Pope Week – Sept 27, 2015

Today I will discuss five things that happened last week:

  1. The Pope Comes to America and Talks About Climate
  2. China Announced Cap-And-Trade Program Through White House
  3. House Passes Doomed Regulatory Reform Legislation
  4. Hillary Comes Clean on Keystone
  5. Jeb Bush Proposes Regulatory Reform

And I will replay my February 2015 interview is with Steve Myers, the coauthor of Tapping the Shale Gas Boom: How to Penetrate the Shale Gas Market, a book about marketing and business development in the region.

Click below to listen or find us on iTunes or Stitcher.

 1.  The Pope Comes to America and Talks About Climate

Last week, the Pope visited the United States and talked about climate change:

2.  China Announces Cap-And-Trade Program Through White House

As Vox explains:

On Friday, Chinese President Xi Jinping announced that his country would enact a national cap-and-trade system to limit carbon emissions, starting in 2017. The program will eventually cover a number of key industries, including electricity, iron and steel, chemicals, building materials, and paper-making.

This is, potentially, a major step toward addressing climate change. It also shouldn’t come as too much of a surprise. Since 2011, China has been experimenting with smaller cap-and-trade programs in seven major cities, including Shenzen, Beijing, and Shanghai. Despite a series of early missteps, these pilot programs have been showing promise, and China-watchers had been expecting they’d be scaled up.

The Marginal Revolution blog noted some skepticism but also said:

The Chinese have decided to make “doing something about carbon” a potential source of soft power in the international arena. They are giving themselves an option on this path, and in the meantime trying to minimize the reputational deficit they face from being the world’s largest source of carbon.

3.  House Passes Doomed Regulatory Reform Legislation

Last week the House of Representative passed regulatory reform, summed up by its sponsor this way:

Today, Congressman Tom Marino (PA-10) successfully managed the passage of his signature piece of legislation, H.R. 348, the Responsibly And Professionally Invigorating Development Act of 2015 (RAPID Act). The RAPID Act is specifically designed to streamline the approval and permitting processes for federally-funded energy, critical infrastructure and other vital construction projects. The RAPID Act also requires federal oversight agencies to provide approval or disapproval of a project in a reasonable amount of time.

Another good explanation of the legislation comes from the U.S. Chamber of Commerce:

The Hoover Dam was built in five years. The Empire State Building took one year and 45 days. The Pentagon, one of the world’s largest office buildings, took less than a year and a half. The New Jersey Turnpike needed only four years from inception to completion. Fast forward to 2015, and the results are much different. By contrast, the Cape Wind project has needed over a decade to obtain the necessary permits to build an offshore wind farm. After obtaining federal leases in 2005, it took Shell Corporation seven years to obtain oil and gas exploration permits for the Beaufort Sea. And the Port of Savannah, Georgia spent thirteen years reviewing a potential dredging project….

The major cause of these delays in federal permitting is the mandate to conduct environmental reviews of major projects under section 102 of the National Environmental Policy Act of 1969 (NEPA). When federal agencies undertake major actions (including issuing permits), they must evaluate the environmental impacts of the action, along with potential alternatives, unavoidable effects, impacts on long-term productivity, and resource commitments for all covered projects….The RAPID Act almost exclusively relies upon concepts that are part of existing law [including…:]

  • Early designation of a lead agency, participating agencies and cooperating agencies when multiple agencies are involved in a NEPA review;
  • Acceptance of state “little NEPA” reviews where the state has an equivalent process, avoiding needless duplication of state work with the federal NEPA review;
  • A requirement that each alternative include an analysis of employment impacts;
  • Creation of a schedule for the EIS or EA, including deadlines for decisions underother Federal laws;
  • Reasonable fixed deadlines for completion of an EIS or EA; and
  • Reduction in the statute of limitations to challenge a final EIS or EA from sixyears down to 180 days.
Rep. Sheila Jackson Lee (D-TX) was one of several Democrats to argue against the bill, saying it would through caution to the wind.  The White House also issued a veto threat, saying “would undercut responsible decision- making and public involvement in the Federal environmental review and permitting processes.”

4.  Hillary Comes Clean on Keystone

Last week, Democratic Presidential candidate Hillary Clinton held a town hall where she made the much-anticipated announcement that she would oppose the Keystone XL pipeline:

5.  Jeb Bush Proposes Regulatory Reform

In a Wall Street Journal editorial called “How I’ll Slash the Regulation Tax” the Presidential candidate said:

My administration will create a commission charged with reviewing regulations from the perspective of the regulated and shifting more power from Congress back to states. In my administration, every regulation, including those issued by so-called independent agencies such as the Consumer Finance Protection Bureau, will have to satisfy a rigorous White House review process, including a cost-benefit analysis. Regulations will be issued only if they address a major market or policy failure. Regulators will be directed to favor private and state-driven solutions unless it is clear that federal intervention is necessary and appropriate…

As early as possible, I promise to roll back many of the most reckless and damaging rules promulgated under President Obama. As president, I will repeal the Environmental Protection Agency’s new rule extending federal jurisdiction under the Clean Water Act over millions of acres of private land, its new regulation of carbon dioxide under the Clean Power Plan, and its new and costly coal-ash standards for power plants. I will also work to repeal the so-called net-neutrality rule forced on the Federal Communications Commission by the White House and the Department of Education’s “gainful employment” rule that punishes for-profit colleges. That’s for starters.

Interview with Steve Myers on Business Opportunities From the Shale Boom (Starts at 19:42)

Steve Myers is a marketing and business development professional who helps companies find opportunities in the oil and gas business.  His has had a long career in marketing, largely in the newspaper business and then later working with architects, engineers, and construction companies.  He is also the coauthor of Tapping the Shale Gas Boom: How to Penetrate the Shale Gas Market.  

The book was born out of a frustration experienced by Steve and his coauthor James Laero.  They attended a number of conferences early in the shale boom that purported to provide business development information to companies, but they found specifics were scarce.  They spent nearly two years writing a book filled with the information they felt was missing.

When Steve was first asked about opportunities in the Marcellus Shale, he ignored the question.  After the issue kept coming up, Steve decided he better learn something about it.  Pennsylvania has had a long history in the oil and gas business and that started making a bit of a resurgence, demonstrating Marcellus’ potential.

The heart of the book Tapping the Shale Gas Boom is marketing.  It starts with a history of the industry, and provides some background on the industry’s economics.  It is particularly aimed at small and medium sized businesses.  Steve is very positive about the future of the industry, regardless of the current fluctuation in oil and gas prices.  He said that companies must adjust to do business in oil and gas.  For example, oil and gas companies typically operate on 24-hour schedules.  That means anyone hoping to supply an exploration and production company needs to be prepared to make 2:00 a.m. deliveries.

Steve said one of his favorite success stories was about a fence company.  The fence company approached an exploration and production company with a fence recommendation.  Though the initial recommendation was not followed, the fence company earned some credibility and went on to be highly successful.  Welding, Steve said, is also particularly lucrative.  He talked about a group of welders that started a small operation and are all making six-figure incomes.  He said that the industry is really looking to become more efficient, and is very open to inventors and entrepreneurs who have cost-saving ideas.  Water conservation, in particular, is a coveted skill.  Pennsylvania has a strong tool and die industry that is benefiting from nearby oil fields.

He counsels companies to set up operations that are nearby and able to service any accounts with large exploration and production companies.  The larger companies vet their subcontractors, but want to hang on to any high-performing partners.  Turnover of subcontractors is a cost that most companies seek to minimize.

Steve said that protests against fracking go on every day and are an ongoing challenge.  He said he grew up critical of large oil companies, but has now come to really respect how they do business.  He said these companies are being challenged by low prices, and that will help mature the industry.  Regardless of the challenges, the opportunities will continue as production levels are still growing and there is still an enormous shale resource in the ground.  Steve argues this is a time of opportunity.

You can learn more or order the book at www.shalegasboom.com.