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STEER: A Business Model That Works

It was great to be able to write this issue’s cover feature on the South Texas Energy & Economic Roundtable (STEER) and its outstanding staff, including President and CEO Omar Garcia. Watching the organization have so much success has been very rewarding, since I played a minor role in its creation back in 2012; and writing the piece provided a chance to reflect on the STEER business model and why the oil and gas industry should try to replicate it in other parts of the country.

By late 2011, it had become obvious to everyone that the Eagle Ford Shale was a world-class resource that represented an unprecedented opportunity for economic development in South Texas. Shortly after a lunch during which I and a group of colleagues talked about how best to go about protecting this opportunity, I got on a conference call with the Haynesville Shale Operators’ Committee (HSOC). This coincidence of timing was what spurred my involvement in the germination of STEER.

HSOC was the brainchild of the Louisiana Oil & Gas Association (LOGA) and its President, Don Briggs. Created during the height of the development of the Haynesville Shale natural gas development, the organization served as an extremely effective voice for the industry in what was at the time the busiest shale development region of the country. The challenge the Haynesville Shale presented to LOGA was its concentration in the northwest corner of the state, hundreds of miles from the state capital of Baton Rouge, where LOGA’s offices were located.

Rather than have its staff constantly travel back and forth between Baton Rouge and Shreveport to help its members address community and regulatory issues, LOGA came up with the model of establishing a committee within its organizational structure that essentially functioned as a separate trade association. To become members of HSOC, companies paid separate dues, and the committee itself had its own separate staff.

To further distinguish HSOC as a separate entity, the HSOC staff seldom became engaged in the single most crucial role of any state trade association — lobbying the state’s legislature. Instead, HSOC focused on helping members with community and media relations, functions that have not traditionally been strong points for the industry’s legacy associations.

The model worked. HSOC was a tremendous asset for producers, the media and communities in the region, all of whom needed an honest-broker intermediary to help understand and communicate with one another.

Seeing no reason why this model wouldn’t work just as well in South Texas — where the sudden, massive growth in oil and gas activity was very predictably creating lots of friction and challenges in the local communities — I took the idea to Rob Looney, then-President of the Texas Oil & Gas Association (TXOGA), one of the industry’s largest trade associations, headquartered in Austin. My involvement ended there, since I had a conflicting role with one of the industry’s national trade associations at that time.

Read The Rest Here

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Capital Flow To The Permian Basin Hasn’t Dried Up; It Has Moved Downstream

headline in Tuesday’s online edition of The Houston Chronicle, “Drillers Choke Off Dollars To Permian Basin Operations,” may have unintentionally caused confusion regarding the current state of play in the country’s most active drilling and oil-producing basin.

The story to which this headline was attached references a report by the firm Wood MacKenzie that discusses how upstream merger-and-acquisition activity in the Permian has trailed off somewhat dramatically in recent months. This is entirely true. As The Chronicle points out, Wood MacKenzie’s data indicates: “Drillers spent $35 billion in West Texas over a nine-month period that ended in early spring. By comparison, the collective value of land deals of the last six months is less than $5 billion.”

Someone at The Chronicle apparently realized that the initial headline was somewhat confusing ― the Wood McKenzie report does not talk about any slowdown in drilling ― because the headline was later changed to read “Rising Costs, Land Prices Have ‘Taken The Edge Off’ Permian Basin.” It was inevitable that the upstream M&A fever that developed in the Permian last summer was bound to eventually slow down. As geographically huge as the Basin is, there is a limit to the amount of acreage within it that could rationally be evaluated to meet acquisition costs that in some deals exceeded $40,000 per acre. So it is not surprising at all that the pace of land and reserves transactions has slowed dramatically.

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The Wisdom And Foresight Of The Texas Rainy Day Fund

In its infinite wisdom (OK, I’m kidding just a little here), the Texas Legislature showed great foresight during its 1981 session, creating what the state calls the Texas Economic Stabilization Fund but what has since come to be commonly known as the Rainy Day Fund. At the time, policymakers took advantage of a great boom time in the petroleum industry, using the state’s oil and gas severance tax receipts as the funding source for virtually the entire fund balance.

Over the last 36 years, the Rainy Day Fund has proved to be exactly what it was billed to be back in 1981: a fund that has had the effect of stabilizing the state’s budget situation. As an example, the Great Recession created huge revenue shortfalls for the state government going into both the 2009 and 2011 legislative sessions, forcing policymakers to cut spending on state services deeply. But the ability to take billions of dollars from the Rainy Day Fund ensured that cuts to the bone did not become cuts into the marrow of those services.

The Rainy Day Fund has also allowed legislators to address other pressing state issues without impacting the budget’s General Fund. The 2013 session of the legislature funded the state’s entire $50 billion State Water Plan by tapping the Rainy Day Fund for $2 billion, establishing a revolving line of credit that will be used to finance a large variety of dams and other water projects in the coming decades. That same session also, with the approval of the state’s voters, tapped the Rainy Day Fund for $2.25 billion to fund much-needed road improvement projects all over Texas.

Even after all those and other large, special withdrawals over the last decade, the Rainy Day Fund today retains a balance of over $10 billion, money that is available to help Houston and other areas of Southeast Texas rebuild from Hurricane Harvey. In short, the Texas Rainy Day Fund is a pretty phenomenal success story for which the oil and gas industry rarely receives much credit.

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When Will Soros-Funded Activists Invade Houston? Soon.

Today’s Campaign Update

(Because The Campaign Never Ends)

  • Here is what is fixing to start happening in Houston, probably within the next few days:  You’re going to see a lot of Antifa, Black Lives Matter and other Soros-funded activists come in from other parts of the country and begin to infiltrate the community, particularly in minority-heavy neighborhoods.  Their purpose will be to make it appear that the federal and state response to the Hurricane Harvey disaster is racist and ineffective.  We can imagine that these activist groups and their benefactors in the national Democrat Party have had enough of seeing uplifting video from Texas of grateful people praising local, state and federal officials, and thanking everyone who has been helping them.
  • So, in the coming days, you are going to start seeing video on CNN and the networks of mainly younger people loudly complaining that the people in other (presumably white) neighborhoods are getting their help, but nobody’s doing anything for them.  You will start seeing films of such people loudly interrupting public officials who are trying to hold meetings in minority communities around Houston, shouting them down, even threatening them with violence.  You will probably begin seeing groups of mainly younger people staging protests in front of Houston City Hall, with signs accusing President Trump, Governor Abbott and FEMA officials of being racists and trying to commit genocide in the Bayou City.
  • All of these people will claim to be residents of Houston, and no one at CNN, ABC, CBS or NBC will question that, or take film of the caravan of white buses that will likely transport them into the city, if that hasn’t already happened.  Because you can bet your bottom dollar that the folks at CNN and the networks are sick to death of all the public spiritedness we have seen from Houstonians over the last 10 days.  This not good for ratings, or for clickbait to their various websites.
  • Sound cynical?  Sure.  But look, this is the playbook that we have seen over and over and over again over the last dozen years.  These agitators and the fake news media cannot allow what we have seen thus far from Houston and surrounding areas impacted by Harvey to stand.  People of all colors and creeds reaching out, putting themselves in danger to help one another?  That is not the America we see portrayed on CNN 24 hours every day.  If that is the real America, then there is no other conclusion to reach than that CNN is indeed “fake news.”
  • A Republican Governor in a Red State that voted for Donald Trump last November becoming a national star with his even-handed guidance of his state’s recovery efforts?  Does not fit the media/Democrat narrative of incompetent Republican governance.  President Trump and his FEMA Director leading an incredibly well-organized and efficient federal response, and helping the people of Texas in every way possible? Does not fit the narrative that Trump is a racist/lunatic/monster.
  • So the facts and images on the ground have to change in order to fit the media/Democrat narrative, and these George Soros-funded professional agitators are just the people to change them, working in conjunction with the fake news media.  We must remember that these are the same people who have infiltrated Republican congressional townhall meetings all over the country throughout 2016 and 2017, shouting down the elected officials and not allowing them to get their message out.  Why would anyone think they would hesitate to do the same in public gatherings all over Houston in the days and weeks to come?
  • This is standard operating procedure for those on the radical left and in the fake news media.  Frankly, the wonder is we haven’t already seen it happening.

Just another day in Why Isn’t The Justice Department Investigating George Soros? America.

That is all.

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Media’s “Trump Is A Monster” Narrative Dies In Houston

Today’s Campaign Update

(Because The Campaign Never Ends)

  • We should expect the fake journalists, fake anchors and fake editors at CNN, the NYTimes, the WaPo and the broadcast networks to shift their coverage away from Hurricane Harvey starting today.  The images and films from President Trump’s and First Lady Melania Trump’s visit to Houston on Saturday are simply too compelling and devastating to the media/Democrat concocted “Trump is a monster” narrative for them to continue airing them.  Thus, we can anticipate lots and lots of focus on things like DACA, the debt ceiling and the federal budget this week, even though disaster coverage is without question more lucrative and better for ratings at CNN.  Because this is what the fake news media does in its never-ending role as sad toadies for the Democrat Party.
  • If you want a great example of how the President’s humanizing visit to Houston and Louisiana is destroying the left’s world view, take a look as this piece, which discusses the shock an MSNBC reporter has felt as he’s been assaulted by the angry left  for tweeting a message acknowledging the reality of the President’s visit, and how Houstonians of all ages, colors and genders reacted to him.  Very educational about the true agenda of those on the angry left.
  • Here’s the reality that the fake news media has run smack-dab into over the last week, while covering the recovery efforts in Texas:  Most Americans are just really good, normal people.  They care about one another, they help one another, the rednecks and Cajuns in their fishing boats don’t pick and choose to rescue the people who look just like them first, leaving those with different-colored skin to wait in line.  They rush into harm’s way and start getting people out indiscriminately, take them to safety, and rush back in to do it all over again.
  • For the media people who live in their safe little bubbles in New York, Washington and Los Angeles, this is utterly shocking.  Because their own reporting has constantly informed them that everyone out there in “flyover country”, i.e., the other 98% of America, is a hateful racist, bigots who only want to harm people who aren’t just like they are.
  • I spent most of last week in Las Vegas, at a hotel that did not carry Fox News, and was thus forced to watch the coverage on CNN and, to a much lesser extent, MSNBC.  This turned out to be a very gratifying experience, as reporter after reporter found him- or herself utterly frustrated whenever they would ask any Texan a leading question designed to promote conflict, which is all they ever try to do.  Watching these elitist simpletons try to recover from their shock as Texan after Texan invariably responded with only caring and gratitude towards everyone who was working to help, and to the local, state and federal officials who were organizing shelter and recovery efforts, was a true heart-warming experience for me.
  • These fake news outlets, who have been coordinating with the Democrat Party for the last 10 months to try to create the “next Watergate” out of whole cloth, all went into their coverage of the Harvey catastrophe anticipating being able to create the “next Katrina”.  Now, they’re all down in the mouth be cause a) Houston isn’t New Orleans, b) Texas isn’t Louisiana and has a vastly more competent government, and c) it isn’t 2005 anymore, and FEMA and the rest of the federal government has learned a lot about how to respond to such events over the last dozen years.
  • But for all these left-wingers in the fake news media and the Democrats whose talking points they parrot each and every day, the worst learning out of all of this is that their efforts to portray the current POTUS as a deranged monster cannot survive when they run up against real video of him being himself among a group of struggling, displaced Americans of all colors, sizes, shapes, ages and creeds.
  • Donald Trump isn’t a monster at all.  He’s a real President, and a real American.  And that is a truth the fake news media simply cannot focus on for any length of time.  Thus, ratings and website hits be damned, these fake news sites will now move onto other topics that fit better with their narrative, because that is who they are, and what they do.

Just another day in fake news media America.

That is all.

 

Photo Credit:  DailyCaller.com

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Post-Harvey: Will Texas Repeat Louisiana’s 2005 Money Grab?

Today’s Campaign Update

(Because The Campaign Never Ends)

  • Now that Hurricane Harvey has finally passed, leaving behind in Houston and East Texas a level of devastation unprecedented in U.S. history, the political games around securing taxpayer money at the local, state and national levels to help pay for the rebuilding effort will begin.  Given that Harvey wrought destruction from Corpus Christi all the way up the coast through the Beaumont/Port Arthur/Orange Golden Triangle and into the Piney Woods communities of East Texas, we are talking about an area that is home to at least 8 million Texans.  Contrast this to Katrina, which, as terrible as it was, impacted New Orleans and surrounding areas that were home to just over 1 million Louisianans.
  • Normally in such situations, the most heated politics revolve around federal funds.  The federal government does have a disaster relief budget in its normal funding, but it will only be able to scratch the surface of a recovery and rebuilding effort that will be required for the nation’s 4th largest city and surrounding areas.  So, it will be up to the Texas congressional delegation to develop a proposal for a supplemental funding bill to shepherd through congress.  As we have seen in the past, such supplemental appropriations bills can become controversial, and vehicles for all members of congress to try to attach their own pet pork-barrel spending proposals.
  • In the wake of Katrina in 2005, the Louisiana congressional delegation, led by then-Senators Mary Landrieu andDavid Vitter, swung for the fences, bringing forward an initial proposal for a massive $250 billion appropriation that included funding for things like $35 million in marketing funds for the state’s seafood industry, $8 million for alligator farms and a $40 billion request for the Army Corps of Engineers, which normally spends about $400 million in the state.  This breathtaking money grab came after the George W. Bush Administration had worked with congressional leaders to push through $62 billion in Katrina-related recovery funding.
  • Twelve years later, now comes Hurricane Harvey, and a trail of devastation that is many times the size of the impact of Katrina.  Partisan politics in the nation’s capital were already polarized in 2005, but the situation today makes the politics of a dozen years ago seem like patty-cake by comparison.  A Texas delegation dominated by Republican members will have their work cut out for them in securing a supplemental appropriation that is sizable enough to truly help, and will need its Democrat members to work to secure vote from their own party, as many, many budget hawks in the GOP caucus will refuse to support any proposed legislation.
  • The Texas delegation will also need to strongly oppose efforts to turn a supplemental bill into a pork-barrel vehicle, as the national news media will be looking for any excuse to demonize members who represent a state that voted heavily for President Donald Trump.  Things could get especially uncomfortable for Senator Ted Cruz if he decides to become a sponsor for a supplemental, as he strongly opposed the supplemental bill for relief efforts for the Northeastern U.S. in the wake of Hurricane Sandy.
  • But as is the case related to any disaster such as Harvey, opportunities present themselves as well.  For example, the Texas delegation will have an opportunity to ally itself with the Louisiana delegation related to a supplemental, given that Harvey also caused widespread damage to the Eastern half of the Pelican State.  Care will have to be taken not to revive some of the hair-brained pork barrel stuff that made its way into the Landrieu/Vitter Katrina bill in 2005, but the alliance of the two state delegations would help to build a strong base of support in congress.
  • For the Trump Administration, the opportunity relates to the President’s campaign promise of a national infrastructure spending bill.  The President has often spoken of his desire for a bill in excess of $1 trillion over ten years to help rebuild the country’s decaying system of roads, bridges and other key infrastructure.  The scale of the devastation in Texas and Louisiana from Harvey could serve as an anchoring point to the building out of a comprehensive national proposal.
  • Never have so many major “shovel-ready” infrastructure projects presented themselves in any region of this country at any single time as we are about to see manifesting themselves in Texas and Louisiana in the weeks to come.  It’s still a little too soon for the politicians to begin talking about all of this now, but as the flood-waters recede and the true scope and scale of the devastation becomes visible to television cameras, the political gamesmanship will and should begin in earnest.

Just another day in everything is politics America.

That is all.

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Trump’s Response To Harvey: Fake News Media Narrative Is Already Set

Today’s Campaign Update 

(Because The Campaign Never Ends)

  • If you’ve been wondering how the fake news media would treat the Trump Administration’s response to the disaster that Hurricane Harvey is about to produce along the Texas coast, wonder no more, because the shameless sleaze balls who run Salon.com have already let the cat out of the bag.  There will be no honest reporting, there will be no honest analysis, there will be no real information conveyed by the fake news media to Texas residents for whom information will be crucial in the coming days.  The fake news media/Democrat Axis of Sedition narrative is set, and it will be one of ceaseless criticism of every action the President takes, every word out of his mouth, and yes, every tweet from his Twitter feed.
  • At 3:08 Thursday afternoon, well before the most outer band of Hurricane Harvey had thought about making landfall, a fake journalist named Sophia Tesfaye posted a piece at Salon.com with a headline that would have never even been conceived during the Obama years, and would have waited until after Harvey had come and gone in any other presidential administration.  But this is the Trump Administration, after all, and the media/Democrats/establishment Republicans are smack in the middle of executing a slow-moving coup d’etat, so why wait?
  • “Trump Just Flunked His First Natural Disaster Test”, reads the blaring headline to Ms. Tesfaye’s piece.  Yes, the test hadn’t even arrived, FEMA hadn’t even had a chance to spring into action, but already Donald Trump had “flunked”.  Thank goodness I didn’t have to live up to Salon’s dictated fake timeline when I sat for the SAT back in 1974.
  • So why, a reasonable person – none of which exist in the fake news media anymore – might ask, has President Trump already flunked a test that was yet to make landfall?  Well, because, as Ms. Tesfay “reasons”, he issued a tweet that contained public service information on Thursday morning.
  •  The offending tweet reads as follows:  “As  intensifies – remember to . #hurricanes.gov #ready.gov #fema.gov”.  Doesn’t seem too offensive, does it?  Given that tweets are limited to 140 characters, it also conveyed a good deal of useful information for people to follow up on.  It was also accompanied by a short film that provided further information, but which Ms. Tesfaye falsely calls a “campaign commercial.”
  • So how in the world do Ms. Tesfaye and her fellow seditionists at Salon reason that this single tweet means the Trump Administration has already utterly failed in its response to a hurricane that hadn’t yet made landfall?  Let’s let Ms. Tesfaye’s own idiotic words speak for themselves:  “According to the White House, Trump was briefed on the government’s hurricane preparation efforts earlier this month, but his campaign-style commercial — fitted with a dramatic soundtrack — failed to convey any of that information to worried residents in the storm’s path. His tweet did not include basic information, like who is in danger, how to be prepared or what the government is doing to prepare.”
  • For crying out loud, you insufferable moron, it’s a freaking TWEET.  You can’t convey everything everybody needs to know about how to prepare for a freaking hurricane in 140 freaking characters.  Ok, deep breathing…deeeeep breathing….
  • Ok, I’m back.  Look, I’m not going to go on about this particular steaming pile of horse manure from Salon any further – it doesn’t really deserve the 550 words I’ve already written about it here.  Just be aware that this piece is the canary in this particular coal mine.  This piece contains the tone and sort of specious reasoning we can all expect to emanate over the next several days from similar fake reporters at CNN, MSNBC, ABC, CBS, NBC, the WaPo, the NYTimes and probably most of the Texas news media as well.  The narrative is already set, actual performance by Texas government officials – all of whom are hated Republicans – and the Trump Administration won’t matter.
  • There will be no real, actual journalism going on here.  There will only be the narrative.  American journalism is a sick profession, and Ms. Tesfaye is merely a symptom.

Just another day in tiresome narratives America.

That is all.

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