January 29, 2024 • 45 mins
Operations Manager and Podcaster, Kathryn Mills, joins guest host Robert Rapier to talk about the latest trends, issues, and how the election can affect the oil and gas industry in the coming months and even over the next year.
Inside the Oil Patch. The Latest information on the Oil, Gas, and Natural Gas industry with your host, Kym Bolado. For more information visit https://shalemag.com/in-the-oil-patch-schedule/
Inside the Oil Patch. The Latest information on the Oil, Gas, and Natural Gas industry with your host, Kym Bolado. For more information visit https://shalemag.com/in-the-oil-patch-schedule/
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Episode Transcript
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(00:00):
Welcome to in the Oil Pats,presented by Shale Magazine, broadcasting from the
oil Field Experts Studios. Oil FieldExperts where you get the right products right
now in the oil patches, wheretogether we explore topics that affect us all
in oil, gas business and inyour community. Every week, your host,
Kim Blotto will visit with the moversand shakers in this fast paced industry.
(00:21):
You'll hear from industry experts, electedofficials, and many more right here
on in the oil patch. Welcometo you in the oil Patch Radio.
I'm Robert Ray Peter, senior contributorfrom Forbes, sitting in for Kim Balatto.
This week's guest is Katherine Nills,an operations engineer in the oil industry.
She's also the host of the CrudeAudacity podcast, which covers all aspects
(00:43):
of the oil and gas industry.Catherine tells me it's been on hiatus,
but she may have something to tellus about plans for the podcast in twenty
twenty four. Catherine, thanks somuch for joining us today. Thank you
so much for having me. Thisis great. Yeah, it's it's good
to talk about energy. I enjoyedthis. The last couple of guests were
(01:04):
friends of mine, and you andI have gotten to know each other a
little bit. So we should havea good productive show here, absolutely,
especially going into twenty twenty four withall of the presidential runs, everything we're
seeing the wrap up of twenty twentythree. It should be a great conversation
today, right, I agree,And before we jump into that, let's
(01:26):
tell readers a little bit or listenersa little bit about who you are.
So, yeah, I have sortof an unconventional approach to the energy industry.
I first went to school for businessand economics out of Virginia, and
I grew up in the oil andgas industry, but you know, fought
it tooth and nail, a veryreluctant engineer, if you will. And
(01:49):
finally, a few years after collegeone point zero, it became evident that
I needed to sort of take thosesteps into becoming a petroleum engineer, start
exploring. And one of the universitiesthat I was accepted into for secondary education
or I guess secondary post education,whatever you want to call it, was
School of Mines. And while there, I initially went just to get a
(02:15):
master's but the faculty thoroughly tricked meinto getting the undergrad as well, so
it's kind of been that way eversince. Based out of Colorado, I've
worked with consulting teams, done alittle bit of international evaluations, but really
just staying in the Texas Rockies andnow the Goal South. So it's been
(02:38):
an experience. I've kind of acatch all engineer these days. So did
you go strike to work for theoil industry out of school? Not the
first time around, but definitely whenI graduated with my masters from Mines in
twenty seventeen, I actually no onewas really hiring story of the oil and
(02:59):
gas industry, right, So Istarted reaching out to managers and reservoir departments,
started asking them to coffee, andbasically found an opportunity to go and
work for a shoots when I firstgot out. But it definitely took me
being proactive in my career as opposedto just applying on standard job boards.
(03:20):
Okay, so tell me about yourjob. Where do you fit in the
oil and gas supply chain? SoI'm somewhere between upstream and midstream definitely operations
engineer. Definitely reservoir advanced characterization,you know, seismic to full blown modeling.
But these days I'm very much fallinto facilities. So after wellhead,
(03:46):
everything's coming down flow lines and goinginto processing plants, and that's kind of
where I fall into the facilities productionengineer. We want to keep it going
and keep everything steady, but weare in the mid It's a couple co
two floods that have been going fora while. One of them we're looking
to expansion and I'm about to workwith the team to kick off water flood
(04:09):
here soon. That's been long plannedin the works, but now we're building
up the plant to get ready forour injection wells and that should be kicking
off let's say end of Q oneof twenty twenty four. Okay, So
when I think about oil industry,Mississippi doesn't jump to mind, and I
(04:29):
know you work in Mississippi, andI think, well, okay, but
I've probably got a lot of offshore, but you're doing on shore stuff,
right, I mean, you're sotell listeners who may not be familiar with
the oil and gas industry in Mississippiwhat is going on down there. So
it is one of the best KEPsecrets of the oil field, and honestly
throughout the United States, that wholeregion of the Southern States more conventional type
(04:54):
assets, probably not truly conventional.Definitely some horizontal opportunities out there, but
you know, the craze of WestTexas took over years ago and has kind
of stayed steady. Everyone's chasing theinitial ip to be best in basin,
and we're out there just you know, taking old, old, old fields.
(05:14):
I'm talking like pre oxy type fieldsand just doing recompletes, looking for
on tapped zones or just simply youknow, keeping assets up and running because
they've been study producers for you know, basically decades now. But you're right,
not very many people think about theseSouthern states as big opportunities. Not
(05:38):
very many people are thinking about Alabamafor colbd methane. And we kind of
like it that way. You know, it's a slower way of life down
here, but it is definitely thatit allows for a lot of opportunity and
a lot of engineering that is otherwiselost in say the during half of the
(06:00):
United States all the way to WestTexas. So what does a recomplete entailed?
What are you doing when you goin and you recomplete it. Well,
usually we're going through looking for deeperzones or looking for anything that's behind
pipe, you know that might nothave been previously explored, the same as
what you see in other basins orother assets. But it's just opportunities that
(06:26):
weren't initially tapped. Go back,look at your well control, maybe wrap
in a little petrophysics that you otherwisewouldn't have had from say the eighties or
or in some cases we're looking atthree D seismic opportunities to see if the
rumors are true, if this isreally the biggest opportunity that was out there,
(06:46):
And it's pretty exciting. But again, not a lot of people have
a lot of eyes on us,which allows us to be more creative in
terms of field management and actual trueblue oil field engineering coortunities. So now
a lot of those oils, probablya lot of those oil is probably pre
date fracking. Are you going inand fracking any of those or is it
(07:06):
as much of a fracking business there? I mean, yeah, you'll get
some of it, But like Imean, every well is stimulated in some
fashion, right, You're not justlike shooting perfs and all of a sudden,
you've you've got you know, steadyoil flow you've got to go through,
You've got to clean up, you'vegot to open up the rock in
some ways, so racking, Iguess the way the outsiders, the outsiders
(07:30):
want to say it with a Kif you will not what you see in
West Texas. But in terms ofrunning stages and even on you know,
slightly directional wells like S's or J'sor things like that. Yeah, we've
got crews out here. Not many, but that's okay. We like it
that way. So were you primarilyoil and some gas or lots of gas?
(07:54):
Lots of gas, lots of NGLs, lots of guys. I feel
like I'm giving you all secrets tocome and look at like opportunities down here.
Y'all stay in West Texas. Youguys have you guys have fun in
Wyoming. We're good. So,yeah, tell me about so you told
me that you're working on a gasplant there, so I guess there's enough
gas there to have in gls.What you know, what can you what
(08:16):
can you tell us about that?Well? Facilities is an art in and
of itself. It should be taughtmore in school, and in fact,
the whole process of becoming a petroleumengineer should probably re reevaluated into an apprenticeship
with very little classroom time so thatyou can actually get out in the field
and learn things. But you know, it was kind of a shock for
(08:39):
me to come in. Luckily,I have an excellent team that I'm working
with who has been doing this foryears, so I'm learning from the ground
up, like anything from you know, membrane management all the way to actually
modeling the floods themselves and seeing youknow, like the myths of the huff
(09:00):
and puffs, if you will.And it's been a learning experience because we
aren't exposed to that. And typicallyyou see chemical engineers fall into this realm.
And while some do, they aren'treceiving that same training through their educational
process as well. They're getting tothe field and having to learn it from
the ground up, and some oftheir training is probably better preparing them for
(09:22):
some of these processes you see throughoutthe field. But it's all material balance
at the end of the day.And looking for an opportunity with someone from
the glorified oil field of the eighties, if you will, who's actually gone
through these processes and seen how theywork and actually see the mechanics behind it.
(09:43):
I mean, that's your key,right engineers today thirty years and younger
are ten years and less in thefield typically don't see these opportunities. So
if you're able to get into oneof these mid sized shops and really sink
your teeth into it, don't beafraid have become the catch all engineer,
because you're going to have opportunities inyour career that other people only dream of,
(10:07):
if not probably don't even know about. Yeah, it's interesting to hear
you talk about that because I'm achemical engineer and I was in the Petroleum
engineering building at Texas A and M. That was where my office was,
and it was interesting to see someof the differences in what the petroleum engineers
learned and what we learned. Alot of it is the same. I
mean, you've got, you know, thermodynamics and fluids and things, but
(10:30):
then the patrolling engineers got into alot of areas that you know, I
still don't know to this day.I've managed engineers out in the old fields,
but you know, a lot ofthe things they do is a little
bit different than the stuff I did, you know. I mean the controversial,
I guess statement is to be agood engineer, you've got to get
out of the library. I absolutelybelieve that. Go visit your field,
(10:54):
go see what's happening. You know, the solution to everything isn't just swabbing
a well. Right. So,okay, we've got about a minute until
our break, until we need totake a commercial break. But after the
break, I want to get intoa sort of overall energy policy and I
know you've got some thoughts on that. I just reported in Forbes that the
(11:18):
US oil and gas producers set anew production record, and as of last
Friday, by my calculations, we'reinto record territory now. And you know
a lot of people take that asa political statement, and I don't intend
it as a political statement. It'sjust a fact. But you know,
after break, I would like totalk to you about, you know,
US energy policy. What are wedoing right, what are we doing wrong?
(11:43):
You know what needs to change?So real yep. So with that,
we'll take a quick commercial break andthen after the break we'll get into
energy policy again. I'm Robert rayPier standing in for Kimbalatto and in the
Old Patch Radio with my guest Katherinemiss. In the oil and gas industries,
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Welcome back to In the Oil PatchRadio. I'm Robert rae Pere with this
week's guest, Katherine Mills. So, Catherine, let's talk about energy policy.
(13:11):
Before the break, I mentioned thatthe US has set a new oil
production record, a new annual highnatural gas production. We won't know that
for sure until sometime in twenty twentyfour because they don't report those numbers weekly
like they do the oil production.But as of September, we were running
four percent ahead of last year's record. So clearly the oil industry, Oh
(13:37):
yes, industry is doing well despitedealing with headwinds from an administration that is
fairly hostile total and gas. Onthe other hand, I'm hearing from people
that riggs are stacking up and someoil compidential landoff. So what do you
see right now? Does business lookgood from your perspective? You know,
what are you seeing in the field? So, I mean, the reality
(13:58):
is is that we're as an industry, we are stuck in sort of the
same cycle that we've always been stuckin. Right, opportunity starts happening,
everyone blocks towards oil and gas,and then all of a sudden, something
happens. Either we have an unfavorableadministration and that could be on the Republican
or the Democrat side, but youknow, then we start seeing slowdowns,
(14:22):
we're start seeing more hostilities depending onwho's running actual states and looking at oil
and gas boards for rules and rags, like Colorado is in a perpetual state
of defense and just trying to keepthe industry going, where as some of
the smaller states or maybe the lesserknown states are able to operate as business
(14:43):
as usual and aren't, as youknow, driven by agenda. And yeah,
everyone says that the Biden administration isanti oil and gas, but we've
also had pretty consistently higher prices,higher than if you will, par barrel
for since the beginning of this administration. And the reality is is that presidential
(15:09):
cabinets are judged based off of theflow of economics, right, so while
consumer confidence might be down, we'restill seeing industries sort of buzzing. So
it becomes one of those talking outof both sides of your mouth. We're
never going to see the slowdown ofproduction without the slowdown of demand. So
(15:31):
the consumer can sit there and saywe don't like oil and gas, antisocial
license to operate all of these ESGefforts that I mean questionable what they're actually
resulting in. But we also seeinnovation in interesting ways because administratively wise,
(15:52):
we've got a whole methane industry now, right, and we've been seeing this
budding for a few decades, butit took certain individuals in Colorado to set
policy and then create a company thatdrove these methane evaluations, and we're seeing
majors block to it. You know, we want our ESG, we want
that tick box, but what hasit actually done industry wise? We can
(16:18):
argue several different ways over that,but the reality is is that it took
someone realizing that it was governmental controlto basically build up a leg of an
industry. So oil and gas isn'tgoing anywhere. I don't think anybody's worried
about that, and I don't thinkanybody necessarily cares that the current president might
(16:38):
be outwardly unfavorable in oil and casts. Meanwhile, his son's sitting on a
national oil company's board without any sortof, you know, qualifications to do
so, saying he's putting up sanctionson places like Russia and we're not taking
quote unquote unethical oil. But reallywe are still purchasing Russian oil to make
(17:02):
up for the lags we see fromanything from United States based production. So
it's all, you know, whatside of the mouth are they talking about,
and who is their biggest provider?And what are they actually trying to
accomplish while in federal office? Imean, from your experience, what have
you seen happen over the decades?The Bush administration is arguably just as you
(17:26):
know, questionable as currently the Bidenadministration on energy policy. Right. So
I always tell people that the biggestfactor in the oil and gas industry is
the oil price and gas price,and what a president does is very inconsequential
relative to that underlying price. AndI always give examples, like, you
(17:48):
know, you think of George W. Bush as an oil man, and
yet oil production fell all eight yearshe was in office, and hence we
got desert Storm out of it.I mean, we can follow the money.
Yeah, but the but the thingthat was happening on his watch is
if racking was being developed and startingto pay dividends, and then you saw
(18:10):
that under Obama. You saw underObama fracking mature, and so he encouraged
it. But then he come hecondemned pipelines. It just tried to Yeah,
he tried to have it both ways. Yeah, you know, he
and we had the largest expansion ofoil and gas production in US history under
President Obama. And I don't thinkanybody would call him a pro oil president.
(18:33):
You know, Bush was a prettypro oil president, although we did
get a massive expansion of bio fuelmandates under Bush. But you know,
then Obama comes in and Racking startsto pay dividends, and you know,
whether he's hostile or not, andhe did have multiple hostile policies. You
know, the macro factors are farfar more important than what a president can
(18:56):
do now in the long run.In the long run, on presidents can
have very consequential decisions, and Igive Nixon as an example of that.
Nixon cleared away a bunch of thebarriers for the Alaska Popeline, and you
know, there were a lot ofenvironmental protests and lawsuits and he cleared all
that out, and then the AlaskaPopeline got built and it started producing oil
(19:18):
when Carter was in office, andso you saw oil turn up under Carter.
So that's that's an example of consequentialdecision by a president that had a
long term, long term impact.But in the short term, I always
tell people just look to the price, look to what Opek is doing.
Although old Peck is starting to lose, does Opek really have the influence that
(19:40):
we think OPEK has I mean,the reality is is like we're watching Trudeau
basically cripple Canada. So we've gotall of these assets, We've got easily
found oil, we have technology thatmakes it you know, clean, safe,
affordable, but Trudeau won't allow usto build certain pipelines. It's who's
pay in the buck. Well,let's let's take a break and let's get
(20:03):
into that, because I would arguethat OPEC has lost a lot of power.
So let's talk about that after thebreak. I'm robber Y Pere with
in the old Patch radio to beright back. Are you a business owner
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Start dealing with a company you cantrust and always find Welcome back to in
the Old Patch Radio. I'm Robertray Pier, guest host sitting in for
Kim Balatto with this week's guest KatherineMills. Catherine, before the break,
we touched upon Opeck a little bit. You know, twenty years ago,
(21:34):
Opek had a firm handle on theglobal and gas industry. You know,
they could cut production and they couldshoot prices higher or flood the market and
shoot prices lower. And then frackingcame along and cut into OPEC's market share.
But still when Opek team's up withRussia, Nopeck plus, they still
control nearly half of the world's oalproduction, but they they don't have as
(21:56):
much control as they used to.So what do you think do we need
to be out there actively combating OPEK? You know, what steps should we
be taken to ensure that we can'tbe strongly influenced by OPEK or is that
just happening naturally? Well, Imean, let's start with the OPEC plus
term. Right. That's adorable.Right, they're pulling in as many countries
as they can, but ultimately theeconomics behind it don't make sense. In
(22:18):
terms of cartel theory, there's alwaysgoing to be someone that breaks the agreement.
And while OPEK or Saudi rather mightbe king if they can't get all
the other players to stay in line, which historically they've been unable to do.
So there's always someone who's like,oh, there's some market share,
I'm going to try and grab it, and then they ultimately end up,
(22:40):
you know, shooting themselves in thefoot, if you will. And then
we've got these you know, we'regoing to cut production back x amount for
a short amount of time, butthen you look at daily consumer demand of
said petroleum products and how long doesthat cut actually benefit us? It's usually
band aids if if it all hasan impact, where it becomes concerning I
(23:02):
would say, is what are thesefluctuations in OPEC doing to the consistency of
our petro dollar. And that issomething while the US dollar arguably is going
to stay consistent and yeah, we'llsee ups and downs, but we're not
going to lose the power of theUS dollar. Where is the power of
the petro dollar can potentially be underminedby things like Russia, India and China.
(23:27):
And it's quite frankly our own faultbecause of lack of knowledge and geopolitical
management, if you will, soinevitably the rest of the world, through
all of their good citizenship again inquotes, they're pushing three powers together that
have do not carry the same moralsor the same angles as say the rest
(23:48):
of the world. And it isscary because they are producing things like the
petro yin and the petro ruble.And if someone like Saudi within the OPEC
game, and again maybe their fivebiggest players, decided to come over and
start accepting other forms of the petrodollar itself, then it does have the
potential to undermine the very basis ofour economy, and that's why we have
(24:14):
to be careful. But in termsof daily production and spiking price and then
dropping price. I mean, somany companies these days have hedging agreements and
preset contracts that it's cute, butit's really not doing anything for day to
day production. We would have tosee a long term impact for it to
actually have the consequences that it didprior to the frack revolution. Yeah.
(24:37):
In fact, I think Opek learneda hard lesson about a decade ago,
not quite a decade ago. AndI actually wrote an article for Forbes and
I coined it opex trillion dollar miscalculation. I said, they're out there trying
to put the frackers out of business. And while they did shake out some
of the weaker players, it alsoforced capital discipline. It forced them to
(24:59):
totten up their belts and really,you know, prepare themselves against this kind
of this kind of stuff from Opek. And so, you know, a
couple of years in Opek waves thewhite flag and they say, Okay,
we've had enough, We're gonna we'regoing to go back to uh from from
flooding the market to trying to controlprice, and and a lot of people
don't you know, for the averageconsumer, Opek is a bad deal.
(25:21):
But for the oil industry. Opeck. You know, to the extent that
they raise prices, it helps theoil industry, and you know depends when
the contract was written. Yeah yeah, I guess so. And I think
the average consumer probably hates OPEK becausethey see them driving up prices. But
you know, what's good for OPECis good for Exon Mobil generally. Yeah.
Well, they tend to have theirhand pretty pretty well established in there.
(25:44):
Yeah, yeah, that's true.Some of these these super majors,
they're always going to chase policy thatbenefits them, and we just have to
be aware that we have to pivotbased off of their end goal, not
necessarily ours. Right, Okay,so let's take a quick break right there
and we'll get back into some somenew issues when we come back with catfromails
(26:06):
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(27:15):
one eight eight again two ten twofour oh seventy one eighty eight. Welcome
back to In the Old Patch Radio. I'm Robert rape here with this week's
guest, Katherine Mills. Catherine,one of the things people hit me with
all the time is that, youknow, the oil and gas industry is
(27:36):
a highly polluting industry, and theindustry gets blamed for carbon emissions. And
I've dealt with people who are convincedthat oil companies dump their waste right into
rivers and oceans. But let's let'stalk about reality here. Yeah, reality.
Aren't you bored with that question?I am. I'm bored with the
narrative. I think we've more thanproven multiple times that if you drive an
(28:00):
oil field, the likelihood of theaverage individual who's not within the industry even
recognizing that it's an oil field,Like, yeah, you might see some
pump jacks, but are they reallygoing to recognize what a wellhead is?
I mean, it's clean. Wehave so many rules and REGs in place.
Pipelines in and of themselves have areclamation process. You can't just abandon
(28:22):
an oil field. There are somany state processes that you have to do
for the reclamation process. You know, we want to talk about it,
The administration wants to talk about it. It's going to be a huge topic
for twenty twenty four. But quitefrankly, I'm just bored with it because
consumers have not curbed their demand forconsumption of oil and gas products, even
(28:47):
all the way down to like NGLsand basic plastics. Right whereas we already
know why quote unquote renewable energy isvery poorly misnamed I've never really exceeded thirty
percent of any grid out there,So why are we kind of still entertaining
(29:07):
this? Is it because of theESG movement, is it because of black
rock? Or is it just becausethere's nothing else to say. I think
one of the issues is people liketo pass the buck and people don't like
to take responsibility. And I thinkwhen when somebody says, you know,
exon mobile, look at the ExxonValdez and look look at that, and
I say, well, that wouldn'thappen if you didn't demand oil all the
(29:32):
time, and those accidents happen,and they'll say, you know, look
at the carbon emissions, and I'llsay, who's responsible for that? You
know seven billion people or something thatthat's who's responsible for it? And you
know who's driving it? Who's drivingit is you know several billion Asians who
are just barely increasing their standard ofliving, but so many people driving that
(29:52):
higher. And I think that's athat's something people don't realize that the US
is not driving carbon emissions. That'sbeing driven by developing countries, and that's
why it's such a tough problem.Well, the terms fossil fuel, indicating
that this is a non renewable resourcethat was first started in the what seventeen
nineties, seventeen fifties actually, andthen we saw the emergence of dirty energy,
(30:18):
but there's actually no definition behind that. We're seeing the push or the
breakdown of nuclear options, but theseopportunities have actually been killed by environmentalists such
as the Sierra Club, green Peace, things along those lines. So you
know, it's kind of cutting offyour nose to spite your face. And
(30:41):
the average daily non energy based consumerthey've heard both sides of the narrative because
I mean, no credit to us. We really haven't changed our answers very
well. We've tried to adopt ESG, but there's only so much you can
do with a moving goalpost, right, So it kind of goes a bit
further. And maybe we're not askingthe right questions, or maybe we fundamentally
(31:04):
don't understand the actual problem that we'retrying to solution for here. But the
reality is is that oil and gasis not going to go away, the
consumption for it. I mean,you see we've got all of these drill
rigs going electric these days. Well, where do you think electricity is generated?
What problem have we actually solved.We've just added more cost and more
(31:26):
clean up and quite frankly, abigger footprint that we then have to solution
for that we're just not talking aboutnow. But will we be talking about
it in thirty years? It isa boring question, but looking to a
Democrat or a Republican to solve it, it's kind of the same issue as
gun control. Is there anybody who'sactually willing to solve it? Because you
lose money when you cure said patient? Right? But what the strides have
(31:51):
been made in terms of oil andgas upstream production and even midstream transportation of
said products light years ahead of anyrenewable resource portion of the energy industry.
So why are we still having thisargument? And what are we missing with
the consumers not wanting to are wantingto use an ESG score before they actually
(32:15):
invest in something that's making daily livesbetter? Right? And I think it
gets back to I've used this examplea long time ago whenever we were talking
about tightening up fuel efficiency standards,and I said, you know, everybody's
for that until because because they thinkI will still be able to drive my
(32:36):
big SUV. But you're just goingto make it more fuel efficient and there's
no cost or consequence to me whenthe reality is that means you know,
that may mean vehical offerings have tobe smaller and lighter and actually things that
do impact you. But you know, we like to pass the buck.
You know, people don't like tothink, you know, when they're pumping
(32:57):
gas, I'm responsible for you knowwhat I'm about to consume they want to
make you know, Exxon Mobile oryou know, Chevron is responsible for that.
And that goes back to the Californialawsuit where they're trying to sue them
for misleading over you know, Iget on a soapbox about that because it's
so silly to me that California,a major oil producing state that has benefitted
(33:17):
tremendously from the astronomy state, isnow like they're carbon credits. Yeah,
yeah, guess what. You can'tYou can't qualify for carbon credits in California
if you have anything to do withthe oil and gas industry. But meanwhile,
we're applying a fake marketing based termof carbon neutral to plants like ethanol
(33:39):
plant or yeah, the ethanol cornplants that are just emitting you know,
thousands upon thousands of mcf of COtwo directly into the atmosphere. I would
encourage everyone listening be concerned about what'shappening in your own backyard and with a
grain of you should be listening tosomeone that is dubbed himself the climates are
(34:04):
but has yet to give up twoprivate planes, one yacht, and beachfront
properties. There is a fundamental,you know, panic driven, chaos driven
narrative behind climate change, and yetnone of the predictions have actually happened.
So when are we going to startasking as the consumer the right question?
(34:25):
Right? Okay, so we're headinginto our final segment. Got a lot
of questions still to ask you.This has been a fascinating discussion. Let's
take one more break. Here.I am Robert ray Pier with my guest
Catsornills on in the Old Patch Radio. Attention. Small and medium sized business
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(36:13):
Welcome back to EMI Old Pat Radio. I'm Robert ray Pierre with this week's
gets Catherine Mills. Catherine. Inthis last segment, there is a few
questions I would like to get to. I you know, we're heading into
an election year, and I thinkthere's different opinions about what's going to happen
and how you know, Saudi Arabiaand Russia will play this trying to maybe
(36:34):
influence the election. But how doyou see energy playing out as we go
into this election year? I mean, is this something that Biden is going
to tout? Is it something he'sgoing to hide behind? And how do
you see the other players in thein the world reacting as we head into
toward the election. Well, energyprices as we know it as the everyday
(36:55):
consumer is something that impacts everybody's backyard. Same with education and healthcare. These
are things and decisions that directly impactour purchase power the I guess the power
of our paycheck if you will,So of course it's going to be an
absolutely you know, cutthroat type ofconversation. But what can Biden really stand
(37:19):
on. He's he's not shut usdown, he's not shut the primary baseload
energies down, but he also reallyhasn't answered to the you know, Bernie
Sanders AOC side of the coin either, which ultimately, if you think about
it, could be the very demiseof the Democrat Party based off of what
(37:40):
they have been trying to push overthe last you know, term of the
administration itself and even in the priorelection. So it's going to be interesting
to see what side of the mouthhe talks out of, because talking and
you know, action are very differentthings. And it will be also interesting
to see how you know, Trumpapproaches it, because really, what is
(38:02):
there to complain about When oil pricessteady, production productions increasing, consumer demand
is increasing, prices have been aboutfifty There is opportunity on so many levels.
But I mean, yes, we'reseeing consolidation, but that's really a
plague of private equity, right orthe result of the last downturn in the
last crew change. So I don'tknow which way it's going to go,
(38:24):
but I can guarantee you it's goingto be a vicious conversation, and I'm
one hundred percent here for it rightthe way I'll see it plan out.
I mean, I think that Saudiand Saudi Arabia and Russia would both like
to see Trump back in office,and they know that high prices would probably
help Biden lose the election. Butyou know, as we discussed earlier,
(38:46):
they're losing a lot of their pricingpower, so I think they would like
to influence prices higher. I don'tknow that they will be able to pull
that off. The other thing is, you know, typically in an election
years, especially democratic politicians have usedthe strategic controlling reserve to try to get
prices down, and the impact priceis leading up to the election, and
(39:09):
with the major draw that Biden hasdone on the strategic trolling reserve, I
don't really see that as an optionfor it. So I think it makes
more vulnerable to things that Rush orSaudi Arabia might be able to do.
So from my perspective, it's reallyhard to figure out where oil prices are
going over the next year. Ithink it's going to be a lot more
(39:29):
uncertainly. What is your outlook onthat? How do you see oil prices
going into well, we recently sawsome major consolidations, especially from like Exon.
We saw hesse get taken over,Denberry has been taken over. These
are arguably major players of the pastand still had very large footprints and the
(39:49):
last time we saw that was honestlyin preparation for what was expected to be
a boom. It seems everyone isbearish on oil price and oil and gas
price in g L price, butyou know, it's bit us in the
foot before. So I would Iwould assume that we're going to see some
sort of uptick coming our way.But it would also not surprise me if
(40:10):
some random presidential decree came out thatcreated a burden for us, because let's
face it, I mean, whilethat man came into office, he was
signing uh presidential decrees and even lookedat the media and said, laughed and
said, I don't even know whatI'm signing. So it's really what is
his cabinet trying to do? Whatdeals are being made? And is Briden
(40:36):
is Biden even there? You know, are they banking everything on Biden?
Or is there someone like Newsome they'retrying to work into it? So it
just it depends what fighter they putin place and who the cabinet behind him
is going to be right. AndI have actually talked to Biden voters who
are unhappy about the old production recordthat we're going to set this year because
(40:58):
they said, you know, hedidn't deliver what he said he was going
to deliver, and what has hedelivered except Amazon Prime. I tell people
that that's presidents don't really do that. I mean, that's a president.
Like I said, I viewed themas pretty inconsequential. The old industry is
going to do what they do,and they're going to be driven by prices
mostly. So I've got a fewquestions left to ask that I probably won't
(41:22):
have time to ask, but beforewe do run out of time, I
wanted to ask you about your podcast. You said it's been on hiatus a
couple of years, but we talkedand you said you may want to revive
it next year. So what canyou tell us about the podcast? What
has that experience been like? Andif we have time, I'll ask you
a couple more questions, but Iwanted to make sure we got in some
(41:44):
time for you to be able totalk about that. So podcasting is most
definitely a full time job. Andanybody who comes to me and says,
hey, I'm interested in starting apodcast, as long as you have a
clear vision, go for it.Because the reality is is that unless you
have an ample amount the time tonurture it and to promote it, sometimes
(42:04):
it gets put by the wayside.I'm a perfect example of that. You
know, COVID happened, New opportunitiesin business and marketing started happening, and
I took those opportunities so that Icould continue to build up my personal portfolio.
But ideally I would be podcasting fulltime. I absolutely loved it.
I loved oil, energy and politics, talking shop shit and strategy with oil
(42:27):
field influencers just across the globe.But the goal for next year is to
bring it back on a regular basis. But it all depends on the ebb
of other businesses, right, SoI'm a contract engineer. When that when
that I guess contract washes up,it will be onto the next thing.
And that's something I would actually encourageeveryone in the oil and gas industry.
(42:51):
If we are known for anything,it is volatility. So if you were
relying on one paycheck, I amgoing to strongly suggest you find a way
to diversify and diversify quickly. I'vehad two full time jobs for ten years,
so I've always had something steady inthe background because oil and gas can
(43:12):
be very volatile. I know,we should think of it as a hobby,
right We went to school for ourfavorite hobby. Yeah, it's sort
of funny because that's how it branchedout. You know, I was working
at Conical Phillips, and you know, I needed a hobby, and I
started writing, and from the writingthat kind of took off into a career
of its own. So we've gota one minute left, but I wanted
(43:34):
to ask you, you know,quickly, if what kind of policy changes
would you like to see for theO gas industry. What could help us,
you know, get that next legup on production. If you really
want to see more diversification and opportunity, you are going to have to start
creating policy that favors the small operatorinstead of the super majors. And you
(43:59):
know, I appreciate the full spectrum, but we're going to have to create
policy that uplifts these smaller operators,that will allow for more opportunity and more
innovation, because that is where it'shappening. Otherwise you're cogging the wheel unfortunately.
Yeah, and I worry about anadministration that declares war on the oil
(44:22):
industry. We're unlike anyone else.I mean, I worked in the Netherlands
and they were always proud of Shelleand here we you know, every other
administration go to war with the oiland gas industry and I would like to
see that. Come. Hate usall you want, but we uplift every
other industry out there. Right Well, Catherine, that's all the time we
have for the show. I wantto thank you so much. This conversation
(44:45):
was very enlightening this week in theOld Patch Radio, Katherine Mills, thank
you for joining us. Thank youso much for having me in the Oil
Patches, where together we explore topicsthat affect us all in oil gas business
and in your community. Every week, your host kimball Otto will visit with
the movers and shakers in this fastpaced industry. You'll hear from industry experts,
(45:07):
elected officials, and many more righthere on in the oil Patch
Welcome to in the Oil Pats,presented by Shale Magazine, broadcasting from the
oil Field Experts Studios. Oil FieldExperts where you get the right products right
now in the oil patches, wheretogether we explore topics that affect us all
in oil, gas business and inyour community. Every week, your host,
Kim Blotto will visit with the moversand shakers in this fast paced industry.
(00:21):
You'll hear from industry experts, electedofficials, and many more right here
on in the oil patch. Welcometo you in the oil Patch Radio.
I'm Robert Ray Peter, senior contributorfrom Forbes, sitting in for Kim Balatto.
This week's guest is Katherine Nills,an operations engineer in the oil industry.
She's also the host of the CrudeAudacity podcast, which covers all aspects
(00:43):
of the oil and gas industry.Catherine tells me it's been on hiatus,
but she may have something to tellus about plans for the podcast in twenty
twenty four. Catherine, thanks somuch for joining us today. Thank you
so much for having me. Thisis great. Yeah, it's it's good
to talk about energy. I enjoyedthis. The last couple of guests were
(01:04):
friends of mine, and you andI have gotten to know each other a
little bit. So we should havea good productive show here, absolutely,
especially going into twenty twenty four withall of the presidential runs, everything we're
seeing the wrap up of twenty twentythree. It should be a great conversation
today, right, I agree,And before we jump into that, let's
(01:26):
tell readers a little bit or listenersa little bit about who you are.
So, yeah, I have sortof an unconventional approach to the energy industry.
I first went to school for businessand economics out of Virginia, and
I grew up in the oil andgas industry, but you know, fought
it tooth and nail, a veryreluctant engineer, if you will. And
(01:49):
finally, a few years after collegeone point zero, it became evident that
I needed to sort of take thosesteps into becoming a petroleum engineer, start
exploring. And one of the universitiesthat I was accepted into for secondary education
or I guess secondary post education,whatever you want to call it, was
School of Mines. And while there, I initially went just to get a
(02:15):
master's but the faculty thoroughly tricked meinto getting the undergrad as well, so
it's kind of been that way eversince. Based out of Colorado, I've
worked with consulting teams, done alittle bit of international evaluations, but really
just staying in the Texas Rockies andnow the Goal South. So it's been
(02:38):
an experience. I've kind of acatch all engineer these days. So did
you go strike to work for theoil industry out of school? Not the
first time around, but definitely whenI graduated with my masters from Mines in
twenty seventeen, I actually no onewas really hiring story of the oil and
(02:59):
gas industry, right, So Istarted reaching out to managers and reservoir departments,
started asking them to coffee, andbasically found an opportunity to go and
work for a shoots when I firstgot out. But it definitely took me
being proactive in my career as opposedto just applying on standard job boards.
(03:20):
Okay, so tell me about yourjob. Where do you fit in the
oil and gas supply chain? SoI'm somewhere between upstream and midstream definitely operations
engineer. Definitely reservoir advanced characterization,you know, seismic to full blown modeling.
But these days I'm very much fallinto facilities. So after wellhead,
(03:46):
everything's coming down flow lines and goinginto processing plants, and that's kind of
where I fall into the facilities productionengineer. We want to keep it going
and keep everything steady, but weare in the mid It's a couple co
two floods that have been going fora while. One of them we're looking
to expansion and I'm about to workwith the team to kick off water flood
(04:09):
here soon. That's been long plannedin the works, but now we're building
up the plant to get ready forour injection wells and that should be kicking
off let's say end of Q oneof twenty twenty four. Okay, So
when I think about oil industry,Mississippi doesn't jump to mind, and I
(04:29):
know you work in Mississippi, andI think, well, okay, but
I've probably got a lot of offshore, but you're doing on shore stuff,
right, I mean, you're sotell listeners who may not be familiar with
the oil and gas industry in Mississippiwhat is going on down there. So
it is one of the best KEPsecrets of the oil field, and honestly
throughout the United States, that wholeregion of the Southern States more conventional type
(04:54):
assets, probably not truly conventional.Definitely some horizontal opportunities out there, but
you know, the craze of WestTexas took over years ago and has kind
of stayed steady. Everyone's chasing theinitial ip to be best in basin,
and we're out there just you know, taking old, old, old fields.
(05:14):
I'm talking like pre oxy type fieldsand just doing recompletes, looking for
on tapped zones or just simply youknow, keeping assets up and running because
they've been study producers for you know, basically decades now. But you're right,
not very many people think about theseSouthern states as big opportunities. Not
(05:38):
very many people are thinking about Alabamafor colbd methane. And we kind of
like it that way. You know, it's a slower way of life down
here, but it is definitely thatit allows for a lot of opportunity and
a lot of engineering that is otherwiselost in say the during half of the
(06:00):
United States all the way to WestTexas. So what does a recomplete entailed?
What are you doing when you goin and you recomplete it. Well,
usually we're going through looking for deeperzones or looking for anything that's behind
pipe, you know that might nothave been previously explored, the same as
what you see in other basins orother assets. But it's just opportunities that
(06:26):
weren't initially tapped. Go back,look at your well control, maybe wrap
in a little petrophysics that you otherwisewouldn't have had from say the eighties or
or in some cases we're looking atthree D seismic opportunities to see if the
rumors are true, if this isreally the biggest opportunity that was out there,
(06:46):
And it's pretty exciting. But again, not a lot of people have
a lot of eyes on us,which allows us to be more creative in
terms of field management and actual trueblue oil field engineering coortunities. So now
a lot of those oils, probablya lot of those oil is probably pre
date fracking. Are you going inand fracking any of those or is it
(07:06):
as much of a fracking business there? I mean, yeah, you'll get
some of it, But like Imean, every well is stimulated in some
fashion, right, You're not justlike shooting perfs and all of a sudden,
you've you've got you know, steadyoil flow you've got to go through,
You've got to clean up, you'vegot to open up the rock in
some ways, so racking, Iguess the way the outsiders, the outsiders
(07:30):
want to say it with a Kif you will not what you see in
West Texas. But in terms ofrunning stages and even on you know,
slightly directional wells like S's or J'sor things like that. Yeah, we've
got crews out here. Not many, but that's okay. We like it
that way. So were you primarilyoil and some gas or lots of gas?
(07:54):
Lots of gas, lots of NGLs, lots of guys. I feel
like I'm giving you all secrets tocome and look at like opportunities down here.
Y'all stay in West Texas. Youguys have you guys have fun in
Wyoming. We're good. So,yeah, tell me about so you told
me that you're working on a gasplant there, so I guess there's enough
gas there to have in gls.What you know, what can you what
(08:16):
can you tell us about that?Well? Facilities is an art in and
of itself. It should be taughtmore in school, and in fact,
the whole process of becoming a petroleumengineer should probably re reevaluated into an apprenticeship
with very little classroom time so thatyou can actually get out in the field
and learn things. But you know, it was kind of a shock for
(08:39):
me to come in. Luckily,I have an excellent team that I'm working
with who has been doing this foryears, so I'm learning from the ground
up, like anything from you know, membrane management all the way to actually
modeling the floods themselves and seeing youknow, like the myths of the huff
(09:00):
and puffs, if you will.And it's been a learning experience because we
aren't exposed to that. And typicallyyou see chemical engineers fall into this realm.
And while some do, they aren'treceiving that same training through their educational
process as well. They're getting tothe field and having to learn it from
the ground up, and some oftheir training is probably better preparing them for
(09:22):
some of these processes you see throughoutthe field. But it's all material balance
at the end of the day.And looking for an opportunity with someone from
the glorified oil field of the eighties, if you will, who's actually gone
through these processes and seen how theywork and actually see the mechanics behind it.
(09:43):
I mean, that's your key,right engineers today thirty years and younger
are ten years and less in thefield typically don't see these opportunities. So
if you're able to get into oneof these mid sized shops and really sink
your teeth into it, don't beafraid have become the catch all engineer,
because you're going to have opportunities inyour career that other people only dream of,
(10:07):
if not probably don't even know about. Yeah, it's interesting to hear
you talk about that because I'm achemical engineer and I was in the Petroleum
engineering building at Texas A and M. That was where my office was,
and it was interesting to see someof the differences in what the petroleum engineers
learned and what we learned. Alot of it is the same. I
mean, you've got, you know, thermodynamics and fluids and things, but
(10:30):
then the patrolling engineers got into alot of areas that you know, I
still don't know to this day.I've managed engineers out in the old fields,
but you know, a lot ofthe things they do is a little
bit different than the stuff I did, you know. I mean the controversial,
I guess statement is to be agood engineer, you've got to get
out of the library. I absolutelybelieve that. Go visit your field,
(10:54):
go see what's happening. You know, the solution to everything isn't just swabbing
a well. Right. So,okay, we've got about a minute until
our break, until we need totake a commercial break. But after the
break, I want to get intoa sort of overall energy policy and I
know you've got some thoughts on that. I just reported in Forbes that the
(11:18):
US oil and gas producers set anew production record, and as of last
Friday, by my calculations, we'reinto record territory now. And you know
a lot of people take that asa political statement, and I don't intend
it as a political statement. It'sjust a fact. But you know,
after break, I would like totalk to you about, you know,
US energy policy. What are wedoing right, what are we doing wrong?
(11:43):
You know what needs to change?So real yep. So with that,
we'll take a quick commercial break andthen after the break we'll get into
energy policy again. I'm Robert rayPier standing in for Kimbalatto and in the
Old Patch Radio with my guest Katherinemiss. In the oil and gas industries,
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(12:05):
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Welcome back to In the Oil PatchRadio. I'm Robert rae Pere with this
week's guest, Katherine Mills. So, Catherine, let's talk about energy policy.
(13:11):
Before the break, I mentioned thatthe US has set a new oil
production record, a new annual highnatural gas production. We won't know that
for sure until sometime in twenty twentyfour because they don't report those numbers weekly
like they do the oil production.But as of September, we were running
four percent ahead of last year's record. So clearly the oil industry, Oh
(13:37):
yes, industry is doing well despitedealing with headwinds from an administration that is
fairly hostile total and gas. Onthe other hand, I'm hearing from people
that riggs are stacking up and someoil compidential landoff. So what do you
see right now? Does business lookgood from your perspective? You know,
what are you seeing in the field? So, I mean, the reality
(13:58):
is is that we're as an industry, we are stuck in sort of the
same cycle that we've always been stuckin. Right, opportunity starts happening,
everyone blocks towards oil and gas,and then all of a sudden, something
happens. Either we have an unfavorableadministration and that could be on the Republican
or the Democrat side, but youknow, then we start seeing slowdowns,
(14:22):
we're start seeing more hostilities depending onwho's running actual states and looking at oil
and gas boards for rules and rags, like Colorado is in a perpetual state
of defense and just trying to keepthe industry going, where as some of
the smaller states or maybe the lesserknown states are able to operate as business
(14:43):
as usual and aren't, as youknow, driven by agenda. And yeah,
everyone says that the Biden administration isanti oil and gas, but we've
also had pretty consistently higher prices,higher than if you will, par barrel
for since the beginning of this administration. And the reality is is that presidential
(15:09):
cabinets are judged based off of theflow of economics, right, so while
consumer confidence might be down, we'restill seeing industries sort of buzzing. So
it becomes one of those talking outof both sides of your mouth. We're
never going to see the slowdown ofproduction without the slowdown of demand. So
(15:31):
the consumer can sit there and saywe don't like oil and gas, antisocial
license to operate all of these ESGefforts that I mean questionable what they're actually
resulting in. But we also seeinnovation in interesting ways because administratively wise,
(15:52):
we've got a whole methane industry now, right, and we've been seeing this
budding for a few decades, butit took certain individuals in Colorado to set
policy and then create a company thatdrove these methane evaluations, and we're seeing
majors block to it. You know, we want our ESG, we want
that tick box, but what hasit actually done industry wise? We can
(16:18):
argue several different ways over that,but the reality is is that it took
someone realizing that it was governmental controlto basically build up a leg of an
industry. So oil and gas isn'tgoing anywhere. I don't think anybody's worried
about that, and I don't thinkanybody necessarily cares that the current president might
(16:38):
be outwardly unfavorable in oil and casts. Meanwhile, his son's sitting on a
national oil company's board without any sortof, you know, qualifications to do
so, saying he's putting up sanctionson places like Russia and we're not taking
quote unquote unethical oil. But reallywe are still purchasing Russian oil to make
(17:02):
up for the lags we see fromanything from United States based production. So
it's all, you know, whatside of the mouth are they talking about,
and who is their biggest provider?And what are they actually trying to
accomplish while in federal office? Imean, from your experience, what have
you seen happen over the decades?The Bush administration is arguably just as you
(17:26):
know, questionable as currently the Bidenadministration on energy policy. Right. So
I always tell people that the biggestfactor in the oil and gas industry is
the oil price and gas price,and what a president does is very inconsequential
relative to that underlying price. AndI always give examples, like, you
(17:48):
know, you think of George W. Bush as an oil man, and
yet oil production fell all eight yearshe was in office, and hence we
got desert Storm out of it.I mean, we can follow the money.
Yeah, but the but the thingthat was happening on his watch is
if racking was being developed and startingto pay dividends, and then you saw
(18:10):
that under Obama. You saw underObama fracking mature, and so he encouraged
it. But then he come hecondemned pipelines. It just tried to Yeah,
he tried to have it both ways. Yeah, you know, he
and we had the largest expansion ofoil and gas production in US history under
President Obama. And I don't thinkanybody would call him a pro oil president.
(18:33):
You know, Bush was a prettypro oil president, although we did
get a massive expansion of bio fuelmandates under Bush. But you know,
then Obama comes in and Racking startsto pay dividends, and you know,
whether he's hostile or not, andhe did have multiple hostile policies. You
know, the macro factors are farfar more important than what a president can
(18:56):
do now in the long run.In the long run, on presidents can
have very consequential decisions, and Igive Nixon as an example of that.
Nixon cleared away a bunch of thebarriers for the Alaska Popeline, and you
know, there were a lot ofenvironmental protests and lawsuits and he cleared all
that out, and then the AlaskaPopeline got built and it started producing oil
(19:18):
when Carter was in office, andso you saw oil turn up under Carter.
So that's that's an example of consequentialdecision by a president that had a
long term, long term impact.But in the short term, I always
tell people just look to the price, look to what Opek is doing.
Although old Peck is starting to lose, does Opek really have the influence that
(19:40):
we think OPEK has I mean,the reality is is like we're watching Trudeau
basically cripple Canada. So we've gotall of these assets, We've got easily
found oil, we have technology thatmakes it you know, clean, safe,
affordable, but Trudeau won't allow usto build certain pipelines. It's who's
pay in the buck. Well,let's let's take a break and let's get
(20:03):
into that, because I would arguethat OPEC has lost a lot of power.
So let's talk about that after thebreak. I'm robber Y Pere with
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Start dealing with a company you cantrust and always find Welcome back to in
the Old Patch Radio. I'm Robertray Pier, guest host sitting in for
Kim Balatto with this week's guest KatherineMills. Catherine, before the break,
we touched upon Opeck a little bit. You know, twenty years ago,
(21:34):
Opek had a firm handle on theglobal and gas industry. You know,
they could cut production and they couldshoot prices higher or flood the market and
shoot prices lower. And then frackingcame along and cut into OPEC's market share.
But still when Opek team's up withRussia, Nopeck plus, they still
control nearly half of the world's oalproduction, but they they don't have as
(21:56):
much control as they used to.So what do you think do we need
to be out there actively combating OPEK? You know, what steps should we
be taken to ensure that we can'tbe strongly influenced by OPEK or is that
just happening naturally? Well, Imean, let's start with the OPEC plus
term. Right. That's adorable.Right, they're pulling in as many countries
as they can, but ultimately theeconomics behind it don't make sense. In
(22:18):
terms of cartel theory, there's alwaysgoing to be someone that breaks the agreement.
And while OPEK or Saudi rather mightbe king if they can't get all
the other players to stay in line, which historically they've been unable to do.
So there's always someone who's like,oh, there's some market share,
I'm going to try and grab it, and then they ultimately end up,
(22:40):
you know, shooting themselves in thefoot, if you will. And then
we've got these you know, we'regoing to cut production back x amount for
a short amount of time, butthen you look at daily consumer demand of
said petroleum products and how long doesthat cut actually benefit us? It's usually
band aids if if it all hasan impact, where it becomes concerning I
(23:02):
would say, is what are thesefluctuations in OPEC doing to the consistency of
our petro dollar. And that issomething while the US dollar arguably is going
to stay consistent and yeah, we'llsee ups and downs, but we're not
going to lose the power of theUS dollar. Where is the power of
the petro dollar can potentially be underminedby things like Russia, India and China.
(23:27):
And it's quite frankly our own faultbecause of lack of knowledge and geopolitical
management, if you will, soinevitably the rest of the world, through
all of their good citizenship again inquotes, they're pushing three powers together that
have do not carry the same moralsor the same angles as say the rest
(23:48):
of the world. And it isscary because they are producing things like the
petro yin and the petro ruble.And if someone like Saudi within the OPEC
game, and again maybe their fivebiggest players, decided to come over and
start accepting other forms of the petrodollar itself, then it does have the
potential to undermine the very basis ofour economy, and that's why we have
(24:14):
to be careful. But in termsof daily production and spiking price and then
dropping price. I mean, somany companies these days have hedging agreements and
preset contracts that it's cute, butit's really not doing anything for day to
day production. We would have tosee a long term impact for it to
actually have the consequences that it didprior to the frack revolution. Yeah.
(24:37):
In fact, I think Opek learneda hard lesson about a decade ago,
not quite a decade ago. AndI actually wrote an article for Forbes and
I coined it opex trillion dollar miscalculation. I said, they're out there trying
to put the frackers out of business. And while they did shake out some
of the weaker players, it alsoforced capital discipline. It forced them to
(24:59):
totten up their belts and really,you know, prepare themselves against this kind
of this kind of stuff from Opek. And so, you know, a
couple of years in Opek waves thewhite flag and they say, Okay,
we've had enough, We're gonna we'regoing to go back to uh from from
flooding the market to trying to controlprice, and and a lot of people
don't you know, for the averageconsumer, Opek is a bad deal.
(25:21):
But for the oil industry. Opeck. You know, to the extent that
they raise prices, it helps theoil industry, and you know depends when
the contract was written. Yeah yeah, I guess so. And I think
the average consumer probably hates OPEK becausethey see them driving up prices. But
you know, what's good for OPECis good for Exon Mobil generally. Yeah.
Well, they tend to have theirhand pretty pretty well established in there.
(25:44):
Yeah, yeah, that's true.Some of these these super majors,
they're always going to chase policy thatbenefits them, and we just have to
be aware that we have to pivotbased off of their end goal, not
necessarily ours. Right, Okay,so let's take a quick break right there
and we'll get back into some somenew issues when we come back with catfromails
(26:06):
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(27:15):
one eight eight again two ten twofour oh seventy one eighty eight. Welcome
back to In the Old Patch Radio. I'm Robert rape here with this week's
guest, Katherine Mills. Catherine,one of the things people hit me with
all the time is that, youknow, the oil and gas industry is
(27:36):
a highly polluting industry, and theindustry gets blamed for carbon emissions. And
I've dealt with people who are convincedthat oil companies dump their waste right into
rivers and oceans. But let's let'stalk about reality here. Yeah, reality.
Aren't you bored with that question?I am. I'm bored with the
narrative. I think we've more thanproven multiple times that if you drive an
(28:00):
oil field, the likelihood of theaverage individual who's not within the industry even
recognizing that it's an oil field,Like, yeah, you might see some
pump jacks, but are they reallygoing to recognize what a wellhead is?
I mean, it's clean. Wehave so many rules and REGs in place.
Pipelines in and of themselves have areclamation process. You can't just abandon
(28:22):
an oil field. There are somany state processes that you have to do
for the reclamation process. You know, we want to talk about it,
The administration wants to talk about it. It's going to be a huge topic
for twenty twenty four. But quitefrankly, I'm just bored with it because
consumers have not curbed their demand forconsumption of oil and gas products, even
(28:47):
all the way down to like NGLsand basic plastics. Right whereas we already
know why quote unquote renewable energy isvery poorly misnamed I've never really exceeded thirty
percent of any grid out there,So why are we kind of still entertaining
(29:07):
this? Is it because of theESG movement, is it because of black
rock? Or is it just becausethere's nothing else to say. I think
one of the issues is people liketo pass the buck and people don't like
to take responsibility. And I thinkwhen when somebody says, you know,
exon mobile, look at the ExxonValdez and look look at that, and
I say, well, that wouldn'thappen if you didn't demand oil all the
(29:32):
time, and those accidents happen,and they'll say, you know, look
at the carbon emissions, and I'llsay, who's responsible for that? You
know seven billion people or something thatthat's who's responsible for it? And you
know who's driving it? Who's drivingit is you know several billion Asians who
are just barely increasing their standard ofliving, but so many people driving that
(29:52):
higher. And I think that's athat's something people don't realize that the US
is not driving carbon emissions. That'sbeing driven by developing countries, and that's
why it's such a tough problem.Well, the terms fossil fuel, indicating
that this is a non renewable resourcethat was first started in the what seventeen
nineties, seventeen fifties actually, andthen we saw the emergence of dirty energy,
(30:18):
but there's actually no definition behind that. We're seeing the push or the
breakdown of nuclear options, but theseopportunities have actually been killed by environmentalists such
as the Sierra Club, green Peace, things along those lines. So you
know, it's kind of cutting offyour nose to spite your face. And
(30:41):
the average daily non energy based consumerthey've heard both sides of the narrative because
I mean, no credit to us. We really haven't changed our answers very
well. We've tried to adopt ESG, but there's only so much you can
do with a moving goalpost, right, So it kind of goes a bit
further. And maybe we're not askingthe right questions, or maybe we fundamentally
(31:04):
don't understand the actual problem that we'retrying to solution for here. But the
reality is is that oil and gasis not going to go away, the
consumption for it. I mean,you see we've got all of these drill
rigs going electric these days. Well, where do you think electricity is generated?
What problem have we actually solved.We've just added more cost and more
(31:26):
clean up and quite frankly, abigger footprint that we then have to solution
for that we're just not talking aboutnow. But will we be talking about
it in thirty years? It isa boring question, but looking to a
Democrat or a Republican to solve it, it's kind of the same issue as
gun control. Is there anybody who'sactually willing to solve it? Because you
lose money when you cure said patient? Right? But what the strides have
(31:51):
been made in terms of oil andgas upstream production and even midstream transportation of
said products light years ahead of anyrenewable resource portion of the energy industry.
So why are we still having thisargument? And what are we missing with
the consumers not wanting to are wantingto use an ESG score before they actually
(32:15):
invest in something that's making daily livesbetter? Right? And I think it
gets back to I've used this examplea long time ago whenever we were talking
about tightening up fuel efficiency standards,and I said, you know, everybody's
for that until because because they thinkI will still be able to drive my
(32:36):
big SUV. But you're just goingto make it more fuel efficient and there's
no cost or consequence to me whenthe reality is that means you know,
that may mean vehical offerings have tobe smaller and lighter and actually things that
do impact you. But you know, we like to pass the buck.
You know, people don't like tothink, you know, when they're pumping
(32:57):
gas, I'm responsible for you knowwhat I'm about to consume they want to
make you know, Exxon Mobile oryou know, Chevron is responsible for that.
And that goes back to the Californialawsuit where they're trying to sue them
for misleading over you know, Iget on a soapbox about that because it's
so silly to me that California,a major oil producing state that has benefitted
(33:17):
tremendously from the astronomy state, isnow like they're carbon credits. Yeah,
yeah, guess what. You can'tYou can't qualify for carbon credits in California
if you have anything to do withthe oil and gas industry. But meanwhile,
we're applying a fake marketing based termof carbon neutral to plants like ethanol
(33:39):
plant or yeah, the ethanol cornplants that are just emitting you know,
thousands upon thousands of mcf of COtwo directly into the atmosphere. I would
encourage everyone listening be concerned about what'shappening in your own backyard and with a
grain of you should be listening tosomeone that is dubbed himself the climates are
(34:04):
but has yet to give up twoprivate planes, one yacht, and beachfront
properties. There is a fundamental,you know, panic driven, chaos driven
narrative behind climate change, and yetnone of the predictions have actually happened.
So when are we going to startasking as the consumer the right question?
(34:25):
Right? Okay, so we're headinginto our final segment. Got a lot
of questions still to ask you.This has been a fascinating discussion. Let's
take one more break. Here.I am Robert ray Pier with my guest
Catsornills on in the Old Patch Radio. Attention. Small and medium sized business
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(36:13):
Welcome back to EMI Old Pat Radio. I'm Robert ray Pierre with this week's
gets Catherine Mills. Catherine. Inthis last segment, there is a few
questions I would like to get to. I you know, we're heading into
an election year, and I thinkthere's different opinions about what's going to happen
and how you know, Saudi Arabiaand Russia will play this trying to maybe
(36:34):
influence the election. But how doyou see energy playing out as we go
into this election year? I mean, is this something that Biden is going
to tout? Is it something he'sgoing to hide behind? And how do
you see the other players in thein the world reacting as we head into
toward the election. Well, energyprices as we know it as the everyday
(36:55):
consumer is something that impacts everybody's backyard. Same with education and healthcare. These
are things and decisions that directly impactour purchase power the I guess the power
of our paycheck if you will,So of course it's going to be an
absolutely you know, cutthroat type ofconversation. But what can Biden really stand
(37:19):
on. He's he's not shut usdown, he's not shut the primary baseload
energies down, but he also reallyhasn't answered to the you know, Bernie
Sanders AOC side of the coin either, which ultimately, if you think about
it, could be the very demiseof the Democrat Party based off of what
(37:40):
they have been trying to push overthe last you know, term of the
administration itself and even in the priorelection. So it's going to be interesting
to see what side of the mouthhe talks out of, because talking and
you know, action are very differentthings. And it will be also interesting
to see how you know, Trumpapproaches it, because really, what is
(38:02):
there to complain about When oil pricessteady, production productions increasing, consumer demand
is increasing, prices have been aboutfifty There is opportunity on so many levels.
But I mean, yes, we'reseeing consolidation, but that's really a
plague of private equity, right orthe result of the last downturn in the
last crew change. So I don'tknow which way it's going to go,
(38:24):
but I can guarantee you it's goingto be a vicious conversation, and I'm
one hundred percent here for it rightthe way I'll see it plan out.
I mean, I think that Saudiand Saudi Arabia and Russia would both like
to see Trump back in office,and they know that high prices would probably
help Biden lose the election. Butyou know, as we discussed earlier,
(38:46):
they're losing a lot of their pricingpower, so I think they would like
to influence prices higher. I don'tknow that they will be able to pull
that off. The other thing is, you know, typically in an election
years, especially democratic politicians have usedthe strategic controlling reserve to try to get
prices down, and the impact priceis leading up to the election, and
(39:09):
with the major draw that Biden hasdone on the strategic trolling reserve, I
don't really see that as an optionfor it. So I think it makes
more vulnerable to things that Rush orSaudi Arabia might be able to do.
So from my perspective, it's reallyhard to figure out where oil prices are
going over the next year. Ithink it's going to be a lot more
(39:29):
uncertainly. What is your outlook onthat? How do you see oil prices
going into well, we recently sawsome major consolidations, especially from like Exon.
We saw hesse get taken over,Denberry has been taken over. These
are arguably major players of the pastand still had very large footprints and the
(39:49):
last time we saw that was honestlyin preparation for what was expected to be
a boom. It seems everyone isbearish on oil price and oil and gas
price in g L price, butyou know, it's bit us in the
foot before. So I would Iwould assume that we're going to see some
sort of uptick coming our way.But it would also not surprise me if
(40:10):
some random presidential decree came out thatcreated a burden for us, because let's
face it, I mean, whilethat man came into office, he was
signing uh presidential decrees and even lookedat the media and said, laughed and
said, I don't even know whatI'm signing. So it's really what is
his cabinet trying to do? Whatdeals are being made? And is Briden
(40:36):
is Biden even there? You know, are they banking everything on Biden?
Or is there someone like Newsome they'retrying to work into it? So it
just it depends what fighter they putin place and who the cabinet behind him
is going to be right. AndI have actually talked to Biden voters who
are unhappy about the old production recordthat we're going to set this year because
(40:58):
they said, you know, hedidn't deliver what he said he was going
to deliver, and what has hedelivered except Amazon Prime. I tell people
that that's presidents don't really do that. I mean, that's a president.
Like I said, I viewed themas pretty inconsequential. The old industry is
going to do what they do,and they're going to be driven by prices
mostly. So I've got a fewquestions left to ask that I probably won't
(41:22):
have time to ask, but beforewe do run out of time, I
wanted to ask you about your podcast. You said it's been on hiatus a
couple of years, but we talkedand you said you may want to revive
it next year. So what canyou tell us about the podcast? What
has that experience been like? Andif we have time, I'll ask you
a couple more questions, but Iwanted to make sure we got in some
(41:44):
time for you to be able totalk about that. So podcasting is most
definitely a full time job. Andanybody who comes to me and says,
hey, I'm interested in starting apodcast, as long as you have a
clear vision, go for it.Because the reality is is that unless you
have an ample amount the time tonurture it and to promote it, sometimes
(42:04):
it gets put by the wayside.I'm a perfect example of that. You
know, COVID happened, New opportunitiesin business and marketing started happening, and
I took those opportunities so that Icould continue to build up my personal portfolio.
But ideally I would be podcasting fulltime. I absolutely loved it.
I loved oil, energy and politics, talking shop shit and strategy with oil
(42:27):
field influencers just across the globe.But the goal for next year is to
bring it back on a regular basis. But it all depends on the ebb
of other businesses, right, SoI'm a contract engineer. When that when
that I guess contract washes up,it will be onto the next thing.
And that's something I would actually encourageeveryone in the oil and gas industry.
(42:51):
If we are known for anything,it is volatility. So if you were
relying on one paycheck, I amgoing to strongly suggest you find a way
to diversify and diversify quickly. I'vehad two full time jobs for ten years,
so I've always had something steady inthe background because oil and gas can
(43:12):
be very volatile. I know,we should think of it as a hobby,
right We went to school for ourfavorite hobby. Yeah, it's sort
of funny because that's how it branchedout. You know, I was working
at Conical Phillips, and you know, I needed a hobby, and I
started writing, and from the writingthat kind of took off into a career
of its own. So we've gota one minute left, but I wanted
(43:34):
to ask you, you know,quickly, if what kind of policy changes
would you like to see for theO gas industry. What could help us,
you know, get that next legup on production. If you really
want to see more diversification and opportunity, you are going to have to start
creating policy that favors the small operatorinstead of the super majors. And you
(43:59):
know, I appreciate the full spectrum, but we're going to have to create
policy that uplifts these smaller operators,that will allow for more opportunity and more
innovation, because that is where it'shappening. Otherwise you're cogging the wheel unfortunately.
Yeah, and I worry about anadministration that declares war on the oil
(44:22):
industry. We're unlike anyone else.I mean, I worked in the Netherlands
and they were always proud of Shelleand here we you know, every other
administration go to war with the oiland gas industry and I would like to
see that. Come. Hate usall you want, but we uplift every
other industry out there. Right Well, Catherine, that's all the time we
have for the show. I wantto thank you so much. This conversation
(44:45):
was very enlightening this week in theOld Patch Radio, Katherine Mills, thank
you for joining us. Thank youso much for having me in the Oil
Patches, where together we explore topicsthat affect us all in oil gas business
and in your community. Every week, your host kimball Otto will visit with
the movers and shakers in this fastpaced industry. You'll hear from industry experts,
(45:07):
elected officials, and many more righthere on in the oil Patch
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