For the most part, the annual State of the Oil and Gas Industrymeeting of the Texas Railroad Commission in Austin yesterday was alove fest, as producers, operators, association representatives andvarious others lauded the good times and high profits the industryis having.

Most of the testimony from industry and associationrepresentatives centered on easing regulations and reducing the taxburden to ensure exploration and production remain high. Of course,it was not a complete love-in, as a few representatives fromconsumer groups and political organizations interests pushed forstronger environmental controls and more campaign oversight at theTRC.

It was an industry stalwart, however, who sounded a warning bellabout the problems plaguing the industry even as companies roll inthe profits. Tom Brown, founder of independent natural gas and oilproducer Tom Brown Inc., took home the coveted TRC Pioneer Awardfor his contributions to the field. But after accepting the award,he challenged his colleagues to work for improvement to ensure thatthe industry remains on track.

“We are faced with a horrendous people problem in the industry,and we are going to need new blood to keep it going strong,” Brownsaid. He proposed raising wages for the low wage earners. Withoutmore take-home money, he said, oil and gas producers will be leftwith no workers to actually get the job done. “As basins getfarther and farther away, say 150 to 160 miles from a rig, it’s abig, big problem.”

To run 10 to 12 rigs, the Midland, TX oilman suggested thatevery crew needs a relief crew. He said the days of working sevendays a week are past; the new workforce won’t do that. “They wantto work four days or five days at a time. We’ve got to accommodatethose changes,” he said. He said that when a potential worker canmake $10 an hour at the “local WalMart, he’s not going to changehis job to make the same amount in a distant gas or oil field.That’s tough.”

Railroad Commissioner Michael Williams said that the TexasWorkforce Commission in partnership with Texas A&M Universityis considering revitalizing its roughneck school in Abilene, andCommissioner Tony Garza said that scholarships would be offered ifthe program takes off. The school lasted two years during boomtimes a few years ago, but fell apart as the industry lost momentumabout two years ago.

Brown, whose company now is headquartered in Denver afterbeginning in Midland, TX, also suggested that the state work moreclosely with Mexico to help develop the “large gas deposits” there.”We’ve got to knock down the borders and make our energy programsseamless,” he said.

The testimony, which continued through the early afternoonyesterday, is used by the TRC to gauge stakeholder interestsspecifically in oil and gas. While TRC sets rules for othertransportation-related sectors, it is the oil and gas industry thatoccupies most of its time.

Following the hearings, TRC’s Williams said he “took a lot ofnotes,” and tried to listen to what everyone had to say. However,no agenda was set about what will happen with the testimony.

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