Energy Workforce & Technology Council Members met in Denver August 3-5 for the 2022 Summer Meeting, with leaders from all sectors of the industry contributing to high-level discussion centering on energy production, regulations and policy, labor issues, supply chain challenges and more.
Colorado Gov. Jared Polis joined the opening reception and welcomed them to the state. Polis stressed the importance of the oil and gas industry to Colorado.
Board Member Marshall Dodson, President & CEO, Key Energy Services, kicked off the meeting on Thursday by recognizing a number of Members for their safety successes last year.
STATE OF THE ASSOCIATION
Energy Workforce CEO Leslie Beyer delivered her State of the Association address, highlighting the growing global energy demand and Member Companies who are broadening access to resources through energy expansion.
“The long-term outlook continually shows increases in global energy demand. Oil and gas are a very important part of energy security, and they are not going anywhere in future energy development. We are moving forward with reducing emissions in the industry and implementing new technologies, as oil and gas and the development of hydrocarbons are critical to our energy future.”Leslie Beyer, CEO, Energy Workforce
“We can achieve our environmental and sustainability goals while increasing U.S. production,” she said.
Beyer continued by highlighting regulatory hurdles the industry faces as it works to increase production and provide reliable, affordable energy. She also noted that continuing negative rhetoric from the Biden Administration is detrimental to energy security, increased innovation and overall industry morale.
“The vilification of our industry has constrained our access to capital, it has kept us from being able to recruit and attract the workforce we need to increase production, and it is not representative of who we are and the importance of what our industry does to power our world.”Leslie Beyer, CEO, Energy Workforce
Even with the negativity coming from the Administration, the industry is strong and Beyer says she is focused on the positive, not the negative.
“We continue to focus on reduction of emissions, on safety, and on our workforce, but we need a regulatory environment that we can operate in with some certainty and we need access to capital to invest in new technologies of the future. We are not the enemy, we are the solution.”
She also highlighted the training programs, networking events and leadership development provided to Members during the year and encouraged participation.
“We believe the future looks very strong for our industry and as your trade association, we are focused on continuing to serve you, but we need your engagement. We are thrilled to represent you and support you, and we look forward to continuing to serve you for years to come,” she said.
Austin Harbour, Managing Director, Piper Sandler, provided a market outlook for the industry discussing recent policy at the Federal Reserve, inflation, the situation in Europe, oil and natural gas supply and demand dynamics, and how investors view the industry.
“At a high level, supply is tight, demand is relatively bullish, supply chains are challenging and access to capital is constrained,” Harbour said. “I believe the backdrop provides a unique opportunity for the industry to start fresh – generating substantial free cash flow and returns exceeding cost of capital, coupled with returning capital to shareholders – making it once again an exciting opportunity for investors.”
Energy Workforce COO Molly Determan moderated the session’s first panel, “The First 180 Days: Employee Selection, Onboarding and Retention Through the Lens of HSE.” Panelists included Micah Backlund, HSE Director, Helmerich & Payne; Gary Childress, Vice President – Health, Safety, Environmental and Sustainability, Oil States International; and Ken Houston, Vice President QHSE, Key Energy Services.
This panel delved into recruiting and interviewing potential employees, as well as looking for aptitude and attitude during the process and being honest about the expectations of the job.
“We are looking to find people seeking a career. We know we can build the skill sets and we know how to get them where they need to be to do the job, but we need people receptive to learning, following processes and committed to the work and their colleagues,” Houston said.
Backlund discussed how H&P has used rig managers and employees in the district or at the rig site to do most of the recruiting, identifying candidates and hiring — as those employees understand the skill set needed and are often better at identifying the right person for the job.
“For years we have had hires selected by rig managers or individuals at the district or rig site level. We have seen a lot of value in having that dedicated, relatively small team of individuals dedicated to recruiting people, identifying candidates and making the hires,” Backlund said.
Childress added that the interview and retention process doesn’t stop at the initial interviews, that it is an open-ended process through their entire career.
“We let employees know from day one that they can have an immediate impact. We are willing to listen and learn from them, and we engage them into the organizations. We are also empowering them to speak up. On day one they understand their opinion is valuable to our industry.”Gary Childress, Oil States International
Determan discussed using social media to attract more people, and said a younger workforce is looking for an organization’s social media presence for the company’s story. If there isn’t one, that says a lot to these younger workers.
Houston says he has seen a big difference in the impact social media has had to let people know it’s a good place to work, with a fantastic career path, and the people are great to work with.
The panelists also discussed how to safely bring on new employees to an arena they may not have much experience, teaching them not only the mechanics of the job but also how to remain safe and healthy while on the job by having awareness of their surroundings. They stressed the importance of looking at candidates as individuals, their capabilities and limitations, and how to best place them so they successfully perform.
POLITICAL AFFAIRS LUNCHEON
Attendees heard from Heidi Ganahl, CU Regent and Republican Nominee for Colorado Governor at the Political Affairs luncheon. Energy Workforce Advisory Board Member Justin Bliffen, Founder and CEO, Brigade Energy Services, moderated the discussion.
In her remarks, she thanked Energy Workforce members for the work they do, as the industry is crucial to the economy of Colorado. She stressed the importance of the industry being involved in advocacy, trade associations, and in state and local governments to ensure input from those who know the sector best.
FIRESIDE CHAT: POLICY OUTLOOK
Following lunch, Energy Workforce SVP Government Affairs Tim Tarpley moderated a discussion with Kathleen Sgamma, President, Western Energy Alliance.
Tarpley started the session with a question about the recently passed Inflation Reduction Act.
“It’s a bad deal for the country. It’s a lot more spending and really should be called the Inflation Expansion Act,” Sgamma said. “But as far as the impact on our industry, it is better than the original ‘Build Back Better’ plan that we were able to stop. We really dodged a bullet.”
On the increased royalty rates for leasing on federal lands and waters, Sgamma said, “With this legislation we get a 16.66% rate, which is above (what was the current) 12.5% but not 18.5% (which was the rate on the latest round of lease sales). So this rate will be baked in and future administrations can’t arbitrarily raise it, therefore that is sort of a positive. But given this Administration was moving forward with an 18.5% rate, I think codifying it in statute at 16.66% is not horrible.”
They also discussed the proposed SEC climate reporting rules, the Russian invasion of Ukraine, the energy situation in Europe, and the impact state governments can have on the industry. Specifically, they discussed SB 181 which ushered in a new era of oil and gas regulations in Colorado.
“If you look at California and Germany being a model for the net zero transition economy, Colorado is the model for the left on what they want to have happen in the United States,” Sgamma said. “This is a test case on how to overregulate an industry out of business, or nearly out of business. They are making the cost so much higher for small independents that the result will be a handful of companies, mostly the large operators, left in Colorado.”
BREAKOUT SESSIONS & MORE
Billy Liucci, Executive Editor & Co-Owner, TexAgs gave a college football preview. The lively discussion was moderated by Board Vice Chair Daniel Hindes, Vice President – Well Servicing, ClearWell Dynamics, and Advisory Board Member Ryan Phillips, Chairman of the Board, Axis Energy Services.
In his discussion, Liucci said he is very excited about the expansion of the SEC with the University of Oklahoma and University of Texas joining in the next couple years. He is also excited about the upcoming season, especially Georgia, Alabama, Texas A&M and Texas. He says OU is the wildcard, and he is looking forward to seeing all of the talent play out on the field. He did note, however, the chaos of college football following the adoption of NIL and the transfer portal.
“I’m more concerned about the future of college athletics than I’ve ever been. Everyone I deal with — coaches, media, former players — everyone is concerned to varying degrees,” Liucci said. “It is like the wild west — no regulation, rules or protocols. At least in the NFL they have contracts, and rules against tampering, there are fines when you cross the line. In college, there is none of that right now.”
The general session ended with two breakout sessions, the Committee Leadership & Chapter Chairs Roundtable and the Talent Development Breakout: High Competence and High Confidence Teams, led by Pat Lipovski, Founder & CEO, Envision Group.
Roundtable speakers included reports and discussion from committee leaders, including Kevin McDonald, NexTier; Board Member Matt Hooker, Ranger Energy Services; Advisory Board Member Dave Warnick, SPM Oil & Gas, A Caterpillar Company; Gary Childress, Oil States International; Advisory Board Member Gary Hauck, Vallourec; Elizabeth Stephens, HMH; and Board Member Scott Livingston, NOV.
The chairs from the Permian, California, Kansas, Oklahoma and Gulf Coast chapters also updated the Membership on their activities during the roundtable, including Board Member Leroy Law, LL Industrial Transmission; Garret Dobson, TechnipFMC; Graham Klaiber, Ensign Energy; Phil Pierpoint, Gressel Oilfield Service; Dustin Anderson, Kimray; and Jordan West, Mustang Cat.
‘BETTERING HUMAN LIVES’
Friday kicked off with breakfast keynote speaker Ron Gusek, President, Liberty Energy, with a presentation entitled “Bettering Human Lives.” He discussed the importance of energy accessibility to improving human health, including access to clean water and reduction in malnourishment. He also noted that reliable, affordable energy saves lives.
“Domestic producers utilize state-of-the-art technology and innovation to optimize production, while decreasing emissions, reducing leaks, limiting venting and flaring, and disturbing less land,” Gusek said. “We are able to deliver abundant, efficient and affordable energy sourced and produced locally in one of the safest and most environmentally sound manners anywhere.”
WELL SERVICING PANEL
Energy Workforce Board Member Matt Hooker, COO, Ranger Energy Services, moderated the “Market Outlook for Well Servicing” panel. Participants included Advisory Board Member Justin Bliffen, CEO & Founder, Brigade Energy Services; Board Member Marshall Dodson, President & CEO, Key Energy Services; and Board Vice Chair Daniel Hindes, Vice President – Well Servicing, ClearWell Dynamics.
Labor and supply chain challenges dominated the conversations, with Bliffen giving a positive perspective on the opportunities this environment offers the industry.
“The challenge is the opportunity in this space,” Bliffen said. “If any one of us is able to perform 10% better on recruiting and retaining talent, then we have an edge to beat out (outside industry) competition and grow the market.”
“Part of what we are doing is reinforcing how valuable recruits are to the business, that they are key to success. We are taking extreme ownership and personal accountability for anything in the organization, including labor retention. Therefore, we are really supporting our workforce, especially new hires, and doing everything in our power to hang on to that person.”Justin Bliffen, Brigade Energy Services
Dodson expanded on labor challenges impacting production.
“Labor challenges are definitely impacting activity,” Dodson said. “We are facing the challenge of bringing new people into the industry and bringing people back to the oilfield. The challenge for me isn’t swapping experienced hands, it’s how do we attract new people into the industry and then how do we train them to work safely.”
The panel wrapped up with a discussion on keeping organizations healthy through all cycles by fostering partnerships with clients, staying focused on the core of the business, and building a sustainable business model.
“If you want to be successful long-term, you need to operate with little to no debt,” Hindes said. “Two, you should stay in your lane, stick to well servicing. Third, you must consider capital cost of the rigs. If you aren’t considering the capital cost of the rigs over time, you are wearing equipment out and will slowly go broke. If you stick to little to no debt, stick to what you are good at, and you are covering the capital cost of the rigs, you can sustain the business long-term.”
WELL STIMULATION PANEL
Attendees wrapped up the day with a “Well Stimulation Market Update” panel moderated by Kevin McDonald, EVP, CAO & General Counsel, NexTier Oilfield Solutions. Participants included Ron Gusek, President, Liberty Energy; Aaron Hilber, Vice President, Power Solutions, NexTier Oilfield Solutions; and Ladd Wilks, CEO, ProFrac.
In the discussion, the panel touched on labor challenges but primarily focused on implementing new technologies in the oilfield, and ensuring the workforce is trained and remains safe. They said through Energy Workforce collaboration, members are sharing best practices and can align around process, procedure and safety for using new technologies, especially natural gas.
“For years our sector had been working independently to determine how best to handle safety around natural gas at the worksite,” Hilber said. “Through the Energy Workforce Well Stimulation Committee, we are able to work together to share best practices, focused primarily on safety. We have a lot of new people to the oil field, but even more new to working around natural gas. It is our duty to ensure they are educated and trained, that we identify clearly roles and responsibilities at the worksite, and that employees stay safe. We are doing this better today because we are working together with others in our industry facing the same challenges.”
The panel also discussed automation and emissions reduction, especially through increased natural gas use and declining diesel use. On ESG, Wilks stressed the need to ensure companies align commercial objectives with societal objectives to build a sustainable business plan. He noted that businesses will see profitability while working towards ESG goals.
“To have sustainable ESG, it needs to be profitable, and we are finding it is profitable,” Wilks said. “We have standby controllers on engines at the worksite — instead of idling, they shut down. It makes us more profitable and is good for the environment. Moving to electric fleets, we are reducing diesel and using more natural gas which is great for the environment and also profitable for us. The downside of ESG is it seems the targets are always moving and there is no clear definition.”
The panel concluded with a brief discussion on the importance of advocacy across the industry, ensuring facts over hyperbole, and being proactive in pointing out the necessity of oil and gas for a flourishing society.
“(When pushing back against negative attacks on the industry) Always be fact based. Don’t be argumentative, take emotion out of the discussion. Humor is always a good approach. We have found that most of the arguments coming our way are very often emotionally based. Those are easy to combat with facts that are irrefutable. This approach has proven successful for us.”Ron Gusek, Liberty Energy
Kevin McDonald reiterated that “the U.S. produces energy cleaner, safer and with the least amount of corruption risk than any place in the world.”
Thank you to all of the Summer Meeting sponsors, including Strategic Partners Chevron and Schlumberger. Sponsors include NOV, Brigade Energy Services, Kahuna, PECO, ARIES Worldwide Logistics, AUGE Industrial, ClearWell Dynamics, Mustang Cat, Ensign and GO Wireline.