Everyone is talking about ESG these days. From Wall Street to Madison Avenue to the podcaster-of-the-week. It’s everywhere these days and everyone is trying to figure out how to figure it out. Well one individual is on the right path when it comes to having a complete understanding of the good, bad and symbolic ugly that comes with this ESG trend.
For starters the E is for Environment, not Economy. However, for the reality of ESG, the environment in that context is really part of that economy. Call it an economic evolution. Because that’s what Midland Mayor Patrick Payton called it during the DistributionNOW’s grand opening and ribbon cutting celebration and press conference.
“The economic evolution, a lot of people talk about economic diversification, but any diversification has to be tied to the oil and gas industry,” Payton said. “You’re listeners know this, but most people do not understand how many companies and organizations are involved in oil and gas. From distribution warehouses of goods and services to the people who are making the roads so you can get out to the rigs and frac locations, so anything the two (Mayors and cities) of us can do, as Secretary Evans calls it, ‘in the heartbeat of the most secure and safe oil and gas region in the world’ then we have to do it alongside that industry and see what we can do to improve it.”
DistributionNOW, which operates primarily under the DistributionNOW and DNOW brands, opened a new major distribution facility for the Permian Basin and people from all over the community showed up in support. Through its network of approximately 195 locations and 2,600 employees worldwide, DNOW offers a comprehensive line of products and solutions for the upstream, midstream and downstream energy and industrial sectors. Its locations provide products and solutions to exploration and production companies, energy transportation companies, refineries, chemical companies, utilities, manufacturers and engineering and construction companies.
Mayor Payton was one of the special guest dignitaries who spoke at the DNOW event, along with the City of Odessa Mayor Javier Joven. The two mayors joining together created a synergy and symbolism they both would like to see continued into the future.
Mayor Payton continued the conversation into the growth and expansion still happening in the Permian, despite global and domestic challenges.
“I was on another radio show this morning and so many people think that the oil industry just pokes holes in the ground and oil just comes out,” Payton said. “They do not realize, and it’s easy to say that over the past three-to-four years this industry has faced an onslaught of really beaucracy coming after it impacting capital investments.”
Payton believes despite Russia, Ukraine and other political obstacles, the Permian Basin communities are growing together and assisting each other for a common community goal. Payton sees more work ahead, however, in more areas than infrastructure.
One area of change the industry will need to address is the industry’s image and its disconnection with the public.
“For us to reach the potential and hit the numbers to fill the global demands, there is going to have to be a little bit of an attitude change about investment into the oil and gas industry or it’s going to be slower than it should be,” Payton said. “It’s not going to be as high as it could be, as fast as it could be. So we have a tough road ahead of us in the regulatory environment to just take advantage to what we have here. It’s going to be a long road.”
Host Jason Spiess grabbed the “regulations” and “governance” portion of Payton’s context and carried it into ESG territory for the “government employee”. ESG is an acronym for Environmental Social Governance, which impacts risks and rewards with investing and finance.
“It’s an interesting phrase to say ‘I work for the government’, as the Mayor of Odessa Javier Joven knows, we make about $75-a-month,” Payton quips. “We (Mayors) have companies we run and other jobs and we really volunteer to serve in the community, which to your ESG question is the difference right there because often times in Washington DC and Austin (TX) you are dealing with career politicians who are not aware of the things they are doing and promoting that are damaging industry.”
Payton continued with examples from the industry, starting with the E.
“One quick point to that, when you talk about the E with ESG and you do not have a wake up call like we are having on the globe today, then people are not able to hear that we are able to produce a barrel-of-oil in the Permian Basin 75% cleaner than anywhere else in the world,’ Payton said. “So if you want safe environmental oil and gas exploration and production it has to happen in the (Permian) Basin, North Dakota and North America so we can continue to lead the way.”
The environmental accountability isn’t lost on Payton either when it comes to industry, environment, energy and government policies.
“All the gains we make here environmentally are done away with with what they do in China, Venezuela, Russia and other places,” Payton said. “While ESG issues can be a part of the important conversation, if we high-side on ESG symbolically, then substantially we miss out on on the opportunities we have for energy.”
In an organic and unusual context swerve, the conversation enters the Garden Of Eden as the two ordained individuals compare the “symbolic” nature of ESG, the Garden of Eden and Original Sin.
“I would even take it to a different place. I believe the environmental movement is it’s own religion,” Payton opined. “It has it’s own preacher, it’s own theology, it has it’s own theology if you question it than you must be a denier of that theology so people will come after you for denying that theology.”
Spiess cites several anthropological examples to support the biblical ones Payton mentioned to strengthen the thesis or argument that the environmental movement has evolved from Movement to Religion.
“Do I think it is it’s own theology and movement in a religious sense? Absolutely,” Payton said. “I think the other part of that is when you are as abundant as we are in the United States and you take energy for granted, sometimes you can have the discussion that the spoiled rotten kid can have who says he has nothing while driving his Porsche down the street and is 18-years-old.”
Payton warns if this type of American Apathy increases while the church of the environment continues to develop roots, it could be more ESG issues for the oil and gas industry, than solutions.
“When the world begins to go haywire like it’s going, then the symbolism about what makes you feel good about ESG will start to be heard louder,” Payton said. “ESG isn’t a bad thing in and of itself, but if you use it as a whipping tool for something without perspective than it becomes dangerous to the industry.”
One social issues the industry can become proactive on is Sex Trafficking. Spiess and Payton have had several conversations on The Crude Life regarding this terrifying back alley business.
Sex trafficking in a serious issue in the United States and is becoming social issue number one in the Permian Basin for families with children.
Payton, who hosts No Neutral Moments podcast, recently interviewed Lisa Bownds, the founder of Reflections Ministry. Bownds, who was a member of Payton’s church, became “awakened” to the issue of Sex Trafficking through her own personal experiences.
Furthermore, Payton recently attended a press conference with US Senator John Cornyn on sex trafficking in the Permian Basin to address the increasing number of our youth being impacted.
“The thing that is alarming is you hear the word sex trafficking and your mind cannot comprehend how extensive it is,” Payton said. “It’s a $150B industry in the United States. Most children are groomed into sex trafficking before they are 17-years-old. It’s 12 or 13, it’s 8 or 9, these are hard things to hear but they are trafficked 30-to-40 times a day.”
Both Payton and Spiess believe this is one are the industry can become very helpful and proactive. Spiess mentions how he uses sex trafficking as a Social issue example in his ESG Classes and Curriculum while Payton challenges Spiess and others to add it into their programs too.
“There’s a wake up happening towards this issue here in the Permian Basin. The average predator is an average white man 50-year-old,” Payton said. “We have to wake up to this, we have to make sure our industry wakes up to it and we have to make sure that at man camps and other places where they do safety meetings they are talking about more than the safety of wearing a hard hat but the safety of your sexuality and what is happening around you.”
Like a sermon on Sunday, the former full-time Pastor leads our industrial energized conversation into a place of acceptance, service and gratitude.
“There’s nothing negative about paying attention to and protecting your environment. There’s nothing negative to paying attention to and protecting your social welfare and social fabric of your community,” Payton said. “There’s nothing really different between the sacred and the secular when it comes to our workplace. And there is nothing wrong with talking about governance and making sure we are representing people.”
He continued saying the majority of the people in the industry put their head down, work hard and support their families. This leaves little time to study up on ESG or understand the geopolitics behind the new special interest acronym-of-the-week.
“It’s a wake up call right now as an industry to say hang on a minute. Environmental Social Governance matters,” Payton said. “So let’s make sure we take care of that before we are MADE to take care of it through regulation.”
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