oil and gas industry

Photo Credit: Chelsea Purgahn | Daily Texan Staff

Team Roden Analytics, a group of engineering students interested in entrepreneurship, is a competing finalist in the global British Petroleum Ultimate Field Trip competition in Houston in April. 

BP hosts the competition each year to engage with college students who may be interested in the oil and gas industry. UT students have reached the UFT national level the last two years, but none have yet to win the grand prize, an exclusive trip to Trinidad and Tobago.

Malvika Gupta, biomedical engineering junior and Roden Analytics team member, said she has already learned a lot from the competition, and she is glad her team has been exposed to the oil and gas industry.

“There will be teams from six other universities, including MIT, Penn State, Rice, A&M, University of Illinois Urbana–Champaign and the University of Oklahoma,” Gupta said. “Every team had to have a pretty great idea for them to have gotten this far, so it’s really hard to tell who our biggest competitor will be.”  

The competition began with a quiz designed to test the students’ knowledge of oil and gas. Students were then tasked with creating a workable solution for a realistic problem confronting those working in the oil and gas industry.

This year’s challenge involved creating a solution that would reduce surplus water produced from routine operations in an oil or gas plant and find an efficient use for that water. Teams then present their plans to three BP judges. The winning teams continued as finalists to the national competition in Houston.

The competition gives students an opportunity to gain real-world experience, according to Jason Terrell, a talent acquisition manager at BP.

“[The goal is] to provide students an opportunity to explore the industry, while, at the same time, enabling students to embrace new and exciting ideas head-on,” Terrell said.

College students from the U.S., the U.K., Canada and Angola participate in UFT, and winners from each country are selected to go on the two-week grand prize trip, where they are exposed to the mechanics of a BP operation.

Julia Harvie-Liddel, head of resourcing at BP, said she hopes UFT helps students start learning about the oil and gas industry and get a head start on their careers. 

“We hope that this will give students a real insight into our industry and show them a career in oil in gas is a platform from which they can make a real difference,” Harvie-Liddel said. 

After an insurgence of public doubt, UT has named a three-person panel to review geology professor Charles Groat’s research study on hydraulic fracturing, a gas extraction method. Groat failed to reveal ties to the oil and gas industry, violating UT standard procedure on outside employment.

The panel does not have a time limit for reviewing the study. Gary Rasp, a spokesman for UT’s Energy Institute, which published the study, said any consequences Groat may face for failing to reveal ties are still unknown and appropriate action will be taken by UT Provost Steven Leslie.

“Provost Leslie has agreed to follow the panel’s recommendations regardless of what the panel finds. We will wait to see the panel’s conclusions and recommendations, which will give us guidance on how to proceed” Rasp said.

The panel is made up of three experts from varying fields and includes Norman Augustine, a former CEO of Lockheed Martin, a U.S. company specializing in emerging energy capabilities; James Duderstadt, a University of Michigan science and engineering professor and Rita Colwell, former president of the National Science Foundation.

Leslie ordered the review after reports by the nonprofit Public Accountability Initiative revealed Groat was a paid member of Plains Exploration and Production, a Houston oil and gas company.

Hydraulic fracturing, or fracking, is the process of injecting sand, water and chemicals to harvest natural gas from shale beds underground. Groat’s study concluded there was no evidence to support that fracking led to the contamination of groundwater in the area.

“I ask that the panel assess the impact of Dr. Charles Groat’s failure to disclose his affiliation with Plains Exploration and Production both in the report and to the university,” Leslie said in a letter to Cowell in early August released to The Daily Texan. “Furthermore, I ask the panel to evaluate the impact Dr. Groat’s position as a member of the Plains Exploration and Production board of directors may have had on the substance of the report.”

Geological sciences professor William Fisher, a former dean of the Jackson School of Geosciences, said he does not believe this scandal will affect UT’s tier one research status.

“It’s hard to comprehend something that would constitute something so grievous as to affect tier one status,” Fisher said. “Tier one is built up from a lot of things, not just one particular publication.”

Fisher said a scandal where a professor takes money to alter his study is virtually unheard of.

“I’ve been here 52 years, and this is not anything I’ve seen,” Fisher said.

Lauren Birks, a research student in the McNair Scholars Program, which supports undergraduate student research to prepare them for doctoral work, has also never heard of an incident of this kind happening. If the panel finds that Groat did have a conflicting interest, Burks said she could see how that might tarnish UT’s image.

“I’ve never heard of a professor taking under-the-table money,” Birks said.

Election 2010

The election of the next chairman of the Texas Railroad Commission, the office charged with regulating the state oil and gas industry, will test whether more endorsements and experience can help one candidate overcome an even bigger handicap — the ‘D’ next to his name.

The race between Democrat Jeff Weems, a lawyer from Houston, and Republican David Porter, an accountant from Giddings, takes on added significance as the commission approaches review in the next legislative session by the Sunset Advisory Commission, which can make recommendations to overhaul or abolish ineffective state agency bodies. Hearings on the railroad commission end in November.

Since 1994, Republicans have been charge of regulating the Texas oil and gas industry, but after incumbent Victor Carrillo was upset in the Republican primary by the little-known Porter, Democrats began to view the seat as a statewide office that could potentially change hands. A UT/Texas Tribune poll released Monday shows Porter leading Weems 50 percent to 34 percent. In the poll, undecided voters were pressed to choose a candidate.

Low natural gas prices in the current economy could mean a slow down in drilling activity, said Justin Furnace, president of the Texas Independent Producers and Royalty Owners Association.
“Leadership is needed during the slowdown to fix issues at the railroad commission and find ways to encourage operators to invest in Texas,” Furnace said.

The UT System owns 2 million acres of oil and gas-rich land, about half of which are leased to companies for oil and gas exploration. Oil and gas prices affect the value of those lands to UT. Jim Benson, director of University Lands, said the UT System is in tune with the daily operations of the commission, which oversees drilling, pipeline leaks and other environmental issues.

“We work in concert with the railroad commission. We also have people looking after UT System institutions’ interest in the Permanent University Fund lands,” Benson said. “The railroad commission is a tremendous tool that we utilize.”

Small-percentage payouts from the Permanent University Fund pay for certain academic programs and other critical items at UT Austin and 16 other institutions in the UT and Texas A&M systems. According to the UT System’s quarterly prediction, recovering oil prices will greatly increase UT’s payout.

Weems, who received six major newspaper endorsements, said commissioners should fight for continued support of the agency so that it has the manpower to enforce environmental regulations. He said Republican commissioners brag about cutting their budget to the point that the body can’t do its job, which led to lax regulation and increasingly ignored safety issues in locations such as the Barnett Shale in North Texas.

“The field people could fix [environmental issues in the Barnett Shale] quickly, but instead the EPA and the TCEQ will come in, stumble around and do things that don’t fix the problem and screw up the job-creating aspect of the industry,” Weems said.

Weems has received $38,000 from lawyers and lobbyists. Porter has received $12,500 from the energy and natural resources sector. Carillo had received $168,000 from the energy and natural resources sector.

Porter said in the state’s present budget crisis, the commission will have to do more with less to maintain the regulatory functions of the commission and keep families near drilling activities safe. Porter said he looks at regulations from the point of view of people who have to comply with them.

“If they can’t comply with them, it doesn’t matter what it’s supposed to achieve,” he said. “Compliance is what’s going to achieve the safety goals that [the regulation] has got in mind.”

But Andrew Wheat, research director for Texans for Public Justice, said the railroad commission is a textbook example of a “captured agency,” a state agency beholden to the interests of the industry it is supposed to regulate. Current railroad commissioners have received 40 to 45 percent of their campaign donations from the oil industry, which he said is a “huge conflict” of interest. Donations from lawyers and lobbyists with interests in matters that the commission regulates is also a potential conflict of interest, Wheat said.