RRC’s ‘State of the industry’

The Texas Railroad Commission held its 53rd annual ‘State of the Oil and Gas Industry’ round table earlier this month. On the agenda, some quixotic tilting at the regulator, warnings of demographic doom and a pat on the back for the RRC’s new web-based electronic permitting system ECAP.


Mark Baxter (Maguire Energy Institute) painted a bleak picture of the US domestic oil and gas industry. Industry is in denial over the labor shortage. “A tight market is here today, and our actions are nurturing a further breach of the talent pool.” The domestic industry lost more than a half a million jobs during the oil shocks of the 70’s and 80’s. Today the average age of employees with the majors is 49 and average retirement age is 55. While the computer has brought substantial productivity gains, these have masked the underlying trend. These gains are not sustainable and “future improvements in efficiency will not offset the impending loss of senior expertise that will continue over the next 5-8 years”.


Paul Covert, President of the National Association of Royalty Owners believes that the real state of our industry is one of disrespect and distrust. “From ExxonMobil to Scooter Gibson’s East Texas Mom & Pop Producer, the public thinks we are out to destroy the air and land and reap obscene profits”. Covert asks “why are we not telling them the truth?” He believes there is there is no cleaner fuel today in quantities enough to supply the “enormous energy appetite of the American people.” Education is needed to redress the balance in favor of the oil industry.


Frank Henry of Baker Engineering echoed Baxter fears on the employment situation. Baker is faced with a growing demand for personnel while the supply of skilled workers in all disciplines dwindles. A ‘talent war’ is being fought between companies. This has increased personnel turnover and caused wage escalation. The answer—according to Henry—is better personnel planning and cooperation between industry, educational entities and government agencies.


Mary Ann Pearce (ConocoPhillips) applauded the Commission’s new ECAP web based electronic permitting system. ECAP received a “best of Texas” award from the Center for Digital Government. Pearce reports that the ability to file permits with the Commission and retrieve information electronically has been an important factor in reducing costs and in making quality data available to the public. The Commission has filed about one third of all electronic drilling permits to date.

This article originally appeared in Oil IT Journal 2002 Issue # 12.

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