The Pied Piper(s) … in Washington

ROBERT E. WARREN, President, Baclenna, Inc.

“When you don’t know what you’re doing, it’s best to do it quickly” – Jase Robertson, Duck Dynasty

“The integrity of the upright guides them, but the unfaithful are destroyed by their duplicity” – Proverbs

When considering a forecast for the next period, it helps to see where we’ve been during the last. By all accounts, the global production of hydrocarbons continues a healthy expansion on a relative basis, improving domestically with the advances of hydraulic fracturing, and offshore with increased efficiency in deepwater operations. Sounds good, so far.

The future for everyone working in the industry today should be solid, and one of the few bright destinations for the next generation of career-seekers. Personally, the oil and gas industry has been an amazing vehicle for my life journey, but my optimism needle is unsteady; here’s why.

The Plot. On a recent flight to Brazil, I got into the film Now You See Me about four magicians who mesmerize the audience with their sleight of hand. Enter the befuddled FBI, who cannot decipher the remarkable tricks, and the resulting theme: what we see is not what is really happening. Each event is a setup for the next, and the next will be more spectacular than the last. The plot keeps you guessing—and awake on an overnight flight.

Apply that implausible story line to the events we’re witnessing in this nation. Consider the notion: what we’re seeing now is not really the end game, but a setup for the next event. What’s really coming is in progress, but out of sight. Consider then, the definition of sleight of hand, and a forecast.

Sleight is dexterity or deceptiveness, and comes from a Norse word meaning cleverness, cunning, slyness, which defines where we find ourselves today with the elected and appointed leadership. The oil and gas industry is expected by a minority in power to keep the lights on for society by producing sufficient quantities of Btus from hydrocarbons, with minimum footprint and visibility. Call it hypocrisy on steroids because, as energy demand increases across both the developed and developing world, we should see headlines screaming for energy jobs, careers and the resulting bounty of taxable income—personal and corporate—that could be directed to bailing the deficit of our sinking ship of state. High unemployment? This industry is open for business. And, yes, returning veterans are very welcome to come aboard.

Analyze This. Only fools and con artists (non-gender specific) would deny the opportunity to provide immediate and long-term economic solutions through growth in the oil and gas industry, while sustaining our energy security. But the regulatory environment will become increasing restrictive, even as E&P companies, drilling contractors, service companies and industry associations work flat out to increase operational integrity, competence and environmental stewardship. Unfortunately, that work—and the notable results—is seldom recognized in the court of public opinion because of negative media attention, uninformed young people and a disinterested voting public. Expect more severe restrictions with leasing, permitting and environmental interpretation throughout the hydrocarbon recovery cycle.

Enter Iran. Consider an up-close-and-personal experience with applied sleight in international policy. While I was working in oil-rich southern Iran during the late 1970s, the Iranian Revolution was gaining momentum with the specific goal of paralyzing the source of the regime’s wealth. By mid-1978, we were told that the Shah was firmly in power, with solid support from the U.S. government and military. U.S. president at the time: Jimmy Carter. As the violence escalated and the killings began, we were instructed to continue life as usual with no need to plan for evacuation. The events that followed produced a life lesson in skepticism of government: don’t believe everything you are told, look for the money and observe whose interests are really being served (often not yours). Fast forward to our present dance with Iran to see a disingenuous explanation of a useless agreement, from an administration desperate for any show in the negotiations with Iranian leaders.

The Pied Piper(s). Our present administration and the elected representatives in government are, for the most part, failing miserably our people, our industry and our national security. The American people are expected to believe the narrative that the aggressive development of natural resources is not a cornerstone for the protection of our country, and only reaffirms the fact that fools and con artists have been entrusted with public policy (elections have consequences). The compass of leadership is broken, but those most impacted are not reading these words: our children and grandchildren who will reap the disastrous legacy of today’s policymakers. The original Pied Piper lured the children away, never to return. And sleight, sleight is at hand—and it continues.