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Q&A: Aera CEO talks climate change, wastewater management and her new neighbors

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Christina Sistrunk

Christina Sistrunk is CEO of Bakersfield-based oil producer Aera Energy LLC.

She’s worked in Houston, New Orleans, the Netherlands and even the Arctic. But not until earlier this summer had Christina Sistrunk’s 30-year career in the oil industry stationed her in the heart of West Coast oil production.

As announced in April, Sistrunk replaces retired executive Gaurdie Banister Jr. as president and CEO of Aera Energy, Bakersfield’s largest locally based oil producer. The company is a joint venture between Shell Oil Co. and ExxonMobil, taking in $5 billion per year turning out a quarter of the petroleum produced in California.

Its 14,500 wells are concentrated in western Kern County.

In her most recent assignment, as Shell’s vice president of Arctic capability, Sistrunk was part of a team working on improving the company’s approach to drilling in Alaska. The high-stakes effort was intended to avoid the kind of errors that doomed Shell’s 2012 attempt at exploiting a 15-billion barrel prospect thought to exist offshore 800 miles from Anchorage.

She took time Friday at the company’s Ming Avenue headquarters to speak with The Californian on topics ranging from Bakersfield’s warm welcome to climate change to the industry’s single-biggest challenge.

QUESTION: How is your family’s transition to Bakersfield coming along?

ANSWER: This is a very easy place to live. We did a short stint in Houston before we came here. Houston has 4.5 million people and, I swear, 6 million cars. So just our quality of life, I think, has really gone up. People have been so welcoming and friendly. I mean, everywhere we’ve gone, people have been helpful, whether that’s asking a neighbor about a contractor to do something around the house...

One of our neighbors dropped by the other night to say, ’Look, I know you and your husband travel a lot. If you need me to get your trash cans off the curb because you’re not going to be home, or you need me to get your trash cans out on the curb, you know, on trash day, just let me know.’ I don’t know that we’ve ever been in any community where so many people have been just so outreaching so consistently.

Q: When was it you started to work on the Arctic initiative?

A: It was in October of 2014. So, a very short stint. That’s why I actually went to Houston. It was a long-term planning role for Shell’s global Arctic aspirations, so it was beyond just the work that was occurring in Anchorage. And so I was in that organization for about eight months before I came here.

Q: So you were not involved in the many (Arctic drilling) mishaps of 2012?

A: No.

Q: A lot went wrong back then. How is it going to be different this time?

A: Well, the organization went through a really intensive learning process to understand what had caused those issues. And, they have just done an incredible job in taking those learnings to heart. The organization that is running that operation is significantly larger than it was in 2012. It has been very thoughtfully put together in terms of the skills and capabilities that were needed, and the level of resourcing, the level of engagement with contractors.

So, in the role that I was in I had an opportunity to speak with many of the contractors, and I asked them directly, what do you see that’s different this (drilling) season getting ready for the season than what you saw in 2012? And they talked about how they had been brought in much earlier to do planning, how they were being listened to in a very different way, how their concerns were being addressed when they raised them. So I really do believe that the organization, you know, saw that as a very significant event, one that nobody was happy with, and made a real commitment to understand what had caused that and to change how it operated going forward to learn from that.

 

Q: It continues to be quite a controversial effort. Here we have in California a lot of opposition to the oil industry, various parts about it. Do you feel it’s prepared you in any way for the opposition that we’re seeing around the state?

A: When I was first approached about taking this role, I thought, you know, most of my background ... has been the Gulf of Mexico, and then I moved to the Arctic for a short time, and now I’m coming to California. I thought, there really isn’t a lot of consistency in that. But the short time that I was working in the Arctic organization actually, I think, did a really good job on really quickly coming to speed on the dynamics of engaging with the broader stakeholders in California around the oil and gas industry.

 

Q: So how did that experience, most recently in the Arctic, lead you to Bakersfield?

A: I don’t know that it led me to Bakersfield. I was working in Shell’s organization, and Aera is a joint venture that our parents are Shell and Exxon. So, historically the CEO position has come out of the Shell organization. Within senior leadership with Shell, a role like this is one you get asked about your interest in, but you don’t, so to speak, throw your hat in the ring.

I think the reason I was asked to consider this role was really based on the depth of my operational and strategic leadership roles, one of which was in this long-term planning role in the Arctic, albeit I only did it for a short time. I think it was also based on the track record of performance that I had had around improving safety and environmental performance in a variety of roles that I’d held previously.

I had served as the heath, safety and environmental manager for North and South America for the exploration and production business within Shell from 2005 to 2008. From 2008 to late 2009, I led a global project to improve process safety in Shell’s upstream operations worldwide. So, I think they knew I had both the technical background and the proven track record of being able to run relatively large and complex operations in a way that continued to improve safety performance and environmental performance in those organizations, and I think that’s what led me to the role here.

 

Q: Shell has long supported the notion of man-made climate change. What does that mean, if anything, for Aera?

A: Whether you’re from Shell and you say this is a man-made event, or whether you’re from some other constituencies, it’s clear that debating whether climate change is occurring or not occurring is, really, it’s an unproductive argument. And so, what I think it means for Aera is how do we collaborate with others, both across the industry and across the communities and within government, to actually say, ’What do we do about it?’

I think what’s clear is, we’ve got to find a practical and effective way to navigate the energy transition and that that’s got to be done in a way that, you know, preserves the underlying economy and quality of life for the people in the communities that we serve. That’s going to be a pretty significant dilemma, and I think it’s going to cause us to need to come together and work together in a way that perhaps we haven’t recently done.

I don’t think anybody’s got the full answer to how we need to navigate this. I don’t see a good blueprint out there anywhere in the world. So, that’s exciting in that we have the opportunity to contribute to that conversation and be an example. But it will also stretch us in terms of our ability to really collaborate, listen and learn from each other and work to create that.

I think one of the important things that sometimes gets lost in the conversation is that there’s a lot of information out there that says when you just look at worldwide energy demand, it’s likely that between, you know, 2000 and 2050 to have doubled. And when you look at even the most optimistic scenario to what role renewables can play in that time period, it’s a very significant chunk.

But just as when you look at the last energy transition the world went through between coal and hydrocarbons, coal didn’t completely go away. I haven’t seen any scenarios that say in 2050 we’re still not going to need a pretty significant component of hydrocarbon production. And so if that is the case, again, how are we to do it in the most responsible way, and how do we do it in a way that absolutely minimizes the carbon footprint in the process of doing that? I think that I’ve got a role to play and Aera’s got a role to play in helping to define that answer.

Q: Can you tell me about your approach to environmental stewardship, if you care to add to the previous answer?

A: We’ve got a very significant responsibility where that’s concerned. And I think that looks like a few things. One is in being absolutely as efficient as we can be in the resources that we utilize in doing our business. I think the other is in making sure that we are investing and that we are training our people to be able to deliver our product in a way that has the minimum impact to the environment.

I look at this industry and I’ll be honest and say we have certainly not done everything right in the three decades that I’ve been in it. But I would say overall, I look at the attention that we’ve got today to even very, very small spills, right? And it is so different from what it is when I entered this industry. And we’re certainly making progress year on year in being able to minimize the impact that we’re having while delivering a source of affordable energy to the communities that we serve, and I think that’s real.

Here at Aera, I’ve been impressed as I’ve come online because I think the commitment is even more visible than most places that I’ve worked. For example, in 2012, our operation was certified as waste-free. So we either compost or recycle everything that comes through this office. Our water usage here at the Oaks is actually down by 43 percent. When you walk up, you can see that the grass doesn’t look like ... (She laughs as her interviewer sheepishly eyes a bottle of water she handed him earlier.) We drink water. We’ve got a whole addition about keeping people healthy, and that’s pretty important. But you’ll notice the grass doesn’t look like it does in many people’s homes.

We’re saving 200,000 gallons of water a year. When the office was remodeled in 2008, the fixtures in the bathrooms were changed to minimize water usage. So, you know, it’s not just a concept that says we want to be environmentally responsible. I think our employees have done a great job of helping us find ways to put that into action.

 

Q: As part of California’s continuing overhaul of oil regulation, there’s been a focus on wastewater disposal. Going forward, what will be Aera’s approach to wastewater management?

A: That’s an area that we’re working really hard. So I will say, an awful lot of our water actually gets reused in our enhanced oil recovery processes. So the vast majority of the water we generate actually gets reused in the process itself.

Q: So produced water gets treated...?

A: Gets treated and put back in the reservoir for enhanced oil recovery. The water we do need to dispose of, we have approved injection zones that we have been disposing in. Now, we will revalidate those as part of the UIC (underground injection control) process. But we’re confident that we’ve got the data in place, including monitoring wells, and the other requirements and a very extensive data set which we monitor closely to be in a position where they will be re-certified.

And in fact, of the 100 disposal wells that we’ve got, all of them are classified as tier three, which in the UIC process is considered to be the lowest-risk class of wells that they’ll be evaluating and re-certifying. But we will go through the process.

If anything, actually, we wish we could speed it up a bit, if that makes sense, right? So we want to make sure that that’s done appropriately. We are exploring other technologies that would allow us to, hopefully, provide that water for other uses. Right now, a combination between technical issues and economic issues, we haven’t found the right combination yet to be able to do that. But ideally we would like to move towards a world where, you know, if we’re not using the water for enhanced oil recovery, we’re actually able to provide it for beneficial reuse.

 

Q: Chevron and California Resources Corp. have taken steps to — well, mostly recently with CRC — to blend or divert more of their produced water to irrigation. Other initiatives locally deal with investment in water treatment plants. Are you looking at either or both of those as options?

A: I think the water that Chevron and CRC (are) contributing for beneficial reuse actually has some different characteristics than the water that we currently produce. It’s just a geologic phenomenon.

Q: In West Kern...

A: Yeah. And so as it relates to water treatment, I know that that’s on the radar screen with a group that’s looking at what we would have to do to find the right technical and economic option to be able to move toward that. There’s something in that space that today we don’t have the right answer. But that is the model of where we want to move to. We’ve just got to figure out how to solve the problem.

Q: What is your vision for Aera going forward?

A: My vision for Aera going forward is we continue to be a great partner in this community, that our people feel like they want to work here, so they are safe, healthy and challenged in their work, as well as supported to develop and fully contribute to delivering oil and gas production for a long time in a way that helps set the standard for how to do that responsibly.

Q: What would be your thoughts about the biggest challenges and opportunities for Aera?

A: I think certainly the current economic climate provides a level of challenge we haven’t seen in the industry in quite a while. And so, how do we continue to be a viable business without comprising our commitment to safety and environmental performance? Because that’s just not an option.

In doing that, how do we create the trust and relationships to actually contribute to and be a part of finding a viable way to move toward the energy transition in California? I think we’ve got a real role to do there and doing it in a way that preserves the health for the California economy is critically important to all of us.

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