GE center to boost oil industry, Oklahoma City

Our NewsOK Energy team chatted with readers Tuesday about the upcoming General Electric research center.

by Jay F. Marks and Adam Wilmoth and Paul Monies Modified: December 10, 2013 at 11:39 am •  Published: December 10, 2013
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Our NewsOK Energy team chatted with readers Tuesday about the upcoming General Electric research center.

You can join our energy Q&A’s on the second Tuesday of every month at 10 a.m. and submit your questions about energy companies and developments across the state. Below is an unedited transcript of Tuesday's chat.

NewsOK 9:18 a.m. Good morning. We'll get started at 10 a.m., but you can start submitting your questions now.
Paul Monies 9:55 a.m. Hello, energy fans. We'll be getting started in about 5 minutes.
Jay F. Marks 10:02 a.m. I hope the lingering ice and snow won't freeze out anyone with energy-related questions for us today...
Paul Monies 10:03 a.m. Jay, give us an update on what's going on at Equal Energy.
Jay F. Marks 10:04 a.m. I reported in today's paper that the Oklahoma City-based company has found a buyer in Tulsa's Petroflow Energy.
Jay F. Marks 10:04 a.m. Petroflow has agreed to buy all outstanding shares in Equal for about $230 million, but one of Equal's largest shareholders has chimed in today with some concerns about the deal.
Jay F. Marks 10:05 a.m. Stay tuned to NewsOK to find out more once I do some reporting on the latest developments.
Jay F. Marks 10:05 a.m. Your turn, Paul. What is the deal with Piedmont's push against wind development in its area?
Paul Monies 10:07 a.m. Some resolution on that front came last night. A little background: Apex Clean Energy has planned a wind farm in southern Kingfisher County and northern Canadian County.
Paul Monies 10:08 a.m. The project ran into some opposition from a few, vocal opponents who live in and near Piedmont, one of the fastest-growing cities in central Oklahoma.
Paul Monies 10:09 a.m. After a contentious recall election, opponents of the project removed one city councilor and replaced him with one opposed to the wind farm. The city then passed an ordinance forbidding wind turbines within a certain distance of city limits. That obviously made things difficult for Apex, even though the company pledged not to place any turbines on leased land inside Piedmont's city limits.
Paul Monies 10:10 a.m. Last night, the parties announced a settlement. We had a short write-up this morning, but we'll be following up with more today.
Jay F. Marks 10:11 a.m. Any other questions, folks?
Guest 10:13 a.m. Where can I find the write up about Equal Energy?
Jay F. Marks 10:14 a.m. We will have more on this deal in tomorrow's paper.
Rodney Grimes 10:14 a.m. Was Newfileds Stack Play announcement to pump up there stock price or do you really think they have something there? With so many big names in the area (Devon, Marathon, Ciimarex) its hard to believe this is a new play?
Paul Monies 10:15 a.m. Our queue is filling up nicely with some questions. Keep 'em coming.
Jay F. Marks 10:15 a.m. I'm not sure how much of a bump Newfield got from that news, but I doubt they were trumpeting a discovery they were not sure of.
Jay F. Marks 10:16 a.m. They definitely are in an area that is not new to oil and natural gas activity, but the advent of horizontal drilling has opened up new opportunities to producers.
Jay F. Marks 10:16 a.m. Newfield's play is about being able to access multiple rock formations from its acreage.
Jay F. Marks 10:17 a.m. Other companies are doing the same thing in Oklahoma, but the STACK name doesn't seem to have caught on yet.
Jay F. Marks 10:17 a.m. It's not necessarily a new play, but a new way of producing in a historically active area. That's the name of the game these days.
Mark 10:17 a.m. When will we see more solar-powered buildings downtown?
Paul Monies 10:18 a.m. I'll have to check with our downtown expert Steve Lackmeyer, but I don't expect many commercial buildings to add solar to their rooftops.
Paul Monies 10:19 a.m. I just don't think there's enough rooftop space to make that cost-effective, even as the price of solar panels continues to drop.
Jay F. Marks 10:20 a.m. I don't think Oklahoma has the best solar potential, especially at current prices, but there could be some intriguing options as technology gets cheaper.
Jay F. Marks 10:20 a.m. I really like the idea of parking lots with solar panels.
Paul Monies 10:20 a.m. It makes a little more sense on the residential side, but even then it's still a significant expense to install solar panels for homeowners. You pretty much have to be committed to staying in your home for more than 10 years.
Jay F. Marks 10:20 a.m. That would give us a shady spot to park during the hot Oklahoma summers, while collecting the sun's rays for electricity.
Jay F. Marks 10:21 a.m. I'm not sure if it is cost-effective at this point, but it definitely is an interesting option.
Abner 10:21 a.m. Steve Lackmeyer wrote today that Chesapeake and SandRidge are still supporting holiday events. Have you seen any pullbacks by those companies in community or charitable giving?
Jay F. Marks 10:22 a.m. It's going to be hard to see from outside the nonprofit community, but both companies definitely will be spending more on their core operations and less on other things, like sponsorships, etc.
Jay F. Marks 10:23 a.m. Chesapeake and SandRidge continue to encourage their employees to volunteer in the community, while supporting some nonprofits, but they can't afford to be the lead sponsor on every community event like they used to.
Jay F. Marks 10:24 a.m. Neither company has offered any detail on what that will mean to their charitable giving from here on out.
Wm Frank 10:24 a.m. What's your take on the EPA's so-called "War on Coal?" Is that just rhetoric?
Paul Monies 10:24 a.m. Yes.
Paul Monies 10:25 a.m. Coal will be with us for a long time to come. It's still used extensively for baseload generation, the type of power that always needs to be available.
Paul Monies 10:26 a.m. But it's getting squeezed by the rise in natural gas generation, which can be used both for baseload generation and for "peaking" at high-demand times.
Paul Monies 10:26 a.m. Wind and natural gas work pretty well together, so that's adding further to coal's woes.
Paul Monies 10:27 a.m. But the political rhetoric of a "war on coal" is a useful talking point for many politicians. It's also an easy way to explain some of the other, complex things that will need to change in electricity markets.
Paul Monies 10:28 a.m. We're still trying to figure out how to build out the transmission infrastructure to take all the wind farms that have been developed in last decade.
Paul Monies 10:30 a.m. There are some fairly burdensome regulations upcoming on carbon dioxide and other emissions, but the majority of the federal regulations that are impacting older coal plants are ones that have been on the books for decades. Some have been tied up in court battles that are just now getting to some kind of resolution.
Wes Dennis 10:30 a.m. So you are saying the new EPA regulations are having minimal impact on the coal industry?
Paul Monies 10:31 a.m. Sorry, Wes, see my last response.
Jay F. Marks 10:31 a.m. Coal has lost some ground to affordable alternatives, like natural gas and wind, as people increasingly clamor for fewer unhealthy emissions from their power sources.
Paul Monies 10:33 a.m. Part of the issue with coal is that it was practically illegal to build natural gas plants in the 1970s. That's how we have so many coal plants that are more than 30 years old. They are getting close to the end of their useful lives, so utilities are taking a hard look at retirements, new natural gas and wind generation, or buying power from third-parties.
Jezebel 10:34 a.m. Do you think Enable Midsteram will be a major tenant of the new tower that's to be built downtown at the Stage Center site, or will build its own tower?
Jay F. Marks 10:34 a.m. From what I've been told, no.
Jay F. Marks 10:35 a.m. Enable, which includes the assets for OGE Energy Corp. subsidiary Enogex, has a long-term lease at Leadership Square.
Jay F. Marks 10:35 a.m. Plus I haven't heard anything about the company bringing a lot of new jobs to Oklahoma City, so it doesn't seem like it needs new office space.
John 10:36 a.m. Any word on where Tom Ward's new company plans to operate? Do you think it will be in the Miss where SandRidge is currently operating?
Adam Wilmoth 10:38 a.m. Ward and his family have holdings in the Mississippian, but it's not clear if that is where his new company, Tapstone Energy will focus.
Adam Wilmoth 10:40 a.m. The last I heard, Tapstone is still looking for an area to focus on. They're looking initially at areas that are undervalued, but that have potential. That likely means natural gas.
Guest 10:40 a.m. What is Tom Ward up to? Is he starting a new company or looking to bring an already established one to OKC?
Adam Wilmoth 10:42 a.m. Ward has said he likes working for himself, but that he would consider bringing in investors if he needs them.
Jay F. Marks 10:42 a.m. It sounds like Ward is committed to building his own company again, like he and Aubrey McClendon did with Chesapeake, but I imagine that could change if he finds the right deal.
Paul Monies 10:42 a.m. [Thanks, we've got several questions in the hopper. Please bear with us; we'll get to them as soon as we can.]
Guest 10:42 a.m. How are things with Aubrey's AEP company? Are we looking at another CHK in the making?
Jay F. Marks 10:42 a.m. It's way too soon to speculate on that, I think, but I don't imagine Aubrey is thinking small at this point.
Jay F. Marks 10:43 a.m. McClendon has lined up $1.7 billion to buy acreage and drill in Ohio's Utica Shale, one of Chesapeake's last major discoveries with him at the helm.
Jay F. Marks 10:44 a.m. Now it remains to be seen how well his new company, American Energy Partners, can capitalize on that.
Jay F. Marks 10:44 a.m. I don't think many people are betting against him, but it likely will be very difficult to create another Chesapeake.
Rodney Grimes 10:45 a.m. How are the results for the Mississipi Lime play coming in- Seems like some companies have backed off of some of those early projections? Thanks.
Adam Wilmoth 10:45 a.m. There is oil in the Mississippi lime, but there also are extra expenses.
Jay F. Marks 10:45 a.m. SandRidge obviously has staked its future on the play, since it sold off its acreage in the oil-rich Permian Basin.
Guest 10:45 a.m. Is SandRidge's outlook improving?
Adam Wilmoth 10:46 a.m. Companies in the area have to deal with an unusually high amount of produced water, and they are having to build out electrical and pipeline infrastructure.
Adam Wilmoth 10:46 a.m. SandRidge has built up the infrastructure in several parts of the area and is expecting strong results.
Adam Wilmoth 10:47 a.m. The high up-front cost has scared off some companies.
Jay F. Marks 10:47 a.m. The Kansas side of the northern Oklahahoma-southern Kansas play seems to have disappointed some operators (Shell is selling its 625,000 acres in the play) but it probably has some upside for companies that aren't trying to hit a grand slam every time.
Jay F. Marks 10:48 a.m. SD has staked its future on the Mississippian, but it also appears to have some growth prospects in the Gulf of Mexico.
Jay F. Marks 10:48 a.m. How it's able to exploit those opportunities will determine its future.
Guest 10:49 a.m. Why did Devon choose CrossTex as its MLP partner? And what does that mean for OKC moving forward?
Jay F. Marks 10:49 a.m. The two companies have a long working history. It seems executives on both sides are comfortable working together, which probably helped cement the deal.
Jay F. Marks 10:50 a.m. Partnering with an established midstream company takes some of the financial burden off Devon, which still needs new pipelines to support its operations. Now it can spend its money on drilling while the new MLP ponies up for the midstream costs.
Jay F. Marks 10:51 a.m. The deal gives CrossTex access to a number of plays where Devon is active, from Canada to the Rockies to south Texas.
Jay F. Marks 10:52 a.m. I don't think the deal will mean much for Oklahoma City, although the midstream company will stay in Dallas.
Jay F. Marks 10:52 a.m. Devon will keep the bulk of its operations here, as evidenced by the company's decision to build its new office tower. It's not going to move away from that.
Rob 10:52 a.m. Jay, what can we look for out of Post Rock Energy? Are they ever planning on drilling an oil well?
Jay F. Marks 10:53 a.m. That is the company's focus now.
Jay F. Marks 10:53 a.m. PostRock recently has purchased acreage in central Oklahoma to give it access to more oil.
Jay F. Marks 10:54 a.m. They're lagging behind others that have made the move away from natural gas, but officials think they're headed in the right direction.
Jay F. Marks 10:55 a.m. PostRock has spent more than $10 million recently to buy oil assets, so its liquids production should be on the rise.
Tom 10:55 a.m. Does anyone have an opinion on the technologies and future of the company Syntroleum? Does their GTL technology have any value to any of the big companies in Oklahoma?
Paul Monies 10:56 a.m. They always seem to be on the verge of the next big thing, and it never pans out for them.
Jay F. Marks 10:56 a.m. Syntroleum has partnered with Tyson Foods to turn chicken waste into fuel, but that plant hasn't yielded any production breakthroughs yet.
Paul Monies 10:57 a.m. The technology is impressive, but they just haven't found a way to succeed with it.
Adam Wilmoth 10:57 a.m. Syntroleum made a run several years ago when it had government deals to make jet fuel, but its recent focus on fuel from chicken waste has been expensive.
Jay F. Marks 10:57 a.m. The company has gotten some fuel contracts for its Dynamic Fuels venture, but it probably needs more biofuel mandates to keep that going.
Adam Wilmoth 10:58 a.m. With natural gas selling at such a discount to oil, it would sound like converting gas to diesel would make sense. But the process is expensive.
Guest 10:59 a.m. People have made a somewhat big deal about Enable choosing to locate their leadership team in OKC. But you don't think they're bringing a lot of new jobs. Was this made out to be a bigger deal than what it actually winds up being?
Paul Monies 10:59 a.m. [We're going to go past 11 a.m. to get to your questions still in the queue.]
Tom 11:00 a.m. Who are the technology leaders when it comes to GTL?
Jay F. Marks 11:00 a.m. I'm told there will not be a whole lot of net job growth from the Enable deal, but Oklahoma City may see some net gains because the executives will be drawing higher salaries than the folks staying in Houston.
Adam Wilmoth 11:02 a.m. Chevron and Shell have been two of the gas-to-liquids leaders. But Shell this week said it will abandon its plans for a large GTL plant on the Gulf Coast.
Adam Wilmoth 11:03 a.m. Shell said cost estimates had risen above $20 billion for the proposed GTL plant.
Jay F. Marks 11:03 a.m. I know Syntroleum has been battling with one of its competitors on multiple fronts over its technology, but there hasn't been any final resolution on that front.
Guest 11:04 a.m. Why doesn't Harold Hamm move his Hiland Partners to OKC like he did Continental?
Jay F. Marks 11:05 a.m. Continental moved because the company had grown so large it had trouble luring employees to Enid.
Jay F. Marks 11:05 a.m. As I recall, some CLR folks were given the option to move to Hiland if they didn't want to leave Enid when the company did.
Jay F. Marks 11:06 a.m. Continental outgrew Enid. Hiland apparently has not at this point.
Adam Wilmoth 11:06 a.m. Hiland recently opened an office in Oklahoma City.
Guest 11:07 a.m. How big a deal is GE's research center going to be for OKC? Do we see some corporate relocations to OKC because of GE's presence?
Jay F. Marks 11:07 a.m. I don't know about relocations, but I definitely expect more companies to open offices here or develop around GE and its research.
Adam Wilmoth 11:08 a.m. It could be a very big deal. GE has built out around its other research locations.
Jay F. Marks 11:08 a.m. GE has invested about $14 billion in its oil and gas business, which will benefit from the research coming out of Oklahoma City. That will definitely spur the industry's interest... likely bringing dollars and jobs to the city in the process.
Adam Wilmoth 11:09 a.m. GE also already has about 800 employees in Oklahoma, most of which are at its artificial lift business on south Sooner Road.
Adam Wilmoth 11:11 a.m. The south Sooner Road group used to be owned by the Wood Group. The GE division works on technology to move oil from the bottom of a well to the surface.
Guest 11:11 a.m. Is SandRidge in OKC for the long haul, or positioning itself for someone to buy it off?
Jay F. Marks 11:12 a.m. New CEO James Bennett insisted the company was not for sale when he took over for Tom Ward this summer.
Adam Wilmoth 11:13 a.m. SandRidge executives have said they plan to stay here. But the things they are doing to make the company more profitable also could make it more attractive to potential buyers.
Guest 11:14 a.m. How is Access Midstream doing?
Jay F. Marks 11:15 a.m. The company seems to be staying active, while reducing its ties to former parent company Chesapeake Energy.
Paul Monies 11:16 a.m. Their share price has risen from about $34 to $51 per share this year, so investors are happy with them, too.
Jay F. Marks 11:17 a.m. Access has a presence in every unconventional basin in the U.S. except the Bakken, while building a state-of-the-art control center here in Oklahoma City.
Paul Monies 11:18 a.m. OK. I think that will do it for today. Thanks for joining us.
Paul Monies 11:18 a.m. Our next energy chat will be at 10 a.m. Jan. 14.

by Jay F. Marks
Energy Reporter
Jay F. Marks has been covering Oklahoma news since graduating from Oklahoma State University in 1996. He worked in Sulphur and Enid before joining The Oklahoman in 2005. Marks has been covering the energy industry since 2009.
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by Adam Wilmoth
Energy Editor
Adam Wilmoth returned to The Oklahoman as energy editor in 2012 after working for four years in public relations. He previously spent seven years as a business reporter at The Oklahoman, including five years covering the state's energy sector....
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by Paul Monies
Energy Reporter
Paul Monies is an energy reporter for The Oklahoman. He has worked at newspapers in Texas and Missouri and most recently was a data journalist for USA Today in the Washington D.C. area. Monies also spent nine years as a business reporter and...
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