IPAA Annual Meeting: Continental’s Hamm says his book celebrates industry’s achievements
(WO) - As the Independent Petroleum Association of America’s (IPAA’s) Annual Meeting in San Antonio continued into Wednesday, the group’s third and final day was highlighted by a special fireside chat with Continental Resources Executive Chairman Harold Hamm. In addition, as the association heads into its 95th year, IPAA’s leadership and staff presented the first installment of a new recognition award.
The Wirt Franklin Lifetime Advocacy Award—named after and in the spirit of IPAA’s founder and first chairman/president—recognizes the contributions of an advocate, who has dedicated his or her career to advancing the interests of independent oil and natural gas producers. Accordingly, at IPAA’s final luncheon for this year’s annual meeting, it was announced that Lee Fuller (Fig. 1), the group’s Officer for Environment and General Strategy, is the award’s first recipient.
Fuller joined the IPAA staff in 1998 and is responsible for coordination of legislative and regulatory activities. He has 35 years of experience in federal policy issues, having served as staff on the U.S. Senate Committee on Environment and Public Works from 1978 through 1986. In 1985 and 1986, he was the Minority Staff Director, serving under Senator Lloyd Bentsen. During this time, Fuller was involved with all major legislation developed by the Committee. He served as IPAA’s Vice President of Government Relations from 1998 to 2015, and then filled the role of Executive Vice President from 2015 to 2021.
Hamm explains the motivation for his new book. Following the award to Fuller, the assembled independent producers and associated firms settled in for what was labeled a “fireside chat” between IPAA Chairman Steven Pruett and Continental’s Harold Hamm (Fig. 2). During that 45-min. session, talked extensively about his new book, Game Changer: Our 50-Year Mission to Secure America’s Energy Independence.
Hamm noted that one of the first words that opponents, critics and haters of the U.S. oil and gas industry like to use, to disparage its companies, is “the F world, fracing.” Of course, to enable fracing, horizontal drilling is required, which is something else that industry opponents despise. “But horizontal drilling really gave us the production we have today,” declared Hamm. “More than anything, in three decades, we took this industry from terminal decline to 13 MMbopd, and this was due to horizontal drilling and fracing. And yet, no one is talking about it—what we’ve accomplished in a short time. That’s why I wrote the book,” he explained.
“This is not a ‘me’ book; it’s an ‘industry’ book. I wrote it to tell the marvelous story of horizontal drilling and how it has brought us energy independence.”
Hamm’s political activism. It’s no secret that Hamm has been involved in political matters for some time now, from an energy perspective. Asked by Pruett why he feels political activism is so important, Hamm explained that the political and regulatory structure in the U.S. has had an outsized impact on independents’ operations for a long time. Consequently, he has felt obligated to work on these matters where he can.
“My hat is off to [IPAA’s] Lee Fuller and all of your (IPAA staff) service,” said Hamm. “Today, it (politics) governs everything we do. [Former President Richard] Nixon did us no favors. He put us under price controls when oil went from $3.75 to $4.00/bbl. Can you believe it?” Hamm obviously has not lost his irritation with Nixon’s 52-year-old action.
“I got involved (in politics) way back (over 20 years ago) in Oklahoma with the sales tax, when people wanted to raise it,” added Hamm. “We defeated that effort, and I found out how powerful this industry can be.”
Hamm’s role in establishing U.S. oil exports. Reminded by Pruett that he played a key role with Congress and then-President Barack Obama in getting exports of U.S. oil approved, the chairman observed, “it’s hard to imagine where we’d be today without oil exports in a range between 3.0 MMbpd and 5.0 MMbpd. The refineries hadn’t retooled (they had too much heavy oil capacity), so we had to do something to handle all the light, sweet crude coming from the shales.
“But we had a lot of opposition,” added Hamm. “The Obama camp didn’t want to do anything with us (oil industry executives and Republican lawmakers). But, we put the export bill in the omnibus spending bill, and they couldn’t say ‘no.’ Thus, we did the right thing, and it passed (on Dec. 18, 2015). And most everybody (in the industry) worked with us. The major refineries were with us. We got it done in one year, when some people said it would take three [years].”
Hamm’s management philosophy. Asked by Pruett about his managing style, Hamm eagerly remarked that at Continental, “we’ve enjoyed a ‘culture of the possible.’ We go back to some common themes with [Founder] Sam Walton of Walmart. One important thing you can do is just walk around (the company offices) and make your people feel important. But there also has to be some accountability.”
What seems to further Hamm’s popularity in his own company is his steadfast antipathy for laying off workers, even in a pronounced industry downturn. “The main ingredient of success is the people. When you have a downturn, don’t cut your people. In the last downturn, we didn’t cut anybody. But we did cut production.”
Asked about the so-called energy transition, Hamm had a succinct answer. “We’ll need oil and gas in large amounts over the next 50 years,” he predicted, “but we need to do it in a cleaner way. Of course, we (the industry and the global community) have a lot of work to do in China and India.
