STEER: A New Kind of Trade Association

No one questions the effectiveness of the South Texas Energy & Economic Roundtable (STEER).

No one questions the expertise and energy consistently displayed by STEER President Omar Garcia and the entire STEER staff.

No one questions their ability to effectively communicate with a broad range of stakeholders in the Eagle Ford Shale region of South and Central Texas.

No one questions that STEER has been a real asset for the last five years, not just for the oil and gas industry which it represents, but for the entire Eagle Ford community.

Indeed, it often seems as if the only thing anyone really questions about STEER is why this uniquely-structured trade association exists in the first place. To fully understand the answer to that question, we need to start by understanding unique and unprecedented opportunity the Eagle Ford Shale presents to the people of the region.

A Sleeping Giant Beneath The Chalk

Nestled in a quiet area of suburban Dallas, just off the intersection of Texas State Highway 12 and Interstate 30, lies the neighborhood of Eagle Ford. At one time an incorporated city, Eagle Ford was annexed in the mid-1950s by the city of Dallas, whose city center skyscrapers can be seen just 6 miles away.

Originally settled by the family of Enoch Horton in 1844, the community soon became known as an important crossing of the West Fork of the Trinity River. The Horton family established a grist mill; and within a few years they donated land to establish the town’s first cemetery and for the right of way and depot for the Texas and Pacific Railway. As was the case for hundreds of communities in Texas’ early decades, the establishment of a rail depot led quickly to rapid population growth. By the 1870s, Eagle Ford had become a key shipping point for the cattle industry, and its population had grown to several thousand.

The death of the trail drives led to the collapse of the cattle business, and by the 1890s, Eagle Ford’s population hovered around 50 citizens, where it remained well into the mid-20th century. Memory of the community’s heyday was largely lost to history, where it remained until late 2008.

Not far from the location of the original Horton grist mill, a small cliff face reveals an out-cropping of the Austin Chalk formation, which had become famous during the 1970s and again in the 1990s for the production of prodigious amounts of crude oil. Indeed, the Chalk is experiencing a bit of a third revival today.

Immediately beneath the Chalk outcropping, another formation displays what seems to be a rocky, clay-like profile. This formation is actually a shale formation, one that happens to be the source rock for the Austin Chalk. It was the oil migrating up from the Eagle Ford that made the Chalk such a prodigious formation to begin with.

Like the Austin Chalk, the Eagle Ford Shale extends deep into South Texas and even under the Rio Grande into northern Mexico. Unlike the Chalk, however, this formation had received scant attention until October 2008, when Petrohawk (now a part of BHP Billiton) drilled what is credited as the first commercial horizontal well completed in the formation in La Salle County. The well, completed with a 3,200-foot horizontal lateral involving a 10-stage frac job, produced at an initial flow rate of about 7,600 MMBTU of natural gas per day, and the race was on.

Companies had been drilling for oil and gas in the 21-county swath of South and Central Texas now known as the Eagle Ford Shale region for many decades. Companies who drilled wells into formations deeper than the Eagle Ford considered the shale to be a nuisance, because they would always get a “kick” — a show of natural gas — when the drill bit hit the shale. So, they knew the formation contained gas but also knew that the rock itself was too tight to yield economic quantities using conventional drilling and completion methods.

That all began to change in the late 1990s, when Mitchell Energy pioneered the wedding of horizontal drilling and heavy hydraulic fracturing jobs as a means of producing natural gas from the Barnett Shale region in North Central Texas. Mitchell proved that shale rock could indeed yield the dry natural gas that characterized the Barnett formation, though the jury was still out on whether you could also extract crude oil and petroleum liquids from this very dense rock. Many doubted the latter could ever happen.

That belief began to change in the mid-2000s, as producers began to find ways to extract natural gas rich in liquid content — what the industry refers to as “wet gas” — in commercial quantities from the immense Marcellus Shale in Pennsylvania and West Virginia. After all, if natural gas liquids could be released from shale, why not oil? It was, as it turned out, a very good question, the answer to which was just around the corner.

The Discovery Begets a Boom

No one was surprised when Petrohawk’s discovery well turned out to be a wet gas producer. It wasn’t until 2009, as other producers began drilling wells west and north of Petrohawk’s position, that the variability of the Eagle Ford was discovered. Within months, it became apparent to everyone that the farther west and north you drilled into the shale, the wetter the production became. By the end of 2009, maps were being produced dividing the formation into a southeastern “dry gas” zone, a central “wet gas” zone, and a northwestern “crude oil” zone. Such variability within a single shale formation was unprecedented.

Throughout 2009 and 2010, excitement over the Eagle Ford’s production and economic development potential grew in sync with its rising rig count. By the middle of 2010, as the rig count approached 15, everyone involved knew this resource presented an unprecedented opportunity for a part of Texas that had historically experienced little in the way of economic development, and whose geography was typified by large farming and ranching operations and small towns.

Late in 2011, as that rig count ran up to nearly 250, America’s Natural Gas Alliance — which was then active in Texas but has since merged with the American Petroleum Institute — commissioned The University of Texas at San Antonio’s Institute for Economic Development, led by Dr. Thomas Tunstall, to perform an initial economic impact study related to the play.

The results were staggering. The press release for the study contained the following findings:
“In 2011 alone, the play generated over $25 billion in revenue, supported 47,000 full-time jobs in the area and provided $257 million in local government revenue.

The study also concluded that in 2011, [Eagle Ford Shale] development:

• Paid $3.1 billion in salaries and benefits to workers,

• Provided more than $12.6 billion in gross regional product,

• Added more than $358 million in state revenues including $120.4 million in severance taxes

• And spurred a triple-digit sales tax revenue increase in various local counties.”

By the end of the year, the region was being widely hailed as one of the hottest economic development areas in the United States. It was around that time that the oil and gas industry in Texas realized this resource needed special attention, especially with regard to public and media relations. Oil and gas is an extractive industry, which is always going to have an impact on the communities in which it operates. From traffic and noise to water and road conditions, this extractive industry, and the rapid economic development it created, was also producing a variety of industry-wide issues and conflicts that needed to be properly attended to.

The Challenges of Very Good Times

The industry had done itself great reputational damage several years prior by failing to pay proper attention to issues and conflicts as they arose in the Barnett Shale development in North Texas. Cognizant of this information, representatives of companies active in the Eagle Ford Shale engaged in a process to ensure things would be different in the Eagle Ford Shale region. It was out of that process that the idea for the South Texas Energy & Economic Roundtable (STEER) was born.

Statewide trade associations in the oil and gas industry have traditionally been created, funded and staffed to deal with legislative and regulatory matters at the state level. As such, most of these associations are either headquartered in the various state capitals or, at the very least, maintain offices in the capitals from which their lobbyists and regulatory staff do their work.

No state is home to a more effective and powerful set of statewide trade associations than Texas, a large reason why the state’s regulatory environment for oil and gas development is somewhat favorable when compared to other states. The simple fact is that the state government of Texas likes the oil and gas industry, and wants to ensure companies are able to operate within the state in a safe and responsible manner. The industry’s taxes and royalties fund a sizable portion of the state’s budget, and its activities are responsible for the creation of hundreds of thousands of high-paying jobs.

So, no one in late 2011 had in mind a new trade association that would somehow replace any already-existing associations. Those trades were doing their jobs quite well. Rather, the thought among those working on the concept was to create a different kind of association that would serve a different set of needs.

While the existing trades were set up to address legislative and regulatory issues, they weren’t set up to communicate at the grassroots level. Whether it was with the news media, communities or the general population, the industry’s traditional trade associations were not established to take on the task of communicating with the community. Indeed, the same could have been said of the industry as a whole until the last 15 years or so. The world was changing, but the industry was slow to change with it.

The industry’s experience in North Texas, as well as other reputational disasters taking place in other parts of the country, had convinced those drilling and producing in the Eagle Ford that this all had to change. The play was becoming so prolific, and the opportunities so enormous, that the industry felt an obligation to do what was needed to ensure the play worked for all involved. Clear and accurate communications were vital to achieving that goal.

Finding the Right Person for the Job

From the outset, it was clear to everyone involved that hiring the right person to lead this new venture was the single most important factor in making it work. Leading STEER is not a job for just anyone. It’s a job for a person with boundless energy. It’s a job for someone who has a keen understanding of the region, its people and its economy. It’s a job for someone who doesn’t mind driving hundreds of miles a day to attend a Kiwanis, Lions, Knights of Columbus or Rotary club meeting in Beeville, Cuero, Gonzales, Tilden, La Grange, Goliad, Freer, Falfurrias, Cotulla, Kenedy, Karnes City or Seguin.

It’s a job for someone who can comfortably relate to the unique, culturally diverse population in South Texas. It was decided that the perfect person for this job would feel comfortable communicating with a wide range of people. From property owners, business leaders, elected officials, and more, the leader of STEER would be shaking many hands. Additionally, and of great importance, the leader of this organization needed the ability to convey information accurately to journalists calling from Reuters and Bloomberg News, as well as the San Antonio Express-News and the Beeville Bee-Picayune.

In other words, it’s a job tailor-made for Omar Garcia. Luckily for the industry, Garcia happened to be interested. “We started STEER back in October of 2012,” says Garcia, STEER’s first and only President, with a smile. “They gave me the name of the association, a title and a bank account and said, ‘Go get it done.’”

Garcia was born and raised in Kingsville, which is not technically in the Eagle Ford Shale play but sits in the central part of deep South Texas. Indeed, other than his years spent obtaining his degree in international business and Spanish at St. Edward’s University in Austin, Garcia has spent virtually his entire life in the region.

Prior to joining STEER, Garcia enjoyed a successful career in various economic development roles at the state and local levels. A former Vice President of the San Antonio Economic Development Foundation, Garcia was appointed by Texas Gov. Rick Perry in 2010 to a leadership role with the Texas Economic Development Corporation (TEDC).

Garcia looks back on that role with TEDC with fond memories. “I was able to travel the world promoting Texas,” he says, “We visited Spain, Amsterdam, Germany, Brazil, and Argentina. It was a pretty dynamic appointment and a lot of fun promoting the state, and to tie it all back to San Antonio and South Texas, which was my focus in that role.” Twelve years of experience in the economic development realm, along with a three-year stint banking in Houston, really helped prepare Garcia for his role with STEER.

“Having the connections from San Antonio to Corpus Christi to Laredo, working in the region for many years helped me get this job. And it helped me establish STEER pretty quickly with the relationships that I had across the region,” he says. “It allowed us to start STEER by establishing a solid reputation. To know you had someone who knew the region and understood it, and knew the players, the culture, [and] how politics worked. I think those were really important factors.”

Managing a Growing Association

Garcia’s ability to hit the ground running very quickly led to him and STEER getting involved in more and more initiatives as the organization became increasingly well-known throughout the region as an honest broker. Before half a year had gone by, that increasing involvement grew into a need to add staff members.

As luck would have it, Garcia began the process of finding the Vice President of STEER when one such initiative led him to the right person.

“I had coordinated a meeting with Omar when I was at the Alamo Area Council of Governments [AACOG] where I worked in natural resources on alternative energy and transportation,” says Chris Ashcraft, STEER’s Vice President. “One of those issues was natural gas vehicle transportation. I actually asked Omar to come out and meet with me to help us in our efforts to build out natural gas vehicle infrastructure. A lot of the members at STEER at that time were either utilizing natural gas vehicles or in the process of converting their fleets.”

That meeting ended with Garcia asking Ashcraft if he was interested in joining STEER instead, and he ultimately accepted that offer. Ashcraft has been at STEER now for almost five years. “It’s been awesome, the best decision I ever made for my family,” he says. Ashcraft comes from a military family — his father served in the U.S. Army for 30 years. When asked where he grew up, he gives a classic Army brat reply: “I mostly grew up in Maine but I lived all over the place.”

After obtaining his degree in political science at the University of Maine, Ashcraft followed in his father’s footsteps, joining the U.S. Army as a medical officer. It was during his Army service that he and his wife first lived in San Antonio. “We just fell in love with the city,” he says.

“When I got out of the Army, I moved to Washington, D.C., worked at the [Environmental Protection Agency (EPA)] under the Bush administration on the Farm, Ranch, [and] Rural Communities Federal Advisory Committee.” But presidential administrations come and go, and shortly after the Obama administration came into power, Ashcraft left the EPA and brought his family back to San Antonio, where he had landed a job at the AACOG.

There, Ashcraft says, he “ended up working on everything from air quality to alternative fuel transportation, oil and gas, natural gas vehicles. So, I have a varied background, a lot of relationships” from those years with AACOG. Those relationships and the skills he brought with him to STEER helped prepare him for the collaborative efforts in which the organization involves itself with a broad range of members and stakeholders in the region.

As the organization continued to develop and evolve, it began the process of creating a set of committees designed to help address the variety of issues that were arising with the increasing industry presence across the region. “We started off with two committees back in 2012,” Garcia says. “The first two were the Communications and Stakeholder Relations committees, which were the foundations that STEER was built upon. But our committees have evolved as [the] organization has grown. Since 2012, we’ve added a Health Safety Environment Committee, a Water Sustainability Committee, an Operations Committee and a Millennial committee. The Millennial Committee was set up to understand how to communicate, how to market millennials, how to get them involved, what are their hot-button issues.”

Each additional committee and the issues it was designed to address added a new level of complexity to STEER’s sphere of work, thus requiring more staff work to keep it all moving in the right direction. As 2013 rolled along, Garcia and Ashcraft became overwhelmed, and the need to add another person was evident.

Again, as luck would have it, the right person for the job was about to become available. Oil and gas is known as a boom-and-bust industry, a business in which every company has its ups and downs.

Unfortunately, when those down times hit, they are often accompanied by significant reductions in staff. When Chesapeake Energy implemented a large layoff during August 2013, one of the unlucky employees caught up in it was Haley Curry Bloemer.

“Yes, I was let go at Chesapeake, but in the most positive way, if that’s possible,” Bloemer says with a laugh. “And the next morning Omar called and said that he wanted me at STEER and to hold tight.” It took Garcia a little while to get all the interviews, paperwork and member approvals in place, but “within two months I was working for STEER and then moved to San Antonio that next January [of 2014].”

While at Chesapeake, Bloemer spent 18 months as the company’s external affairs manager for both their Eagle Ford Shale and Permian Basin assets, so she came to STEER already very familiar with the western half of the Eagle Ford region, which is where the Chesapeake leasehold assets are concentrated. “I had an office in Austin [while with Chesapeake], but I really didn’t live there.

Mainly I lived in Uvalde in a family friend’s house,” she reflects. “I traveled around the west side of the play and got to do some amazing things. Part of what I was in charge of was making sure that the company’s communication strategy was being deployed effectively and making sure that what we were doing was being understood by the local region, whether it be County Commissioner or a chamber or just the community in general. One of the best things Chesapeake taught me was about the industry itself. Each employee was expected to be able to explain the process of drilling and completing a well to anyone, regardless of their background.”

Once on board with STEER, she immediately became immersed in the work of the STEER committees and quickly began to expand her understanding of the full region. “I was put in charge of the Stakeholder Relations Committee and the Communications Committee. In getting to know the east side of the play, I found it very interesting. Even though there are many of the same issues across the entire play, the subregions have differing personalities and cultures. There is a denser population on the east side than on the west side. I had a pretty firm grasp of the west side of the region, so bringing that together and [looking] at a holistic picture of the Eagle Ford as a whole was a challenge. It was very exciting to bridge my experience at Chesapeake, and working at STEER has brought that experience to an entirely different level. When I left Chesapeake, I knew I wasn’t done with the Eagle Ford.”

Her opportunity with STEER had just begun, because this was one of the few industry trade associations whose membership didn’t dramatically fall when the bust in oil prices hit in 2014.

Growth During Boom and Bust

“Remarkably, we have grown our membership base from 2014 to today,” Garcia says when asked about how STEER managed during the downturn. “In 2014 we had 11 members on our board of directors; today, we have 15, with two other members who aren’t at the board level.” STEER did lose one past member company, but that was because it sold its assets and left the Eagle Ford play completely. But the addition of several new members has more than made up for that loss.

“Our members’ commitment never waivered because our mission was needed even more during the downturn. More than ever, we needed to go out and communicate with these communities to help them manage through the downturn. To help them plan for what that’s going to look like, to help them prepare for what their tax revenue may look like after a high in 2014 to a low in 2016.” This is a very good point that many in the industry and the news media tend to overlook: The boom and bust cycles endemic to the oil and gas business may well impact small communities even more significantly than the companies themselves.

Garcia says that “some counties and cities did a remarkable job with that revenue” that they had taken in during the boom years of 2009 through 2014. “Others had challenges. But with our diverse background on staff, we were able to work with some of the counties and some of our stakeholders in the region. So that never changed, and the member companies recognized that.”

Of course, now that drilling activity is picking up — the Eagle Ford rig count more than tripled between July 2016 and July 2017 — many of the challenges faced during the boom times are coming back. “Workforce has always been a challenge,” says Garcia. “Trying to get our younger generation involved in the oil and gas industry has been tough. And especially now that we’ve had a downturn, some of the parents don’t want their child to go into our industry.”

But workforce is far from the only challenge: Roads, noise, water, dust and other environmental impacts also become more visible issues as industry activity picks up. “Roads were a hot topic back then in 2014, and we’re back at it again because roads are being utilized at a much heavier pace than they were, 6–12 months ago,” Garcia says. “Impacts, whether it’s environmental, water or others, those remain steady whether we were in the great boom years or in down times.”

Ashcraft agrees: “The decrease in drilling gave companies a chance to refocus on core assets — the Eagle Ford being one of those — and catch their breath and improve understanding about their place in the community, their infrastructure, their partnerships. STEER and its six committees made up of core technical staff from all these companies provides a unique opportunity for people from those companies to really learn from one another and find out what those impacts were in the communities. So, I think that that provided a unique value to all those operators to be prepared when times got better again.”

And then there are the anti-fossil fuel activist groups who attempt to make inroads into the region frequently. “Groups attacking this industry have not stopped,” Garcia says. “And another reason why our member companies have never wavered their commitment is for us to be properly funded to combat some of that negativity.”

While, as Garcia points out, the anti-oil and gas activism hasn’t stopped, it’s also important to note here that, while conflict groups have persistently attempted to gain footholds in the region, those efforts have failed, largely due to STEER’s efforts. Where faulty studies and alarmist claims attacking the Barnett Shale development were able to gain significant traction during the early years of the last decade in North Texas — mainly because the industry did not act quickly enough to mount an effective response — these same groups and others who have tried to deploy similar tactics in the Eagle Ford have invariably found their claims rapidly met with factual information and effective communications provided by the staff at STEER.

That rapid, consistent, effective response has encouraged such groups to focus most of their efforts in other parts of the country.

The Staff Expands Again

The ongoing issues, rising membership and increasing activity in the region also created a need for STEER’s management team to further expand its staff. Two new director-level jobs have been added since 2015 to help meet the increasing needs in the area’s community engagement and communications.

Justine Carroll was the first to come on board in early 2015. A native of San Antonio, Carroll and her family had spent 15 years in Austin where she obtained her degree in public relations. She was working for a healthcare nonprofit at the time, but had always wanted to return to San Antonio.

Again, as luck would have it, Omar Garcia and STEER came calling at just the right time.

“In my role as communications director, I am responsible for our communications committee and ensuring that STEER is speaking to its stakeholders whether that is through social media, our website, presentations in South Texas or working with various media outlets throughout South Texas.”

The most recent staff addition is Yliana Flores, another native San Antonian who just came to STEER in mid-2017. While she is new to the association, she did not come in as an unknown to STEER’s staff. Flores obtained her bachelor’s degree from St. Mary’s University in communications, and she is now working on a master’s degree in public administration at The University of Texas at San Antonio. After college, she says, “I started my career at AACOG, actually. I got an internship through AmeriCorps, and I worked under the Clean Cities effort with Chris Ashcraft.”

When Ashcraft left AACOG, Flores took over the Clean Cities effort. “From there, I went over to the San Antonio River Authority where I was doing intergovernmental relations for their Southern Basin region. So, I spent a lot of time in Karnes and Wilson [counties]. I was there for about two and a half years and absolutely loved the people,” she says. “That’s the best part of being out in those regions; when I had the opportunity to come here, I knew it was going to be a good fit because of the relationships that I had built with the people that I had been working with for the past three years now.”

There are common themes among all the staff at STEER: communications, relationships, communities, and partnerships.

That isn’t lost on Garcia — in fact, it’s his daily focus. “What I think is the most important thing is that STEER recognizes who our audience is, and it’s rural South Texas, it’s rural counties. And while social media plays an important role for us say in the Metros, in the region our successes are measured by handshakes and visibility. It is really important for us to be seen in the community, shake those hands, attend the County Commissioner meetings, attend the city council meetings … so that they know we have a vested interest in their community and that we’re there to help, and that’s a big part of our communication strategy.”

Carroll expands on that theme: “We go out there and we build those relationships and they have our cell phone numbers and they’ll text us if they need anything. So, it’s important for us to keep in constant contact with these stakeholders because we want to talk to them, we want them to come to us if they need something related to the industry.” Their efforts are not limited to communities in the Eagle Ford region. “We have relationships with the Victoria newspaper even though they’re not technically in Eagle Ford,” Carroll continues. “They still have a lot of readership; their coverage area is where we need to be reaching out to. Even Corpus Christi, we’ve gone to Corpus to visit with the television stations and the newspaper. We try to stay in constant contact.”

It is this constant outreach, this consistent effort to make contact with stakeholders, this active, continuing focus on communications with communities and the news media that distinguishes the STEER business model from the industry’s traditional trade associations. It is no accident that every one of STEER’s employees comes from a background of communications, collaboration and relationship-building. The people fit the plan.

Bloemer points out that the consistent contact is crucial to the organization’s effectiveness. “It’s important for them [stakeholders] to know that we’re not just going to be calling when we need something from them,” she says. “I think a lot of public relations has become so fast and there [are] so many different avenues to go that people forget that it is about a relationship. They just send information out thinking that journalists are supposed to just take that, it’s their job. Well, it is their job, but it’s more about making sure they understand who you are and the information they can gleam from the organization. Which for us is anything related to the industry, but you have to make sure that they feel comfortable and that they remember to call you. It’s not about dropping off a pamphlet and expecting them to remember you the next day. It’s about knowing how their kids are doing and things that are important. I think that’s something that STEER has really done well.”

As Ashcraft points out, building trust is also key. “[Stakeholders] have to know that what they’re always going to get from us is the truth. We’re not going to run away from the hard questions and, most importantly, we have the resources and technical expertise across our membership that we want to answer those hard questions. We want to listen to the community and their news outlets, because a lot of the time those local media outlets reflect those natural concerns that are in the community. STEER’s strength comes from getting the boots on the ground with those relationships, listening and answering those questions that people don’t know, not being afraid to answer them and to be honest with them. And when we don’t know an answer, being honest with them and [saying] that we’re going to find out.”

All of this may sound sort of like communications 101 to those in other industries. But for an industry like oil and gas — which in the past has had a habit of shying away from communications and media relations activities — this is really radical stuff.

It Matters What You Don’t Do, Too

Because STEER is so different from the industry’s other state associations, what Garcia and his staff doesn’t do matters just as much as what they do. The main thing they don’t do is lobby.

“We don’t spend any time in Austin or Washington, D.C., to lobby a specific bill. Our role is to work with the communities in South Texas,” he says. “Being able to say that we don’t spend time in Austin or D.C. lobbying on specific issues lends a lot of credibility to the organization. Because the people in the Eagle Ford know that we are community-focused. They know that we are going to be there for them. And they know that we’re not going to be there working on issues that may not favor rural South Texas.

“Our mission has lent itself to make this organization into what it is today: A very successful community relations oil and gas trade association,” Garcia says. “That’s what we do; we don’t have to worry about what’s going on in Austin. Does it affect us? Of course, it does. Do we follow it? Yes. But our focus areas are the people and the communities in South Texas.”

In the end, it is that focus on its unique role that has made STEER such an important player in the success story of the Eagle Ford Shale. Given the immense opportunity the Eagle Ford Shale represents to South Texas, that success has been vital to everyone living there, not just to STEER’s member companies.

There’s nothing magic about any of this — it just takes a lot of hard work and dedication, planning and execution, creativity and communications, and, above all else, bringing in the right people to make it all work.

Garcia and his staff have proven time and again that they are the right people. And so, STEER works, for everybody.

 

About the author: David Blackmon is Associate Editor for Oil and Gas for SHALE Magazine. He previously spent 37 years in the oil and natural gas industry in a variety of roles, the last 22 years engaged in public policy issues at the state and national levels. Contact David Blackmon at david@shalemag.com.

 

Photos by Michael Giordano and STEER

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