Company Structure in the Energy Industry

Here is a table of the occupations in the green building in Maryland. In the table, we can see that in the energy industry, most of the workforce are hourly workers, and their wages are not high.

Kinder Morgan is one of the largest energy companies in the US, which focuses on the delivery of oil and natural gas and owns over 30,000 miles of pipelines around the whole country, taking up 33.6% market share in the natural gas liquids pipeline transportation in the US (IBIS World). The company has a complex business structure. Most of the company’s asserts are held by Kinder Morgan Energy Partners, which is a master limited partnership, this kind of structure could help avoid corporate taxes when being traded on the stock, which makes investors gain much more money. And the third entity in the company, Kinder Morgan Management makes institutional investors be able to hold equity in Kinder Morgan Energy Partners. The Kinder Morgan Energy Partners claim to be simple. “We own, operate, expand, build and acquire primarily fee-based energy assets that typically have minimal exposure to commodity price volatility” (Corporate Responsibility). This kind of business model is backed up by a strong and stable financial support and could consistently ensure the fluent cash flow of the whole corporation.

References:
48699 - Natural Gas Liquids Pipeline Transportation in the US Major companies (2011) Retrieved from http://clients.ibisworld.com.proxyau.wrlc.org/industryus/Majorcompanies.aspx?indid=1184 on 7th Oct 2011
“Corporate Responsibility” (2011) Retrieved from http://www.kindermorgan.com/responsibility/
Maryland's Energy Industry Workforce Report http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=5&ved=0CHgQFjAE&url=http%3A%2F%2Fwww.mdworkforce.com%2Fpub%2Fenergyworkforce.doc&ei=G9nATpTuLaP10gGe8u3tBA&usg=AFQjCNFu2LjZyBvdmrwagVxPvXoXxI1VOA&sig2=XXvu9rwkB-h4zTAyhnRb_g

Energy CEOs You Should Know:

Out of numerous swings in and out of power, qualitatively these four CEOs are among the most influential industry leaders and economic leaders over the past 20 years: Rex Tillerson, John Watson, Richard D. Kinder, and Jeffrey Skilling.

Rex Tillerson has been the CEO of Exxon Mobil since January 6^th 2006. He graduated from the University of Texas-Austin with a BS in Civil Engineering. His company is among the largest publicly traded in the world, often ranking at first or second. With thirty seven oil refineries in over twenty one countries, Exxon is the largest oil refiner in the world. Tillerson is the recipient of the UN 2011 Global Leadership Award and is personally responsible for corporate deals worth approximately $331 billion. His structuring strategy ensures Exxon employs an estimated 82,000 people worldwide.

John S. Watson has been the CEO and partial CFO of Chevron Corporation since September 30^th 2009. He graduated with a degree in Agricultural Economics from University of California-Davis, and went ton to the University of Chicago for a Master’s in Business Administration. Chevron has been ranked in the Top 5 Companies in America by Forbes 500 for the last seven years. It is active in 180 countries worldwide and employs 62,000 workers as a multinational energy company.

Richard D. Kinder has been the CEO of Kinder Morgan since February of 2001. Between his salary, bonuses, restricted stocks, non-equity incentives, and all other compensation, he receives $1 a year. This is the reason he is a recipient of Morning Star’s CEO of the Year award and receives glowing reviews by most major business mediums. He is ranked 497^th on Forbes “Executives with Financial Success” list, yet his company is worth $29.7 billion currently. His monetary assets are aligned with his morals and because of this I am describing him as one of the most important CEOs of the last 20 years. Influential doesn’t always mean wealthy.

Jeffrey Skilling is the man behind Enron. He was promoted to CEO February 12^th 2001 and received $132 million in options and salary his first year. His notorious Harvard Business School interview in which he spoke of his own genius should have been a warning sign in this case. He was the energy industry wunderkind for developing a forward market on natural gas and a mark to market speculation system. His deception of stock holders and allowance of immoral decision making that resulted in tens of billions of dollars being robbed from shareholders has led him to where he is today: a federal security center in Littleton Colorado.

Information for this posting and further information can be found through the following links:

http://www.businesswire.com/portal/site/exxonmobil/index.jsp?ndmViewId=news_view&ndmConfigId=1001106&newsId=20111108007334&newsLang=en

http://ycharts.com/companies/KMI/assets

http://people.forbes.com/profile/richard-d-kinder/47389

http://ncf.uschamber.com/ceo_chevron/

http://vita.mcafee.cc/PDF/Enron.pdf

Libya Builds Back Up, Oil Prices Head Down?

According to Libya’s National Oil Co. Chairman, Nuri Berruien, the country’s oil industry is slowly regaining strength as the country reconstructs after a long devastating civil war. Damages to oil and gas facilities were estimated to cost hundreds of millions of dollars but the industry is rebounding faster than expected. The Elephant oil field has already began production while the Waha oil field’s restart up is anticipated by the end of the year and should contributed 400,000 barrels a day. There are 600,00 barrels of oil being produced currently with about 140,000 barrels of that going to the refinery. Libya is predicting an increase to 800,000 by the end of this year and projecting to reach pre-war levels (about 1.6 million barrel a day) by 2013. This could mean good things (and big savings) for oil consumers around the world.

Political instability in the Middle East and northern Africa has been the main cause for the rise in oil prices over the last few years. Although Libya isn’t completely stable, officials have been doing a great job restoring the shut down oil fields and reestablishing Libya’s industry. Hopefully now that was has ended and the the political and social chaos has quieted down, Libya can reach its full production potential and prices will start to come down.

http://online.wsj.com/article/SB10001424052970204323904577035581326011256.html

When Energy Markets Expand, So Will Jobs.

What workforce trends is the industry experiencing? For example, manufacturing jobs in this industry are moving to Mexico and China at a very fast rate. Or, companies are investing heavily in engineering in order to remain competitive through innovation.

Chevron Corporation has led the way for energy innovation by expanding their technological know-how and hiring skilled experts. The emerging markets for energy fuel have increased the demand for well-paying jobs that require skilled workers. As a financially stabile company, Chevron is able to invest its strong earnings into exploration, production, and gaining a foothold in new markets. Expanding its services will inevitably create more jobs throughout the world. Chevron offers a vast array of engineering opportunities to support its energy exploration and to create innovative technology. Their greatest need for engineers relies on their leading operations: energy technology; exploration and production; natural gas; refining, marketing, and trading; and transportation and shipping (1).

According the State Department, the extraction of oil and natural gas resources in the United States could create hundreds of thousands, perhaps millions of jobs for Americans. The development of the Marcellus Shale—one of the largest natural gas reserves in North America—can create upwards of 200,000 jobs for Americans by 2015 (2). After Chevron’s acquisition of Atlas Energy in 2010, they gain extraction capabilities in the Marcellus Shale. For companies like Chevron and Kinder Morgan, the development of natural gas in North America will give way to significant job creation. As the United States is suffering from slow economic growth and high unemployment, the expansion of the energy industry has the ability fix many of these problems.

Now that corporate responsibility has placed such a large emphasis on the energy industry, companies are hiring more obscure positions to make sure they follow corporate guidelines. Botanists and marine biologists are often hired to make sure large oil and natural gas companies—like Chevron—are not destroying the environment (2). Chevron is currently looking for health and safety professionals with advanced degrees; these workers will make sure Chevron is conscious of the global environment (1). To ensure their environmental-awareness and ethical responsibility, Chevron is following new workforce trends to enhance its corporate reliability.

(1) http://careers.chevron.com/disciplines/index_of_disciplines/engineering/default.aspx

(2) http://energytomorrow.org/job-creation/#/type/all