Imagine the quintessential Texas oil tycoon. Is he rich, ruthless and loyal only to the almighty dollar? Is he a true villain, the kind whose success comes at the expense of family and friends? If so, you’re probably drawing your inspiration from J.R. Ewing, the lead character in the long-running television drama “Dallas.” For the sake of storytelling, let’s turn that stereotype upside-down.
Our new leading man is Pieter Bergstein, a Netherlands-born immigrant who studied banking in Switzerland. Let’s start Pieter’s transformation by overhauling his wardrobe. We’ll toss his obligatory 10-gallon hat and $600 cowboy boots out to pasture, along with his shiny belt buckle.
Now, let’s pluck Pieter from his cozy office in the big city and plop him smack dab in the middle of Lubbock, Texas. Talk about culture shock.
Lastly, let’s do something about his ethics. While J.R. ruthlessly pursued every dollar, Pieter genuinely cares about people, especially his employees. He considers them part of his extended family, and he spares no expense to keep them safe on the job.
What we’re left with is not some composite character concocted by Hollywood. Pieter is the owner of Standard Energy, a Lubbock-based member of the Texas Alliance of Energy Producers safety group. He’s a real-life entrepreneur with a Texas-sized success story. And it’s a story that will be told, but not before we answer the most pressing question: How in the world does a guy from the Netherlands end up in the West Texas oil patch?
Banking on a start-up
Pieter’s banking background gave him a sound knowledge of finance that serves him well as a business owner. It also gave him the woman who eventually became his wife. Lou Ann was an exchange student from, you guessed it, Lubbock, when the pair met in 1978.
Peter followed Lou Ann to America in the late 1970s, landing a job in Houston as a banker. The gig went well until his employer found out he didn’t have a work permit.
“I was going to be deported,” said Pieter. “I was desperate, so I called a friend in Post who was in the oil business. He put me to work at the bottom of the chain as a helper.”
Armed with only a tenuous grip on the English language and a solid work ethic, Pieter steadily climbed the company ladder. It wasn’t long before he was promoted to roustabout. Next, he learned how to drive the hot oil truck. Just as he was getting comfortable with his new assignment, however, his employer decided it was cheaper to outsource the hot oil part of the business.
So Pieter did what any aspiring entrepreneur would do. He bought his own hot oil truck, and his former employer became his first client in 1981. Business took off, and Pieter jumped on the opportunity to expand.
“I was getting busy, and I didn’t want to turn down work,” said Pieter. “I thought, ‘if I hire someone to drive this thing during the day, I can drive it at night.’”
It wasn’t long before Standard Energy had the largest hot oil fleet in the nation. But that didn’t sit well with the man behind the enterprise.
Bigger isn’t always better, even in Texas
Pieter’s business card belies his crucial role at Standard Energy. He lists himself as manager, but in reality, he owns the company and commands a fleet of 770 hot oilers, kill trucks, vacuum trucks and frack tanks. On any given day, Standard Energy vehicles can be seen traversing rural roads across the Permian Basin and Eastern New Mexico.
Given the oil and gas industry’s resurgence, Pieter knows there are ample opportunities for Standard Energy to grow. He also knows he has 400 reasons to keep things just as they are.
“I consider my employees part of my family,” said Pieter. “Sure, we could make more money if we expanded. But we would sacrifice our ability to keep people safe.”
Apparently, the old adage that there’s safety in numbers doesn’t translate to the oil patch. By maintaining small crews, Pieter makes it easier for employees to watch each other’s backs.
“We are a family-oriented business,” said Pieter. “If someone is struggling, everyone notices, and we pick each other up.”
Watching your co-workers’ backs and picking them up when they need help sounds suspiciously like accountability. When employees believe that everyone, from the tool pusher fresh out of high school to the company president, has a role in preventing accidents, they are more likely to accept accountability. And accountability can be a powerful tool. With it, employees take ownership of the safety program and continuously improve it. Without it, they “go through the motions,” doing the bare minimum.
Like anything worth striving for, accountability doesn’t happen overnight. Before it can embed itself in a company’s culture, management has to make it clear that safety is a core business process.
Jack Yates heads up Standard Energy’s safety efforts. He says safety has taken root because the man at the top of the org chart is as accountable as the newest employee.
“We hold safety meetings every week, and Pieter is at every one of them,” said Jack. “How many other company owners do you know who will get up at 4 a.m. to make a 6 a.m. safety meeting in another city? Our employees see Pieter’s commitment, and they follow his lead.”
During a recent visit to one of Standard Energy’s drilling sites, Texas Mutual senior safety services consultant Larry Homen put the company’s culture of accountability to the test. After reviewing and signing the job safety analysis with rig operator Raul Vega, Larry launched into a story about an accident at another company.
“The derrick man had unhooked his lanyard so he could sit on the monkey board and eat his lunch,” explained Larry. “Afterward, he forgot to reconnect the lanyard. He fell 65 feet and suffered multiple fractures. Who was responsible for that accident?”
Of course, we are all accountable for our own safety on the job site. Without missing a beat, however, Raul answered that the operator was also partially to blame. He should have checked to make sure his co-worker reconnected the lanyard.
“Excellent answer,” said Larry. “Call it safety culture, behavior-based safety or whatever other buzz term you want. It comes down to y’all watching each other’s backs out here.”
Raul has extra incentive to watch out for his crew, which includes his two older brothers. The Vegas are industry veterans, a rare breed in an industry where employers are drawing from an inexperienced labor pool to keep up with increasing demand. Jack and Pieter rely on Raul and his peers to share their knowledge with younger workers.
Weathering the great crew change
Texas should go ahead and post big, neon, flashing signs at every border: “Now Hiring.” Federal Bureau of Labor Statistics data shows that while other state’s economies struggled over the past year, Texas added 1,000 new jobs a day, and we account for 35 percent of the nation’s job growth since 2000. We owe much of our prosperity to oil and gas.
The industry accounts for one-third our economy, according to James Lebas, former chief revenue estimator for the Texas Comptroller’s office. Its 400,000 jobs offer average salaries of $125,000, three times the state average. Clearly, now is a good time to be in the oil business, but that wasn’t always the case.
In the mid-1980s, a surplus of crude oil sent prices plummeting and the oil market into a tailspin. With job prospects drying up, experienced workers retired or migrated to other industries. Many never returned.
Compounding the issue is the fact that a generation of baby boomers has its sights set on retirement. Dan Heintzelman, CEO of GE Oil and Gas, noted that approximately five million oil and gas workers – around half the total workforce – will be eligible to retire in 2015.
Many of the workers replacing industry veterans have never stepped foot on an oil lease, much less assembled a pump jack. The phenomenon is known as the “Great Crew Change,” and it comes with benefits and costs for employers.
On one hand, new workers bring energy and fresh perspectives. They are eager to prove their value, and their productivity reflects their enthusiasm.
Unfortunately, new workers are more also likely to get injured on the job than their experienced counterparts. Workers who have been on the job less than one year account for 30 percent of workplace injuries, according to the Bureau of Labor Statistics. In the mining sector, of which oil and gas is a part, the statistic increases to 42 percent.
Standard Energy recognizes the value older workers bring to a crew. In a competitive market, Pieter works hard to attract and retain industry veterans.
“I’ve actually had employers show up on jobsites and try to recruit my employees,” said Pieter.
You can’t blame Standard’s employees for not budging. Under the company’s incentive program, Pieter pays bonuses and funds family vacations for employees who exceed safety expectations. The financial investment is significant, but so is the return. Pieter’s employees believe he is committed to their well-being, and they in turn stay loyal to him. Consequently, he has a talented pool of long-time employees he leans on to mentor their younger counterparts.
One of those long-time employees is Jody Jones. Jody has worked the oil fields for 20 years. He joined Standard Energy as a driver in 2006, and he currently serves as a yard manager. With a wife, five grandchildren, and a passion for cooking and playing blues guitar, you might expect Jody to have one foot out the door. Not quite.
“I’m like an old dog,” joked Jody. “You’ll have to run me off or put me down to get me out of here.”
Pieter has no intention of doing either. Jody’s field experience makes him a valuable resource. He takes every opportunity to deliver this simple message to young, aspiring crew members.
“Listen to older employees, and learn from them,” advised Jody. “And never avoid asking questions if you don’t understand something.”
Standard Energy’s new-hire orientation includes thorough safety training, starting with general concepts like personal protective equipment, loading and unloading hoses, and H2S exposure. From there, Jack pairs them with a mentor like Jody, who helps train them on their specific job tasks. Before Jack releases new hires to full duty, they have to pass a test and prove they took the training to heart.
It’s a meticulous process that often takes up to three months. During that time, new hires aren’t contributing much to productivity, but that’s okay with Jack and Pieter.
“You can’t put a price on your employees’ safety,” said Jack. “And there’s no way to quantify the knowledge experienced workers bring to the training process. We lean on them heavily to teach new workers how to avoid common hazards they will see in the field.”
Those hazards include heavy equipment, explosive gases, hazardous chemicals and confined spaces. But of all the hazards your employees face, the most dangerous is something they’ve been doing most of their lives: driving.
Leveraging technology to drive safety
If Herbert Heinrich is right, employers should never be taken off guard when a workplace fatality happens. In fact, workplace accidents should never happen, according to Heinrich’s research.
Heinrich was an industrial hygienist – that’s corporate-speak for workplace safety professional – who wrote a book titled, “Industrial Accident Prevention, A Scientific Approach” in 1931. Heinrich held that for every workplace fatality, there are 30 injuries, 300 incidents and, most importantly, 3,000 leading indicators. That’s scientist-speak for “red flags.”
A leading indicator might be a noticeable drop in employee participation during safety meetings. Or perhaps it’s an increase in unsafe behaviors observed during facility walk-throughs. Whether you buy into Heinrich’s data is irrelevant for our purposes.
The point is that if you learn to identify leading indicators, you can take corrective action before someone gets injured. Standard Energy leverages leading indicators to reduce the risk of a growing safety hazard in the oil and gas industry: motor vehicle accidents (MVAs).
MVAs are among the most common causes of oil patch fatalities. A study released in 2014 by the National Institute of Occupational Safety and Health showed that between 2003 and 2009, the motor vehicle fatality rate among oil and gas workers was 8.5 times higher than the rate in other industries.
Furthermore, an Associated Press analysis of traffic deaths and U.S. census data in six drilling states shows that in some places, fatalities have more than quadrupled since 2004. In 21 Texas counties where drilling has recently expanded, deaths per 100,000 people are up an average of 18 percent. In the rest of Texas, they are down 20 percent.
Rural Texas roads ill-equipped for the surge in industrial traffic that has resulted from the oil boom are no doubt a contributing factor in MVAs. Accident investigations, however, often uncover root causes that indicate unsafe behaviors, such as speeding, using a cell phone, driving while fatigued and failing to wear a seat belt.
At Standard Energy, in-vehicle monitoring systems (IVMS) help employees navigate Texas’ questionable infrastructure and correct the unsafe behaviors that drive MVAs.
“We have a map of zones we want our drivers to steer clear of,” said Jack. “We call them black zones. Some are poorly maintained roads, and others have heavy oilfield traffic. We give all of our drivers routes that avoid those areas whenever possible. Then the IVMS allows us to instantly locate every vehicle and see the route the employee took to get there.”
That is just one example of a suite of IVMS components that empower Standard Energy to monitor drivers and provide real-time coaching. Pieter has also invested in on-board cameras triggered by harsh acceleration, abrupt braking and speeding. The system can even tell if the driver is texting or doing something else that takes their attention off the road.
“We play those recordings in safety meetings and use them as a coaching tool,” said Jack. “We’re not trying to embarrass drivers. The pressure people get from their peers is usually enough to change their behaviors.”
IVMS is based on the principle that we cannot manage what we do not measure. Studies indicate that when it comes to correcting unsafe behaviors, IVMS measures up pretty well.
Results vary by study, but generally speaking, IVMS can contribute to a 60 percent reduction in speeding, an 80 percent increase in seatbelt use and a 75 percent reduction in aggressive driving.
Despite the promising returns, outfitting your vehicles with high-tech gadgets can’t be cheap. Neither can any of Pieter’s other investments in safety, and none of them are required by law. So why doesn’t he simply send his employees out the door every morning with an enthusiastic, “Be careful out there today,” and hope for the best?
The universal language
By the time he left the Netherlands for Switzerland, Pieter was fluent in French, German and Dutch. English was a different matter. So, he took classes and mastered the basics.
Today, Pieter’s accent is a unique blend of English, West Texas drawl and whatever language they speak in the Netherlands. Still, very little gets lost in translation, especially when he talks safety.
Ask Pieter anything about his safety program, including why he prioritizes safety over production, and he consistently points to Standard Energy’s mission statement: 3SQ – Safety. Service. Satisfaction. Quality.
Pieter has plastered those four words across his headquarter walls, marketing materials, t-shirts and company vehicles. But make no mistake; 3SQ is more than a catchy slogan. It is a core business principle that drives everything Standard Energy does.
“We are extended family at Standard Energy,” said Pieter. “We protect our family by watching each other’s backs on every job. When we watch each other’s backs and prevent accidents, we fulfill our mission, which in turn drives Standard to be number 1 in our industry.”
And it’s an industry that has been under scrutiny since the fracking boom began. Fatality rates are seven times higher in oil and gas than other industries, according to the Centers for Disease Control and Prevention. Between 2008 and 2012, the country recorded 545 oilfield deaths. Texas accounted for more than half of them.
Standard isn’t the only company working to change the status quo. The industry as a whole has taken note, and the results have been encouraging.
A 2014 report by the U.S. Bureau of Labor Statistics showed that fatal work injuries in the private mining, quarrying, and oil and gas extraction sector decreased from 181 in 2012 to 154 in 2013, a 15 percent reduction.
Similarly, the number of fatal work injury cases in oil and gas extraction industries dropped from 142 in 2012 to 112 in 2013, a 20 percent reduction.
That’s great news in an industry that doesn’t get enough credit for the positive steps it has taken to reverse the trend in workplace accidents. For Pieter, the industry’s reputation is not the only thing at stake. Safety became personal the day he had to make a difficult phone call to an employee’s family.
“Years ago, one of my employees hit a patch of black ice and had a fatal accident,” said Pieter. “I had to call his wife and tell her what happened. That call will live with me forever. I never want to be in that situation again.”
Sometimes, workplace accidents are an unfortunate symptom of a culture in which safety takes a back seat to production. Personal tragedies have a way of changing people’s paradigms. Perhaps that is why at Standard Energy, safety is mission critical.