Regional Director's Brief — United States and Mexico
January 2025
Happy New Year!
First and foremost, I’d like to wish you a Happy New Year and hope that your 2025 is off to an incredible start. Over the last two years, it has been an absolute privilege to serve the SPE membership as the Regional Director for the MidCon/Eastern region. I've truly enjoyed getting to know so many of you who are driving innovation and excellence in both the petroleum industry and SPE. Together, we’ve made significant strides, and I’m excited about what’s ahead in my final year on the board.
In this month’s newsletter, I’d like to share my thoughts on the evolving energy landscape in North America, highlight key trends to watch, and discuss upcoming SPE events you won’t want to miss.
Industry Consolidation: A Familiar Cycle
Over the past 2–3 years, the North American energy sector has been defined by significant consolidation. Larger companies continue to acquire smaller ones, as capital providers prioritize scale to maximize efficiency and returns. This recurring cycle of consolidation and expansion isn’t new—it’s been a hallmark of the industry for decades, even predating my 25-year career.
The pattern is clear: big players absorb smaller ones, optimize operations, and then divest non-core assets. This creates opportunities for new startups to emerge, hoping to uncover overlooked potential. The big question is when we’ll see capital flow back into smaller private companies, sparking the next wave of innovation and growth. Regardless of the timing, one thing remains certain: the industry will continue to rely on skilled petroleum engineers to unlock value. Demand for talented engineers will always endure.
North American Oil and Natural Gas: Challenges and Opportunities
When it comes to oil production in North America, the story is straightforward. The world needs more oil, and producers are eager to supply it. However, the most prolific and low-risk areas have already been claimed, raising barriers to entry for smaller companies. Exploration and delineation are still underway, offering hope for the discovery of new reserves.
Natural gas, on the other hand, presents a different dynamic. Its price volatility—spiking during winter events and plunging shortly after—poses unique challenges. Yet, exciting developments are reshaping the landscape.
You’ve likely heard of flare mitigation solutions, such as cryptocurrency miners using flared gas to power mining operations. These “digital pipelines” have contributed positively to decarbonization and emissions reduction efforts. While cryptocurrency’s long-term role remains uncertain in the eyes of some, any reduction in flaring is a win for the industry and the environment. But the most intriguing story in natural gas is its growing synergy with datacenters.
AI & Datacenters – Natural Gas has entered the chat
Datacenters, which store, process, and distribute data and applications, are essential to our digital lives. They power everything from social media platforms to AI, machine learning, and tools like ChatGPT. However, their energy consumption is immense. Leading companies such as Alphabet, Amazon, Apple, Meta, and Microsoft are actively seeking reliable, 24/7 power to meet soaring demand.
Recently, ExxonMobil made waves by entering the natural gas-fired power plant business, aiming to vertically integrate datacenter operations. By controlling the entire value chain—gas procurement, power generation, and datacenter operation—companies can improve resilience and optimize returns. This trend not only supports natural gas demand but also alleviates stress on the electrical grid, paving the way for greater stability and growth.
Nuclear Energy Renaissance
Looking ahead, the expansion of LNG capacity and innovative technologies like Small Modular Reactors (SMRs) could further transform the landscape. The recent acquisition of Calpine by Constellation Energy—a powerhouse in nuclear energy—signals growing interest in zero-carbon baseload power. The fact that the nuclear power projects are beginning to gain momentum, knowing the capital needs and economics associated with nuclear projects, should tell us something about the upcoming demand.
Policy, Economics, and the Path Forward
While I prefer to steer clear of political commentary, it’s impossible to ignore the impact of policy on our industry. In the U.S., a more energy-friendly administration offers hope for reduced red tape and a shift away from the “production at all costs” mindset that has historically led to damaging boom-and-bust cycles.
I’m particularly optimistic about the nomination of Chris Wright, CEO of Liberty Energy as Secretary of Energy. With his diverse background in oil, gas, nuclear, and solar, he understands the need for energy that is reliable, sustainable, and economical. If you haven’t seen him speak on energy, I highly recommend you do or watch one of his recent presentations on Youtube (a hyperscaler who hosts an enormous amount of video data). If confirmed, his leadership at the Department of Energy, combined with his close ties to the incoming administration, could bring meaningful change to the industry.
Get Involved with SPE
As we look to the future, staying connected within the SPE community is more important than ever. Did you know SPE has its own platform similar to Reddit/LinkedIn, SPE Connect? It’s a fantastic resource for engaging with fellow members, sharing insights, and learning from others’ experiences. Whether you’re in section leadership seeking advice on fundraising, scholarships, or member programs, SPE Connect is a valuable tool for collaboration and innovation.
Recognizing Excellence: SPE Awards
Don’t forget—nominations for SPE regional and international awards are due soon! These awards are a wonderful way to honor the hard work and achievements of your colleagues. Having attended both regional and international ceremonies, I can attest to the pride and inspiration these events bring. Be sure to submit your nominations by February 15th and consider attending an award ceremony to see the impact firsthand. Learn more here: https://www.spe.org/en/awards/ & https://www.spe.org/en/awards/spe-regional-awards/
Thank you for your continued dedication to SPE and our industry. Together, let’s make 2025 a year of progress, innovation, and connection. As always, please feel free to reach out if you have any questions, comments or would like to learn more about anything I’ve covered.
All the best,
Robert C. Martinez, P.E.
SPE Regional Director – Eastern and MidCon
Vice President – Crescent Energy