only did they emphasize that without hard work we wouldn’t get anywhere, but without them, I may not have found my calling.”

Early Career Upon graduation, he worked a few years in the industry to learn the business before borrowing $1,000 to buy the family’s used truck. Hamm began hauling water and cleaning oil tanks and, before long, he created the Shelly Dean Oil Company, named after his two daughters, Shelly and Deana.

And seemingly overnight, his drive, ambition and enthusiasm led him to become one of the most influential producers in the country.

Oil and gas had become his lifeblood. And he would do whatever it took to grow and protect it.

As Hamm’s company grew, he began experimenting with horizontal drilling technologies. Using two- and three-dimensional seismic

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imaging and multistage fracturing, Hamm saw the potential of these new drilling techniques and was willing to take risks while others shied away.

He now jokes about the early stages of building Continental’s predecessor, Wheatland Oil, which Hamm cofounded with Jeff Hume, now the Vice Chairman of Strategic Growth Initiatives at Continental.

But the two of them didn’t always strike oil. They encountered 17 straight dry holes, enough to shake anyone’s faith.

But not Harold Hamm.

“I never considered quitting,” Hamm can say now with a smile on his face.

“I wouldn’t say they were planned, but we knew the risk. But that’s what took us to the oilier areas of the U.S. At that time, we were 65 percent gas and 35 percent oil. We thought, after that, that our future might be brighter with crude oil, so we started focusing on oil prospects. They were high-risk, high-potential deals.”

The decision to focus on crude oil brought Hamm to the Williston Basin area in North Dakota. Following a directional drilling trajectory from Oklahoma through Montana to North Dakota, Continental experienced critical success in the Peterson well of the Cedar Hills Field in North Dakota. Soon, the company began seriously exploring the area and leased nearly 1 million acres across the Bakken.

Using new and improved technologies such as multistage, horizontal fracturing to gain access to previously inaccessible oil, Hamm and his team at Continental Resources discovered some of the most prolific oil finds in U.S. history. At its peak, the Williston Basin had 250 rigs running.

The Bakken discovery launched America into an era of energy abundance — a renaissance in U.S. oil production, and Harold Hamm was determined to make it last.

Backing the Bakken At the time of the Bakken discovery, North Dakota lawmakers, both county and state, had recently imposed higher taxes on the oil and gas industry — up to 11.5 percent — and, as a result, oil

production in the state was languishing.

On the other side of the play, Canadian producers, who were drilling in the northern half of Williston Basin on the Canadian side of the border, were able to take advantage of their government’s “tax holiday” which was instituted in 1993 to provide a tax break on the first 100,000 barrels of oil produced on each well using horizontal drilling.

“Their rig count went from about 50 to 300 in no time. And they’re in the northern half of the same basin. And we saw that, and we in the industry set up what we called the Williston Basin [Petroleum] Conference,” Hamm says.

The Williston Basin Petroleum Conference gathered leaders across the state to discuss drilling challenges in North Dakota. The conference included the state’s Senate Leader, Speaker of the House, members of the North Dakota Industrial Commission, and the Governor.

During this conference, Hamm’s group spoke of the vast benefits of North Dakota oil production. They explained that in order to compete with the growth in Canadian oil production that was made possible through tax breaks, North Dakota should encourage, not hinder, production growth.

The Governor of North Dakota, Ed Schafer, also spoke at the state legislative committee hearing about the dramatic change occurring in Canada strictly due to a tax cut, and the lawmakers concurred.

A bill removing the North Dakota state tax — and thus halving that 11.5 percent — was passed unanimously (county taxes remained) and went into effect in April 1995.

The American energy renaissance was officially ready to launch. And Harold Hamm was leading the charge.

Save Domestic Oil Harold Hamm isn’t one to play around when it comes to American oil production.

Similar to the current oil price recession resulting from overproduction in the Middle East, he witnessed another event in the late 1990s. At the time, Venezuela began producing at record speed and selling oil in America for approximately

Using two- and three-dimensional seismic imaging and multistage fracturing, Hamm saw the potential of these new drilling techniques and was willing to take risks while others shied away SEPTEMBER/OCTOVER 2016  SHALE OIL & GAS BUSINESS MAGAZINE

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$4 per barrel (far below its production cost of approximately $7 per barrel), and took away our market share. Soon, Saudi Arabia, Iraq and Mexico joined the race to crush American production.

But Hamm would have none of it. He and a group of about 30 other industry leaders created a group called Save Domestic Oil. Together, they filed a lawsuit in international trade court against Saudi Arabia, Venezuela and Mexico to charge the countries with dumping and demand them to disclose their costs and pricing data.

The case was dismissed on a technicality, but not before the story went public. The case may have been dismissed, says Hamm, but those countries “dropped it like a hot rock.” They were fearful of the worldwide repercussions should such a case reach a courtroom and international press. “It’s a case we actually won just by filing it,” he says.

Global Supply and Demand

According to Hamm, Saudi Arabia’s policy of producing flat out at record rates is working well for American producers

The current oversupply of crude oil around the world has spurred one of the worst oil crises in modern times. In attempt to protect market share, some countries continue to produce at record rates and refuse to cooperate with other producers’ attempts to temper the flow. Saudi Arabia just came off its highest ever production rate: a near-record rate of 10.2 million barrels per day.

U.S. producers, on the other hand, have been cutting back on production and dropping rigs to keep supply in line with demand. While the U.S. oil and gas industry has experienced massive layoffs and bankruptcies, some producers, like Continental Resources, have been able to use this period to reduce costs, build greater efficiencies and fine-tune the industry.

According to Hamm, Saudi Arabia’s policy of producing flat out at record rates is working well for American producers. The man who foresaw in early 2016 that prices would rebound to $60 by the end of the year also foresees a dismal future for those countries trying to break the American oil and gas industry — in the long run. These countries are producing at a breakneck speed and, yes, America is experiencing the pain of lower oil prices, but Hamm also knows that the demand for oil is only rising.

In 2017, Hamm expects to see a shortfall between demand and supply of up to 200,000 barrels per day. Eventually, the tide will turn and America will be the only country left with unlimited resources, while the countries who are trying to break our industry will run out and become dependent on our oil.

“When they run out, it’s going to be a different day and age,” he says. “They’re going to go from being a relevant force to becoming totally irrelevant.”

When will that happen? Hamm says, “We’re getting really close to that point.”

You might ask how Hamm can be so confident. He will tell you it’s in the numbers.

Many people are not looking at the bigger picture: the refineries, storage and other aspects of the industry that are all tied together.

There is no surplus, according to Hamm, as we still aren’t meeting the demand, and that demand is constantly rising. The U.S. Energy Information Administration recently reported a loss of at least 200,000 barrels of U.S. crude oil inventories. He says it will be a lot more than that. The demand will just keep rising.

So let those other countries overproduce, sell their oil and deplete their reserves.

We’ll be waiting.

Just ask Jack Coleman, he says. Managing Partner and General Counsel of Energy North America LLC, an energy consulting firm, and former member of the House of Representatives, Coleman spoke before Congress in 2011 concerning our dependence on foreign oil. Or lack thereof.

At the time, Coleman said that Americans consumed 19 million barrels of oil per day and imported 58 percent of it: 4.2 billion barrels each year. He quoted 2006 assessments of 15 billion barrels discovered on federal offshore sites but not yet produced, as well as an estimated 86 billion barrels not yet discovered. And that doesn’t even take into account the natural gas reserves. This man, Hamm says, is telling us that just in the offshore region alone, we have enough oil to eliminate all oil imports for nearly 25 years.

If only the government would understand.

The Political Landscape Harold Hamm’s support of his industry doesn’t stop at the local and state level.

You’ll often find him inside influential circles, espousing the importance of a country free of dependence on foreign oil.

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When Mitt Romney was making a bid for the White House, he selected Hamm as his energy advisor. Hamm made quite an impact on the presidential candidate. His energy plan called for fixed timetables for approving energy projects, removing carbon dioxide from the list of regulated pollutants and handing control of drilling permitting over to the states.

Were those Hamm’s ideas?

“Yes, they were,” he says. “And at that time, the Feds were killing any projects they didn’t like by just sitting on them, refusing to bring them up for discussion.” A change in the rules such that any proposed project must be dealt with within a reasonable amount of time just seemed logical to him. And Romney agreed.

In Hamm’s view, regulatory control was one of the first things that needed to be changed. The Feds are always trying to regulate industry, but that’s the state’s job. Such issues are so statespecific that one blanket set of rules simply can’t effectively, or correctly, oversee and protect this country.

Harold Hamm is widely recognized as the man who led the charge on lifting the 40-yearold ban on U.S. crude oil exports and, in effect, changing the world. In 2013, Harold launched the national discussion for lifting the ban at a Washington, D.C., media dinner, where he laid out the need for exports to help America achieve energy independence by 2020. Shortly thereafter, he was invited to testify at the first congressional hearing on crude oil exports in 25 years.

With over 30 trips to Washington, more than 250 meetings with members of Congress and countless other efforts, Harold rallied the troops, created the greatest bipartisan collaboration in Congress in recent memory and did something that no one thought was possible.

A Decade of Death by a Thousand Cuts Harold Hamm believes that President Obama’s weakness

toward taking a stand for America against outside aggressors has set us up for terrible consequences.

Obama’s premise that climate change is the biggest problem in the world is just wrong. It’s global terrorism.

Had Romney won, we’d have had 3 percent growth and north of 5 percent to 6 percent GDP growth, according to Hamm. “Romney would have tapped into the nation’s pent-up energy and economic potential that’s not been unleashed because of the anti-owner, anti-business sentiment in our courts in D.C. and all the regulatory overreach across every single sector.”

“We’re having to steal parts off of airplanes in museums to keep our jet fighters going. That’s the shape of our military today,” Hamm adds.

Let’s be clear. Harold Hamm is a businessman, not a politician. But I just had to ask: What if he were running things? What would his agenda look like?

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American Energy Policy Federal lands, of course, were on Hamm’s list. He says there’s been a long-standing bias against drilling in federal lands, and that what the typical American thinks of when you say federal lands are parks, wildlife and beautiful scenery that takes your breath away. And then there’s eastern Montana.

“Those same people have never been to eastern Montana,” Hamm says. “It’s a bunch of land that nobody wanted; nobody cared to try to farm it, and nobody even tried to live on it. So the government made it federal land, and there it stays.”

That’s the type of land that he would open up to development. And it would be done respectfully, carefully, with every precaution taken to avoid damage. In fact, he says, if Romney had been elected president, he had hundreds of ways at his disposal to develop such land without harm.

New York is another example. There is a lot of oil to be drilled there, Hamm says, “but nobody’s beating the door down to do it.” A state regulation now forbids hydraulic fracturing, following a moratorium in place since 2008 while studies of the effects of the practice took place. There is quite a bit of controversy in the state over it. Imagine you are a New York state citizen and you had bought mineral rights as your neighbor had across the state line. Once the moratorium took effect, you watched your friend continue to collect royalties while you were stuck sitting on precious land with no way to obtain the return on investment.

They feel cheated, duped, Hamm says, because their hard-earned money — valued at up to $25,000 an acre just across the state line in Pennsylvania — was invested in a project that was later turned off on the whims of Gov. Andrew Cuomo. Many, however, have been calling for the Governor to reverse his stance. U.S. Rep. Tom Reed, for example, has stated that current regulations provide more than enough

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oversight and protection against any potential damage; and he cites new studies — including ones from the EPA — that show hydraulic fracturing to be safe.

2016 Presidential Election It’s a turbulent year in the political arena. An especially thoughtprovoking year, one might say. So much seems to be at stake. So I wanted to get Hamm’s take on what we should really be focusing on.

What are the components of the bigger picture, as far as he’s concerned?

Fossil fuels, not surprisingly, are at the top of the list.

“Paramount here is the fact that, with [Hillary] Clinton, her philosophy is to eliminate all fossil fuels,” he says. “They got the coal out already, basically. Now they’re out to get rid of oil and gas. Don’t they realize natural gas is the cleanest fuel available?”

As far as presidential support, Hamm believes Donald Trump is the best choice for president. Speaking at the Republican National Convention, Hamm passionately stated, “President Donald Trump will unleash America’s pent-up energy potential, eliminate foreign oil imports, trash these punitive regulations, create millions of jobs and develop our most strategic geopolitical weapon, crude oil. He will restore America’s rightful place as the energy leader of the world.”

Harold believes Donald Trump is the man who will fuel America's future.

If it’s about fueling America’s future, how does Hamm feel about possibly being nominated as Trump’s Energy Secretary? “It’s a very important job,” he says. “But, look. I have a full-time job at Continental.

And all that talk about that position, it didn’t even come from the two of us. That was a lot of stuff coming out of Reuters; we had no input into it.”

Hamm says his future is with Continental. “I’m an explorationist. It’s what I do.”

Ames Hole And just when you think you have Harold Hamm pegged, he brings up Ames Hole.

Ames is a small town near Enid, Oklahoma.

Ames Hole wasn’t his first find, nor was it the first play he developed, but it seems to have a bit of a soft spot in his heart. It was 1991, and he and his team at Continental were exploring

this new find. The geological anomalies appeared to form a large underground crater, with rings of differing geology. Intrigued, they continued using enhanced computer capabilities and realized they were working with a large astrobleme that would turn out to be one of only six oil-producing craters in the United States.

The astrobleme is 8 miles wide and is approximately 450 million years old. The enormous pressures created beneath the area perhaps aided in

 Ames Astrobleme Museum, summer 2007 the creation of quite prominent oil and gas resources.

One of Continental’s exploration managers, Rex Olson, noticed the

odd pattern and showed it to Hamm, who was immediately intrigued. They discovered gas in the outer ring, but drilling for gas was far from economical at the time. Eventually they discovered oil by drilling deeper than normal, past 9,000 feet, and began producing.

It was their most significant find to date, and it pushed Continental Resources into the next level. As Hamm says, “We are risk takers, and it was one of our first successful plays.”

Hamm was in the big leagues now.

A museum was later erected at the site, where a unit still pumps at his inaugural Gregory Well. Today, the Ames community proudly claims the crater as its own — and as an important contributor to the geological knowledge of the nation’s petroleum industry.

Hamm was the primary developer of the museum, which opened in 2007. Since Hamm’s discovery, many more wells have been completed in the Ames crater, some producing more than a million barrels of oil.

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To learn more about Harold Hamm and his company, Continental Resources, visit www.clr.com.

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INDUSTRY

Q&A With Matt Scullin, CEO & Founder of Alphabet Energy Special to SHALE Alphabet Energy is solving major thermoelectric problems that address cost, scalability, efficiency, and reliability. Their technology converts waste heat into electricity in the range of microwatts to megawatts.

What are thermoelectrics? Materials that turn heat into electricity with no moving parts. We had a conversation with Matt Scullin, Founder and CEO, giving us more insight:

Q

A

How did you begin working in the energy industry?

When I was in engineering school it was clear to me that wasted heat from flares to power plants was one of the most abundant and relatively untapped resources on the planet. I knew I wanted to be in this field. I dove in — knowing nothing — about 15 years ago, and am still trying to figure it out!

Q: What are some of your latest breakthroughs?

A: Today we’re most excited about the Power Generator Combuster (PGC) and the extraordinary value it can deliver to the oil and gas industry. The fit of our PowerModules in flares and combustors — both in terms of scale (kilowatts) and value proposition given the huge problem that is flaring in North America — is the kind of differentiation that few technologies are able to achieve. This excites us the most at Alphabet Energy: when our deeply technical materials science breakthroughs can unlock real value in the economy.

Q: What is the best part of your workday?

A: When I’m at our headquarters in Hayward, California, I do a daily walk-through of our lab and manufacturing facility to shoot the breeze with our operators and technicians and have them teach me whatever new processes they are doing. When I’m in the field with customers, I enjoy getting into the details of how every piece of their equipment or operation is working (or not). I’m happiest when I’m connecting the dots between the very technical challenges that make up the energy industry’s daily operations and our own technical capabilities at Alphabet Energy.

Q: Where do you see the company in 10 years?

A: Alphabet Energy’s PowerModules have the potential to deliver value by turning wasted heat into electricity in many different industries. In 10 years, we plan on being not just in the oil patch, but on the bottom of cars, on the back of remote power plants, in ships and in factories. We’ve already inked partnerships to do so in most of these areas and have shipped our PowerModules to a variety of different types of customers.

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To learn more about Alphabet Energy’s technology and services, visit www.alphabetenergy.com.

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INDUSTRY

Energy2016: The Leaders We Elect Will Impact Our Industry

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lections matter for everyone in our nation. But for the energy sector — for energy employees and our families — the results of the 2016 elections could be a major turning point, for good or bad.

The leaders that we elect at all levels of government will make and modify the laws that govern energy production.

On Election Day, all of us can help set the course for a brighter future for our industry by educating candidates on the role of oil and natural gas in powering and protecting our nation.

Making Energy Part of the Campaign Conversation Because of the importance of the elections, Energy Nation — the American Petroleum Institute’s issue education and advocacy program for industry employees — is now running its Energy2016 campaign program.

The goals of this program are to educate industry employees about the election, urge candidates to have an honest conversation about energy and encourage support for pro-energy policies at every level.

The outcome of the upcoming elections could impact the energy sector in several ways. Here’s some of what’s at stake:

The outcome of the upcoming elections could impact the energy sector in several ways

• Jobs: In 2015, our industry lost more than 250,000 jobs, while government policies continued to impede energy development and cut off access to

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onshore and offshore resources. This picture could change ... if we vote, and if we vote for energy.

• Household and business budgets: Government policies not only impact energy jobs, but they can also drive up costs for businesses and households, and hold back our nation’s economy.

Failed policies like the Renewable Fuel Standard and restrictions on energy infrastructure can be reversed ... if we vote, and if we vote for energy.

• Environmental progress: The increased use of natural gas to generate electricity is the primary driver of U.S. carbon emission reductions.

Our nation can go further — and we can assist other nations, too — if government policies allow increased energy development and LNG exports. It will happen ... if we vote, and if we vote for energy.

• Energy security: Our nation now provides the majority of our own energy. If government policies further limit domestic energy development, we could return to the days of being heavily dependent on foreign producers. We can stop this from happening ... if we vote, and if we vote for energy.

How You Can Help We recognize that a lot of Americans — energy employees included — are fed up with our nation’s politics. It’s easy to throw your arms up in disgust and turn your back on the elections. But why not turn your frustration into action?

You can make an impact now — and help shape future policies — by raising your voice. As a first step in Energy Nation’s Energy2016 campaign, energy employees around the nation are writing their candidates to demand that they support realistic solutions for our nation’s energy future.

Your emails to candidates will help demonstrate that energy is a key issue for voters. In addition, winning candidates will better recognize the importance of energy to their constituents when they take office.

Even if you choose not to write your candidates, you can become an informed energy voter by accessing the voter resources provided by Energy Nation.

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To learn more about Energy Nation and its mission, visit www.energynation.org.

JKRAFT5/BIGSTOCK.COM

Special to SHALE

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INDUSTRY

PESA President Leslie Shockley Beyer Keynotes the World Energy Cities Partnership Luncheon Special to SHALE

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xpanding the reach of PESA’s efforts to highlight innovation in the oil field, PESA President Leslie Shockley Beyer delivered the keynote address to a gathering of mayors from leading energy-focused cities as part of the World Energy Cities Partnership’s Annual Corporate Luncheon during Offshore Technology Conference (OTC) Week in Houston. Beyer encouraged each of the mayors to embrace the oil and gas service, supply and manufacturing companies in their cities as innovators and leaders in the innovation economy.

The following is an excerpt from the keynote address: Every January, attendees flock to Las Vegas to see the latest innovations at the Consumer Electronics Show. This year, smarter TVs, advances in self-driving cars and refrigerators that allow you to read your e-mail received all the headlines. ...

If you were to watch the news, or more likely take a look at your Facebook or Twitter feed, it would be pretty clear from all reports that the consumer is the focus of cutting-edge innovation. And cities around the globe ... are working to tap into that excitement and build their own innovation economy. ...

Yet, you all know that innovation isn’t only happening on a drone, your wrist or your refrigerator. The world’s energy innovators are gathered in Houston this week for the Offshore Technology Conference. The technologies developed by innovators on the show floor at OTC directly or indirectly make possible every single piece of technology at CES, every app on your phone and every online shopping order you place.

And it isn’t just the technology we interact with every day that depends upon the innovations from these oilfield service and manufacturing companies: health care, transportation, and other

PHOTOS COURTESY OF PESA

The technologies developed by innovators on the show floor at OTC directly or indirectly make possible every single piece of technology at CES, every app on your phone and every online shopping order you place

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groundbreaking disciplines are dependent upon energy innovators, as is modern society.

It’s time to recognize energy innovators as part of the innovation economy and the work that they are doing to drive the possibility of all other technological advances. ... Oilfield service and manufacturing companies  PESA President are producing gameLeslie Shockley Beyer changing technologies every with Sylvester Turner, day, many of them leading Mayor of Houston, and to the discoveries that make Michael Savage, Mayor modern life more efficient. ... of Halifax, Nova Scotia, Reliable energy is not and President of WECP. simply necessary for economic development — it is critical to addressing disease prevention and treatment, reducing infant mortality rates and growing life-sustaining crops. When thought of that way, the innovation of the oil and gas industry is truly serving a higher purpose — certainly higher than the development of a new algorithm to help you find specific movies on Netflix.

To that end — our mission at PESA, and many other energy trade associations, is to promote all that oilfield service, supply and manufacturing companies are doing to lead innovation across the industry. We work to elevate the understanding that these companies are actively developing tools and technology to harness our resources safer, more efficiently and with a smaller environmental footprint. ...

Now if you were to ask the average person who doesn’t know much about the oil and gas industry, they would probably tell you the only place such an “innovation ecosystem” is possible is when it is built around companies like Google, Tesla or Apple.

But look at the oil and gas service and supply sector — we have all those assets and more. We are constantly looking forward, developing better, more efficient and safer ways to solve some of the biggest challenges we as humans face. ...

Even though our industry is facing challenging economics, this commitment to innovation does not stop. We’re proud of our legacy as innovators, and I’m honored to work in an industry that does so much to support and improve modern life for millions around the world each day.

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To learn more about PESA, visit www.pesa.org.

Reliable energy is not simply necessary for economic development — it is critical to addressing disease prevention and treatment, reducing infant mortality rates and growing lifesustaining crops

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INDUSTRY

Texas Ports Are on the Rise

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s the state Senator for seven coastal counties and over a third of the Texas coastline, I was honored when Lt. Gov. Dan Patrick asked me to serve on the newly created Senate Select Committee on Texas Ports. I’m thankful for the opportunity to help the vital coastal and inland water networks within my district and across Texas.

The impact of our ports does not stop at the water’s edge. In fact, Texas ports have a major impact on our local and statewide economies, reportedly generating around $82 billion in personal

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income and 1.4 million jobs.

The committee will focus on what our ports must do to remain competitive. We simply must look at the recent Panama Canal expansion and how it has altered modern shipping. It is imperative for Texas to take the appropriate steps to modernize our port network so that we can continue to compete on an international playing field. By investing in our maritime trade networks, we can attract larger amounts of commerce to ensure that Texas’ economy remains strong.

So much of our future success hinges on the

PHOTOS COURTESY OF LOIS KOLKHORST

By: Sen. Lois W. Kolkhorst

development of inland ports to facilitate the flow of goods into and from coastal areas. For example, I recently had the opportunity to tour the Port of Victoria to discuss the economic impact that it will have on Senate District 18 and the state of Texas. It’s an honor to represent the Port of Victoria, which is considered a leading economic engine for the Texas Gulf Coast. Going forward, it is poised to continue to grow with the state’s industrial giants, which are engaged in billions of dollars of current and future infrastructure investments along this stretch of the Texas coast.

The Port of Victoria has come a long way since it began in 1968 when the 35-mile Barge Canal to Victoria was completed to a navigable depth of 9 feet and a width of 100 feet. Today, that port is not only wider and deeper, it is rightfully considered a center for the chemical, construction, steel fabrication and agribusiness industries offering access to all modes of transportation.

Recently, the Port of Victoria attracted attention when it was named as one of four sites being considered for a multibilliondollar petrochemical complex proposed by ExxonMobil and Saudi Arabia Basic Industries Corporation. I have personally visited with port officials and have faith that they are fully committed to handling this project. The mere fact that a relatively small port can step up and compete on a global stage says so much about the future of our region. The improvements made to the property in recent years by adding liquid cargo docks, general cargo docks, roadways and rails are clearly paying off.

The infrastructure improvements made at the Port of Victoria should serve as an example of what Texas ports need to do to prepare for the future. It’s not only a gateway to the Gulf, but to markets across the world, from Mexico to South America and beyond.

With the Panama Canal expansion, the opportunities are limitless for our Texas ports, and I am dedicated to helping all of them with the Senate Select Committee on Texas Ports.

If you are interested in our work, the committee will meet again on September 15 at the Texas State Capitol. In the meantime, I look forward to working with all of my friends across Senate District 18 to grow our economy and keep our port communities thriving.

The impact of our ports does not stop at the water’s edge

About the author: In December 2014, Lois W. Kolkhorst was elected to the Texas Senate in a special election, after previously serving 14 years in the Texas House. She represents all or part of 21 Texas counties.

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INDUSTRY

Texas Ports Are Leading the Way

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exas ports have lead the way in the expansion of the Texas economy and the overall economic impact on all Texans. Marine cargo activity at public marine terminals in Texas accounts for nearly $300 billion in total economic activity according to an economic impact study done in 2011. More than 1 million jobs and up to 25 percent of the Texas economy rely on maritime ports. Port officials from Brownsville to Corpus Christi, Victoria to Houston, Beaumont, and every port in between have been providing leadership to grow their ports, tax base, jobs and economic output. They have done so without any help from the state of Texas, despite immense competition from other gulf coast states that invest millions of dollars into their port infrastructures each year. For the first time the Texas Department of Transportation awarded

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grant funding this past year, but a more permanent solution is needed.

The connectivity and infrastructure of ports, roads and rail are critical to the safe, efficient transport of goods. The Texas Legislature created the Port Access Account Fund in 2001 in Chapter 55 of the Texas Transportation Code to help invest in port infrastructure by creating jobs, facilitating the safe and efficient transport of much needed goods, and extending the life and viability of taxpayer investment in roads and bridges. The problem is the Port Access Account has never been funded. It’s an issue that comes up every legislative session, yet leadership has been unable on the state level to fund it when it comes to Texas ports. Hopefully that is now changing with the newly created Senate Select Committee on Texas Ports.

Legislators have begun to realize the economic importance of Texas ports and have started hearings to determine what’s needed for our future. Energy analysts expect global energy demand to grow by 25 percent in the next 20 years, and the energy industry in Texas can help meet that demand with crude oil and liquefied natural gas (LNG) exports.

Texas ports and the energy industry can work together to continue the expansion of our economy.

Eagle Ford Shale oil provided the catalyst for the Port of Victoria to rapidly expand in recent years, and leadership from the Victoria County Navigation District Commissioners made it happen with a visionary plan for the future.

In addition to energy and other exports, the Panama Canal expansion will bring about more imports and long-term economic expansion in Texas if our ports are ready. It cannot be overstated that additional funding without new user fees is necessary to keep Texas ports competitive with neighboring gulf coast ports. Texas Sen. Lois W. Kolkhorst recently toured the Port of Victoria and other ports on a fact-finding mission to understand the current impact of maritime ports and the potential for the future.

The future of the Texas economy is bright, and Texas maritime ports will continue to provide leadership and play a vital role in our economic expansion. Texas ports, the legislature and industry can work together to keep our transportation network second to none in getting goods to Texas consumers and Texas exports to the global marketplace.

PHOTOS COURTESY OF MIKE SIZEMORE

By: Mike Sizemore

Texas ports and the energy industry can work together to continue the expansion of our economy

About the author: After more than 30 years of experience in television, media, public policy, and politics, Mike Sizemore began Sizemore Media & Consulting in January 2007. Sizemore is a former award-winning broadcast Journalist and television News Director for ABC and NBC network affiliates in Texas and New Mexico. He left his television career to become the Press Secretary and District Director for Texas State Sen. Ken Armbrister. During his more than 15 years working in the Texas Senate, he worked on issues relating to water, education, transportation and other issues important to Texas.

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INDUSTRY

Leaders STEP Up

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n a vast world of fit-for-purpose coiled tubing technology, STEP Energy Services produced their zero rolling TRIP milestone on Thursday, August 11, logging 365 days without a recordable incident, bringing its 12-month rolling total recordable incident frequency (TRIF) to zero. This impressive task was accomplished by a group of professionals dedicated to leading their team by example on a day-to-day basis. We recently spoke with Brock Duhon, Vice President of U.S. Coiled Tubing Services, and Ryan Pastor, Site Manager, in their U.S. operations, to gain insight on how it’s done.  Brock Duhon Vice President, U.S. Coiled Tubing Services What was important to you, as a leader, in your Eagle Ford team?

Once I understood the high-performance culture that STEP Energy Services brings to the Canadian market, it was now my task to incorporate the same high-performance culture into the U.S. market.

The first step was to build a team of like-minded professionals who were open-minded to seeing the future possibilities. My operations manager

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and I came over to STEP together, and he was key in building a team as he worked the majority of his career in the Eagle Ford. We then proceeded with the interviewing process. As we started this process, I wanted to look for leaders who were like-minded professionals who truly believed in our core values (safety, trust, execution and possibilities). We believe that the integration of these core values into our corporate culture, growth strategies and client-focused service differentiates STEP in the marketplace both as an employer and a service provider. Then a trustworthy, competent team was assembled

PHOTO COURTESY OF STEP ENERGY SERVICES

Special to SHALE

and the stage was set for the flawless execution to come.

Can you describe a time you led your team through a difficult situation?

The team was operational and functioning together as a unit for a few months. I noticed that a few tasks were taking longer than normal to complete. I pulled the management team together for a meeting. Once all departments had the chance to speak, it became clear that the issue was communication. The team was wearing multiple hats as we were a lean organization in the current market conditions. I implemented weekly meetings followed by monthly meetings with assigned tasks, completion dates and reviews to ensure we have clear direction and accountability.

What is the key to effective delegation?

Through hiring the right talent of like-minded professionals committed to tremendous execution, I have been able to assemble a team that’s effective at taking on tasks that I delegate. My position requires a lot of travel; and working from the road can be difficult at times, so I often rely on others to respond and accomplish tasks while I’m out of the office.

What is the key to success in leadership?

Positive reinforcement is something I believe in. Every chance I get to run out to the field to support our team and boost morale, I take it. I encourage my management team to get out from behind the desk and make frequent visits to the field to see our accomplishments firsthand.

It is a huge morale booster for the field professionals to see upper management out in the field, on the front lines, ready to support the team. Providing an exceptional employee experience through leadership helps our professionals provide an exceptional client experience!  Ryan Pastor Site Manager Can you reflect on a time when you displayed exceptional leadership skills?

A time I demonstrated leadership skills was during a trip to Canada to commission one of the first coil units for the U.S. division. The team of professionals had not yet had the chance to work with one another, and the equipment was very new to most of us, so as a team we had to learn the equipment as we completed what needed to be done.

There was a lot to accomplish in a small time frame, and I was responsible for leading this newly hired team to get the tasks completed in a timely manner. We were able to work together safely and execute the project as if we had been a team for years. As one of STEP’s core values, having trust in my team and their ability to work together was key to our flawless success.

Have you had a difficult project in the past that ended well because of your leadership role?

The first time STEP had all three U.S. coil tubing units operating in the field. While one coil unit was operating

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in the Permian, I had to coordinate operations for the two units operating in the Eagle Ford on separate client locations. I had to step up and lead our team to ensure both units arrived on time and ready to provide an exceptional client experience. The STEP professionals and equipment executed their first simultaneous operations safely and efficiently.

What is the key to effective delegatation?

I delegate effectively by empowering others to take on a task that I know they are capable of, even if they doubt their ability. I believe delegating has two positive outcomes.

One is that it helps offset my administrative workload, allowing me to focus and support my team. Secondly, it boosts morale and raises the feeling of significance to someone who gets appointed with an important job task that he or she wouldn’t normally take on.

As a leader, what can you do to lead your team by example?

This is something I think everyone at STEP Energy Services does due to the culture STEP has created.

Everyone, including the leadership team, while at the shop is actively working to stay safe. When we are working on the equipment and we have to climb on the injector head or on the reel, or any other working-at-heights situation, I make sure that I wear our company-provided fall-protection harnesses — even if I am only climbing up 3 or 4 feet. It’s just good to make a habit of putting it on anytime it’s necessary to work at even a small height.

Safety is the most important core value at STEP, and as leaders we try to encourage our team to be safe by doing what we can to prevent injuries for ourselves.

BROCK DUHON – VP, U.S. COILED TUBING SERVICES As vice president, Brock Duhon is responsible for overseeing the business operations of the coiled tubing service line in the United States. Brock ensures the business is built with the same culture and core values that led to the rapid growth of STEP’s Canadian operations. Brock holds over 16 years of experience in the coiled tubing industry, spending half his career with Coiled Tubing Services before participating in a coiled tubing start-up in 2008, Go-Coil LLC, which was acquired by Pioneer Energy Services in 2012.

RYAN PASTOR – SITE MANAGER As site manager, Ryan Pastor is responsible for overseeing the safe and efficient execution of various coiled tubing operations to meet client needs while leading, coaching, and organizing STEP’s coiled tubing professionals. Ryan is a coiled tubing and thru-tubing professional with more than 15 years of field experience.

He has worked in both on- and offshore inland waters and land basins operations, and spent 10 years in horizontal completions in Oklahoma, Pennsylvania, north Louisiana, Texas and West Virginia oil and gas shale plays. He has worked with Go-Coil, Turn Right Thru Tubing, Weatherford International and Pioneer Energy Services.

To learn more about the leadership team and services at STEP, visit www.stepenergyservices.com.

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Chemical & Petrochemical Downstream Oil & Gas Upstream Specializing in: Instrumentation • Instrument installation • Calibration • Loop check • Start-up assistance • Control panel, DCS & PLC installation & testing • Tubing installation & testing • Analyzer installation & testing • Instrument stand fabrication & installation

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POLICY

Governmental Overreach Detrimental to Improvement and Ef f iciency By: David Porter, Texas Railroad Commission Chairman

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The Railroad Commission is the most mature regulatory body in the world, and history shows that decreases in emissions and improved environmental conditions come about as a result of innovative technological advances and market-driven efficiencies, not through the massive overreach of federal bureaucrats and the circumvention of the regulatory authority granted to the EPA by Congress.

Unlike the Railroad Commission, the EPA consistently fails to base its regulations on sound science and take into account economic impacts on both energy producers and consumers. The Railroad Commission is the most mature regulatory body in the world, and history shows that decreases in emissions and improved environmental conditions come about as a result of innovative technological advances and market-driven efficiencies, not through the massive overreach of federal bureaucrats. When businesses are forced to stifle innovation and instead operate as bureaucracies — which the EPA seems intent on achieving through its unwarranted and overreaching rules — both consumers and the environment pay the price.

The state of Texas filed its petition for review of the EPA’s Methane Rule in the U.S.

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Court of Appeals for the D.C. Circuit on July 28, which has since been consolidated with a petition filed by North Dakota. We expect briefings on these petitions to begin this fall and continue into early next spring with oral arguments occurring later in 2017. I applaud the Attorney General’s decision to challenge the current administration’s attempt to exercise unconstitutional powers and for protecting our state from intrusive regulations that undermine the Texas oil and gas industry. I also commend the Railroad Commission staff for their engagement and thoughtful analysis of the impacts of the EPA’s regulatory overreach.

I am confident leaving office knowing that this important state agency will continue to diligently work to restrain the federal government from assuming unconstitutional powers and issuing intrusive regulations, so that Texas and the U.S. continue to serve as the global energy leaders we are today.

For more information about the Railroad Commission of Texas, visit www.rrc.state.tx.us.

HEADSHOT PHOTO BY MICHAEL GIORDANO

hen I made the decision to run for Railroad Commissioner in 2010, I committed to combatting federal regulatory overreach, and I have proudly continued fighting that battle for the past six years. Last month Texas Attorney General Ken Paxton filed suit on behalf of the Texas Railroad Commission and the Texas Commission on Environmental Quality in response to the new U.S. Environmental Protection Agency (EPA) emission standards for natural gas facilities.

Shortly before the Attorney General’s action, I traveled to Washington, D.C., to testify before Congress, expressing the Railroad Commission’s concerns about the EPA’s rule-makings. My testimony before the U.S. House Energy and Commerce Committee’s Subcommittee on Energy and Power condemned recent EPA rule-makings under the Clean Air Act, specifically the recent methane rules, the Clean Power Plan and Mercury and Air Toxics Standards. I emphasized that EPA actions under the Obama administration have been characterized by minimal interaction and consultation with Texas and other state regulatory authorities; underestimated or ignored compliance costs; overestimated, unjustified and exaggerated regulatory and environmental benefits; increased regulatory and economic burdens on operating companies, particularly smaller oil and gas operators who make up an overwhelming majority of the industry in Texas; and creation of one-size-fits-all regulations that ignore the significant differences in regional operating conditions and state regulatory systems.

The underlying themes of these EPA rule-makings have been the consolidation of increased regulatory power in the federal government to the detriment of state authority

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POLICY

Policymakers Must Be as Dynamic as the Energy Industry By: Sen. Carlos I. Uresti

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he quickening pace of technological change has kept the energy industry in a state of unending revolution — and it seems our very understanding of the energy landscape changes dramatically with every step forward in scientific or technical knowledge.

This isn’t a new phenomenon. In the 1960s, it was a widely held belief that nuclear power would be the backbone of our grid. In the 1970s, we waited hours for gasoline during the oil embargo, and it seemed that foreign oil had an unbreakable grip on our economy. Later in the 1990s, panic set in about a crisis of “peak oil” that always seemed eminent yet failed to materialize. Innovations — like the rise of hydraulic fracturing, the rapidly increasing efficiency of solar and wind generation, and the increasing energy efficiency of home appliances — continue to turn our understanding of the energy economy upside down.

However, this rapid pace of change doesn’t mean that elected officials shouldn’t plan for the long term.

On the contrary, policymakers have an obligation to be nimble, flexible and willing to respond when necessary to the changing energy landscape.

Here in Texas, we have done this well. During my first term in the Texas House of Representatives in 1998, Texas wisely set aside money to construct transmission lines to connect the state’s main urban corridors with the wind-rich plains in the west of the state, while setting goals and standards for renewable energy. In 2005, we went

Policymakers have an obligation to be nimble, flexible and willing to respond when necessary to the changing energy landscape

further, increasing our goal for renewable energy generation significantly.

This was long before wind energy was competitive with coal, and was a proactive bet by Texas politicians that paid off and helped Texas become the No 1. wind-producing state.

Simultaneously, we have encouraged the exploration of new oil and gas resources in places like the Eagle Ford Shale and Permian Basin, where we have seen an explosion of activity. Driving through my district in South Texas and West Texas, you’re bound to see horizontal and vertical drilling interspersed with wind turbines and newer solar projects.

Of course, conditions are constantly changing and Texas should continue to adapt. This is why last legislative session I filed and fought for Senate Bill 12, which, had it passed, would have begun transitioning the state vehicle fleet to natural gas. Using natural gas to displace other fuels would be another smart, long-term bet on homegrown Texas energy. I hope to revisit the idea next session, as well as consider new ideas brought by colleagues.

Some of these ideas are obvious. For example, the Legislature should find a way to use the rest of the unspent Texas Emissions Reduction Plan (TERP) funds for their intended purpose of promoting cleaner sources of energy. Texas should also continue to invest in our exemplary public universities, which produce many of the talented engineers and scientists who are fueling innovation in the energy sector.

However, it may not be prudent to address energy with only a handful of bills in a hit-or-miss fashion. Instead, we need a long-term vision to push our energy economy in the right direction — leading the nation in an all-of-the-above clean energy strategy that leverages the wide availability of oil, gas, wind and solar in a way that keeps Texas on the cutting edge.

This is not to suggest the Legislature micromanage our energy industry. Instead, we should be providing clarity and leadership while remaining adaptable to changing realities. This means investing in infrastructure, funding research and development, and providing sensible oversight.

Tomorrow, we may wake up to news that scientists have invented cold fusion and all of our energy problems will be solved — or, conversely, that some international event beyond our control has led to another oil-price shock. Whatever it may be, we need to be on top of our game, ready to power a thriving Texas into the 21st century.

About the author: Sen. Carlos I. Uresti represents Senate District 19, which covers more than 35,000 square miles and contains all or part of 17 counties, two international ports of entry, 11 state parks, 51 school districts, 2,700 miles of highways and more than 23,000 producing oil and gas wells in both the Eagle Ford Shale and Permian Basin. The district is larger than 12 states and 82 nations, and contains over one-third of the Texas-Mexico border. Sen. Uresti is proud to serve on the Senate Committees on Finance, Natural Resources & Economic Development, Health & Human Services, and Administration. He also serves on the Senate Select Committee on Property Tax Reform & Relief, the Joint Interim Committee to Study a Coastal Barrier System, and the Joint Committee on Border Security.

Uresti is the first Senator from San Antonio to serve on the Legislative Budget Board.

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POLICY

A Time for Choosing By: Bill Keffer

News flash — we are in the throes of a presidential election like no other. The Republican Party has nominated Donald Trump. Not since Wendell Willkie in 1940 against the two-term incumbent Franklin D. Roosevelt has there been such an unorthodox nominee of a major party. The Democratic Party has nominated Hillary Clinton.

Never before has a major party nominated a female candidate for president. Whichever way the election turns out in November, history will be made in a big way.

So what does all of that mean for American energy policy? What do the platforms of the two major parties say? The Republican Party national platform states the following principles: 1) a commitment to U.S. energy independence; 2) free-market determination; 3) an “all-of-theabove” energy approach, including coal, oil, natural gas and nuclear; and 4) the Keystone XL pipeline, which should have been, and can still be, approved. The Democratic Party national platform states the following principles: 1) U.S. energy policy should be driven by climate change; 2) “America must be running entirely on clean energy by mid-century”; 3) the federal government should be powered by 100 percent clean electricity; 4) the Keystone XL pipeline should have been, and should stay, rejected.

Authors like Alex Epstein in his The Moral Case for Fossil Fuels and Kathleen Hartnett-White and Stephen Moore in their Fueling Freedom remind us that the incredible advances made in our modern society and economy are the direct result of the development and use of coal, oil and natural gas — the so-called fossil fuels — but, upon studied reflection, are more accurately described as the “muscle fuels.” Other than nuclear energy, there is no other energy source that even comes close to these muscle fuels for their energy density. Muscle fuels continue to be cheap, abundant and accessible — even more

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so today than they have ever been in the past.

On top of all of those undeniably superlative attributes, muscle fuels are also more abundant and available in the United States than anywhere else in the world.

Much to the chagrin of those who long for central command and control in their government and society, and those who choose to deny the inconvenient truth of common-sense opportunity that comes with energy independence, muscle fuels continue to be even more available and affordable than they have ever been. Their alternative, instead, is to turn away from the domestic abundance of muscle fuels and embrace, at enormous taxpayer cost and great economic sacrifice, other energy sources that are not so much renewable as they are unreliable, that are admittedly abundant but whose abundance doesn’t come close to compensating for their lack of density.

Wind and solar energy can play a role as supplemental energy sources, but they cannot, and will never, do the work that muscle fuels have done in building the greatest economy in world history in the United States. Those who unrealistically dream of a world where wind and solar energy can fully replace all of the work that muscle fuels currently do in the modern economy of 2016 have a vision that only plays at Hollywood cocktail parties, where “designer fuels” are endorsed more for their social-status statement than their versatility and effectiveness. Unlike past transitions in energy sources, which have opened

For the first time in history, a transition in energy sources would result in a huge step backward economically

up new opportunities for those less fortunate, a move from muscle fuels to designer fuels will have a direct and substantial negative impact on the middle and lower classes.

For the first time in history, a transition in energy sources would result in a huge step backward economically. The wealthy would be able to afford the increase in energy costs, but the unavoidable result would be a greater gulf between those who have and those who have not. The future would no longer be brighter for the next generation; instead, our children and grandchildren would have to learn how to make do with less. That would be the legacy of those who believe they are somehow reversing climate

Party supports, and it is equally clear in which direction the Democratic Party wants to lead.

Leading in the right direction will further build on a foundation that has been impressively formed over the past two centuries. Leading in the wrong direction will be nothing more than going backward.

The vitality of a nation’s economy is directly determined by its access to affordable, abundant and accessible energy. A vibrant economy means more opportunity. More opportunity means more progress. America can be energy-independent. We have the energy to be independent. Will we demonstrate the wisdom to achieve it?

Muscle fuels continue to be cheap, abundant and accessible — even more so today than they have ever been in the past change. That sounds more like a description of a nation resigned to winding down its affairs and conceding that its time as a “shining city on a hill” has passed because it has chosen to no longer use its own resources that could easily keep the lights on.

Since the economic shock that OPEC inflicted on the U.S. in the 1970s, every U.S. president has called for a national energy policy and for energy independence — but no president has been able to deliver. Ironically, energy independence has only recently become a viable concept during the administration of the most anti-muscle fuel president in modern history — Barack Obama. What does that tell you?

It is, and should continue to stand as, a clear and unmistakable reminder to those who have forgotten and those who have never known, that the laws of common sense and the free market will always prevail over the attempted edicts and directives by the elites in government who think that they know better. The technological advances and entrepreneurialism in the oil and gas industry led to the development of 3-D seismic testing, hydraulic fracturing and horizontal drilling, which all combined to unlock the natural resources that heretofore had been inaccessible. And, despite every effort by President Obama to shut down the oil and gas and coal industries, we have more oil, natural gas and coal now than we have ever had before.

So what will our energy future be in America?

It is clear what principles the Republican

Fun fact:

The title of this article is a reference to Ronald Reagan’s famous speech delivered in 1964 in support of Barry Goldwater’s presidential campaign.

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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SHALE

Enjoy a glass of SHALE Wine

! y o TA S T E . S H A L E . nj E CABERNET SAUVIGNON | PINOT GRIGIO A L M O N D S PA R K L I N G W I N E | R A S P B E R RY S PA R K L I N G W I N E SEPTEMBER/OCTOVER 2016  SHALE OIL & GAS BUSINESS MAGAZINE

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BUSINESS

Propel, Don’t Sell: The Only Way to Create Team Buy-In By: Alex Charfen

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hat could a business accomplish if every team member was as invested in the success of the company as the owner? If you’re in a position of leadership, there’s no doubt you’ve wished this before.

No matter what level of leadership you’ve attained — entrepreneur, division manager, team lead or CEO — everyone expects the same from their team: You want them to care.

Some say this is impossible and that there is no way to achieve that level of buy-in from a team because they don’t have as much stake in the company. But that’s simply untrue. It is possible to get that dedication out of your team. But there’s only one thing that can make it happen: vision.

Now, don’t get me wrong, money, titles and job security are all things that will motivate people to work. But only a compelling vision will inspire them to work hard and commit discretionary time to your cause.

It isn’t enough, however, to simply think of where you want to go and rubber stamp the destination as your vision. Your vision must be wellconceived and include certain elements to ensure it’s as effective and

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A Defined Why Every company has a purpose — you simply have to find it. Your purpose may already be evident, or you may have to dig deep to discover why your business exists. Ultimately, though, this purpose or “why” should have intrinsic value (i.e., it exists for its sake only).

If you were a real estate broker, would your purpose be to simply sell homes and make commissions? Or would it be to help people fulfill their dream of owning a home? The latter has a greater impact on society and the world, and will be easier to communicate.

For most people, it’s hard to get behind an endeavor if its ultimate stated goal is wealth.

But helping people share in the American dream is a worthy effort many can rally around.

Oftentimes a business why is simple. One useful exercise that helps entrepreneurs get to the root of their mission is simply asking “why?” five times. Each time you ask why to the previous response, you should get deeper into your true purpose.

For example, your first response may be “to provide X service.” Why? “To help people

by X ...” Why? “We believe everyone deserves X ...” Why? And so on.

Telling your team what they’re driving toward is vital.

But telling them why they’re driving toward it is equally important. That’s because a compelling why gets everyone

DOLGACHOV/BIGSTOCK.COM

compelling as possible. Here’s what any sound vision for your company should include.

No matter what level of leadership you’ve attained — entrepreneur, division manager, team lead or CEO — everyone expects the same from their team: You want them to care motivated for the journey and makes them a part of something greater than themselves. Once you’ve solidified this integral core value for your team, everything becomes easier.

Big Goals As a leader, you should never set a goal because it seems attainable.

Goals should be grand in scale and they should push your team to perform at the highest level. This big goal may take some time to reach — even years. But it must be a target that will move you significantly closer to reaching your ultimate vision.

If your vision is the destination, the big goal is the route you’re taking to get there. That route will have mile markers, just as your goal will have milestones along the way so that you can track progress. The reason behind the goal has to be compelling for your team — not rooted in money, but measured by impact.

It’s also important to make sure your goal applies to the version of your company that exists at present. Companies can change over time, and your goals may too. But establishing unrealistic goals for the company you want to be will only cause confusion and discouragement.

Effective Communication A great vision is useless if not properly communicated to the team. So, once you’ve determined what your why is, you’ll want to think about how to communicate it, and how you communicate in general.

Oftentimes, this means teaching team members to think a bit differently about what they’re doing. Instead of thinking in terms of numbers and sales, focus on emphasizing the impact you’re having.

If you’re a doctor, you may want to think in terms of “lives saved” as opposed to “patients.” If you own a salon, you might be empowering others through self-confidence and beauty rather than just “doing hair.”

Though it sounds like a small shift, this turns your numbers into emotional motivators as people understand their contribution and the impact they’re helping to create. Obviously, daily metrics are still important, but it’s always useful to think strategically about which metrics are important and how the communication around those metrics is phrased.

More than anything, people want to be a part of something important.

They want to have an impact and to feel that their efforts matter. If you outline the vision for your organization properly, and if that vision has a compelling destination, you will set up your organization to succeed.

Your team’s abilities will become fully leveraged and momentum will come easily.

About the author: Alex Charfen is co-founder and CEO of CHARFEN, a training, education and consulting organization for entrepreneurs and small businesses. For more information, visit www.charfen.com.

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BUSINESS

Argentina Will Be the Next Big Shale Play

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was among several invitees recently asked to present at a series of workshops in Buenos Aires and Neuquén provinces in Argentina June 27– July 1. The workshops were coordinated by the U.S. Department of the Interior, the U.S. Department of State and the Government of Argentina. With the new presidential administration in place in Argentina, many changes are afoot, as evidenced by the event.

The workshop sessions were a high-profile affair.

Opening comments in the city of Buenos Aires were made by the U.S. Ambassador to Argentina, Noah B. Mamet, and the Argentine Secretary of Hydrocarbon Resources, José Luis Sureda. The participants were primarily interested in the experience of researchers and local officials with more mature shale fields in the United States, such as the Niobrara in Colorado, the Bakken in North Dakota, the Marcellus in Pennsylvania, the Barnett in North Texas and, of course, the Eagle Ford in South Texas.

According to the U.S. Energy Information Administration, Argentina has world-class shale oil and gas potential, perhaps the most productive outside of

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North America.

Much like the U.S., Argentina has tapped into most of its conventional resources already and is aggressively moving to develop its unconventional opportunities. The case of Argentina contrasts starkly with that of Mexico, which still has substantial untapped oil and gas reserves not only in shale fields, but also in onshore conventional, shallow water, and deep-water fields.

PEMEX, for example, has not made any significant progress tapping Mexico’s deep-water fields, which are believed to be extensive. Now that energy reform is taking hold there, the world’s major oil companies are expected to invest heavily in Mexico. The majors have

PHOTOS COURTESY OF THOMAS TUNSTALL

By: Thomas Tunstall, Ph.D.

become well-versed at exploiting deep-water oil and gas fields, which typically require 10-year development horizons and hundreds of millions or even billions of dollars in capital outlays. This means that shale fields in Mexico may not receive as much early interest from exploration and production companies because of more attractive prospects in conventional oil and gas fields.

In Argentina, the area of greatest potential lies within the Neuquén Basin, west of the country’s capital of Buenos Aires and backed up against the Andes Mountains. The key geologic formation is known as the Vaca Muerta, a shale field that is richer

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Argentina is undergoing an important era of transformation to a more market-oriented economy and thicker than the Eagle Ford.

All told, Argentina is estimated to hold more than 800 trillion cubic feet of natural gas and 27 billion barrels of recoverable oil.

For perspective, the Eagle Ford contains an estimated 50 trillion cubic feet of natural gas and 10–12 billion barrels of recoverable oil.

Needless to say, interest in the Vaca Muerta formation is very high.

Argentina is undergoing an important era of transformation to a more market-oriented economy. This past May, the Instituto Argentino del Petróleo y del Gas (Argentina’s Oil and Gas Institute) held its annual conference in Houston, which provided many timely updates on the progress of shale development in Argentina. The Argentine Minister of Energy and Mining, Juan José Aranguren, opened the conference by highlighting the prospects for Argentina and making a pitch for foreign direct investment (FDI).

A move that underscores efforts to bring in FDI by the new Mauricio Macri administration is the recent debt settlement after over a decade-long holdout with creditors. Argentina has now reentered the global financial market and is indeed well-positioned to attract investment capital.

The Houston conference and Argentine workshops have signaled that Argentina is serious about developing its shale reserves. While this new type of exploration and production has for the most part languished outside the U.S., Argentina is moving ahead confidently into the realm of unconventional shale oil and gas development.

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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BUSINESS

Don’t Compromise Confidentiality Special to SHALE

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GLB Act The Gramm-Leach-Bliley Act of 1999 requires that financial institutions guarantee the security and confidentiality of nonpublic customer information. Secure storage, disposal and sharing of confidential information is also covered.

Businesses involved in banking, credit issuing, insurance, stocks, bonds, investments and other financial services must comply with this act.

SOX The Sarbanes-Oxley Act of 2002 is in response to corporate and accounting scandals. SOX sets new and stricter standards for public company

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boards of directors, public accounting firms and public management firms. Privately held companies are not covered by SOX. The act requires retention of financial documents for five years past or review prior to destruction.

FACTA The Fair and Accurate Credit Transactions Act of 2003 amends the Fair Credit Reporting Act (FCRA) and is intended to protect against consumer fraud and includes identity theft. The act requires the destruction of papers containing consumer information.

FACT Act The Fair and Accurate Credit Transactions Act of 2003 also amends the FCRA. It’s intended to combat consumer fraud and other crimes including, identity theft. The act requires that papers containing consumer information be destroyed. This law covers most every business to some degree.

Red Flags Rule The Red Flags Rule was enacted in 2008, and was revised and crossed the finish line for compliance on January 1, 2011. This federal law requires that most businesses establish, implement and maintain identity theft prevention procedures. When a new financial or credit account is established, or when changes to an

existing account occur, account authentication is required. The law affects businesses and other organizations that accept payment for goods or services after they are delivered by defining those businesses as a “creditor” or as holding a “covered account.” Only businesses that accept payment prior to delivery or upon delivery (COD) are exempt. Businesses in the healthcare, financial, utility, telecom, mortgage, auto and other dealerships are all affected by this act.

HITECH Act This 2009 addition to HIPAA requires institutions covered by the act to notify individuals in the event of a security breach of unsecured protected health information.

Unsecured health information is information that is not secured by technology or methodology to render it unusable, unreadable or undecipherable to unauthorized viewers.

Document management and destruction is about more than cost effectiveness or “going green.” It is about legal compliance and due diligence in selecting a service provider who will help you train your staff accordingly and avoid breeches.

If you need information about secure document management, storage and destruction, The Back Office provides those services and would be happy to discuss cost-effective solutions for any of your document management needs.

To learn more about document management and destruction services, visit www.thebackofficevictoria.com.

SHALE OIL & GAS BUSINESS MAGAZINE  SEPTEMBER/OCTOBER 2016

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egal and compliance are the two most important words in running an effective business, in any state, in any country. Everyone does it differently ― different economies, different laws. A Texas law exists requiring its business operators to shred, erase or destroy by other means prior to disposal, all business records with “personal identifying information.” The law is called the Texas Shred Law 698.

Texas Shred Law 698 The Texas Information Disposal Act, House Bill 698, enacted in 2005, amends the Texas Business and Commerce Code. Document retention and disposal requirements that require businesses to shred, erase, or destroy by other means prior to disposal, all business records with “personal identifying information”. The act applies to information whether it is from consumers or employees and covers all records created before, on or after the effective date of the act. This act specifically covers destruction, requiring that any and all information that could be used to commit the crime of identity theft is securely destroyed. This includes destruction of Social Security numbers, government issued identification numbers, financial account numbers, birth dates, email addresses and other information. The online address to read the Texas Shred Law is www.capitol.state.tx.us/ tlodocs/79R/billtext/html/HB00698F.htm.

Be familiar with the legislation that requires you to protect your business, employees, customers and business partners. The Texas Shred Law is just one of many acts passed in the past 17 years helping Texas businesses provide confidentiality.

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LIFESTYLE

Navigating the New Nutrition Facts Label Special to SHALE

Serving Size Because the amount people eat in a serving has changed over the years, new serving sizes will reflect the current amount typically consumed. They may be higher or lower than previous serving sizes, and do not necessarily reflect the recommended portion to eat. A nutrition expert such as a Registered Dietitian Nutritionist or the MyPlate guidelines are great resources for help with understanding appropriate portion sizes and individual needs.

Nutrients and Ingredients The new panel reflects changes to nutrients and ingredients that reflect current national health concerns. For instance, vitamin A and C are no longer listed because Americans generally consume sufficient amounts of these nutrients. Vitamin D and potassium will now be included since they are both scientifically linked to promote heart and bone health. Based upon new governmental studies and recommendations, there will be new daily values for nutrients like sodium, dietary fiber and vitamin D. Added Sugars Added sugars will now be listed as a sub-item under total sugars in order to align with the 2015–2020 Dietary Guidelines, which call for a reduction in added sugars for Americans to address obesity.

Percent Daily Value To better explain what percent Daily Value means, the new footnote will read: “*The % Daily Value tells you how much a nutrient in a serving of food contributes to a daily diet. 2,000 calories a day is used for general nutrition advice.” Percent DV is listed for the entire day, not just one meal or snack.

The new food label is designed to be easier to read and apply to eating habits. To learn more, whether you are trying to manage a disease or just want to learn how to more effectively shop for your health or your family, H-E-B Registered Dietitians are available to help each customer reach their individual goals. Please visit heb.com/nutrition to learn more.

Thanks for making H-E-B your destination for health and wellness.

The perfect healthy, delicious treat for summer brought to you by H-E-B: Reference: U.S. Food and Drug Administration

What to Look For The familiar look and feel of the label itself is staying the same, but there have been a few important updates to make selecting products more consumer friendly. In line with recommendations provided by the Academy of Nutrition and Dietetics, the new panel will better reflect serving size, nutrients and ingredients that focus on health. It also updates current percent Daily Values (DV). Let’s take a look!

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Elvis Smoothies Makes 2 servings

INGREDIENTS 1 banana 1 cup bunched spinach 2 tablespoons H-E-B Texas Creamy Peanut Butter 1 cup H-E-B MooTopia 2% Reduced Fat Chocolate Milk INSTRUCTIONS Combine banana, spinach, peanut butter and milk in a blender, and blend until smooth.

IAKOV KALININ/BIGSTOCK.COM, MELICA73/BIGSTOCK.COM, ROXILLER/BIGSTOCK.COM

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n May 2016, the U.S. Food and Drug Administration (FDA) finalized the new Nutrition Facts label for packaged foods.

According to the FDA, the label will reflect new scientific information, including the link between diet and chronic diseases such as obesity and heart disease. The new label will make it easier for consumers to make better informed food choices. Most manufacturers will need to use the new label by July 26, 2018. Those with less than $100 million in annual food sales will have an extra year to comply.

To make your next HEB shopping trip a little easier, we’ve made this brief overview as a guide for you when reading over the new labels!

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SEPTEMBER/OCTOVER 2016 ď “ SHALE OIL & GAS BUSINESS MAGAZINE

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LIFESTYLE

Healthy Solutions for All Your VIPs Special to SHALE

VIP Care at Baptist Healthy Solutions is tailored to your specific workforce needs, offering everything from onsite clinics to health risk assessments, immunizations, screenings, coaching and more

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For more information about Baptist Healthy Solutions, call 866-206-4742 or visit www. bhealthy.net.

South Texas. Members and their families have 24/7 access to the VIP Care Line that is staffed by an experienced triage nurse who can answer many health-related questions, help employees seek appropriate care and assist with booking appointments within the Baptist Physicians Network.

Enrollment in the Baptist VIP Care Network is automatic for employees who work for employer partner. Baptist Healthy Solutions programs include, but are not limited to: ● Onsite biometric screenings, which are brief evaluations that assess a patient’s health and wellness and can include blood pressure, diabetes and cholesterol screenings, and blood draws to determine health risks ● Onsite clinics ● Mobile health unit ● Onsite health education and nurse counseling ● Wellness challenges ● Immunizations ● Online wellness portal ● Telephonic and online health coaching ● Access to VIP care line These types of programs and services can save time, prevent unnecessary time off from work, offer peace of mind and save money for both employees and employers alike.

PHOTOS COURTESY OF BAPTIST HEALTHY SOLUTIONS

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ne of the most important elements of any business is its workforce. Employees are the engine that make the business run, and just like an engine, if they’re not running well, the business will not flourish. Keeping employees healthy is the best investment any company can make.

It’s not only the smart thing to do, it’s the right thing to do. Healthcare costs continue to rise, and for most employers, they are the most expensive aspect of running a business. To manage these costs, many companies are investing in the health and wellness of their employees with programs offered by Baptist Healthy Solutions.

Baptist Healthy Solutions offers employers a wide range of customizable health and wellness programs to help employees conveniently manage their health and the health of their families. VIP Care at Baptist Healthy Solutions is tailored to your specific workforce needs, offering everything from onsite clinics to health risk assessments, immunizations, screenings, coaching and more. Members of Baptist Healthy Solutions’ wellness programs have VIP access to one of the largest primary and specialty physician networks in

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LIFESTYLE

Taking the Worry Out of Weddings

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n a recent trip to Las Vegas, I had the pleasure of attending a wedding. When I usually think of destination weddings, I picture Hawaii or some other dreamy beach location. Now, I’ve never been to Hawaii, but I’ve heard it’s so unbelievably beautiful ... and expensive. I can imagine flying even a small family out to the islands could quickly become cost-prohibitive for most people.

But Las Vegas isn’t very far away, or expensive if you don’t want it to be. In fact, you could easily make it into a road trip from Texas. Hotel accommodations range from very affordable to luxuriously pricey.

There’s plenty to do in Las Vegas too, so in between weddingrelated events, guests can enjoy the wonders of the city.

My trip started with an early morning flight from San Antonio.

I always suggest leaving early for Vegas so you can take advantage of a full day there. Once we arrived, we checked into our room at the MGM Grand Las Vegas

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Hotel and Casino, which had an incredible view overlooking the famous Las Vegas strip. The beds were luxurious, and the bathroom was stocked with many amenities to make our stay comfortable.

My husband was with me for this trip. We both enjoy gambling, so we eagerly went down to the casino area to have some fun.

We played slots and some table games and made our way into a poker tournament, where we met many interesting people from all over the country and beyond. It was our lucky night!

We both won in the tournament and gained some extra play money, so our first day there was a success. We spent the next day visiting various casinos and taking in the sights. There is so much to do, no matter what you enjoy, in Las Vegas.

The nuptials were planned for our last full day in Vegas at the MGM Grand’s Forever Grand Wedding Chapel. I’m not sure if having the wedding on the last day worked out to the bride and groom’s advantage, but it

SHALE OIL & GAS BUSINESS MAGAZINE  SEPTEMBER/OCTOBER 2016

certainly made for a fun last night there.

Getting prepped for the wedding was easy as pie. When we arrived in Vegas, the groom went for a tux fitting as soon as we arrived at the hotel. And the bride had her dress (she brought it from Texas) delivered to the hotel concierge so that it could be steamed.

Now, the bride could have purchased her gown in Las Vegas. In that case, she wouldn’t have needed to haul extra baggage (stuffing a huge ball gown into a suitcase wasn’t exactly easy), and she wouldn’t have needed to get it steamed. But finding a gown last-minute and off the rack might not have worked out. What if she hadn’t found her dream dress? Still, as someone who had a big traditional wedding, these preparations seemed quite stress-free.

On the morning of the big day, we woke up relatively early (we were on Vegas time, of course). We had a delicious breakfast, and then it was time to get dolled up for the wedding. The bride had an appointment at the Cristophe Salon in the MGM Grand; the service was included in her wedding package. We were greeted by the sweetest staff who made our time at the salon so relaxing. We were served champagne as we bubbled with excitement over the upcoming ceremony. The makeup artist was easy to talk to and very knowledgeable. And when she finished her work on the bride, she looked like a flawless movie star. Next it was time for the hair. The bride opted for the glamourous big hair with long

PHOTOS COURTESY OF MGM GRAND LAS VEGAS HOTEL AND CASINO

By: Lauren Guerra

curls that has been so popular on the red carpet recently. Once her hair was done and her veil was placed, she was ready to get married.

We made our way to the chapel dressing room to help the bride into her gown. As we got her dressed, the staff brought in her beautiful white and red rose bouquet and the boutonnieres for the groom and best man.

The ceremony was sweet and heartfelt. It was short, but every word was extremely meaningful.

We all celebrated as we exited the chapel with the new husband and wife, and then waited as they took a few photos for their keepsake book.

The couple opted for a very minimalist package so there wasn’t a formal reception following the ceremony. The venue does have many options, however, to satisfy the wishes of every bride and groom. In the case of this wedding, we all went

It wasn’t a traditional wedding by any means, but it was exactly what the bride and groom wanted: a stress-free and fun destination wedding to dinner with the bride and groom to celebrate following a quick wardrobe change. Once dinner was over, we embraced the entire Vegas experience: We walked around, enjoyed cocktails at various bars, gambled, danced and enjoyed a lovely night celebrating the newlyweds.

It wasn’t a traditional wedding by any means, but it was exactly what the bride and groom wanted: a stress-free and fun destination wedding. The hotel was accommodating in every way; the salon did an impeccable job on the bride’s hair and makeup; the chapel was sweet and intimate; and the night was unforgettable.

Anyone interested in having a highly customizable wedding experience should look no further than the Forever Grand Chapel at the MGM Grand Las Vegas Hotel and Casino.

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To learn more about wedding packages and rates at the MGM Grand Las Vegas Hotel and Casino, please visit www.mgmgrand.com.

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SEPTEMBER/OCTOVER 2016  SHALE OIL & GAS BUSINESS MAGAZINE

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COMMUNITY

UTSA Receives Funding for STEM Students Special to SHALE

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awards are made possible due to the successful fundraising efforts of SAPA’s members. SAPA hosts golf, sporting clay, and fishing tournaments throughout the year, which have become increasingly popular and are well-attended.

To date, SAPA has awarded over $135,000 in scholarships. The goal of the SAPA Scholarship Program is to encourage and support the success of outstanding STEM students in their educational endeavors.

In the 2016 award year, SAPA is pleased to not only award scholarships to individual applicants, but also donate $15,000 to the

University of Texas at San Antonio College of Engineering to be distributed to well-deserving STEM students as recommended by the university’s selection committee. It is the extreme pleasure of this organization to contribute toward the excellence of the College of Engineering.

The membership of SAPA wishes the best to all the recipients of the scholarship awards, and it is their hope that upon graduation these students will become members of the San Antonio Pipeliners Association and continue the lifeline of charity for the future of our energy community.

PHOTOS COURTESY OF SHALE

he San Antonio Pipeliners Association (SAPA) is a 501(c)(6) organization that was created in 2012. This organization is comprised of individuals, operating companies, service providers and suppliers in the midstream oil and gas industry. The purpose of this organization is to not only provide networking opportunities for its members, but also to raise money for scholarships to be awarded to deserving second-, third-, fourth- and fifth-year college students pursuing a degree in math, science, or engineering (STEM). These scholarship

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SCENE

Our beloved radio show, In The Oil Patch, has been growing rapidly over the last year and a half. It’s interesting to look back and see where we started (February 2015) and where we are now with our current iteration of the show 76 episodes later!

Aside from this wonderful update, we would also like to bring you some exciting news!

The In The Oil Patch radio show is the No. 1 show on Sunday afternoons and evenings on iHeartRadio's KTRH 740 AM! We have also expanded our weekly listener base to a new radio station, the NBC powerhouse in Corpus Christi, KSIX 1230 AM! We have been overwhelmed with joy as our show approaches its second year on terrestrial radio. Without our fans and listeners, we would not be as successful, nor would we be able to spread education and news about the oil and gas industry. Here’s to continuing our success and prospering in the new year!

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PHOTOS COURTESY OF SHALE

in the oil patch

Introducing the SHALE Mobile App Free to Download on iPhone and Android

GPS-Enabled Directory Oil and Gas Survival Kit and More!

connect. share ideas. discuss.

SHALE Oil & Gas Business Magazine is an industry publication that showcases the significance of the South Texas petroleum and energy markets.

SHALE’s mission is to promote economic growth and business opportunity that connect regional businesses with oil and gas companies. It supports market growth through promoting industry education and policy, and it’s content includes particular insight into the Eagle Ford Shale development and the businesses involved.

Shale’s distribution includes industry leaders and businesses, services workers and entrepreneurs.

OIL & GAS BUSINESS MAGAZINE

http://www.linkedin.com/company/ shale-oil-&-gas-business-magazine

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SCENE

The Corpus Christi Chapter of the Texas Energy Advocates Coalition (TEAC) The Corpus Christi Chapter of the Texas Energy Advocates Coalition held their second mixer at Katz 21 Steak & Spirits on Aug 10. Industry experts and local business professionals mingled and sampled the local cuisine all for one common goal: to network and advocate for the energy industry.

PHOTOS COURTESY OF SHALE

For more information and to join, visit shalemag.com/teac.

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SEPTEMBER/OCTOVER 2016  SHALE OIL & GAS BUSINESS MAGAZINE

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SCENE

San Antonio Pipeliners Association Luncheon

The San Antonio Pipeliners held their first luncheon of the 2016-2017 season on Thursday Sept. 8 from 11:15 a.m. to 12:45 p.m. at the Hilton Garden Inn on Rim Pass. The keynote speaker at the luncheon was John Tintera, Executive Vice President of Texas Alliance of Energy Producers.

Tintera gave a compelling speech on the regulation from Washington and how it impacts Texas. The first Young Professional of the Year Award was also presented at the event.

The South Texas Energy & Economic Roundtable (STEER) and Cheniere held a private cocktail reception to discuss the the liquefied natural gas (LNG) export industry and how Cheniere’s $14 billion LNG export facility in Corpus Christi will impact the Texas energy industry. The event hosted Sen. Carlos Uresti as a special guest. The event took place on Wednesday, Sept. 7, at the Emma Hotel in San Antonio. Our team had a great time at the event and enjoyed learning more about Cheniere’s LNG export facility.

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PHOTOS COURTESY OF SHALE

STEER and Cheniere's Cocktail Reception

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TRAIN ELEVATE NETWORK The go-to resource for oilfield service providers, suppliers and manufacturers.

Get connected at PESA.org.

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