Here you will find the full versions of our articles… articles that appeared in truncated form in our October print edition of the magazine, in our “Drilling Deeper” department.
TABLE OF CONTENTS:
- Renaissance Man, in Retrospect
- Workforce Housing’s Unexpected Side Benefits
- eOilBoom.com Launches Oil and Gas Crowdfunding Platform
- Professional Development Getting Shortchanged
- RR Candidate Takes On Workforce Issue
“If you can’t figure out how to make the world work with 6 billion people, how are you going to make it work with 9 billion people?” —George P. Mitchell
There’s no doubt that, as The Economist opined recently, “Few businesspeople have done as much to change the world as George Mitchell.” Yet the story of George P. Mitchell, founder of Mitchell Energy and Development, which revolutionized the oil and gas industry with its refinement of hydraulic fracturing in the Barnett Shale, is a bit more complicated than that of the typical Texas oil and gas wildcatter’s.
Many may be surprised to learn that Mitchell, who passed away July 26 at the age of 94, was also an early believer in and supporter of environmentally friendly growth. Throughout his career, he applied his philanthropy and powers of persuasion to put the United States and the world on a more sustainable path.
Mr. and Mrs. Mitchell, and the Cynthia and George Mitchell Foundation, have distributed or pledged more than $400 million in grants to myriad causes, programs, and institutions—with a significant percentage of these gifts focused on sustainability science and environmental sustainability issues.
What follows is a collection of vignettes of Mitchell’s professional and philanthropic career, excerpted from obituary notices collected by the Cynthia and George Mitchell Foundation (website at cgmf.org). Taken together, these provide a glimpse into Mitchell’s life that show him to be an even more diverse, engaged, and public-minded man than perhaps most took him to be.
From David Crossley, in the Houston Chronicle:
Legend has it that, when the shocking MIT study called The Limits to Growth was published in 1972, George P. Mitchell… bought hundreds of copies and sent them to every member of Congress and the President. “I read the book and it just impressed the hell out of me,” Mitchell said. “It was a first wake-up call.
Mitchell threw himself into the global conversation, which had been cranked up by the Club of Rome, the sponsor of the MIT study.
He quickly became involved with the MIT team, including Dennis Meadows, Donella Meadows, and Jurgen Randers. Beginning with them, Mitchell organized the first of The Woodlands Conferences, which were staged in Houston at The Woodlands in 1974. It was called “The Limits to Growth: The First Biennial Assessment of Alternatives to Growth.”
“How well humankind manages earth’s resources, environment, and population will determine whether civilization advances or dies in coming years,” Mitchell said.
At the second conference, in 1977, Mitchell said “We knew that the Limits to Growth slogan was not exactly right. Because we knew there had to be limits on some growth, but not limits on other growth. And what we were seeking was the sustainability of our societies. This was the first time I ever heard of the expression.”
Mitchell lays claim to some degree of authorship of the sustainability language, including the term itself. Mitchell acknowledged that the term sustainability was already in use, but talked of the concept of “sustainable societies” as the idea that emerged from his conferences.
“After about two or three conferences I began to realize what we’re really seeking was the nature of sustainable societies, he said. “How could you establish sustainable societies when you have a rapid population growth?”
“Sustainable societies are those that are capable of reaching and then sustaining a decent quality of life for their citizens,” he said. “To achieve sustainability in the world there must be a balance between things like environmental degradation, deforestation, desertification, food availability, and other resources for the amount of people we have.”
Sometimes I think it’s ironic that the first global discussion of sustainability happened in Houston. And then I think that maybe it’s a good omen. Maybe we’ll begin to realize that George Mitchell was right about sustainable societies, as he was about a lot of other amazing things.
From a statement published by the National Academy of Sciences:
George Mitchell has made his mark as a renaissance American businessman and entrepreneur. As a young petroleum geologist and engineer in Texas after World War II, he realized that in the rush to find oil and drill profitable wells, big petroleum companies were often ignoring—even burning off as waste—another important energy source: natural gas. He set his sights on exploiting that underutilized resource and built his own industry powerhouse around it—the Mitchell Energy and Development Corp.
An early admirer of the work of design and ecology visionary Buckminster Fuller, the young CEO Mitchell helped sponsor the work of Dennis Meadows, whose Club of Rome study The Limits to Growth was a global wake-up call on the pressing need for sustainable energy technologies and food sources worldwide.
“[In the late 1960s,] I first became involved at the Aspen Institute with Buckminster Fuller, a tremendous mind,” said Mitchell. “I was intrigued with him and his concept that the Earth could handle only so many people… because I realized that his concept was right. Later, with Dennis Meadows and his study The Limits to Growth, we came up with a new concept. We talked about ‘alternatives to growth.’ Then we finally hit on ‘sustainable societies.’ What we were really trying to determine was, how could you establish sustainable societies when you have a rapid population growth?”
Mitchell has been equally concerned about unplanned urban sprawl in this country, much of it — he believes — fueled by “white flight” to suburbs in the 1960s and 1970s that threatened the very existence of central city cores. After visits to inner-city communities like Watts and Bedford-Stuyvesant, Mitchell turned his talents and resources to developing a master-planned city for residents of all incomes. His new town, “The Woodlands,” is located just north of downtown Houston. Today it is home to more than 70,000 residents. Its design, which will accommodate a total population of 150,000 and provide jobs for 75,000, has won awards for urban design, energy use, and ecology.
“What does sustainable growth come down to?” asks Mitchell. “Well, if you can’t make the world work with 6 billion people, what are you going to do with 9 and a half billion? How do we finally get enough collective organization and efforts in the next 10 to 40 years to really see how we resolve these issues?”
From a tribute by author Daniel Yergin:
George Mitchell started out after World War II with nothing except his brains and determination and a one-room office atop a Houston drugstore. But before Mitchell was done, he launched what has proved to be the most important innovation in energy so far this century. For Mitchell, who passed away at age 94, broke the code on shale gas and launched the unconventional revolution in oil and gas.
In Chapter 16 of The Quest, I describe how this all came about. In the early 1980s, Mitchell read a scholarly article saying that it might be possible to extract commercial gas from shale rock. Until then, people didn’t talk about “shale gas”; if it had any name, it was “uneconomic gas.” The breakthrough did not come easily. It took a decade and a half of conviction, investment, and dogged determination. In the face of great skepticism, Mitchell refused to accept no as an answer. The head of his development team told me that Mitchell “wanted us to figure a way” to get the gas out of a formation called the Barnett Shale. “If we couldn’t, then he would hire other people who could.”
The breakthrough on hydraulic fracturing came in the late 1990s. In 2003, Devon Energy, which had acquired Mitchell’s company, yoked it to another technology, horizontal drilling, but it still took another half decade before it all really took off. The impact is now clear—both in terms of energy and environment. United States natural gas production is up a third over the last decade.
Whether we achieve energy independence or get close to it is a matter of debate. But it is clear that one man’s determination – in this case George Mitchell’s – can have a very great impact and, in the process, overturn established opinion. And, in his case, it has, with all the debates, changed the way our nation thinks about energy.
From Adrian Woodridge, writing for The Economist:
George Mitchell was a one-man refutation of the declinist [“America is in decline”] hypothesis. From the 1970s America’s energy industry reconciled itself to apparently inevitable decline. Analysts produced charts to show that its oil and gas were running out. The big oil firms globalised in order to survive. But Mitchell was convinced that immense reserves trapped in shale rock deep beneath the surface could be freed. He spent decades perfecting techniques for unlocking them: injecting high-pressure fluids into the ground to fracture the rock and create pathways for the trapped oil and gas (fracking) and drilling down and then sideways to increase each well’s yield (horizontal drilling).
The result was a revolution. In an interview with The Economist last year Mr Mitchell said he never had any doubt that fracking might turn the American energy market upside down. But even he was surprised by the speed of the change. Shale beds now produce more than a quarter of America’s natural gas, compared with just 1 percent in 2000. America is on the way to becoming a net gas exporter. Traditional petro-powers such as Saudi Arabia and Russia are losing bargaining strength.
After studying petroleum engineering and geology Mr Mitchell served in the Army Corps of Engineers during the Second World War. On returning to civvy street he displayed a mistrust of big organizations—he made a career with Texas’s scrappy independents rather than with the local giants—and a gambler’s cunning. In his early days he struck a deal with a Chicago bookmaker to buy rights to a piece of land known as “the wildcatter’s graveyard,” and quickly drilled 13 producing wells.
His stubbornness was, though, his most important quality. Investors and friends scoffed, but he spent two decades poking holes in the land around Fort Worth. “I never considered giving up,” he said, “even when everyone was saying, ‘George, you’re wasting your money.’” Then, in 1998, with Mr Mitchell approaching his 80s, his team hit on the idea of substituting water for gunky drilling fluids. This drastically cut the cost of drilling and turned the Barnett Shale into a gold mine.
From Robert J. Samuelson, writing for The Washington Post:
For decades, geologists knew that huge reservoirs of natural gas and oil lay trapped in tight shale rock. The consensus was that tapping these supplies was too expensive. George Mitchell rejected the consensus. By the early 1980s, his own medium-sized company—Mitchell Energy and Development Corp.—faced shrinking reserves of conventional natural gas. If shale gas could be made to pay, his supplies and the company’s value would multiply dramatically.
Success took roughly two decades of trying different mixtures of highly pressurized water, sand, and chemicals to split seams in the shale and release the gas economically. But once Mitchell proved this, a bonanza ensued. From 2005 to 2012, U.S. natural gas production, which had been slowly declining, rose by one- third. Similar techniques of “fracking” and “horizontal drilling”—turning the drill pipe sideways along energy-bearing seams—were applied to oil with equally spectacular results.
“In just the last two years, oil production has increased by more than 2 million barrels per day (and 37 percent), from 5.52 million bpd [barrels per day] in July 2011 to 7.55 million bpd,” writes economist Mark Perry of the University of Michigan. The production surge, he says, equals “the entire oil output of Brazil” and erases the output drop of the previous two decades.
Our world has been upended. U.S. oil and natural gas imports are falling. Cheaper energy is helping U.S. manufacturing, especially petrochemical plants using natural gas as an input. By one (industry-financed) study, the oil and gas boom and its side effects have added 1.7 million jobs.
These narratives are worth retelling because they illuminate some bedrock sources of economic growth, jobs, and higher living standards. In 2012, Mitchell ranked 239th on Forbes’ list of the 400 wealthiest Americans with a net worth of $2 billion. It’s fashionable these days to disparage the top 1 percent as being “filthy rich” and, symbolized by Wall Street traders and hedge-fund operators, not contributing much to the common welfare. Whatever the truth of this stereotype, Mitchell’s life reminds us that many of the super-wealthy came by their fortunes the old-fashioned way: through patient risk-taking that also created huge social and economic benefits. Part of our problem today is that we don’t have enough of this.
The Ongoing Legacy
The book Limits to Growth inspired George Mitchell to take action and apply his entrepreneurial spirit to the issue of global sustainability. The book addressed the twin problems of population growth and resource depletion, concluding that the path forward at then-current rates of consumption was unsustainable. The first conference was held in 1974, with six more taking place over the next 28 years. Avant-garde for its time, the conference and its early participants are recognized as the pioneers of the sustainability movement.
Ralph Cicerone, president of the National Academy of Sciences, wrote to President Obama in late 2012, singling out Mr. Mitchell’s work in the field of sustainability science, stating, “Mr. Mitchell has consistently looked beyond the limits of others’ vision to see what could be.
“In 1996, Mr. Mitchell provided a $1 million grant to support an effort to create a sustainability focus at the National Academy of Sciences. This effort enabled a high-level interdisciplinary team of scientists, industrialists, and policy experts to examine the sustainability concept. The resulting book, Our Common Journey: A Transition Toward Sustainability, was published in 1999 and helped launch the sustainability science field.”
Mr. Mitchell followed his original gift with a $20 million endowment, making this new field of study a permanent effort at the National Academy of Sciences. He also founded the Houston Advanced Research Center, the non-profit research center aligned around the mission to operationalize the sustainability science approach in Texas. Today the Mitchell Foundation continues this legacy by utilizing the sustainability science framework to guide its strategy grantmaking programs.
For more on Mitchell legacy, both professional and philanthropic, go to cgmf.org.
Target Logistics, the largest turnkey workforce housing provider in the United States, has just released a white paper titled “Return on Sustainability: Workforce Housing for People, Planet and Profit” by Richard Rothaus, Ph.D.
“By addressing the triple bottom line of social responsibility, natural capital, and economic prosperity, well-organized workforce housing can be an important component of both short- and long-term business success,” Rothaus writes. A historian and archaeologist whose research focuses on human-environmental interaction, Dr. Rothaus is president of Trefoil Cultural and Environmental and a research associate at North Dakota State University.
Workforce housing that’s professionally managed, according to Rothaus, can assist companies in recruiting and retaining skilled workers, as well as insulating workers from the daily life disruptions that are common in areas with insufficient or nonexistent infrastructure.
“Our company is committed to being a leader in environmental sustainability, both in the way we carry out our operations and in the products and services we offer,” says Target Logistics Founder and CEO Brian Lash. “A return on sustainability is important to us. We strive to reduce our carbon footprint, operate as efficiently as possible and minimize waste production.”
Reusable modular structures offer a green building solution for housing, and have built-in conservation and cost-saving features. Rothaus explains, “By providing an independent and largely self-sufficient infrastructure, such accommodations can significantly reduce negative impacts on smaller communities caught up in rapid industrial development.”
Target Logistics, an Algeco Scotsman company, operates 16 properties in the North America housing some 5,000 oil, gas and mining workers. It is the largest turnkey workforce housing provider in the United States, with administrative headquarters in Boston; operational headquarters in The Woodlands, TX; and offices in Williston, ND; Denver, CO; Edmonton, AB; and Sydney, AU. The company provides customized site design, construction, operations, security, housekeeping, and catering for temporary workforce lodging, mobile crew camps, and extended-stay hotels. Named by Inc. magazine as one of “America’s Fastest-Growing Private Companies,” Target Logistics offers innovative housing solutions in the world’s most remote locations. Visit www.TargetLogistics.net or call (800) 832-4242.
White Paper Executive Summary
Well-organized workforce housing can be a valuable partner for companies pursuing their sustainable development goals, as well as a component of long-term profitability. Such housing can assist companies in recruiting and retaining skilled workers, as well as insulating workers from the daily life disruptions that are common in areas with insufficient or nonexistent infrastructure. Reusable modular structures offer a green building solution for housing, and have built-in conservation and cost-saving features. Workforce housing also can offer essential services that reduce the environmental footprint of company operations, including wastewater treatment and transportation services. By providing an independent and largely self-sufficient infrastructure, such accommodations can significantly reduce negative impacts on smaller communities caught up in rapid industrial development. By addressing the triple bottom line (TBL) of social responsibility (people), natural capital (planet) and economic prosperity (profit), appropriate workforce housing can be an important component of both short- and long-term business success.
The white paper can be downloaded for free at http://www.targetlogistics.net/white_papers.php.
The website eOilBoom.com, which bills itself as the first oil and gas crowdfunding platform, officially launched at Summer NAPE in Houston, Texas. The organization’s proprietary and patent-pending platform unites oil and gas deals with accredited investors. The entire process from the due diligence of a deal to completing the transaction will take place on eOilBoom.com’s funding platform, according to the company’s CEO, Rodney D. Giles.
“We finally have created a platform where the masses have the opportunity to invest in an alternative investment such as oil and gas instead of continuing to only invest in the traditional volatile stock market. eOilBoom.com’s oil and gas deals can potentially provide larger and more stable rewards for our investors,” said Giles in a prepared statement.
He went on to say that eOilBoom.com has been working for months with their in-house development team and outside legal counsel on figuring out the right method to make this platform work correctly. Giles remarked, “Our platform is unique because typically an investor is only able to buy into an ownership of a holding company such as a LLC or LP, with our funding platform, our investors will have direct ownership through a working interest in a lease or through a direct mineral or royalty ownership.”
“We understand each investor has a different risk tolerance and with eOilBoom.com we provide both drilling prospects as well as long life production deals providing investor a wide variety of investment choice based on the investor’s risk profile,” says Giles.
According to a new study released by ESI International, a leading project management training company, project managers are being trained in fewer skills compared to 2012—by as much as 20 percent. The researchers found, however, that organizations committed to applying training on the job and measuring its impact on job performance deliver projects on-time and to-budget more often than organizations without training adoption in place.
“The across-the-board decrease in project management training is a disturbing trend that organizations need to reverse,” said J. LeRoy Ward, ESI executive vice president. “Not only is it detrimental to the professional development of project managers, it has a direct, negative effect on project execution, which impacts an organization’s bottom line and its ability to satisfy its customers.”
ESI’s latest annual benchmarking study, “The Global State of the PMO: An Analysis for 2013, shows that having a project or program management office (PMO) tasked with training and learning sustainment, among other responsibilities, positively affects training levels and project outcomes.
According to the study:
Methodology and Tools Training:
In 2013, 62% of workers who report up to a PMO said they receive training in using methodology and tools. That is a decrease from 75% in 2012.
Less than half (47%) of non-PMO managed workers received methodology and tool training in 2013, down from 68% in 2012.
Soft Skills Project Training:
A very low 30% of PMO-managed workers said they receive soft skills training (e.g., leadership, critical thinking, team building) down from 41% in 2012.
Only 22% of non-PMO managed workers received soft skills training in 2013, compared with 35% in 2012.
“While these training numbers reveal a decline in project-focused training, the survey underscores the importance of training and its direct correlation to project success,” said Ward. The study found that 56% of respondents who are part of PMOs that are active in measuring training impact and learning sustainment said more than 75% of projects were delivered on time, to budget, within scope and to customer expectations. That number plummets to 39% for those whose PMOs are not active in either.
The Global State of the PMO annual survey seeks to investigate the evolving role of the Project/Program Management Office (PMO) in training and development, its level of maturity and value for the overall business. This year’s survey also examined the role that Agile plays in the PMO. The survey was conducted from March to April 2013 with responses from over 2,300 project management professionals worldwide.
Download a copy of The Global State of the PMO: An Analysis for 2013 by clicking on the highlighted link.
Former State Representative Ray Keller, conservative Republican candidate for Railroad Commissioner, recently announced that “A key issue I plan to discuss with the people of Texas in this campaign is the great need for insuring a plentiful workforce in the petroleum industry.”
As Keller remarked, “In going around the state, it is apparent the continuation of our present energy boom is only as viable as is the growth of jobs to support it. Workforce development is a key component of continued energy development. We can have all the technological advancement we want but the industry can only grow as much as the trained workforce supporting it. The industry and some of our schools are doing a good job but it is also a matter of educating our students that their future, even at entry levels, looks bright and promising in the oil and gas fields.
“We are fortunate technology is leading the energy boom going on in Texas. It is also giving way to the jobs supporting it requiring substantially more technological training. The days of the roughneck in the oil field have given way to robotics, fiber optics and computers. On-the-job training alone will not be sufficient. Estimates also are for every petroleum job created there are four additional jobs created to support it. This is a great opportunity we need to get a handle on right now.”
Keller added: “I intend to take the lead and bring together an Advisory Board of industry, vocational schools, education leaders and other parties to work together to keep this need at the forefront of discussion. As a former Texas State Representative I can work with the appropriate Legislative committees to encourage more skilled employees in the oil and gas industry through training in our schools.”
A fourth generation Texan, Keller said he wants Texas to lead the nation in trained, skilled energy job applicants. “I am excited to take on this challenge and look forward as Railroad Commissioner to selling these opportunities as a career move,” he said. “I am especially excited this is a great opportunity for our veterans who are increasingly trained in the most advanced technologies and a positive for other vocational jobs like welders and truck drivers. Our energy independence and national security is only as good as the workforce supporting it. Our Texas economy depends on it.
Keller recently retired from a business career in the public safety sales industry. He served in the Texas Legislature from 1979 to 1987. Currently he lives in North Richland Hills with his wife Carol and two young granddaughters.