Subscribe
Share
Share
Embed
"Uncapped with Executive Roustabouts" will provide candid, entertaining interviews with retired or former Oil & Gas executives whose "unfiltered" perspectives offer unique value to the industry's ecosystem. The primary audience includes current professionals looking for mentorship, suppliers seeking executive insights, and former peers interested in the guests' current lives. Initially hosted on LinkedIn via Funk Futures, the 45-minute video and audio sessions will balance informative discussions with humorous observations from the host.
Jon Krome (00:02.114)
Rod, can you hear me?
Jon Krome (00:05.976)
I can't hear you.
Jon Krome (00:24.92)
Try it again. Participant Rod is having a problem. Failure reason cannot read properties of undefined.
Jon Krome (00:37.206)
Yeah, there's something on, it says it's something on your end, but I'm not sure what that is. Say something again?
Rod Skaufel (00:48.398)
on the earth.
Well, hello everybody. This is Uncapped with Executive Rastabouts. This is the first episode and I have the great pleasure of welcoming my friend and former colleague, Rod Skaufel Rod, welcome to the show.
Thank you, John.
Rod is a graduate of the infamous Colorado School of Mines in Golden, Colorado, as a petroleum engineer. He began his career in mobil as an operations engineer in Lost Hills, California, outside of Bakersfield, which is where we met in 1987. He progressed through a series of technical business roles in mobile's heavy oil business, including as production foreman and operations supervisor in roles and fields such as South Belrich and Midway Sunset.
He moved to New Orleans with Mobile and Cal Resources, became Era Energy in 1997, leading half of the operation through some very turbulent times. The ExxonMobil merger took him to Houston where he was one of the production company planners. His final role in ExxonMobil was as technical manager for the Chad project where he met his wife. Following a group of ExxonMobil executives to BHP Billiton, he became the VP of Central Engineering.
Jon Krome (02:00.984)
growing into such roles as president of the conventional assets and then the shale asset. was instrumental in monetizing BHP's acquisition of Petrohawk's shale assets. His final role at BHP Billiton was as head of strategic planning in Melbourne. Rod then joined Cobalt Energy as the president of operations where he left in 2018. Once again, Rod, welcome to the program.
Thank you, John. Sounded mostly correct. Good job. That's it. Sounded mostly correct. Well, we go back a long ways back to when you were a summer hire working for us at Lost Hills.
So say that again.
Mostly correct. Well, that's good.
We do, we do.
Jon Krome (02:42.444)
What do you remember about me as a summer hire?
what a great worker you were. That's what I remember.
There you go. You hear that everybody? He can sweat like nobody's business.
Actually, I remember you and Dan McKee and having a little bit of a wrestling match in there.
we'll talk about that in a minute when we come to practical jokes. So we'll start kind of gently Rod. Are you watching land man?
Rod Skaufel (03:02.062)
Yeah
Rod Skaufel (03:07.649)
Of course.
Tell me, what do you think? Is that art or Willfield?
that is probably not what a land man actually does. mean, season one, he kind of was a land man who typically put agreements together, interface with land owners. He's more of the operations manager, head lawyer, part owner, general troublemaker. but it's, it's fun. I enjoy the show.
It's highly entertaining. Yeah, the first season, you know, was an operations manager a few times myself in South Texas. I never had a bag over my head get beaten by Mexican cartels. That's not part of the job description. I didn't see him spend too much time with owners trying to negotiate, you know, rights and percentages and things like that. And now we're in the second season. He's the president, El Presidente. And he's still driving around in that same truck.
Yeah, going.
Jon Krome (04:11.33)
goes to the main camp, giving out work instructions, this guy can do it all.
Yeah, his kids are roused about now. All of a sudden he's discovered an oil field. I I don't think that's exactly how it works. Anyway.
Yeah. Yeah. Day one, he's a roustabout and he goes up in the, on the drilling rig up to the floor or to the tower. Right. mean, that's a little dangerous. The kid had a rough first day, no doubt. The oil field is known for its practical jokes, particularly when we broke out. mean, we were typically in remote locations. We were young. We were totally unsupervised by the grownups. You know, it felt like a small frat house in a way.
Yeah, yeah.
Rod Skaufel (04:48.078)
Hmm.
Rod Skaufel (04:52.77)
Mm.
What's one of the best practical jokes that you remember, whether it got played on you or you played on someone else?
Well, specifically when you're talking about the field, when we were both working in the field office, you know, I'm leaving for the afternoon and my company LTD, and I drive for about one minute and slam on the brakes. Cause there's this snake at my feet and I totally freak out, jump out of the car. Turns out it's probably a five foot long snake that was dead.
Obviously you had put in my car, but obviously that was a very memorable event.
If I remember right, you had a deathly fear of snakes in general. So it was perfect, right?
Rod Skaufel (05:39.052)
Yeah. yeah. Perfect.
Perfect. You've had quite a career. You kept moving forward, you kept moving up, not a lot of lateral stuff, not a lot of kind of developmental roles, maybe a small step backwards as many people have had. If you had some advice for today's younger folks in the workforce, particularly given the vast differences in the workplace, mean, what might some of that advice be?
Hmm.
Rod Skaufel (06:12.654)
I would just say, know, stretch yourself. There's no job that's too big. There's no job that's too small. And, if you're going to do a job, you do a great job. It's, and I mean, I always just, how do I apply myself now? I would also map out, you know, career aspirations. mean, you probably didn't know this, but you know, I always maintained kind of a five to seven year outlook of what would I think is a.
did not.
acceptable progression for myself. And I would use that in discussions with my supervisor. And you can say, boy, that shows a lot of ambition. Ambition is not a bad word. As long as you back it up with delivery of results. so, because I was always prepared, I would leave if I didn't feel like professionally, I was moving in the direction I wanted to. And fortunately, I had some
very good sponsorship within the company. Sponsorship meaning supervisors, managers, vice presidents that had an interest in you. And I think that's very difficult if you're working remotely. mean, I think building relationships in the office is super important, but it really comes down to, everything that I do, I do great. And I do excellent.
And that would be my advice to kids coming out of school or younger grads that are currently in the workforce.
Jon Krome (07:53.112)
So this last five years in particular, I've been exposed to new grads coming out of school in the places I've worked. And there's no doubt the ethos has changed in the workforce of that age. I think it's much more rare to see ambition. It's almost as if it's a dirty word, as if my success means someone else is diminished. And it doesn't have to be. My success is my success, and I can bring others along with me.
Okay.
Rod Skaufel (08:11.106)
Yeah.
Jon Krome (08:20.962)
And there's a bit of the tall poppy syndrome. know, kids today have a hard time standing out amongst their colleagues.
Well, and...
Rod Skaufel (08:27.458)
Yeah, I remember I worked, when I was working at Bellridge, we had some super talented people working on that. mean, know, guys like Carl Lakey, mean, you know who I'm talking about. And, you know, I learned this principle that, Hey, you know what? There's plenty of credit to go around. In other words, we can all share in the credit and conversely.
there's plenty of blame that can go around. So being able to operate in a team-based structure and recognizing that, I might have to share the credit, so I'm gonna discredit someone to make sure that I get all the credit. I can tell you that might work in the short term, it never works in the long term. And so having this attitude that we win as a team and we lose as a team,
I think goes a very, very long way. And then if you've got some leadership capability, being able to step up and grow into that, whether it be informally or formally, leadership in your company will notice that. And so again, I don't think ambition is a bad word unless...
You're one of these people that wants to be hyper competitive at work, become extremely political in terms of how you do your business, at which point, again, that'll carry you only so far. Anyway, I mean, I think it's a really important topic for young people. you know, I think working remotely, you know, post COVID.
think it's a big disadvantage because how do you get mentored if everything is over video? mean, that day-to-day interaction, not only with your teammates, but your supervisors. I just think it's super, super important. And for me, I grew a ton by that level of interaction every single day. I mean, you know what it was like.
Jon Krome (10:43.66)
Yeah, yeah, those those gentle interactions just walking down the hall, being in an elevator, somebody seeing him in the lobby or the parking lot. I mean, they have virtue. It's difficult to put your finger to quantify it, but there is benefit to that kind of interaction that is lost today. There's no doubt about that.
You remember we used to work projects, projects, meaning problems, and we'd set up a war room, right? We all go into the war room and we'd get after it to go solve a problem. mean, it's a, and those were some of the best memories of my entire life. And you worked like a dog, but the results were just so fantastic. I just got very good memories of that.
Let's talk about shale a little bit. Although you and I cut our teeth in heavy oil, which is kind of constantly drilling, constantly developing, that's a little unusual. And most conventional assets, it's very simple in that you design and build, and then there's a big event. You install it, you start it up, and you produce it for years. Maybe there's some capital way after that, but generally that's the, there's a big event. And then you operate for many, many years.
Mm-hmm.
Jon Krome (11:59.246)
Shale kind of reminded us how difficult it is to be constantly developing and producing on top of each other all the time. And, um, you know, it wasn't easy for us at BHP and it's not easy for a lot of other people as well. What would you do differently or what are your key learnings about how to develop a Shale asset today, that you might not have thought about when you first entered the Shale game, whether it was at Fayetteville or Eagleford or wherever.
Mm.
Rod Skaufel (12:30.242)
Well, I don't know if it's something we hadn't thought about, but you know, there was a pressure from the acquisition to develop the assets. And in hindsight, we were going too big, too fast. We were running 45 rigs at one point. And what it did is it never allowed you time to learn. And in hindsight, I wish we would have gone slower.
developed greater learning as we went. And then this is in all phases. This is in the development planning, this in the fracturing technology, this is in the drilling. I mean, it was across the board. To your point, I've worked in an operation where we're wells that come online in California every two days.
And we were drilling with 20 rigs at Bellridge. And so I've worked in that environment. The problem was our teams hadn't worked in that environment. Very difficult to take an offshore company, which essentially what BHP was, and immediately turn it into an onshore multi rig, multiple wells per week.
mean, we were drilling what, 250 wells a year? I mean, it's hard to teach people how to work in that process-oriented environment. you know, so in hindsight, I wish we'd have gone slower. But again, there was some corporate pressure in order to deliver certain results based on the acquisition case. Now was, you know, it's interesting.
there was a change in leadership and it facilitated us to be able to almost drop the recount in half. And that's when we really started to be able to learn. mean, we had such smart people working at BHP. mean, I was just so impressed with the folks that we had there. So our early struggles was not due to a lack of
Rod Skaufel (14:51.662)
brain power or a lack of effort. It was just going too fast and being able to take the time to learn.
Yeah, I think that's a great example of something simple that we kind of knew, but we just didn't practice by choice. I remember our drilling teams really found their feet once they were able to slow down and learn and just did incredible things.
Well, I mean, I think the drilling is an interesting one because again, had an A plus drilling team with offshore experience. So offshore experience, I need to have redundancy on everything because it costs so much if that rig is idle. Everything is the best.
So we went into shale with, I've got gold plated everything. I've got redundancy on everything. And our wells cost twice as much as everybody else's. And we quickly realized that that model was never going to work that. Hey, you know what? If I'm down for half a day on a rig, it's not really that big a deal. What's fit for purpose.
our guys did such an outstanding job of climbing that learning curve around cost became a major issue in shale.
Rod Skaufel (16:29.976)
that I think we were just a little bit ill-equipped to deal with initially, because the experience base from our engineering team and drilling teams was primarily offshore.
Jon Krome (16:44.558)
And the other aspect of that that I can speak to personally is the only fatality I've been exposed to in my career happened when we were moving so fast in shale. And I can guarantee you that once we slowed down, our safety mindset and our safety outcomes became much, much improved.
Mm-hmm.
Rod Skaufel (17:07.17)
Yeah, and you know, there's a, there's cultural differences when you make an acquisition that I don't think you probably always properly factor in. And, you know, the safety culture.
in the safety mindset and the safety priority for a major oil and gas company, it's different than it is for a smaller company. And those cultural differences, they need to be properly thought through as you go through acquisitions like we did with both Chesapeake assets and PetroHawks. People want to do the right thing, but
If you've never been in a system like that, you've got to take some time to learn it. I mean, you know what I'm talking about. You were on the front line. mean, it's a different priority.
There's no doubt. took me, I would say, easily a year, maybe longer to get the acquired company's leaders heads in the right place. That's a priority. And then probably another year and a half to two years to give them the skills and capabilities to actualize improved safety outcomes.
Mm-hmm.
Rod Skaufel (18:32.45)
Yeah. Yeah.
Okay, let's change gears a little bit. I'm gonna define core work in kind of a unique way. It's value added effort that increases competitive advantage. Core work is value added that increases competitive advantage. With that in mind, what do you think the core work of an upstream company is?
Mm.
Rod Skaufel (18:58.126)
I would say is primarily development planning, geologic interpretation, geologic mapping that forms the basis of petroleum system models in order to be able to optimize the development of an oil field. That is where
the largest value add and the highest level of technical work is done. I think there's other value added work depending on complexity, drilling for example.
working offshore on some of these, can tell you having a quality drilling team is value added work. You can outsource stuff like that, but I would call that core work. Project management, could, you could debate whether that's core or not core again, depending on the scope. There's, there's something about ownership of that.
and driving, cost and schedule. But as you well know, in project, a large portion of that work is already contracted out or subcontracted out. And then we get to operations. We want to be the operator because we think we can add a lot of value. you know, I don't know, any company that I've worked for, everybody always believes that.
I don't necessarily subscribe to that in hindsight. I think the value of being the operator is having control over the other things that we just talked about control of the development plan. Control of the drilling. I'm not sure the quote operation is always core. mean, what are your thoughts on this? I mean, you've, you've looked at it both from
Rod Skaufel (21:18.146)
being on the operations side as well as being from a consulting side. I mean, you've got a interesting background to kind of comment on that. Cause not only have you seen it in the companies you've worked for, you've seen it for the companies you've consulted for. So your purview is probably wider than what mine is.
Yeah, I would say in most cases it is not core work. Now, there's a caveat to that. You know, the core work of the operations team is really keeping that proverbial valve as open as possible. So once you've got a reservoir performance and you've got the deliverability of the wells, the only thing an operations team can do is reduce the productivity through equipment failure.
or accidents or whatever the case is. You can't make more oil and gas than that well is delivering you, in other words. Well, but again, through reliability, you're allowing the wells and the reservoirs to produce what they will maximally produce. You're not making more oil and gas. So you're keeping that valve as open as possible. So you're not a choke point whatsoever for the deliverability of the well or the reservoir.
Well, reliability.
Rod Skaufel (22:29.806)
Hmm.
So you could make a case that the value add of the ops and maintenance team is to keep it high up time and all that kind of stuff. But you're not making more oil and gas is my point.
But coming back to the broader, upstream company, I mean, you've heard the areas that I felt like were core work. I mean, do you agree? Disagree? mean,
So I think of it in terms of a bullseye. In the center of the bullseye, which is the most core, is all things subsurface. I think it is, in the beginning at least, drilling of the appraisal and the exploration of the development wells. I think it's about reservoir management and understanding the depletion plan and how the reservoir is depleting over time. I think then the next circle in that bullseye, in that annular space, is ops and maintenance. You can make a case for or against it.
Mm.
Rod Skaufel (23:16.003)
Yep.
Jon Krome (23:24.13)
The four is you get to control the timing of turnarounds and shutdowns. You get to control things like the safety culture and impart your level of risk tolerance to the operation itself, things like that. Then there's the third annual or space, so the third layer of the bullseye. And I think everything else is in there, which could be non-core work. Now, I think the part that's hard to define is does core work mean that it's a company employee?
Mm.
Jon Krome (23:55.03)
And I think that's as difficult a question about is what is core work itself. You've had a lot of core work be done by highly skilled, great contractors or consultants. You couldn't find the skill inside. They didn't want to work for you, whatever the case is. So I think the important thing in addition to the core work question is in source, outsource.
Yeah.
Rod Skaufel (24:16.874)
Yeah, I I've got a slightly different view. I think you could augment your team with contractors doing core work. There's something to be said about pride of ownership, pride of working for this company. We're all in this together. Not that you don't get that with contractors working within your team, but I've worked in various companies now.
And I think when you start growing non-employee jobs within teams, you start to lack that sense of ownership, pride. We're going to do whatever it takes. So for core work, for me, it's primarily employees as opposed to contractors.
Yeah, I would agree with that. I would agree with that as well. You take a look at that annual space and the very out procurement and HR and IT, it's necessary work. It has to happen. Can you take the company to the next level with better practices in those domains? I would say it's likely. It's difficult.
Yeah.
Rod Skaufel (25:33.858)
Yeah.
Would you like it if your HR department was some contracted entity? I don't think so. I mean, now you're dealing with people and when you're dealing with people, it's got to be an employee. can make it, oh yeah, that's non-core work. I don't know. I couldn't envision having an oil and gas company where...
Well, I mean, in many cases, so.
Rod Skaufel (26:06.543)
HR was not employee based.
So HR is a great example. I'd say in terms of the HR business partner, I think you're right. But HR has also got benefits, outsource. It's got talent acquisition, outsource. It's got aspects of talent development, outsource. So I think there are components of it that you could sensibly ask for help.
Mm-hmm.
Yeah.
Rod Skaufel (26:25.016)
That's Yeah, no, no, that's fair. Yeah, no, that's fair.
so HSE is an interesting one of those. I do think HSE has got to be in that bullseye has got to be in that core. let's take a look at some of the most profound accidents in our industry. This last 30 years, they've had a major impact, not just on the people involved, but on the performance of the company. It took years for Exxon to kind of recover from Valdez and, Piper alpha is still talked about today as a seminal.
Mm-hmm.
Rod Skaufel (26:56.364)
Mm-hmm.
Mm-hmm.
safety event that changed the industry. And, Texas City dragged the stock price down for some time. So these have real consequences. And I think HSE is in the center as well. What do you think?
Mm-hmm.
Rod Skaufel (27:14.222)
Well, I mean, you remember back in the day when we started, know, HSE was the HSE department. That was their job. That wasn't my job. That was their job. And through all the experiences that you just laid out, you quickly became a convert to say, HSE, that's a line job. That's an operations job.
My job. Absolutely.
That's an employee's job. The HSE department helps facilitate some of that, but the ownership sits with the line and any respectable oil and gas company, that's what you'll see. And I think that's, I think that's ingrained in the industry to tell you the truth. mean, it's, it's important and
It's a dangerous world. And people going home safely. That's a priority.
You
Jon Krome (28:17.622)
It has to be, right? I would you want your kid, I do, would you want your kid as an example, and we'll come to this later, but you want your kid working for a company, whether it's in our industry or not, for a company that doesn't value their life, that feels like they're disposable? Absolutely not, right? Yeah. And speaking of HSE, know, every executive, since there were executives, kind of pounds the table and...
Do you agree?
Rod Skaufel (28:33.578)
No, of course not. Of course not. Yeah.
Jon Krome (28:47.298)
kind of whines about excessive regulation and oversight and things like that. And oil and gas has got a bit of history in that behavior. What do you think? In the long run, does more regulation help or hurt our industry?
Rod Skaufel (29:13.08)
Look.
the larger, probably not even the larger, the good companies, they're gonna do what's right. Regulation is often for the companies that aren't gonna do what is right. So let's talk about methane emissions. Do you see any self-respecting oil company?
not collecting methane or venting as a regular practice, or is that just so ingrained that that's just good business? mean, do you need regulation for that? You do, because you got to make sure everybody's doing it. But if you got rid of that regulation today, with Chevron, with Exxon Mobil, with Hill Corp, with those companies, start
not collecting gas off the wellhead and just vet. Of course they wouldn't. I mean, it just, it's not good business. So I think there's areas of regulation that suck up time.
that need to be evaluated. mean, you remember when we worked in California and there were certain animals that prevented you from developing it and you'd have to do all these studies and, what were some of them? The kit box. It's like, what are we doing? That there's some element of excessive regulation that just doesn't make sense. could be, you know, maybe ought to be revisited.
Jon Krome (30:47.17)
The Kit Fox.
Rod Skaufel (31:03.608)
The regulation unto itself for me is really, it's not a dirty word because it's often there for the good of the company, the good of the employee, and the greater good, people. So I don't know, where's your brain around regulation?
So there's no doubt we can pick up examples that are quite silly, whether it was the Kit Fox or something like that. But to your point, this is about the public trust and almost every regulation is based on some extreme failure of a company to have violated the public trust, excessive venting, killing animals when they shouldn't, a poor use of land, the misuse of water resources, whatever the case is, those all became regulation. So I think in the bigger picture,
the more that we can maintain or improve the trust of the public, the longer our industry has to live. You we antagonize communities, we don't do the right thing, to your point. You know, that's when the friction occurs and we lose in that friction. That friction doesn't help us. It might feel good in the moment because we're pushing back, but what are we really doing in the long run?
Hmm.
Rod Skaufel (32:15.563)
Yeah.
Yeah. Yeah.
Rod Skaufel (32:25.846)
Hmm. Yeah, that's, that's a good point. Very good.
what do you think about AI right now in oil and gas? mean, my gosh, whether it's the stock market or all these data center projects or super intelligence, talk to me a little bit about where's your head at on AI and the oil field.
I mean, I don't think I can actually comprehend how powerful AI could be or could not be. I mean, I don't think it's been operationalized yet, but conceptually, you could see how it could be used. So let's talk about core work. So.
Mmm.
development plans. So you generate a development plan and you may use things from simulation to empirical results. So in shale, you've got thousands of wells and these are completed differently and they're in different quality of rock and you've got production histories on them.
Rod Skaufel (33:43.73)
And like when I was at BHP, we'd get all these kids out of school and these kids could grind on data and look for correlations in order to be able to optimize the development of the field, including how many wells, what type of spacing, what type of fracturing, how long the laterals are, envision that you could just have this all loaded up into some supercomputer that could go ahead and make
all of those correlations and couple it to simulation tools that give you a higher level of confidence around how to develop it at probably a fraction of the speed that it took all those engineers to grind out. You can see there's gonna be some capacity for that. Imaging, seismic imaging.
Again, you could see how a powerful tool like that could incorporate the latest technologies in order to be able to find the next Prud'O'Bay. On the operation side, know, hey, we've always tried to use automation in order to not only optimize
performance, but you know, also to optimize costs, reduce head count. Is AI going to replace workers in the oil field? I think there's an element of robotics that might, but there's clearly going to be a cost optimization that could happen there. So it's hard for me to project because
I probably have not seen it, what the true capability of it is. So I'm speculating on it.
Jon Krome (35:50.082)
This is all speculation, right? All of
But I mean, where's your brain on this?
So I'm going to divide it into two kinds of work. And for lack of a better term, I'm going to say the technical, which is kind of white collar stuff and non-technical and the technical. Think of everything it takes to develop a new oil field. You've to do the reservoir characterization. You've got to do the development scenarios. You've got to do the economic analysis. You can see.
that at the push of a button, if you had the data, it would do all those permutations and spit out the development plan in a few hours or less, right? And today, something like that takes months. Take the next step. and by the way, it's already spit out all of the drilling and completion programs for every well and state and got in every location. It's identified which vendors are probably the most capable and started to line up the schedules.
It's already started putting together the production plans for each of the years and the staffing plans. And by the way, it's already populated your ERP with the right maintenance strategies for all the equipment that you bought. So all of that technical work done.
Rod Skaufel (37:08.184)
So I don't need any white collar workers in the...
Well, you need somebody to manage the machine. You need experts that can help with the prompts, do a bit of QA, make sure it's looking at the right data and the output makes sense. But boy, it's a fraction of the people.
Do you think it's gonna be complimentary with a group of engineers and geoscientists, or do you think it's gonna just replace them?
I think somebody's always going to have to be at the controls. So I think it's going to mean that we're going to need a whole lot less people to do the work, but you're always going to need people to do the work. Now let's change gears and talk about the execution activities in the field, whether it's the drilling rig or the operation. think until so and think of automation has got really shades of gray today. We've got lots of automation. You push a button, a solenoid goes back and forth and opens a valve.
Yeah.
Rod Skaufel (37:44.11)
Mm.
Hmm.
Jon Krome (38:04.834)
That's automation. Well, automation on a drilling rig could look like that. And neighbors and H &P have started experimenting with those in big ways with great success. And the ultimate version of that is humanoid robotics. And at some point, companies are going to have to make a choice. Do I invest in lots of automation or robotics? An example would be long haul trucking. At some point, you're to have to make a choice.
Hmm.
Jon Krome (38:34.584)
Am I going to invest in a driverless truck like the Waymo taxis you see today? Or do I stick a humanoid robot in the driver's seat and let it do its thing? Right? Those are choices. And I think we're going to get there. Now that robot is another piece of machinery. It's not going to be cheap. It's going to make mistakes in the beginning. It's going to have to be trained and maintained. It's going to have to be div one class one safe and all that stuff. But
Mm.
Jon Krome (39:03.488)
It's inevitable that there's a future for robotics in the oil field execution world. It's inevitable.
Mm-hmm.
You can't get away from it. It works 24 and 7. It's tireless. It doesn't have to go home because there's been an emergency. It's not afraid of the rain. It doesn't get sick.
Jon Krome (39:28.194)
So it's coming. There's no way around that.
Yeah. Yeah. Which I mean, it's not the subject of this podcast, but the social implications of that world are massive. So.
It's huge.
It's huge. Now in industries where you can't find enough good people, it feels like a godsend. And there's aspects of our industry that can't get enough people. You look on the one ads any day of the week in the career sites and there's thousands and thousands and thousands of jobs open. But there's other places, not so much, where it's going to create some social upheaval you're describing. It's inevitable.
Hmm.
Rod Skaufel (40:04.61)
Mm.
All right, let's start winding down a little bit. What do you think the industry is getting right or getting wrong as we enter into kind of a more carbon conscious world? CO2, methane, whatever the emissions are. What do think we're getting right? Start with that.
Well, let's start with this. Is global warming real? And the answer is yes.
I find it surprising.
that certain people debate that topic. So what is the industry getting right? I think the industry recognizes that carbon emissions are detrimental to the planet and to the world, and that they're serious about trying to improve that.
Rod Skaufel (41:08.43)
And there's different technologies that are being experimented with that aren't necessarily commercial at this point. But all the major companies, they're putting major investment into, whether it's carbon capture, sequestration, hydrogen. I mean,
they're looking for alternative forms of energy that right now may not be economical, but in the long run will benefit the planet. So I think the industry in principle is serious about the environment. Do you agree?
I do agree. mean, there's an aspect of this. So I do. First of all, we're talking about it. And, you know, 25 years ago, no one cared unless you could smell it with, you know, it was H2S or something. People kicked open the valves or flared as much as they had to. I'm sure in South Texas, the tanks were being vented 24 and seven to to abandon with abandon today, you know, particularly around flaring and venting. That's
But what you think they're getting right?
Rod Skaufel (42:06.254)
Mm.
Rod Skaufel (42:11.171)
Hmm.
Jon Krome (42:23.304)
actually economic gas in most cases that could be resold. So there's a financial benefit to sell more and vent or burn less. In terms of emissions, I think there is a wreck.
Mm.
Rod Skaufel (42:34.894)
And you're not seeing the oil companies push back on, regulation around that. Why? It's the right thing to do. You can't be flaring in a community.
makes sense.
Jon Krome (42:48.268)
Yeah, my litmus test when I was in the field was, know, what I want to reside in this community given the environmental practices of that company. Could I live with the level of flaring and venting and all the other, you know, the water usage, water disposal? Could I live in that place? The answer is no. Then I got to take a look in the mirror and do something different to your point earlier. Do the right thing.
Mm.
Mm.
Rod Skaufel (43:12.376)
Yeah.
I think it's easy to kind of talk about them and that's their problem because I'm living in the big city. I'm living in Houston. It's all good. What do I think we're getting?
But what else is the industry getting right?
So what I think we're getting right, think we're emitting less. We're emitting less methane, we're emitting less CO2. Now the challenge on methane is tricky. You we've gone to much more gas. We're using gas in a variety of ways in power generation, but emissions along between the wellhead and the burner tip is not insignificant. Every little flange, every little regulator has got a little bit of vent to it.
And I've heard numbers up to 7 % of gas from the wellhead getting cemented. Let's say that's really off, but it's still a lot more methane than it could be. And that's a hard one to get around because of the design of the flanges and the regulators and all this other stuff.
Rod Skaufel (44:00.791)
Hmm.
Rod Skaufel (44:10.838)
Well, at some point you're chasing your tail to try to solve that problem. It becomes, it becomes uneconomic.
That's right.
Jon Krome (44:18.862)
Yeah, that's right. That's right. What do think we're getting wrong?
Rod Skaufel (44:27.15)
I'll ask you that question. What do you think we're getting wrong?
You know, this in and out, you know, as a global citizen, we go in and out of these agreements with other countries, top 30, and there's a variety of climate.
Yeah.
Rod Skaufel (44:49.21)
But that's a political problem. That's not necessarily an oil and gas company.
No doubt, but we're beholden to whatever the US commits and it rolls into regulation. know, that kind of commitment rolls down into a regulation that somebody has to actualize at some point. you know, forget about which administrations in as it goes from pillar to post. I don't like that.
Yeah.
Rod Skaufel (45:15.18)
Yeah, yeah. Again, I hear you and I'm trying to separate political issues from industry issues. Again, I think the industry in general is supportive of technologies that reduce carbon emissions. And I'm proud of that. I think the industry
recognizes there's alternative forms of energy that can supplement development plans, such as using solar in order to provide power to a plant or a wellhead or, you know, pick whatever type of operation you choose. But it's been effectively
done, you know, is nuclear like they're looking at for the data centers going to be a potential energy source to help power plants similar to what's been discussed about hydrogen. I mean, I just think the industry is very open to this type of discussion. And they should be.
And we've got great examples today where upstream operators are leveraging solar or wind to power their own facilities or wells and pads. West Texas is a great example. Now, scaling that to a business onto its own, like BP, clearly has been more of a challenge. Those are going to be wholesale utility returns. I'm not sure everybody kind of considered that ahead of time. So you're just not going to get
Mm-hmm. Mm-hmm.
Rod Skaufel (46:45.358)
Mm.
Jon Krome (46:56.11)
You're not going to be able to jump into a new business based on that. But I do think that fit for purpose technologies like that can be a great augmentation to an existing operation.
Yeah, so do you think we're at peak oil?
Boy, that's a tough one.
I think if we're not, we should be getting close. I think we'll see it in our lifetime for sure. Some of that is, you know, what's different than the theory, and I think it was Hubbard years ago developed, is that there are alternatives in the market to the fuel for mobility. you know, gasoline is now competing to a degree with the possibility of electric and hybrid vehicles. Because when that model was built, was always, you know, every car on the road
I mean, I thought we were in.
Rod Skaufel (47:36.003)
Mm-hmm.
Jon Krome (47:41.75)
was going to be gasoline powered. And that's really not the case anymore. So I think, you know, that it's not just about the production anymore. It's about the demand side that might actually have a bigger impact than we expected. What do you think? Are we there?
Yeah.
Rod Skaufel (47:54.69)
Yeah. I mean, that's an interesting question because I've always felt like we were going to see peak oil in our lifetimes, i.e. even when I was working. But then, know, the next, the next thing is found. then, know, the, obviously the shale revolution was the current game changer.
what's the next? And this is where evolving technology may discover the next big oil field. But I do think you raise an interesting point that alternative types of energy just prolongs that. what do you see oil and gas companies
evolving to or do they? Do you see them evolving to?
hydrogen or no, that's just supplemental to their core business, which is oil and gas. And, you know, part of it gets back to how much oil and gas is there's out there.
Because it's hard for me to project to say, man, is Exxon Mobil gonna be a great power company? I.e., we provide energy via, pick your technology, hydrogen, nuclear. I.e., that sounds like a utility that doesn't sound like an oil and gas company. Or no, we're gonna continue to explore.
Rod Skaufel (49:44.814)
Because oil and gas is so core to our economy and not just from an energy point of view. Think of all of the products that are made from oil and gas. I mean, it's literally everything in your house, on your body.
Yeah.
Jon Krome (50:00.33)
Everything. So yeah, something like third, some of the numbers vary something like 30 to 40 % of total petroleum products ends up in plastics or Coke or asphalt. And there's all these other products that can be replaceable, but boy, it would be hard and expensive to replace it. There's no easy replacement for plastics and poly and things like that today.
Mm.
Rod Skaufel (50:22.869)
mm-hmm, yeah
Rod Skaufel (50:29.378)
Yeah.
So there's an aspect of oil and gas that is not just mobility related, it's not just power generation related that we really don't talk about enough. So, all right, last question for you, Rod. Make a couple of predictions about what the future of the oil company looks like. You mentioned a few of those. Is it energy or is it just oil? But talk a little about some other things as well. Look into your crystal ball.
Yeah,
Rod Skaufel (50:52.088)
Say that one more time. Say that one more time.
What's the future Will Company look like?
Well, you described it as one filled with robots and AI. Yeah, I necessarily think that's what's going to happen. I think those tools will be complimentary to it. think it's going to be a leaner, meaner machine because of these technologies. so, you know, we talked offline around, hey, would you want your
Hahaha
Rod Skaufel (51:27.818)
son or daughter working in the oil and gas industry. And, man, I don't know, based on everything we just talked about, is it a shrinking industry? What's AI going to do with it? Boy, you could get into a big do loop on that, can't you, in terms of what industries would I be guiding my kids to? You remember when you thought computers were going to get rid of all the engineers and well, that didn't happen and just different types of work.
Got to have some faith that that's going to be done. you know, initially I'm like, I'm not sure I would have my kids head towards oil and gas, but you know, the more we've talked about it, like during this podcast.
I can tell you it was one of the best choices outside of my wife that I've made in my entire life. And I loved it. Loved everything about it. It's exciting. It's fun. You work with some super smart people and you just got to have some level of faith that that's going to continue to evolve. And is it an industry that has seen its better day? Probably not.
it's still probably a lot of light on the other side of that. that not necessarily the prediction you asked me for, but it kind of talked a little bit about, hey, would you want your kids going into this space? Very rewarding type of.
I think that that's a great place to end this conversation Rod. And I totally appreciate you spending the time here. And for the audience members, we will see you next time on Uncapped with Executive Roustabouts Take care everybody.
Rod Skaufel (53:20.242)
Uncapped. Thanks, John, for having me. It was fun. was good. Good going down memory lane a little bit.