FUELING UTAH’S GROWTH AND PROSPERITY THE OFFICIAL PUBLICATION OF THE UTAH PETROLEUM ASSOCIATION PUB YEAR 3 | ISSUE 2 UPDATE Utah Outlook Page 10
When it comes to getting influential lawmakers, regulators, and their staffs to hear you, there’s only one way to do it right: hire a Government Affairs Specialist. A Government Affairs Specialist does what many companies and organizations can not. They have the experience necessary to find the best solutions, as well as having essential knowledge about the legislative process, and most importantly, they can access the decision-makers who control the process. Pia Hoyt is a law firm with a hyper-focus on achieving our client’s goals. JT Martin is the Government Affairs Specialist at Pia Hoyt. His wealth of experience includes holding elected office, multiple political appointments, and over 10 years in the energy services field. Mr. Martin’s experience combined with the resources of Pia Hoyt will help you meet your policy and regulatory objectives so you can focus on what you do best – producing energy. You can move pipe. You can move earth. But you need someone that can move policy. piahoyt.com To find out if your organization can benefit from a government affairs specialist, contact JT Martin at 801-350-9000.
R I G H T P E O P L E + R I G H T T O O L S = E X C E P T I O N A L R E S U L T S MAINTENANCE • TURNAROUNDS • SAFETY SERVICES TURNUP PERFORMANCE Michael Wolf 714.450.2845 mwolf@aegion.com Rhett Dixon 360.300.7482 rdixon@aegion.com
04. WHO WE ARE 05. PRESIDENT'S MESSAGE RIKKI HRENKO-BROWNING According to a GEO ExPro Magazine, in 1857, a man named Preston Barmore lowered gunpowder into a well at Canadaway Creek, NY, and dropped a red-hot iron down a tube, resulting in an explosion that fractured the rock and increased the flow of gas from the well. 06. APPRENTICESHIP UTAH Utah is recognized as business-friendly for many reasons, such as the economic outlook and an educated workforce. But as the U.S. ages, older workers retire and graduating high school seniors continue to opt for something other than learning a trade. Summary FUELING UTAH’S GROWTH AND PROSPERITY 09. SAVE THE DATE Stroke of luck charity golf mixer. 10. UTAH OUTLOOK The U.S. has had a difficult couple of years because of the COVID-19 pandemic, the pandemic recession and a larger-than-expected cohort of retirees. 13. UPA SHOP WITH A COP AND HOLIDAY VOUCHER PROGRAM The 2021 year is over, but that doesn’t mean we are done trying to serve and help others. 14. UPA ANNUAL MEETING We hope you will join us for our annual meeting, rescheduled from January to March 24th and 25th. 10. UTAH OUTLOOK UPDATE 2
16. REGULATORY UPDATE — SPOTLIGHT ON AIR Given our state’s ozone challenges, UPA has been working collaboratively with our regulators anticipating rulemaking in support of a forthcoming State Implementation Plan (SIP), both for the Wasatch Front and the Uintah Basin. 18. SAFETY AND ENVIRONMENTAL AWARDS The Utah Petroleum Association is proud to announce our inaugural Safety and Environmental Awards, with winners to be announced at the 2022 Annual Meeting. We know there is so much good work going on, quietly, under the radar that does not seek recognition but rather happens because it ’s the right thing to do. REGULATORY UPDATE — SPOTLIGHT ON AIR 16. 22. BUSINESS LISTINGS 23. THANK YOU CHAIRMAN'S CIRCLE MEMBERS 25. WELCOME NEW MEMBERS ©2022 Utah Petroleum Association (UPA) | The newsLINK Group, LLC. All rights reserved. UPDATE is published four times each year by The newsLINK Group, LLC, for the UPA and is the official publication for this association. The information contained in this publication is intended to provide general information for review, consideration and education. The contents do not constitute legal advice and should not be relied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of the UPA, its board of directors, or the publisher. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service advertised. The UPDATE is a collective work, and as such, some articles are submitted by authors who are independent of UPA. While UPDATE encourages a first-print policy, in cases where this is not possible, every effort has been made to comply with any known reprint guidelines or restrictions. Content may not be reproduced or reprinted without prior written permission. For further information, please contact the publisher at 855.747.4003. UPDATE 3
The Utah Petroleum Association (UPA) is a Utah-based, statewide petroleum trade association representing companies involved in all aspects of Utah’s oil and gas industry. We exist to serve our member companies and advance the responsible development of Utah’s natural resources and manufacture of fuels that drive Utah’s economy. Mission Statement Josh Jemente, HollyFrontier Josh Demorret t , ConocoPhillips (Chair) Spencer K imbal l , EOG Resources Cameron Cuch, Uinta Wax Macey Wal lace, Ovintiv Executive Committee Mike Plat z , Silver Eagle Refining Blai r Blackwel l , Chevron Mike Swanson, Big West Oil (Vice Chair) Kr is ten L ingley, Caerus Oil and Gas Brad Shafer, Marathon Petroleum Who We Are UPA Administrative Staff & Office Jennet te K ing, Administrative Assistant Rikk i Hrenko -Browning, President Lauren Brown, XCL Resources 4 UPDATE
President’s Message Rikki Hrenko-Browning We are proud of our seat at the table because we represent you. According to a GEO ExPro Magazine, in 1857, a man named Preston Barmore lowered gunpowder into a well at Canadaway Creek, NY, and dropped a red-hot iron down a tube, resulting in an explosion that fractured the rock and increased the flow of gas from the well. This is widely regarded as the first attempt at hydraulic fracturing, and, with the benefit of hindsight, it ’s almost comical in its blunt force. Technologically, we have come a long way in the ensuing 164 years of oil and natural gas development, an evolution and staying power I attribute to two main factors. The first is the world’s continued need for the products we produce. In addition to heating our homes and cooking our food, natural gas is critical in ensuring our hospitals have the reliable, consistent, and affordable energy that powers ventilators and all other lifesaving technologies on which we rely. In terms of convenience, natural gas provides the necessary fuel for running the servers that allow 24-hour shopping from your couch, monitoring your investments (including the new developments in cryptocurrency), or playing a game with someone on the other side of the world. Oil is not only used in the vast majority of our transportation fuels but is refined into thousands upon thousands of products we all use every single day. The second reason for the staying power of oil and natural gas is our industry’s continued and relentless ability to adapt. Regarding the global pandemic specifically, I cannot imagine anyone of us thought we would continue to deal with the virus’s remarkable (and annoying) staying power resulting in repeated disruptions to our preferred way of doing business. Yet, here we remain, constantly adapting. We have stepped up when our citizens have needed us most. The United States is on track to be the lead producer and exporter for oil and natural gas in 2022 once again despite working under a federal administration that has made no secret of its desire to transition away from fossil fuels. Development opportunities are not as abundant now as they were under other federal administrations, but the industry grows and thrives thanks to continued innovations, efficiency gains, and new operational methods. This is all related to the upstream development of oil and gas. I haven’t even touched on downstream oil and gas, which, when you consider doing more with less, American crude refineries deserve their wing in the Hall of Fame. The last refinery built with significant downstream unit capacity was built in Garyville, Louisiana, in 1977. Yet virtually every refinery in the country has figured out a way to increase their efficiency, maximize output, and increase capacity to meet the robust production growth of upstream producers and market demand for their products without adding new facilities. Refiners are the very definition of doing more with less. Locally, the Utah Petroleum Association is dedicated to finding creative solutions to complex problems like air quality, water scarcity, climate change, labor shortages and more. Many of these topics are touched on later in this edition of Update, which is why we dedicate space to our environmental awards and highlight companies who have thoughtfully and creatively addressed the challenges we face. We sometimes receive criticism from opponents of oil and natural gas for continuing to come to the table and offering solutions for the problems that face us. Everyone is entitled to their opinion about the best path forward, and we certainly welcome any honest dialogue about proposed solutions. But we make no apologies for utilizing our resources, following the data, seeking collaboration, or providing a path forward that we believe works most effectively for the vast majority of Utahns. We are proud of our seat at the table because we represent you. The oil and gas industry does not resist change; we embrace it. Just as we no longer drop gunpowder and red-hot irons down our well shafts for hydraulic fracturing, we know the industry of today will not look like the industry of tomorrow. That ’s why our focus in the 2022 legislative session and beyond is seeking collaborative, creative solutions to the issues we all care about. We choose to look forward to the year ahead with cautious optimism, and we hope you do, too. We have a track record of rising to any challenge that meets us, and we have no reason to believe we won’t again. 5 UPDATE
Apprenticeship Utah A New Initiative: 6 UPDATE
Continued on page 8 Utah is recognized as business-friendly for many reasons, such as the economic outlook and an educated workforce. But as the U.S. ages, older workers retire and graduating high school seniors continue to opt for something other than learning a trade. Old solutions and strategies have become ineffective, and too many job openings for skilled work go unfilled. The Rural Water Association (RWAU), which consists of public and private water and wastewater systems in cities and municipalities, noticed a big gap in the number of workers retiring as opposed to the number of new employees it was able to hire. To help fill this gap, RWAU worked with the Department of Labor, Office of Apprenticeship and Workforce Services to set up two apprenticeship programs and now serves as an intermediary between potential apprentices and its membership base by providing classroom instruction and support throughout the process. Business needs are fluid, and learning new skills is a prerequisite to being employable. Utah’s business owners were reminded of how fast shifts can occur when the pandemic recession hit and some of Utah’s major industries found their revenue sources disappearing. In October 2021, Utah’s unemployment rate was 2.2%, the lowest rate ever recorded. That means about 37,400 Utahns are unemployed. The job growth rate has been 3.7% over the last 24 months, but companies have cumulatively added 58,500 jobs since October 2019. These numbers tell us Utah jobs are growing more than before the pandemic, but participation levels are less than pre-pandemic. Many people have shifted career paths, or some are reluctant to enter the job market again. And this shortage of potential skilled workers does not help businesses deal with the current skilled labor shortages. How can the state help businesses meet the current shortfall of skilled workers? Apprenticeships can be a good tool business owners can add to their repertoire of recruitment and retention strategies. Apprentices benefit by being trained for work, getting paid, and ending with nationally-recognized credentials. The state launched Apprenticeship Utah, an initiative through the Department of Workforce Services designed to increase awareness and participation in apprenticeship programs by employers and future apprentices. Utah’s first comprehensive website, apprenticeship.utah.gov, connects employers who offer apprenticeships with potential employees. Melisa Stark, Commissioner of Apprenticeship Programs in Utah, participated in a seminar about the program held Nov. 16, 2021, during the seventh annual National Apprenticeship Week (NAW). The information in this article is from her presentation and the program’s website. Apprenticeships are a tried-and-true training system combining paid on-the-job learning with formal classroom instruction. On-the-job learning is done at the same time as post-secondary education. Hiring an apprentice allows apprentices to prepare themselves for highly-skilled careers more quickly than would be possible otherwise. Everyone wins. Thanks partially to the pandemic, apprenticeship programs have increased throughout the country because they allow employers to find and train employees for highly skilled work. The number of programs nationally has increased 70% over the last 10 years. There are now almost 26,000 programs with more than 636,000 apprentices training throughout the country. Additionally, the retention rate for employees who complete their program is 92%. After program completion, the average wage for employees is $60,000 per year. Apprentices earn $300,000 or more during their careers than those who don’t participate in an apprenticeship program. The U.S. Department of Labor recognizes approximately 1,200 occupations as suitable for an apprenticeship. And Utah has seen a 25% growth rate in the last year for youth apprenticeships (for people ages 18-24). Utah already offers apprenticeships in many industries. Although most people think of construction apprenticeships, they also work for other industries, including I.T. and health care. Common elements are found in high-quality programs, such as the apprentice is paid to learn in a structured, on-the-job setting. A skilled employee teaches the apprentice, and the program includes related information presented in class. The apprentice’s developing abilities are assessed against established skills and competency standards, and as the apprentice gains experience and skill, wages are increased to match. And finally, the program ends with an industry-recognized credential, certificate or degree. If you have an apprenticeship program, you put yourself in a position where you can control the training for new employees. That makes these programs a valuable resource. Most Utah apprentices are in the 25-34 age group, but the state hopes to attract more people who are just graduating from high school and are ready to enter the workforce. They want high school graduates to know enough about the program to make informed decisions about their direction after high school instead of defaulting to postgraduate schoolwork or low-wage jobs. Pre-apprenticeships and youth apprenticeships can give a foundation as early as junior high school. Pre-apprenticeships might also be a good choice for people changing industries or returning to the workforce after a long absence. There is a marked difference between an internship and an apprenticeship. Think of internships as “try before you buy” and apprenticeships as “train to retain.” Internships are short and don’t usually carry the possibility of long-term employment. And, internships may or may not involve credentials and mentors. However, with an apprentice program, you are investing in the apprentices. They are taught in a formal setting that leads to gaining the appropriate credentials, and they are under the direction of a mentor They are employed officially and continue to be employees after completing their training. And, the national retention rate for apprentices is 92%. With an apprenticeship program, there are several benefits and returns on investment you can expect. An apprenticeship program is a way to create a skilled workforce where the skills are flexible, and training can be customized to your specific work environment. Apprentices learn best practices and your culture from the very beginning. Employers report that apprentices often outperform market-recruited employees. 7 UPDATE
Continued from page 7 Apprenticeships can help with future staffing needs, especially if you allow current employees to participate. A few technical or leadership skills can make all the difference for them. When you are allowed to do so, take part of your reimbursement funds and put them back into apprenticeship programs for new employees so they won’t have to wait before starting a program. With an apprenticeship, you often build company loyalty. Participants know they are valued and are making a contribution. They are more likely to stick around, so turnover is reduced. Also, it is an effective way to build diversity. Low-wage, high-turnover jobs are often the first to disappear in a downturn and the last ones to return to jobs, too. Companies that recruit certain populations can diversify their workforce through apprenticeship programs. Having apprenticeships often makes companies more productive, profitable and innovative. Mentors appreciate the opportunity to share the skills they’ve learned, morale improves throughout the company and employers can identify people who may be well-suited for growth within the company, whether as a manager or someone with valuable skills. According to Nicholas Wyman, CEO of the Institute for Workplace Skills and Innovation (IWSI) America, employers can earn a 36% return on investment because of apprenticeship training. For context, S&P 500 companies usually see an ROI of 10%. Companies with apprenticeship programs have said that every dollar spent returns $1.50 because of increased productivity, innovation and reduced waste. And companies with apprenticeship programs have access to federal and state funding. If you consider starting an apprenticeship program, an obvious starting point is filling current needs. But building a pipeline of potential employees is important so you won’t have the same shortages five years from now. Apprenticeships can help with future staffing needs, especially if you allow current employees to participate. A few technical or leadership skills can make all the difference for them. When you are allowed to do so, take part of your reimbursement funds and put them back into apprenticeship programs for new employees so they won’t have to wait before starting a program. Everyone benefits when businesses have apprenticeship programs to train potential employees and existing employees. From the Department of Workforce Services’ viewpoint, the goal is to expand the employee pool, a strategy that helps employers and potential employees. Apprenticeships can help disadvantaged and marginalized workers reengage with the job market after the pandemic and gain the necessary skills for a successful career path. During the pandemic, employers saw an unusually high number of skilled employees who retired and had problems replacing them. Enlarging the pool of potential employees helps with that. Enlarging the pool means increasing diversity, and Utah’s businesses have plenty of room for that. Over 4,400 people are currently active in Utah’s apprenticeship programs. More than 1,668 started their apprenticeship in 2021, and 29 new programs started the same year. As stated previously, most apprentices (1,894) are in the 25-34 age group. (For 18-24, the number is 1,187, and for those older than 35, the number is 1,140.) Some 8% are veterans. By gender, about 3.2% are female, and 96.8% are male. Most are white, but a larger percentage of minorities are generally participating than in the state’s population. Apprenticeship programs can cause a cultural shift in companies, especially in their diversity, equity, inclusion and accessibility (DEI&A) efforts. Instead of viewing apprenticeship programs that support DEI&A efforts as a form of charity, they discover the programs are a business investment. And by cultivating talent, employers move from a transactional approach that consumes talent to an ongoing collaboration that co-produces talent. Employees gain general skills and company-specific skills. Apprenticeship Utah actively provides how-to information to the business community. The program’s leaders understand that new programs can require businesses to form partnerships with local schools, including high schools. They also know businesses may need guidance about how to create a program. If you have additional questions, contact Apprenticeship Utah at apprenticeship.utah.gov, by email at apprenticeship@utah.gov or 801-707-3549. 8 UPDATE
DELIVERING EQUIPMENT SOLUTIONS • Reach Forklifts • Boom Lifts • Light Towers • Welders • Generators • Carry Deck Cranes • Industrial Tool & Much More! RENTALS I SALES I SERVICE 5050 West 150 South, SLC, UT 84104 801.596.2300 I www.mywse.com Serving Utah, Wyoming, Idaho, & Nevada EQUIPMENT All members and non-members are welcome to join us for our free monthly virtual lunch and learn which take place the last Tuesday of the month at noon. Register on our website at utahpetroleum.org/lunch-and-learn/. Sponsorship opportunities are also available for a very modest cost. Join us for the UPA Lunch & Learn! 9 UPDATE
The U.S. has had a difficult couple of years because of the COVID-19 pandemic, the pandemic recession and a larger-than-expected cohort of retirees. Compared to other states, though, Utah has done remarkably well during this challenging time. Utah outperforms other states and is a model for getting things done. • When it comes to recent growth, Utah and Idaho are battling for the No. 1 spot in the country. • States like California are financially in the red; Utah is not. • Between September 2019 and September 2021, Utah’s job growth was at 3.4%. The worst state for job loss was Hawaii (-12.6%), and the nation as a whole was at -2.5%. • As a direct result of California’s current problems, many people have left it for other destinations, especially in the Intermountain West. Utah and Idaho are two of those popular destinations, as is Texas in the southern part of the country. • Utah’s median age is the youngest in the country. That 3.4% increase in jobs is great news, but it doesn’t tell the whole story, either. Different industries within the state have had very different situations over the last two years. • Natural resources and mining dropped -12.6%. • Leisure and hospitality dropped -2.3%. • Government employment dropped -2.2%. In contrast, other industries increased, sometimes dramatically. Five industries had the biggest employment gains: • Construction increased the number of employees by 10.8%. • Financial activities employment increased by 8.7%. • Professional and business services increased by 6.8%. • Manufacturing increased by 6.4%. • Trades, transportation and utilities increased by 6.1%. Another interesting way to look at Utah employment is by looking at the unemployment rate, adjusted seasonally. Utah has an unemployment rate of 2.4%, compared with the national rate of 4.8%. On a county-by-county basis, Cache County has the lowest unemployment rate (1.5%), and Garfield has the highest (6.2%). The eastern and southern counties in the state generally have higher unemployment rates than the northern and western counties. If you Utah Outlook 10 UPDATE
look at the state’s eastern border, the numbers from the U.S. Bureau of Labor Statistics are as follows: • Daggett (3.5%) • Uintah (4.1%) • Grand (4.2%) • San Juan (4.9%) • On the state’s western side, nothing is higher than 2.3% (Tooele, Iron and Washington counties). In the central northern counties, where so much of Utah’s population lives, the numbers are relatively low, too: • Davis (1.9%) • Salt Lake (2.2%) • Summit (2.2%) • Utah (1.8%) In November 2021, economist Ken Simonson talked about some specific concerns within the construction industry: • The vaccination rate is 53% for construction workers and 81% for other occupations. • The industry has relied on paying premium wages compared with the private sector, but the gap between them has gotten smaller. Why has the gap gotten smaller? The private sector has had to increase wages to attract and retain employees. How small is it? The premium used to be 10-23% higher for production and nonsupervisory employees within the construction industry. Currently, it is less than 18%. Taking a broader view of the gap, it used to be 9-12% for all employees, but now it is less than 12%. According to Ken Simonson, uncertainty about the future may result in a slower economic rebound. Cost and supply shortages can lead to project deferrals, and even though the infrastructure bill will bring new funds to Utah, it will take time to award those funds to individual projects. He expects a permanent shift from retail distribution to e-commerce, increased focus on green energy accompanied by a reduction in drilling and pipeline construction, and more specialized building for health care. He thinks there will be fewer hospitals and nursing homes. Other long-term changes are not yet clear. What are the reasons for Utah’s success? Natalie Gochnour, the associate dean and director of the Kem C. Gardner Policy Institute, has said several factors are responsible: • Demographic cushion: According to the 2020 census, Utah is growing. Between 2010 and 2020, the percent increase in Utah was 18.4%. The other fastest-growing states were Idaho (17.3%), Texas (15.9%), North Dakota (15.8%) and Nevada (15.0%). Although the state’s population change was less in 2020 than in 2019, the 2020 increase of 40,508 was still good. The lowest year was 4,000 in 1964. (Numbers about population changes are from the Utah Population Estimates Committee and the Utah Population Committee.) • Youthful workforce: According to the 2019 American Community Survey 5-Year Estimates collected by the U.S. Census Bureau, the median age in Utah is 30.8. That ’s good because young people tend to be healthy, inexpensive to insure and techsavvy. The highest median in the nation belongs to Maine (44.7). Florida’s median is 42. According to the 2010 census, looking at Utah’s median age by county, the central-southern part of the state tended to have the highest medians. • Location: The USDA Economic Research Service and Kem C. Gardner Policy Institute have found that most people like sunny, warm winters, temperate summers and low summer humidity. They also want topographic variation and water areas. Like most of the western half of the U.S., Utah’s score is above average or high on all these measures. Utah is the Crossroads of the West and has access to four interstate highways: I-15, I-70, I-80 and I-84. The state also offers substantial amenities: the Mighty Five national parks, 41 state parks, sports teams (the Utah Jazz, Real Salt Lake and the Utah Grizzlies), cultural events such as those presented by the symphony, many outdoor activities and a vibrant capital city. • Fiscal responsibility: Utah has a balanced budget, a line-item veto, a rainy-day fund, a two-year fiscal note process and a triple-A credit rating. The state also limits appropriations. • Business climate: The number of state administrative code regulations is comparatively small. California has 399,556. Utah ranks 15th in the nation with 91,517, and Idaho ranks first with 39,077. Utah is the Crossroads of the West and has access to four interstate highways: I-15, I-70, I-80 and I-84. The state also offers substantial amenities: the Mighty Five national parks, 41 state parks, sports teams (the Utah Jazz, Real Salt Lake and the Utah Grizzlies), cultural events such as those presented by the symphony, many outdoor activities and a vibrant capital city. Continued on page 12 11 UPDATE
• Social capital: The Joint Economic Committee, whose ranking member is Senator Mike Lee, has 32 measures for social capital. The committee defines social capital as a web of social relationships that help people pursue joint ventures. Utah’s score, 2.08, is the highest in the country. States in the U.S. are divided into three categories: large (the first 16 states), medium (17-33) and small (34-50). Utah used to be listed with the small states because it was the 34th largest state. Now, ranked 30th, the U.S. Census Bureau currently considers Utah to be a midsized state. Despite Utah’s successes, though, Utah has not escaped the challenges facing the entire country. Gochnour lists the following growing pains and challenges: • Economic performance is uneven and will continue to be for some time. Economists are talking about inflation for the first time in a long time, and the consumer price index has risen. Fortunately, the percent change from the previous year is a little more than 5%, which is far less than the 1980 peak of almost 15%. • The state has supply constraints and price instability. Labor and housing (especially af fordable housing) are both in short supply. The supply chain stress index is higher than before the pandemic and is worse than during the Great Recession. Economists see cost-push and demand-pull inflation. The yearover quarterly housing price appreciation in Utah and Idaho is bigger than anywhere else in the country. Utah is at 28.3%, and Idaho is at 37.1%. In the past, Utah’s supply outpaced demand. The Kem C. Gardner Policy Institute breaks the numbers down as follows: • From 1971-1980, Utah had 174,272 housing units and 150,669 households. • From 1981-1990, the numbers were 108,382 versus 88,670. • From 1991-2000, the need was 170,206 units for 164,008 households. • From 2001-2010, it was 211,115 for 176,411. From 2010 to 2017, the trend reversed, and there were more households than dwelling units. That trend reversed again in 2018, but Utah is still short on affordable housing, and the combination of high prices and rents is delaying first-time buyer home purchases. A Deseret News article by Katie McKellar appeared Oct. 14, 2021. It said Florida Atlantic University and Florida International University recently ranked housing in Ogden, Salt Lake City and Provo as among the most overpriced markets in the U.S. UtahRealEstate.com said residential units in 2011 took an average of 87 days to sell after being listed. By the end of July 2021, the number was down to six days. The Federal Housing Finance Agency found that the annual percentage change in Utah housing prices for 2020 was 22.7%. Although Gochnour is optimistic about Utah’s economic outlook, she also sees upcoming risks. She recommends continuing to watch consumer confidence and the effect of COVID-19 on the country. With that recommendation in mind, it makes sense to look at the Black Friday weekend. In The New York Times, Nov. 29, 2021, Sapna Maheshwari reported that foot traffic increased 48% from 2020 but was still 28% less than in 2019. She also reported that, according to Sensormatic Solutions, in-store shopping peaked Friday from 1 p.m. to 3 p.m. Online customers spent $8.9 billion on Black Friday and $5.1 billion on Thanksgiving Day. Cyber Monday was 1.4% less than last year, but Adobe Analytics still reported a sales total of $10.7 billion for 2021. Amazon reported record-breaking sales starting Black Friday and ending Cyber Monday, but the company didn’t list specifics. Experts think that lower overall sales can be attributed partially to heavier than normal spending before the holiday. Most people are aware of the supply chain problems and have chosen to get shopping done earlier rather than risk being unable to buy their specific picks. Consumer confidence over the last year has risen and then dropped. The Kem C. Gardner Policy Institute has a monthly index to measure consumer confidence. In October 2020, the index was at 87.2. It rose to a high of 96.4 in March 2021, but in October 2021, it fell again to 81.5. Utah’s economy presents successes and challenges. But if any state is likely to meet the current challenges successfully, Utah is that state. Experts think that lower overall sales can be attributed partially to heavier than normal spending before the holiday. Most people are aware of the supply chain problems and have chosen to get shopping done earlier rather than risk being unable to buy their specific picks. Continued from page 11 12 UPDATE
The 2021 year is over, but that doesn’t mean we are done trying to serve and help others. We want to recognize the effort that went into a Christmas project that took place at the end of the year. Thank you to everyone who participated in the 2021 Christmas Shop With a Cop program. The program helps children and is an opportunity to build and strengthen relationships in the community between officers and civilians, especially children. The Shop With a Cop program is often held during the holiday season. Each participating of ficer is UPA Shop With a Cop and Holiday Voucher Program paired with a child. They have breakfast together and spend the morning shopping for gif ts and warm clothing. Some communities also have a Shop With a Cop Event before the school year begins. During the back-to-school event, each pair shops for school clothing, a backpack, and school supplies. The Utah Police Civilian Association is a 501(c) (3) public charity that supports two programs: • Safety Education • Shop With a Cop Although there are multiple events throughout the state, the holiday event we helped sponsor took L ast November Utah’s oil and gas community provided a holiday certificate worth $50 to every Ute Tribe household for the holiday season. “We’re grateful for the partnership with the Ute Tribe,” said Utah Petroleum Association President Rikki Hrenko-Browning. “This is a small gesture of our gratitude to the community that has been a valuable partner in delivering the homegrown resources we all rely on to power our daily lives. We look forward to a prosperous 2022.” The certificate was redeemable at the Ute Plaza Market, one available per household. Sponsors of this promotion include Finley Resources, Caerus Oil and Gas, Ovintiv, Berry Petroleum, Uinta Wax, XCL Resources, Utah Gas Corp., and Utah Petroleum Association. place this year at Stewart ’s Market in Roosevelt, Utah. Tribal Law Enforcement and UPA members made Christmas a little better for 48 children. Many thanks to the following UPA member companies for their generous donations that made this event a reality. UPA representatives from the following organizations included: • Berry Corporation • Caerus Oil and Gas • Ovintiv • Finley/Uinta Wax • XCL Resources This year’s holiday event was successful, and we had a great time. Few things are more fun than making other people happy, so let ’s not wait until the end of 2022 to find another project. Please let us know if you have any ideas. 13 UPDATE
UPA Annual Meeting We are excited to announce the reschedule of UPA's annual meeting to March 24th and 25th. Join us for Utah's legendary spring skiing! We are excited to announce the reschedule of UPA's annual meeting to March 24th and 25th following the conclusion of the Utah Legislative Session on March 4th. Due to company-imposed travel restrictions and our concern for your safety, we made the difficult decision to delay our initial January date. The good news is that you can now join us for Utah's legendary spring skiing! We will meet at Snowbasin Resort in Huntsville, Utah for the first day of our annual meeting on the 24th. See our website for all the details, but we have plenty of fun networking activities planned for skiiers, boarders, and those that just want to take in the beauty and serentiy that the amazing Utah mountains provide. Enjoy all of the winter activities available at the resort, including riding a gondola to the Needles Lodge at 8,700 feet and the open lift to John Paul Lodge at 9,000 feet. We hope you will join us for a complimentary lunch, thanks to Marathon Petroleum, and also an evening reception featuring a fireside chat on federal energy policy featuring national trade associations and Ms. Nada Culver, Deputy Director for Policy and Programs with the BLM. We encourage ride-sharing for those who plan to drive. We will arrange for a shuttle between Hampton Inn and Snowbasin at the beginning and end of the first day. The Ogden Ski bus is also available, but it only goes up and down once per day. The return bus is at 4:30 p.m. Uber is available to Snowbasin, but not from it. The 25th will we will meet at the Ogden Eccles conference center for our traditional annual meeting. Join us for breakfast and a welcome from UPA President Rikki Hrenko-Browning. We have a fantastic lineup of speakers including — state legislators to recap the 2022 legislative session, industry execs to share their development plans, state regulators to update on changes coming and experts to share their insights on a broad range of issues. Room blocks will be available at the Hampton Inn & Suites, connected to the conference center, and the Hilton Garden Inn, a short 5 minute walk to the conference center. Find all of the details at our website at: https:// utahpetroleum.org/annual-meeting-registration/. 14 UPDATE
Regulatory Update — Spotlight on Air Given our state’s ozone challenges, UPA has been working collaboratively with our regulators anticipating rulemaking in support of a forthcoming State Implementation Plan (SIP), both for the Wasatch Front and the Uintah Basin. In the Basin, while the outcome of this winter is not yet determined, it serves as the critical fork in the road to either a path/redesignation of the standard or a “bump” from marginal to moderate nonattainment status. We will need to ensure that we can continue to reduce VOC and NOx emissions in either case. To that end, the Utah Division of Air Quality (DAQ) is in the process of proposing rules, likely to be presented to the Air Quality Board in March to kick off formal rulemaking, with a target to be effective Jan. 1, 2023, focused on the following (note that this is a high-level summary, not a comprehensive outline of the draft proposal): • R307-506-Storage Vessels: ❒ Removes the exemption from the rule for sites with an Approval Order (AO) ❒ Lowers the applicability threshold for crude oil from 8,000 to 3,200 barrels ❒ Requires controls for applicable tanks “at all times” ❒ Changes to emergency relief storage vessels, including reducing the time period for the vessel to be emptied from 15 days to 48 hours after it receives fluids ❒ Adds pressure relief devices to required monthly inspections and repairs • R307-508-VOC Control Devices: ❒ Removes the exemption from the rule for sites with an AO ❒ Requires operations to meet manufacturer specifications or equivalent ❒ Requires air pollution control equipment to be adequately designed and sized to achieve the control efficiency and reasonably foreseeable fluctuations, including separator dumps • R307-509-Leak Detection and Repair: ❒ Removes the exemption from the rule for sites with an AO ❒ Adds requirements for fugitive emissions surveys with very specific timing of surveys as well as requiring a survey be performed within seven days of a well site becoming operational after being shut-in or temporarily abandoned • R307-511-Associated Gas Flaring: ❒ Removes the exemption from the rule for sites with an Approval Order (AO) ❒ Clarifies recordkeeping requirements for flaring 16 UPDATE
The U.S. Environmental Protection Agency (EPA) also announced a proposal in November 2021 to significantly reduce methane emissions from new and (for the first time) existing oil and gas sources across the U.S.. UPA held a special webinar on the rule in November, and many thanks to Jenn Biever from the law firm Williams Weese Pepple & Ferguson for her expertise in efficiently unpacking this very comprehensive proposal. While the proposed rule is far too extensive to summarize here, details are available at: https://www.epa.gov/ newsreleases/us-sharply-cut-methane-pollution-threatens-climateand-public-health. UPA recognizes the importance of reducing methane emissions in key emitting sectors, including energy, as part of a comprehensive strategy to address the risks of climate change. We support cost-effective policies and direct regulation that achieve methane emission reductions from new and existing sources across the supply chain. We believe policy should encourage innovation; incentivize the development and deployment of technologies to monitor and mitigate methane emissions for compliance purposes; allow flexibility; appropriately quantify and assess the feasibility, costs and benefits of implementing new requirements for existing facilities; and properly interpret and follow the relevant provisions of the Clean Air Act. We also recognize that methane emissions and VOC/NOx emissions needed to reduce ozone go hand in hand, with potential overlaps and interactions between the proposed EPA OOOO rules and the efforts and rulemakings associated with the Basin ozone SIP. While regional, national and other trade groups that we regularly collaborate with will be commenting on general provisions of the proposal that apply to industry across the board, UPA’s comments will focus on Utah specific issues, some of which include: • Special consideration needs to be given to retain and align with Utah’s Permit by Rule • We encourage EPA to finalize the Uinta Basin ozone nonattainment FIP for sources located on Tribal lands as expeditiously as possible and recognize the interplay between the newly proposed OOOO rules and the FIP • Impact on small businesses, which includes UPA member companies, and ways to accomplish the stated objectives while minimizing significant economic impacts of the proposed rule • Labor and supply chain shortages that must be considered in terms of implementation requirements • The limited electrification of the basin and challenges to further expanding grid connectivity and capacity We are also collaboratively engaging with DAQ in preparing for a Wasatch Front ozone SIP and the associated rulemakings needed. We continue to remain active in understanding the science and modeling driving these rulemakings and encourage a data-driven approach to policymaking. If you would like to learn more about these important rulemakings along the Wasatch Front and in the Uintah Basin, you are welcome to join UPA and engage in our committees tackling these issues in detail. We believe policy should encourage innovation; incentivize the development and deployment of technologies to monitor and mitigate methane emissions for compliance purposes; allow flexibility; appropriately quantify and assess the feasibility, costs and benefits of implementing new requirements for existing facilities; and properly interpret and follow the relevant provisions of the Clean Air Act. 17 UPDATE
Safety and Environmental Awards The Utah Petroleum Association is proud to announce our inaugural Safety and Environmental Awards, with winners to be revealed at the 2022 Annual Meeting. We know there is so much good work going on, quietly, under the radar that does not seek recognition but rather happens because it’s the right thing to do. We’re pleased to showcase three awards and the nominees in each category. Here is a brief description of the nominees in each of the three categories: Safety Action Award This is awarded to a person, project, or team that has impacted the likelihood or potential of preventing an accident or incident, or an action that results in improved safety results or processes and was reviewed by a panel of five judges made up of upstream and downstream HSE professionals. Here are the nominees: • Berry Petroleum’s Utah Operations Team for their work on the revised Winter Tire Program. In early 2020, Berry’s Chief Operations Officer challenged Berry’s Health and Safety Team to reduce Berry’s overall rate of motor vehicle accidents. Thanks to a thorough review of the team’s vehicle-related incident data, in late 2020, all field vehicles were fitted with studded snow tires from October to April, which resulted in a 75% reduction in Vehicle Incident Rates over 11 months with an additional benefit of $36,000 in cost savings. • Chevron’s IsoAlky project, which is the product of more than 20 years of research. Chevron chose its Salt Lake Refinery to test the concept with a 10 barrel-per-day pilot plant commissioned in 2009. The scaled facility is the largest capital project the refinery has ever undertaken. This SLC homegrown innovation has allowed the Chevron Salt Lake Refinery to take hydrofluoric acid out of plant operations and to prove this first-of-its-kind technology to the refining industry globally. • Finley and Uinta Wax for their donation to the Uintah Fire District. The Avalon Fire Department has needed a pumper truck capable of dispensing foam and delivering large volumes of water to respond to fires within their response area. Additionally, they donated 10, 4-gas monitors to the Roosevelt, Avalon, and Vernal fire departments. These 4-gas monitors will provide significant protection to the firefighters from Low Explosive Limit (LEL) gases, H2S gas, carbon dioxide, and low oxygen environments. Additionally, six defibrillation units (AED) were donated to Neola Continued on page 20 18 UPDATE
19 UPDATE
Continued from page 18 Elementary, Centennial Elementary, Kings Peak Elementary, Thompson House of Hope, and the Roosevelt Baptist Church. The Step Change in Safety Award This award is given to a company that has demonstrated a culture change or programmatic shift resulting in significant process changes or organizational culture changes, with a focus on innovation or broader step changes, and was reviewed by a panel of four judges comprised of upstream and downstream HSE professionals. Here are the nominees: • Brinderson for their implementation of safety initiatives designed to encourage safe behavior from all team members, and a cultural shift to personal responsibility, and accountability. As a result of actions like site-specific health and safety assessment plans, job hazard analysis, and other actions, Brinderson demonstrated their “zero incidents are possible” mantra, with their last recordable injury occurring on July 23rd, 2020. • InServ, for their deployment of a slate of safety programs including Vivid, a computer-based training that breaks down over 1,000 different training courses, and Patriot Cards, a behavior-based audit program for both self-audits or an audit of a co-worker. InServ has surpassed four million man-hours recordable free. • MMR Constructors launched a new safety program titled “Behavioral Based Safety,” in which all crafts are incentivized to observe their environment and co-workers in the field and to address any unsafe conditions. The program has increased safety participation from an average of three unsafe scenarios being recognized per month to an average of 18 per month and helped achieve over 150,000 labor hours with zero recordable incidents in Utah. • Pro Industrial, for the development of their Tagin Tech system and the SATELLITE and EVAC technology, which use cloud base systems in the event of an evacuation to provide first responders real-time info for rescue decision-making. Tagin Tech has significantly reduced the time and error in human-generated muster reports. • Sulzer introduced a number of programs with the goal of reducing their Total Recordable Incident Rate (TRIR) to a low 1.0 through formalized pinpointed training; High Hazard Analysis reviewed quarterly, a divisional wide safety stand-down led by Upper management and ESH, and introduction of their virtual safety walk. • Superheat created the SWAT program with a goal for employees to be safety forward. Employees fill out SWAT cards each month with observations, corrective actions, and follow-ups. The HSE team selects eight to discuss at monthly meetings with incentives for winning SWAT cards. The program has led to insights on realtime safety trends across the company’s multiple locations. The Environmental Leadership Award This award is given to a person, project team, or company that demonstrates the application of an innovative technology or process that results in positive, measurable environmental impacts that goes above and beyond the regulatory requirements, and was reviewed by a panel of five judges. • Caerus Oil & Gas earned two nominations. One went to Ron Allred for piloting two projects aimed at reducing methane and VOC emissions. The other went to Jerry Dismukes for his leadership in sharing best practices and progressing emission controls and leak detection that go above and beyond requirements. Ron, Jerry, and their colleagues have piloted two projects aimed at lowering methane & VOC emissions. The first is using air skids on production locations to replace gas pneumatics associated with traditional separators. The second is solar power pumps that can replace chemical and heat trace pumps traditionally run of f gas actuation. • Chevron, Rachel Agnew, and her team were nominated for their air action telework program. The Chevron SLC refinery has rolled out a program that not only allows but encourages employees to work remotely on red air days — this cuts vehicle trips and makes measurable emission reduction contributions. • Gigi Camerena from Silver Eagle was nominated for her outstanding leadership in developing and promoting many broad safety and environmental initiatives, sharing best practices, as well as being a critical driver of their environmental and safety culture. • XCL Resources was nominated for their produced water recycling facility capable of handling approximately one million barrels. This will reduce environmental hazards by transporting water via pipeline, reducing local roadway impacts, removing 100k+ heavy truck trips per year, and reducing the amount of freshwater used per year by approximately eight million barrels. Congratulations and a sincere note of gratitude to all of our nominees for their commitment to safety and environmental leadership. The winners will be announced at our Annual Meeting March 24 & 25. We know there is so much good work going on, quietly, under the radar that does not seek recognition but rather happens because it’s the right thing to do. 20 UPDATE
SAFETY ANNOUNCEMENT TURNUP PERFORMANCE Brinderson Achieves Zero Recordable Incidents in 2021 In 2021, Brinderson provided construction, maintenance, and turnaround services at more than 20 client facility locations and expended roughly 1 million work hours with zero recordable incidents. In fact, Brinderson has not had a recordable incident since July 2020. Brinderson’s safety excellence is the result of a dedicated team that practices safe behaviors and has a strong safety culture, demonstrated by a 10-year average 0.27 total recordable incident rate. Below are clients and facility locations with zero recordable incidents for many years. • Aera Energy (Shell & ExxonMobil), California (12 years) • Chevron, El Segundo, California (4 years) • Chevron Terminals, California (8 years) • Marathon, Anacortes, Washington (4 years) • Marathon, Los Angeles, California (4 years) • Marathon, Martinez, California (6 years) Brinderson’s focus on safety is demonstrated by developing personnel, systems, and behaviors that promote a safe work environment. This focus is consistent with its values and extends from senior leadership to each craft person. The safety of each employee is Brinderson’s top priority. This achievement represents Brinderson’s safety culture and demonstrates that its employees believe in the core value that “Zero Incidents are possible.”
www.thenewslinkgroup.orgRkJQdWJsaXNoZXIy MTIyNDg2OA==