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Tech, liquefied natural gas export, economy discussed at biennial conference
Attendance down from last conference in 2016, organizer says
FARMINGTON — Industry professionals spread a message of hope and resilience at the 2018 Four Corners Oil and Gas Conference as the San Juan Basin transitions out of a regional recession after a bust in oil prices.
Tim Rynott, owner of Ridge Resources LLC in Durango, encouraged attendees to not to crack under the pressure of a bust during his presentation about global natural gas markets.
“Be strong under duress, because we don’t know how long this is going to be a (bust) cycle, so whether you’re retired or just getting into the business, this is (something) that I like to say — you gotta be thick-skinned and work your butt off,” Rynott said on May 9. “Take the bull by the horns.”
The biennial conference, which gathers industry representatives from companies around the region and the world, was held May 9 and 10 at McGee Park in Farmington.
The conference is hosted by the Desk and Derrick Club of Farmington, Sandia Mountain Section of NACE International, Farmington Chamber of Commerce, and the Four Corners chapters of the American Petroleum Institute, American Society of Safety Engineers and Society of Petroleum Engineers.
Conference organizer Jan Tomko said 626 people, 183 exhibitors and 246 booths preregistered to attend the event, and an additional 340 unregistered people walked in to the conference. The number is down from the 2016 event, when 775 people registered and 900 unregistered people walked into the conference, which featured 277 booths.
More exhibitors participated in the 2018 conference than in the 2016 conference, however. The last conference had 199 exhibitors, 16 less than this year's, according to Tomko.
Innovations in technology was a hot topic during the conference, in what some attendees are seeing as a larger trend in the oil and gas industry. Brandon Porter of Western Plant and Pipeline Products in Phoenix said he’s noticed that software companies are showing up to more industry conferences than they have in the past.
“There’s a lot more software companies, and I guess it’s just because everything’s so old,” Porter said on May 9. “I’m in the oil industry, and everything’s been around for a while, so that’s the next progression. The tools are all set up (and) they work perfectly; it’s just software and integrating everything together.”
Brian Pugh, chief operating officer for production of BP’s Lower 48 operations, discussed the international company’s efforts and successes in integrating technology and automation into the field, including using data to identify and diagnose issues, as well as automation and augmented reality to plan for and solve problems at remote well sites.
Pugh said the availability of affordable technology and the ability to customize new technology is allowing BP to by-pass expensive and less efficient technology offered by the oil and gas industry’s traditional technology suppliers.
“These computers were developed to bring computing technology to the developing world for next to no cost,” Pugh said on May 10. “They’re every bit as powerful as any computer you could imagine, and more powerful than most of the computers you’re using on the well sites today that are supplied by name-brand suppliers. Those name-brand suppliers have had a chokehold on our industry, and they’ve really held us back, and they’re still holding us back, because many people will tell you that you have to use these companies.”
Pugh said the ability of oil and gas companies to develop their own technology “radically changes the equation of what we can do,” and that automation could mean “fewer jobs, but some of them will be coming back in different ways.”
Rio Grande Foundation President Paul Gessing discussed the economy of the oil and gas industry and the state economy, focusing on the effect of the recession on population decline and employment rates.
San Juan County’s unemployment rate was 5.5 percent in March, up from the state rate of 5.1 percent, according to the New Mexico Department of Workforce Solutions. The national unemployment rate was 4.1 percent in March, according to the U.S. Bureau of Labor Statistics.
“The trend in this country is we’re putting fewer and fewer people to work as the baby boomer generation retires, so it’s not surprising (that regional unemployment is relatively high),” Gessing said on May 9. “What’s shocking is how bad New Mexico has performed relative to the rest of the region.”
Gessing said the state “faces unique and significant challenges” in addressing outward migration and unemployment, including a tax environment that is less friendly than those of neighboring states.
But as activity in the San Juan Basin and throughout the state picks up, some industry players are seeing new potential. Rynott said exporting San Juan Basin’s natural gas to foreign markets through liquefied natural gas ports could drive the regional economy up.
Rynott has been researching LNG ports on the Pacific Coast, including Jordan Cove LNG facility near Coos Bay, Oregon and Costa Azul LNG facility in Baja California, Mexico. He said Costa Azul could be a viable option for San Juan Basin gas.
“I’ve been calling different companies and really trying to research, ‘Is this maybe one of the best places to go?’” Rynott said. “And if it is, then the San Juan is really well-positioned. Right now, we’re looking for some long-term, motivating and inspirational things — maybe this is it.”
“I don’t want this considered an academic exercise,” Rynott added. “We want to think how we can get this area revitalized — Farmington, Durango, whatever — and find place to move all this gas.”
Christi Zeller, executive director for La Plata County Energy Council, said advances in technology and efforts to expedite permitting processes are both signs of hope for the industry, but the industry has a responsibility to share their narrative as it moves forward.
Zeller showed a photo of a city council meeting in Boulder, Colorado where environmental advocates protested fracking by lying on the ground with tombstone signs, and said oil and gas industry needs to define their own identity.
“We need to do a better job at showing up at council meetings; we need to show up at board of county commissioner meetings; we need to talk to our neighbor about what we do; we need to have the face of energy be what all of you are versus letting theatrics tell our story,” Zeller said. “… Our story is powerful, and the human faces that I’ve worked with for a number of years, personal stories about their children graduating – we’re just doing amazing things, and (protestors like those in Boulder) is definitely not what you need to see at a public meeting or hearing, so I’m asking you to show up if you can.”
A new-to-the-region company made its debut at the 2018 conference, and Hilcorp’s Brian Wilbanks, senior vice president of the company’s Lower 48 West operations, was sure to emphasize its commitment to the basin.
“I want everybody in the room to understand just how important (Hilcorp’s San Juan Basin) asset is to our company. A lot of eyes are on the data and a lot of eyes are paying attention to what’s happening out here right now,” Wilbanks said, adding that Hilcorp “intend(s) to be here forever. It’s something that we look forward to developing these relationships with our fellow adjacent operators (and) with our fellow service companies, because … when we work together as an industry, we’re going to actually put this region back on the map and make it feel relevant again.”
Megan Petersen covers business and education for The Daily Times. Reach her at 505-564-4621 or firstname.lastname@example.org.