Successful E&P activity requires access—to
land, money, technology and people. PTTC's focus has been on
the technology aspect of the business, achieving that through
a wide-reaching national technology transfer program.
Realistically though, life is not that
compartmentalized—access to technology intertwines with having
the money and knowledgeable people to put legs to an idea.
Once capital, staff and technology resources are aligned,
additional reserves and production can be achieved only when
there are permitted areas to put these resources to work. The
following interview with a domestic independent producer
highlights the importance of interaction between these four
areas.
With his highly productive term as
Chairman of the Independent Petroleum Association of America (IPAA)
coming to a close, PTTC thought it an appropriate time to
solicit John Walker's thoughts on progress made in each area
of access. Active service with IPAA has undoubtedly enhanced
his feel for the pulse of the domestic E&P industry as John
has attended many meetings with Oil and Gas Associations
across the country, oftentimes delivering keynote speeches
that provided a forum for information exchange on each
regional perspective. John has logged many more miles these
past years by meeting with our national leaders in Washington
and ensuring a clear understanding of domestic energy issues.
Land access
Access to areas to drill domestically is the most important or
critical component and must be done responsibly. Twenty-nine
percent of our nation's land containing over 50% of known
reserves is controlled by the federal government. According to
the National Petroleum Council's 1999 and 2003 studies, this
is a tremendous resource base—estimated at 2500 Tcf of natural
gas. To put that in perspective, the United States consumes 22
Tcf of natural gas per year. Technology, which is discussed
below, does influence land access. Public perception also
influences land access. |
Years ago industry experienced some black eyes
over environmental events that were usually transportation
related. The spillage from a tanker that runs aground is a
different risk than a producing well that can handle hurricane
force winds. The unintended consequence of this perception is
to not allow drilling in many strategic areas. Industry has
proven it can develop resources with fewer wells with less
footprint. We know we cannot become energy independent, but it
is imperative that we steadily produce domestically and keep
the industry healthy. The public would benefit by better
understanding our domestic industry. The tax base and jobs the
industry creates are a significant part of our economy.
Money access
Presently, access to capital is not an impediment for field
development projects. Actually, there is too much money
chasing too few prospects causing this latest boom and price
spike. However, capital for high-risk exploration is another
story. This area could benefit from more capital, which could
yield larger-scale new reserves. Major operators and large
independent producers are funding some of this. It is
interesting to note that industry has shown much greater
financial discipline now than it has in the past, which builds
confidence in the markets.
Technology access
First of all, we are a high tech industry. The O&G industry is
the largest user of supercomputers other than the U.S.
government. Advancements in recent years have improved the
probability of success and minimized drilling, plus when
drilling is done there is less footprint of E&P activity. The
industry has proven that it can responsibly harvest energy
resources in an environmentally responsible manner. Look at
the recent hurricanes in the Gulf Coast. Some tank farms have
reported environmental damage, but there has not been a single
wellbore spillage reported. |
This is a testament to the safeness of our
industry in the wake of such destructive natural forces.
Growth of the Barnett Shale illustrates the
role technology can play. In 10 years there, production has
gone from zero to 1 Bcf/day with advancing technologies being
paramount to that increase. There are more of these types of
fields around the country currently being worked. Even six
feet coal seams are being produced, making coalbed methane gas
a key component of domestic base production
People access
This is a giant problem. We have lost 1.5 generations of
people from the volatility or peaks and valleys of activity
our industry cycles through. Right now, staffing is a zero-sum
game. We as producing companies are hiring from each other,
looking for key fits in technical capabilities for a specific
need. We need to encourage new people to seek higher schooling
to replace that part of the workforce that is retiring, yet
staying on for higher salaries past retirement age. Even
foreigners can help fill the hiring gap, but with the new
immigration laws, that will be a challenge on a large scale.
To address this key problem, the IPAA has just this year
established a Workforce Committee. The committee will work to
inform prospective students and schools on our industry and
encourage interest in the O&G industry.
|
John B. Walker is
the President and CEO of EnerVest Management Partners, Ltd.,
which has acquired with institutional investors more than $1.5
billion in oil and gas properties since November 1994.
EnerVest currently operates over 10,000 wells in nine states.
During his tenure as President and COO of Torch Energy, the
company grew from $200 million in assets to $1 billion. He was
responsible for the creation of Nuevo Energy Company and its
IPO on the New York Stock Exchange. Previous to that, Mr.
Walker raised $136 million to participate in over 1,000 wells
and in 1985 created Walker Energy Partners, an American Stock
Exchange Company. Mr. Walker was selected by Institutional
Investor as an "All American" energy analyst for six years in
a row. He holds a BBA (with honors) from Texas Tech University
and a MBA (with distinction) from New York University. Beyond
the industry, Walker is active in his church, Boy Scouts of
America, and coaching youth sports. |
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